Document:

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                                                                   Exhibit 10(f)

                            BB&T CORPORATION 401(K)

                                 SAVINGS PLAN

                        EFFECTIVE DATE: JANUARY 1, 2000
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                               TABLE OF CONTENTS
                            BB&T CORPORATION 401(K)
                                 SAVINGS PLAN

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<S>                                                                                                           <C>
Section 1.     Definitions...................................................................................  1
        1.1    Account.......................................................................................  1
        1.2    Accrued Benefit...............................................................................  2
        1.3    Actual deferral percentage or ADP.............................................................  2
        1.4    Adjustment date...............................................................................  3
        1.5    Affiliated employer...........................................................................  3
        1.6    Board.........................................................................................  3
        1.7    A break in service............................................................................  4
        1.8    Code..........................................................................................  4
        1.9    Committee.....................................................................................  4
        1.10   Company.......................................................................................  4
        1.11   Company stock.................................................................................  4
        1.12   Compensation..................................................................................  4
        1.13   Computation period............................................................................  5
        1.14   Contribution percentage.......................................................................  5
        1.15   Disability....................................................................................  6
        1.16   Effective date................................................................................  6
        1.17   Elective deferral or elective deferrals.......................................................  7
        1.18   Eligible employee.............................................................................  7
        1.19   Employee......................................................................................  8
        1.20   Entry date....................................................................................  8
        1.21   ERISA.........................................................................................  8
        1.22   Excess aggregate contributions................................................................  9
        1.23   Excess contributions..........................................................................  9
        1.24   Excess elective deferral......................................................................  9
        1.25   Highly compensated participant................................................................  9
        1.26   Hour of service............................................................................... 10
        1.27   Leased employee............................................................................... 12
        1.28   Matching contributions........................................................................ 12
        1.29   Nonhighly compensated participant............................................................. 13
        1.30   Normal retirement age......................................................................... 13
        1.31   Participant................................................................................... 13
        1.32   Participating Employer........................................................................ 14
        1.33   Plan.......................................................................................... 14
        1.34   Plan year..................................................................................... 14
        1.35   Predecessor plan.............................................................................. 14
        1.36   Qualified nonelective contributions........................................................... 14
        1.37   Retire or retirement.......................................................................... 14
        1.38   Salary reduction contributions................................................................ 14
        1.39   Service....................................................................................... 14
        1.40   Spouse or surviving spouse.................................................................... 15
        1.41   Statutory compensation........................................................................ 15
        1.42   Testing compensation.......................................................................... 15
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<S>                                                                                                          <C>
        1.43  Trust or trust fund..........................................................................  16
        1.44  Trustee......................................................................................  16
        1.45  Trust agreement..............................................................................  16
        1.46  Year of service..............................................................................  16

Section 2.    Contributions to the Trust and Allocation Thereof............................................  16
        2.1   Salary Reduction Contributions...............................................................  16
        2.2   Matching Contributions.......................................................................  23
        2.3   Discretionary Supplemental Employer Contributions............................................  28
        2.4   General Limitations..........................................................................  28

Section 3.    Vesting......................................................................................  29
        3.1   General......................................................................................  29
        3.2   Forfeitures..................................................................................  29
        3.3   Change in Vesting Schedule...................................................................  29
        3.4   Predecessor Plan.............................................................................  30

Section 4.    Pretermination Distributions; Loans..........................................................  30
        4.1   Hardship ....................................................................................  30
        4.2   Distributions After Age 59 1/2...............................................................  32
        4.3   Distributions Prior to Age 59 1/2............................................................  33
        4.4   Loans........................................................................................  34
        4.5   Termination of Service Prior To Distribution.................................................  35

Section 5.    Termination Distributions....................................................................  35
        5.1   Distributions on Account of Retirement or Disability.........................................  35
        5.2   Distributions on Account of Death............................................................  38
        5.3   Special Provisions and Definitions...........................................................  38
        5.4   Distributions on Account of Other Termination of Service.....................................  41
        5.5   Directions...................................................................................  42
        5.6   Distributions to Alternate Payees............................................................  43
        5.7   Valuation....................................................................................  43
        5.8   Distributions from Salary Reduction Contribution (before-tax) Accounts,
              Employer Basic Matching Contribution Accounts and QNEC Accounts..............................  43

Section 6.    Adjustment of Accounts.......................................................................  44
        6.1   Adjustment of Accounts.......................................................................  45
        6.2   Loan Account.................................................................................  45
        6.3   General......................................................................................  46

Section 7.    Participant Direction of Investments.........................................................  46
        7.1   Participant Directed Investments.............................................................  46
        7.2   General......................................................................................  47

Section 8.    Administration by Committee..................................................................  48
        8.1   Membership of Committee......................................................................  48
        8.2   Committee Officers; Subcommittee.............................................................  48
        8.3   Committee Meetings...........................................................................  48
        8.4   Transaction of Business......................................................................  48
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<S>                                                                                                            <C>
         8.5    Committee Records............................................................................  49
         8.6    Establishment of Rules; Interactive Voice and Other Systems..................................  49
         8.7    Conflicts of Interest........................................................................  49
         8.8    Correction of Errors.........................................................................  49
         8.9    Authority to Interpret Plan..................................................................  50
         8.10   Third Party Advisor..........................................................................  50
         8.11   Compensation of Members......................................................................  51
         8.12   Committee Expenses...........................................................................  51
         8.13   Indemnification of Committee.................................................................  51

 Section 9.     Management of Funds and Amendment of Plan....................................................  51
         9.1    Fiduciary Duties.............................................................................  51
         9.2    Trust Agreement..............................................................................  53
         9.3    Authority to Amend...........................................................................  53
         9.4    Requirements of Writing......................................................................  54

 Section 10.    Allocation of Responsibilities Among Named Fiduciaries.......................................  54
         10.1   Duties of Named Fiduciaries..................................................................  54
         10.2   Co-fiduciary Liability.......................................................................  55

 Section 11.    Benefits Not Assignable; Facility of Payments................................................  55
         11.1   Benefits Not Assignable......................................................................  55
         11.2   Payments to Minors and Others................................................................  56

 Section 12.    Termination of Plan and Trust; Merger or Consolidation of Plan...............................  5
         12.1   Complete Termination.........................................................................  56
         12.2   Partial Termination..........................................................................  57
         12.3   Merger or Consolidation......................................................................  57
         12.4   Protection of Benefits.......................................................................  58

 Section 13.    Communication to Employees...................................................................  58

 Section 14.    Claims Procedure.............................................................................  58
         14.1   Filing of a Claim for Benefits...............................................................  58
         14.2   Notification to Claimant of Decision.........................................................  58
         14.3   Procedure for Review.........................................................................  59
         14.4   Decision on Review...........................................................................  59
         14.5   Action by Authorized Representative of Claimant..............................................  60

 Section 15.    Portability of Participant Accounts..........................................................  60
         15.1   Definitions..................................................................................  60
         15.2   Construction.................................................................................  61

 Section 16.    Rollovers....................................................................................  61
         16.1   Timing.......................................................................................  61
         16.2   Eligibility..................................................................................  62
         16.3   Maximum Amount...............................................................................  62
         16.4   Accounting...................................................................................  62
         16.5   Transfers Prior to Becoming a Participant....................................................  62
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<S>                                                                                                            <C>
 Section 17.     Special Provisions Relating to Transfers From Qualified Plans................................  62
         17.1    Accounting...................................................................................  62
         17.2    Liability of Trustee.........................................................................  63
         17.3    Protected Benefits Under Section 411(d)(6) of the Code.......................................  63
         17.4    Authority of Committee.......................................................................  63
         17.5    Impermissible Transfers......................................................................  63

 Section 18.     Special Top-Heavy Provisions.................................................................  63
         18.1    Definitions..................................................................................  64
         18.2    Top-Heavy Requirements.......................................................................  66

 Section 19.     Limitations on Allocations...................................................................  67
         19.1    Limitations..................................................................................  67
         19.2    Adjustments..................................................................................  67
         19.3    Participation in this Plan and a Defined Benefit Plan........................................  69
         19.4    Definitions..................................................................................  70

 Section 20.     Parties to the Plan; Transfers of Employees..................................................  72
         20.1    Application of Plan and Trust Agreement......................................................  72
         20.2    Service with a Participating Employer........................................................  72
         20.3    Contributions by each Participating Employer.................................................  72
         20.4    Authority of Board...........................................................................  73

 Section 21.      Compliance with the Uniformed Services Employment and
                  Reemployment Rights Act of 1994.............................................................  73
         21.1     Treatment of USERRA Contributions...........................................................  73
         21.2     Rights With Respect to Salary Reduction Contributions.......................................  74
         21.3     Special Service Crediting Rules.............................................................  74
         21.4     Loans.......................................................................................  75
         21.5     Definitions.................................................................................  75
         21.6     Construction................................................................................  75

 Section 22.      Special Provisions Applicable to ESOP.......................................................  75
         22.1     Investment..................................................................................  75
         22.2     Distributions...............................................................................  75
         22.3     Restrictions on Company stock...............................................................  75
         22.4     Proxy Voting................................................................................  76
         22.5     Valuations..................................................................................  76
         22.6     Diversification.............................................................................  76
         22.7     Dividends...................................................................................  77

 Section 23.      Miscellaneous Provisions....................................................................  77
         23.1     Notices.....................................................................................  77
         23.2     Lost Distributees...........................................................................  77
         23.3     Reliance on Data............................................................................  77
         23.4     Bonding.....................................................................................  78
         23.5     Receipt and Release for Payments............................................................  78
         23.6     No Guarantee................................................................................  78
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<S>                                                                                                             <C>
         23.7     Headings....................................................................................  78
         23.8     Continuation of Employment..................................................................  78
         23.9     Construction................................................................................  79
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EXHIBIT A   Testing Compensation

EXHIBIT B   Participating Employers

EXHIBIT C   Plan Loan Rules
            for Participant Loans

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                            BB&T CORPORATION 401(K)
                                 SAVINGS PLAN

                                 INTRODUCTION
                                 ------------

                  Effective as of July 1, 1982, Branch Banking & Trust Company
("BB&T") established a savings and thrift plan (the "prior plan") for the
benefit of its employees and the employees of its participating affiliates. The
prior plan was entitled the "Savings and Thrift Plan for the Employees of Branch
Banking & Trust Company." The prior plan was last restated effective as of
January 1, 1994. On February 28, 1995, BB&T Corporation (the "Company")
(formerly, the Southern National Corporation) and BB&T Financial Corporation,
the former parent corporation of BB&T, were merged. As a result of the corporate
merger, the Company became the parent corporation of BB&T and the sponsor of the
prior plan. Effective as of January 1, 1996, the name of the prior plan was
changed to the "Southern National Corporation 401(k) Savings Plan." As a result
of the change in the Company's corporate name to BB&T Corporation, the name of
the prior plan was ultimately changed to the "BB&T Corporation 401(k) Savings
Plan." This plan amends and restates the prior plan effective as of January 1,
2000.
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                               BB&T CORPORATION
                             401(K) SAVINGS PLAN*

                  Section 1         Definitions:
                  ---------         -----------

                  As used in the plan, including this Section 1, and in the
trust agreement which is a part of the plan, references to one gender shall
include the other and, unless otherwise indicated by the context:

                  1.1   "Account" means the aggregate of the separate accounts
maintained by the Committee with respect to each participant. The separate
accounts so maintained shall include one or more of the following:

                  1.1.1 "Salary reduction contribution (before-tax) account"
         means the subaccount of the participant that is credited with salary
         reduction contributions made by the participant to the plan or the
         predecessor plan (as defined in Section 1.35).

                  1.1.2 "Voluntary contribution (after-tax) account" means the
         subaccount of the participant that is credited with after-tax
         contributions made by the participant to the predecessor plan.

                  1.1.3 "Employer basic matching contribution account" means the
         subaccount of the participant that is credited with basic matching
         contributions made on behalf of the participant to the plan pursuant to
         Section 2.2.1(i).

                  1.1.4 "Employer supplemental matching contribution account"
         means the subaccount of the participant that is credited with
         supplemental matching contributions made on behalf of the participant
         to the plan pursuant to Section 2.2.1(ii) and matching contributions
         made to the predecessor plan prior to January 1, 2000.

                  1.1.5 "Employer profit sharing contribution account" means the
         subaccount of the participant that is credited with supplemental or
         profit sharing contributions made on behalf of the participant to the
         plan or the predecessor plan.

                  1.1.6 "ESOP account" means the subaccount of the participant
         that is credited with ESOP contributions made on behalf of the
         participant to the predecessor plan. If a participant was a participant
         in more than one ESOP previously established under the predecessor
         plan, a separate ESOP account shall be maintained for the participant
         under each such ESOP.

_____________________
*Note: Except as otherwise provided in Section 1.16, this plan amends and
supersedes as of January 1, 2000, the BB&T Corporation 401(k) Savings Plan,
which was first adopted July 1, 1982 and last amended and restated effective as
of January 1, 1994. Reference is made to the BB&T Corporation 401(k) Savings
Plan Trust Agreement, of even date herewith, which is a part of the plan.
<PAGE>

                  1.1.7   "Prior plan account" means the subaccount of the
         participant that is credited with contributions made on behalf of the
         participant to the Thrift Plan for the Employees of Branch Banking &
         Trust Company and the Profit Sharing Plan for the Employees of Branch
         Banking & Trust Company prior to their merger into the predecessor plan
         on January 1, 1986.

                  1.1.8   "PAYSOP account" means the subaccount of the
         participant that is credited with employer contributions made on behalf
         of the participant to the Southern National Employee Stock Ownership
         Plan prior to its merger into the predecessor plan on May 13, 1996 or
         to the United Carolina Bancshares Corporation Dollar Plus Savings Plan
         prior to its merger into the predecessor plan on December 12, 1997.

                  1.1.9   "QNEC account" means the subaccount of the participant
         that is credited with qualified nonelective contributions made on
         behalf of the participant to the plan or the predecessor plan.

                  1.1.10  "Loan account" means the subaccount of the participant
         that is credited with payments of principal and interest as provided in
         Section 6.2.

                  1.1.11  "Rollover account" means the subaccount of the
         participant that is credited with rollover contributions made by the
         participant to the plan or the predecessor plan.

                  1.2     "Accrued Benefit" means with respect to each
participant the balance in his account as of the applicable adjustment date
following adjustment thereof as provided in Section 6.

                  1.3     "Actual deferral percentage" or "ADP" with respect to
a participant for a plan year means the ratio (expressed as a percentage and
calculated to the nearest one-hundredth of a percentage point) of: (i) the
salary reduction contributions, if any, made to the trust under the plan by a
Participating Employer on behalf of the participant for the plan year other than
salary reduction contributions distributed to the participant pursuant to the
provisions of Section 19.2(i) (relating to the return of contributions in excess
of the limitations of Section 415 of the Code); to (ii) his testing compensation
(as defined in Section 1.42) for that portion of the plan year during which he
was a participant. Pursuant to regulations issued by the Secretary of the
Treasury, the Committee may elect to take into account matching contributions
made on behalf of any participant to any qualified plan maintained by the
Participating Employer or an affiliated employer for purposes of determining the
ADP

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of such participant. In no event will matching contributions which are taken
into account for purposes of determining the ADP of a participant, be taken into
account in determining the contribution percentage of such participant.
Notwithstanding the foregoing, the ADP of a nonhighly compensated participant
shall be determined without regard to any excess elective deferrals made under
the plan or any other plan maintained by an affiliated employer with respect to
him. The ADP for a specified group of participants for a plan year shall be the
average (expressed as a percentage and calculated to the nearest one-hundredth
of a percentage point) of the ADPs calculated separately for each participant in
such group. The ADP of a participant who is eligible to make a salary reduction
contribution under the plan but does not do so, or who is not eligible to make a
salary reduction contribution because allocations to his account would exceed
the dollar limitation or the statutory compensation limitation in Section 19.1,
shall be zero. The determination and treatment of the ADP of any participant
shall satisfy such other requirements as may be prescribed by the Secretary of
the Treasury.

                  1.4  "Adjustment date" means each day on which the New York
Stock Exchange is open for business. The last adjustment date in each plan year
is sometimes referred to herein as the "year-end adjustment date."

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

                  1.6  "Board" means the Board of Directors of the Company.

                                       3
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                  1.7     A "break in service" means a computation period in
which an employee does not complete more than 500 hours of service and shall
occur at the beginning of such computation period.

                  1.8     "Code" means the Internal Revenue Code of 1986, as
amended, and rules and Treasury Regulations issued thereunder.

                  1.9     "Committee" means the administrative Committee
provided for in Section 8.

                  1.10    "Company" means BB&T Corporation, a North Carolina
corporation with its principal office at Winston-Salem, North Carolina.

                  1.11    "Company stock" means shares of common stock issued by
the Company which are readily tradable on an established securities market. As
of the effective date, the Company stock is listed on the New York Stock
Exchange under the Symbol "BBT."

                  1.12    "Compensation" means wages within the meaning of
Section 3401(a) of the Code and all other payments of compensation to an
employee by the Participating Employer (in the course of the Participating
Employer's trade or business) for which the Participating Employer is required
to furnish the employee a written statement under Sections 6041(d), 6051(a)(3)
and 6052 of the Code, but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed, plus any amounts contributed by the Participating
Employer pursuant to a salary reduction agreement which are not includible in
the gross income of the employee under Section 125, 402(e)(3), 402(h) or 403(b)
of the Code, if any, and less reimbursements or other expense allowances, fringe
benefits, moving expenses, deferred compensation, and welfare benefits. For plan
years beginning on or after January 1, 1989, but prior to January 1, 1994, the
annual compensation of each employee taken into account shall not exceed
$200,000. This limitation shall be adjusted by the Secretary of the Treasury at
the same time and in the same manner as under Section 415(d) of the Code, except
that the dollar increase in effect on January

                                       4
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of any calendar year is effective for plan years beginning in such calendar year
and the first adjustment to the $200,000 limitation is effective on January 1,
1990. For plan years beginning on or after January 1, 1994, the annual
compensation of each employee taken into account under the plan shall not exceed
$150,000, as adjusted by the Commissioner for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment
in effect for a calendar year applies to any period, not exceeding 12 months,
over which compensation is determined (the "determination period") beginning in
such calendar year. The $200,000 limitation and the $150,000 limitation,
whichever shall be applicable, shall be hereinafter referred to as the "annual
compensation limitation." If a determination period consists of fewer than 12
months, the annual compensation limitation will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.

                  1.13     "Computation period" means a 12 consecutive month
period, as follows:

                  1.13.1   For purposes of plan participation, the computation
         period initially shall be the 12 consecutive month period beginning on
         the date an employee first completes an hour of service. Thereafter,
         the computation period shall be the plan year, beginning with the plan
         year containing the first anniversary of the date the employee first
         completed an hour of service.

                  1.13.2   For all other purposes under the plan, the
         computation period shall be the plan year.

                  1.14     "Contribution percentage" with respect to a
participant for a plan year means the ratio (expressed as a percentage and
calculated to the nearest one-hundredth of a percentage point) of: (i) the
matching contributions made to the trust under the plan on the participant's
behalf for the plan year; to (ii) his testing compensation (as defined in
Section 1.42) for that portion of the plan year during which he was a
participant. The contribution percentage for a specified group of participants
for a plan year shall be the average (expressed as a percentage and calculated
to the nearest one-hundredth of a percentage point) of the contribution
percentages calculated separately for each participant in such

                                       5
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group. Pursuant to regulations issued by the Secretary of the Treasury, the
Committee may elect to take into account elective deferrals made on behalf of
any participant to any qualified plan maintained by the Participating Employer
or an affiliated employer for purposes of determining the contribution
percentage of such participant. Notwithstanding the foregoing, salary reduction
contributions distributed to a participant pursuant to the provisions of Section
19.2(i) (relating to the return of contributions in excess of the limitations of
Section 415 of the Code) and matching contributions forfeited by a participant
pursuant to the provisions of Section 2.2.4 (relating to the forfeiture of
matching contributions attributable to excess contributions, excess elective
deferrals and excess aggregate contributions) may not be taken into account for
purposes of determining the contribution percentage of such participant. The
determination and treatment of the contribution percentage of any participant
shall satisfy such other requirements as may be prescribed by the Secretary of
the Treasury.

               1.15   "Disability" means a condition for which a participant is
entitled to disability benefits under the BB&T Corporation Disability Plan.

               1.16   "Effective date" of the plan means January 1, 2000.
However, in order to comply with the Retirement Protection Act of 1994, the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, and the
Internal Revenue Service Restructuring and Reform Act of 1998, which are first
effective as of an earlier date, the following Sections of the plan are
effective as indicated below:

                    Section                    Effective Date
                    -------                    --------------

                    Section 1.3                January 1, 1997
                    Section 1.12               January 1, 1997
                    Section 1.14               January 1, 1997
                    Section 1.25               January 1, 1997
                    Section 1.27               January 1, 1997
                    Section 1.39               January 1, 1998
                    Section 1.41               January 1, 1998
                    Section 2.1.4              January 1, 1997
                    Section 2.2.3              January 1, 1997

                                       6
<PAGE>

                         Section 5.1.2(h)           January 1, 1997
                         Section 5.3.1              January 1, 1997
                         Section 5.3.3(f)           January 1, 1997
                         Section 15.1.1             January 1, 1999
                         Section 19.1               January 1, 1995
                         Section 21                 October 13, 1996

                  1.17   "Elective deferral" or "elective deferrals" means, with
respect to any taxable year of a participant, the sum of:

                  (a)    Any employer contribution under a qualified cash or
         deferred arrangement (as defined in Section 401(k) of the Code) to the
         extent not includible in the participant's gross income for the taxable
         year under Section 402(e)(3) of the Code, including a salary reduction
         contribution made on behalf of the participant under Section 2.1 of the
         plan;

                  (b)    Any employer contribution under a simplified employee
         pension plan (as defined in Section 408(k) of the Code) to the extent
         not includible in the participant's gross income for the taxable year
         under Section 402(h)(1)(B) of the Code;

                  (c)    Any employer contribution made on behalf of the
         participant to purchase an annuity contract under Section 403(b) of the
         Code pursuant to a salary reduction agreement (within the meaning of
         Section 3121(a)(5)(D) of the Code); and

                  (d)    Any elective employer contribution made on behalf of a
         participant under Section 408(p)(2)(A)(i) of the Code.

Notwithstanding any provisions of the plan to the contrary, the elective
deferrals of any participant for any taxable year of the participant made under
this plan, and any other qualified plan maintained by the Company or an
affiliated employer, shall not in the aggregate exceed $10,500 (or such greater
amount as may be permitted under Section 402(g)(4), (5) or (8) of the Code). See
Section 2.1.1 of the plan permitting distribution of excess elective deferrals.

                  1.18   "Eligible employee" means each employee of a
Participating Employer except the following:

                  (a)    An employee included in a unit of employees covered by
         a bona fide collective bargaining agreement with a Participating
         Employer that does not specifically provide for coverage of the
         employee under the plan; provided, that retirement benefits were the
         subject of good faith bargaining between the Participating Employer and
         employee representatives.

                                       7
<PAGE>

                  (b)    An employee who is a nonresident alien and receives no
         earned income (within the meaning of Section 911(d)(2) of the Code)
         from the Participating Employer constituting income from sources within
         the United States (within the meaning of Section 861(a)(3) of the
         Code).

                  (c)    An individual who is deemed to be an employee solely
         because he is a leased employee.

                  (d)    An individual who is an employee of an affiliated
         employer that has not adopted the plan and is on a temporary assignment
         to a Participating Employer.

See Section 1.31 for provisions governing participation in the plan by an
eligible employee.

                  1.19   "Employee" means, except as otherwise provided herein,
an individual in the service of a Participating Employer if the relationship
between him and the employer is the legal relationship of employer and employee.
In determining who is an employee for purposes of the plan, the following
provisions shall apply:

                  1.19.1 All leased employees shall be treated as employees.

                  1.19.2 An individual who is identified on the books and
         records of a Participating Employer as other than a common law employee
         shall not be treated as an employee for purposes of the plan regardless
         of a later agency or judicial determination to the effect that such
         individual is a common law employee of a Participating Employer.

See Sections 1.18 and 1.31 for provisions governing eligibility of an employee
to become a participant in the plan.

                  1.20   "Entry date" means the first day of each calendar
month.

                  1.21   "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended (including amendments of the Code affected thereby), and
rules and regulations issued thereunder.

                  1.22   "Excess aggregate contributions" means, with respect to
any plan year, the excess of:

                                       8
<PAGE>

                  (a)      The aggregate amount of matching contributions (and
         any elective deferrals taken into account in computing the contribution
         percentage) actually made to the trust on behalf of highly compensated
         participants for such plan year; over

                  (b)      The maximum amount of such contributions permitted
         under the limitations described in Section 2.2.2.

                  1.23     "Excess contributions" means, with respect to any
plan year, the excess of:

                  (a)      The aggregate amount of salary reduction
         contributions (and any matching contributions taken into account in
         computing the ADP) actually made to the trust on behalf of highly
         compensated participants for such plan year; over

                  (b)      The maximum amount of such contributions permitted
         under the limitations of Section 2.1.4.

                  1.24     "Excess elective deferral" for any taxable year of a
participant means the amount of the elective deferral on behalf of a participant
for any taxable year of such participant in excess of $10,500 (or such greater
amount as may be permitted pursuant to the provisions of Sections 402(g)(4), (5)
and (8) of the Code). Excess elective deferral also shall refer to the specific
amount of elective deferrals for the taxable year of the participant which the
participant allocates to this plan pursuant to the provisions of Section 2.1.1.

                  1.25     "Highly compensated participant" means any
participant who is a highly compensated employee. "Highly compensated employee"
means any employee who:

                  (a)      during the plan year or preceding plan year was at
         any time a 5 percent owner (as defined in Section 416(i)(1)(B) of the
         Code); or

                  (b)      during the preceding plan year received statutory
         compensation (as defined in Section 1.41) from the Company and
         affiliated employers in excess of $80,000 (as adjusted pursuant to
         Section 414(q)(1) of the Code) and was in the top-paid group of
         employees for such preceding plan year.

For purposes of this Section 1.25, the following provisions shall apply:

                  1.25.1   An employee who performs service for the Company or
         any affiliated employer at any time during a plan year shall be in the
         top-paid group of employees for such year if such employee is in the
         top 20 percent of the employees of the Company and its affiliated
         employers ranked on the basis of statutory compensation paid during
         such year.

                                       9
<PAGE>

                  1.25.2   A former employee shall be treated as a highly
         compensated employee if he was a highly compensated employee when he
         separated from service, or was a highly compensated employee at any
         time after attaining age 55.

The determination of who is a highly compensated employee, including the
determination of the number and identity of employees in the top-paid group,
shall be made in accordance with Section 414(q) of the Code.

                  1.26     "Hour of service" means the following:

                  1.26.1   Each hour for which an employee is paid, or entitled
         to payment, by the Company or an affiliated employer for the
         performance of duties. Each such hour shall be credited to the
         computation period in which the duties are performed.

                  1.26.2   Each hour for which an employee is paid, or entitled
         to payment, by the Company or an affiliated employer for a period of
         time during which no duties are performed, irrespective of whether the
         employment relationship has terminated, by reason of vacation, holiday,
         illness, incapacity (including disability), lay-off, jury duty,
         military duty or leave of absence. Each such hour shall be credited to
         the computation period in which no duties are performed. In applying
         this Section 1.26.2, the following provisions shall apply:

                           (i)    The number of hours to be credited to any
                  single continuous period (whether or not such period occurs in
                  a single computation period) for which hours are credited
                  shall be the lesser of: (a) 501 hours, or (b) the number of
                  hours for which the employee is paid with respect to such
                  single continuous period;

                           (ii)   No hours shall be credited with respect to
                  payments made to the employee for the purpose of complying
                  with applicable workers' compensation, unemployment
                  compensation or disability insurance laws, or payments made
                  solely to reimburse an employee for medical or medically
                  related expenses incurred by the employee; and

                           (iii)  An amount paid to an employee by the Company
                  or an affiliated employer indirectly, such as by a trust, fund
                  or insurer to which the Company or affiliated employer makes
                  contributions or pays premiums, shall be deemed to be paid by
                  the Company or affiliated employer.

                  1.26.3 Each hour (to the extent not included in Section 1.26.1
         or 1.26.2) for which back pay, irrespective of mitigation of damages,
         has been either awarded or agreed to by the Company or an affiliated
         employer. Each such hour shall be credited to the computation period or
         periods to which the award or agreement pertains rather than to the
         computation period in which the award, agreement or payment is made.

                                       10
<PAGE>

          1.26.4 Each hour for which an employee is not actually in service
     but is required to be given credit for service under any law of the
     United States, including, but not limited to, the Family and Medical
     Leave Act of 1993. Each such hour shall be credited to the computation
     period or periods for which the employee is required to be given
     credit for service.

          1.26.5 Solely for the purpose of determining whether an employee
     has incurred a break in service, each hour with respect to a period
     during which he is absent from work for maternity or paternity reasons
     which otherwise would be credited to such employee but for such
     absence, or if such hours cannot be determined, 8 hours of service per
     day of such absence. For purposes of this Section 1.26.5, an absence
     from work for maternity or paternity reasons means an absence (a) by
     reason of the pregnancy of the employee; (b) by reason of the birth of
     a child of the employee; (c) by reason of the placement of a child
     with the employee in connection with the adoption of such child by
     such employee; or (d) for purposes of caring for such child for a
     period beginning immediately following such birth or placement. The
     hours of service credited under this Section 1.26.5 shall be credited
     with respect to the computation period in which the absence begins, if
     necessary to prevent a break in service in such computation period. In
     all other cases, such hours of service shall be credited to the
     subsequent computation period. No more than 501 hours of service shall
     be required to be credited for maternity or paternity reasons. No
     credit shall be given under this Section 1.26.5, unless the employee
     furnishes to the Committee such timely information as the Committee
     reasonably may require to establish that the absence is for a reason
     described in this Section 1.26.5 and the number of days for which
     there was such an absence.

          1.26.6 Solely for the purpose of determining whether an employee
     has incurred a break in service, an employee who is absent from work
     due to a leave of absence approved by the Participating Employer for
     which he is not paid (other than a leave of absence for maternity or
     paternity reasons) shall be credited with each hour of service such
     employee would otherwise be credited with but for such leave of
     absence. The hours of service credited pursuant to this Section 1.26.6
     shall be credited with respect to the computation period in which the
     absence begins, if necessary to prevent a break in service in such
     computation period. In all other cases, such hours of service shall be
     credited to the subsequent computation period. No more than 501 hours
     of service shall be required to be credited due to such leave of
     absence. The hours of service granted pursuant to the provisions of
     this Section 1.26.6 shall be disregarded if the participant does not
     return to service upon the expiration of such leave of absence;
     provided that this sentence shall not apply if the employee dies or
     becomes disabled during such leave of absence.

An employee for whom the Company or an affiliated employer maintains records of
hours for which payment for the performance of duties is made shall be credited
with hours of service on the basis of such records. Any other employee shall be
credited with 45 hours of service for each week if under this

                                       11
<PAGE>

Section 1.26 he would be credited with at least one hour of service for such
week. The provisions of this Section 1.26 shall be applied in accordance with
the provisions of Department of Labor Regulations Sections 2530.200b-2(b) and
(c), which are incorporated herein by reference.

          1.27 "Leased employee" means any individual, other than an employee of
the Company or an affiliated employer (the "recipient employer"), who, pursuant
to an agreement between the recipient employer and any other person (the
"leasing organization") has performed services for the recipient employer, or
the recipient employer and related persons determined in accordance with Section
414(n) of the Code, on a substantially full-time basis for a period of at least
one year, and such services are performed under the primary direction or control
of the recipient employer. Contributions or benefits provided a leased employee
by the leasing organization that 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 employer
if: (a) such individual is covered by a money purchase pension plan providing
(i) a nonintegrated employer contribution rate of at least 10 percent of
statutory compensation, (ii) immediate participation, and (iii) full and
immediate vesting; and (b) leased employees do not constitute more than 20
percent of the recipient employer's nonhighly compensated work force as defined
in Section 414(n)(5)(C)(ii) of the Code.

          1.28 "Matching contributions" means the amounts contributed to the
plan by a Participating Employer pursuant to the provisions of Section 2.2. The
amounts contributed to the plan by a Participating Employer pursuant to Section
2.2.1(i) are sometimes referred to herein as "basic matching contributions." The
amounts contributed to the plan by a Participating Employer pursuant to Section
2.2.1(ii) are sometimes referred to herein as "supplemental matching
contributions."

          1.29 "Nonhighly compensated participant" means a participant who is
not a highly compensated participant.

                                       12
<PAGE>

          1.30 "Normal retirement age" of a participant means age 65. The
"normal retirement date" of a participant means the date the participant attains
his normal retirement age.

          1.31 "Participant" means with respect to any plan year an eligible
employee who has entered the plan and any former employee who has an accrued
benefit under the plan. An eligible employee or former employee on the effective
date who was a participant in the predecessor plan immediately preceding the
effective date, or who was eligible to enter the predecessor plan as a
participant on the effective date, shall be a participant in this plan as of the
effective date. For purposes of Section 2.1.1 (making salary reduction
contributions), an eligible employee who has not otherwise entered the plan
shall become a participant as of the entry date next following the completion of
90 days of service. For purposes of Section 2.2.1 (receiving matching
contributions), an eligible employee shall become a participant as of the entry
date next following the later of (i) the close of the first computation period
in which he completes 1,000 or more hours of service; or (ii) attainment of age
21. For the purpose of applying the foregoing provisions of this Section 1.31,
the following provisions shall apply: (i) an eligible employee who is not in
service on the date he is eligible to enter the plan shall not enter the plan
until he reenters service as an eligible employee, whereupon he immediately
shall enter the plan; and (ii) a participant who terminates service and later
reenters service shall reenter the plan as of the date he reenters service as an
eligible employee.

          1.32 "Participating Employer" means the Company and each employer that
has adopted the plan and is listed on Exhibit B attached hereto. See Section 20
for special provisions concerning Participating Employers.

          1.33 "Plan" means the BB&T Corporation 401(k) Savings Plan as herein
set out or as duly amended. That portion of the plan consisting of the ESOP
accounts shall constitute a stock bonus plan and an employee stock ownership
plan within the meaning of Section 4975(e)(7) of the Code

                                       13
<PAGE>

(the "ESOP"). See Section 22 for special rules that apply to the ESOP. The
remainder of the plan shall constitute a profit sharing plan.

          1.34  "Plan year" means the 12-month period ending on December 31 of
each year.

          1.35  "Predecessor plan" means the BB&T Corporation 401(k) Savings
Plan in effect prior to January 1, 2000, and any other plan which was merged
into such plan or whose assets and liabilities were transferred to such plan
prior to such date. The term "predecessor plan" shall also include any plan
which is merged into this plan or whose assets and liabilities are transferred
to this plan after the effective date.

          1.36  "Qualified nonelective contributions" means a contribution made
by the Company pursuant to Section 2.1.4(iv) of the plan.

          1.37  "Retire" or "retirement" means the participant's termination of
service on or after his normal retirement date.

          1.38  "Salary reduction contributions" means the contributions
described in Section 2.1 which are made to the plan by a Participating Employer
on behalf of a participant who has elected to defer a specified percentage of
his compensation.

          1.39  "Service" means employment by a Participating Employer or an
affiliated employer as an employee. An employee's service shall also include his
service with an employer that is acquired by a Participating Employer or one of
its affiliated employers, whether by merger, acquisition of assets or stock, or
otherwise; provided that, the employee becomes an employee of a Participating
Employer or one of its affiliated employers as a result of such acquisition.

          1.40  "Spouse" or "surviving spouse" means the legally married spouse
or surviving spouse of a participant; provided, that a former spouse shall be
treated as the spouse or surviving spouse to the extent provided under a
qualified domestic relations order described in Section 414(p) of the Code.

                                       14
<PAGE>

          1.41 "Statutory compensation" means wages within the meaning of
Section 3401(a) of the Code and all other payments of compensation to an
employee by a Participating Employer (in the course of the Participating
Employer's trade or business) for which the Participating Employer is required
to furnish the employee a written statement under Sections 6041(d), 6051(a)(3)
and 6052 of the Code, other than amounts paid or reimbursed by the Company for
moving expenses incurred by the employee to the extent that at the time of the
payment it is reasonable to believe that these amounts are deductible by the
employee under Section 217 of the Code. Compensation must be determined for this
purpose without regard to any rules under Section 3401(a) of the Code that limit
the remuneration included in wages based on the nature or location of the
employment or the services performed. The statutory compensation of an employee
shall include any elective deferral (as defined in Section 402(g)(3) of the
Code) and any other amount which is contributed or deferred by the Participating
Employer at the election of the employee and which is not includible in the
gross income of the employee by reason of Sections 125 or 457 of the Code. For
purposes of Section 18, the statutory compensation of a participant shall be
limited to the annual compensation limitation set forth in Section 1.12.

          1.42 "Testing compensation" means any of the definitions of
compensation which are set forth on Exhibit A attached hereto, as designated by
the Committee. Notwithstanding the foregoing, a participant's testing
compensation shall be subject to the annual compensation limitation set forth in
Section 1.12. The definition of compensation designated by the Committee for a
particular plan year shall be used for purposes of determining the testing
compensation of all participants for such year.

          1.43 "Trust" or "trust fund" means the trust fund held by the Trustee
under the plan.

                                       15
<PAGE>

          1.44   "Trustee" means the entity appointed by the Company to
administer the trust.

          1.45   "Trust agreement" means the trust agreement between the Company
and the Trustee which shall be a part of the plan.

          1.46   "Year of service" means the following:

          1.46.1 With respect to service prior to the effective date, years
     of continuous service as determined pursuant to the terms of the
     predecessor plan.

          1.46.2 With respect to service on or after the effective date,
     1,000 or more hours of service during a computation period; provided,
     that no year of service following 5 consecutive breaks in service
     shall be taken into account in determining the vested percentage of an
     employee's accrued benefit that accrued before such breaks in service.

          1.46.3 Years of service shall include any period during which an
     employee would have been a leased employee but for the requirement
     that a leased employee perform service for the Company, or the Company
     and related persons determined in accordance with Section 414(n)(6) of
     the Code, on a substantially full-time basis for a period of at least
     one year.

          Section 2.  Contributions to the Trust and Allocation Thereof:
          ---------   -------------------------------------------------

          2.1    Salary Reduction Contributions:

                                       16
<PAGE>

          2.1.1 Amount of salary reduction contributions; Excess elective
     deferrals: Each eligible employee who becomes a participant and is in
     service may elect in the manner provided by the Committee to reduce
     his compensation by a whole number percentage not less than 1 percent
     and not more than 16 percent. The amount of the participant's salary
     reduction shall be contributed by the Participating Employer to the
     trust for each plan year as a salary reduction contribution in
     accordance with the provisions of Section 2.1.2. In no event shall the
     salary reduction contribution made to this plan with respect to a
     participant for any taxable year of the participant exceed $10,500 (or
     such greater amount as may be permitted pursuant to the provisions of
     Sections 402(g)(4), (5) and (8) of the Code) (the "maximum dollar
     limit"). In the event of an excess elective deferral (determined by
     taking into account only the plan and any other plans maintained by an
     affiliated employer), the Participating Employer shall notify the
     Committee in writing on behalf of the participant of such excess
     elective deferral and the amount thereof shall be adjusted for income
     and losses allocable thereto and distributed to the participant (a
     "corrective distribution") no later than the April 15 following the
     end of the taxable year during which such excess elective deferral was
     made. The income or loss allocable to an excess elective deferral
     under the plan for the participant's taxable year of the excess
     elective deferral shall be determined by multiplying the income or
     loss allocable to the participant's salary reduction contribution
     (before-tax) account for such taxable year by a fraction the numerator
     of which is the excess elective deferral made to the plan for such
     taxable year and the denominator of which is equal to the sum of: (i)
     the balance in the participant's salary reduction contribution (before-
     tax) account as of the beginning of such taxable year; and (ii) the
     participant's salary reduction contributions for such taxable year.
     Income or loss allocable to an excess elective deferral for the
     taxable year shall not include income or loss for the period between
     the end of the taxable year and the date of the corrective
     distribution. The excess elective deferral which otherwise would be
     distributed to the participant shall be reduced in accordance with
     Treasury regulations by the amount of any excess contributions
     distributed previously to the participant. If the participant is also
     a participant in another plan or arrangement under which elective
     deferrals were made and the elective deferrals made under such other
     plan or arrangement and this plan in the aggregate exceed the maximum
     dollar limit for such participant's taxable year, then not later than
     March 1 following the close of the taxable year during which the
     excess elective deferral was made, the participant may notify the
     Committee in writing that all or part of the salary reduction
     contribution made on his behalf under the plan represents an excess
     elective deferral for his preceding taxable year and request that his
     salary reduction contribution under the plan be reduced by a specified
     amount. The specified amount shall be adjusted for income and loss
     allocable thereto in the same manner as heretofore provided in this
     Section 2.1.1. In no event may the participant receive from the plan
     as a corrective distribution with respect to a plan year an amount in
     excess of such participant's salary reduction contributions under the
     plan for the plan year, as adjusted for income and losses allocable
     thereto. Distributions of excess elective deferrals to participants
     may be made notwithstanding any other provision of the plan or Code.
     The amount of any excess elective deferral distributed to the
     participant pursuant to this Section 2.1.1 shall not be treated as an
     annual addition for purposes of Section 19.

                                       17
<PAGE>

          2.1.2    Time for making salary reduction contributions: A
     participant's salary reduction contributions shall be accumulated
     through payroll deductions and paid by the Participating Employer to
     the Trustee as of the earliest date on which such contributions can
     reasonably be segregated from the general assets of the Participating
     Employer, but in no event later than the 15th business day of the
     month following the month in which such amounts would otherwise have
     been payable to the participant in cash.

          2.1.3    Administrative rules governing salary reduction
     contributions:

          (i)      An election pursuant to Section 2.1.1 (a "deferral
     election") shall be made by the participant in accordance with such
     rules and procedures as are adopted by the Committee from time to
     time. The participant's deferral election shall become effective as of
     the beginning of the first full payroll period commencing on or after
     the date of receipt by the Committee of such deferral election, unless
     otherwise provided by the Committee. Unless modified or revoked by the
     participant, the deferral election shall continue in effect until such
     time as he terminates service. A new deferral election with respect to
     a participant who terminates service and later reenters service and
     becomes a participant shall become effective at the beginning of the
     first full payroll period commencing on or after the date such
     participant reenters the plan.

          (ii)     Subject to the provisions of Section 2.1.3(v), a
     participant unilaterally may modify his deferral election as of any
     date to increase or decrease the portion of his compensation subject
     to salary reduction within the percentage limits set forth in Section
     2.1.1. Any such modification shall be made in the manner provided by
     the Committee and shall become effective at the beginning of the first
     full payroll period commencing on or after the date of receipt of the
     modified election by the Committee unless otherwise provided by the
     Committee.

          (iii)    Subject to the provisions of Section 2.1.3(v), a
     participant unilaterally may revoke his deferral election at any time
     by providing notice to the Committee in the manner provided by the
     Committee. The revocation shall become effective at the beginning of
     the first full payroll period commencing on or after the date such
     notification is received by the Committee. A participant may resume
     salary reduction contributions at any time by making a new deferral
     election in accordance with the provisions of Section 2.1.3(i).

          (iv)     The Committee may amend or revoke a deferral election
     with a participant at any time if the Committee determines that such
     amendment or revocation is necessary to ensure that the annual
     additions (as defined in Section 19) to the accounts of a participant
     do not exceed the annual addition limitations (described in Section
     19) for such participant or that the requirements of Section 2.1.4 are
     met for such plan year.

          (v)      Notwithstanding the provisions of this Section 2.1.3 to
     the contrary, a participant who is also a participant in the BB&T
     Corporation Non-Qualified Defined Contribution Plan or the BB&T
     Corporation Supplemental Defined Contribution Plan for Highly
     Compensated Employees may only amend or revoke a deferral election
     effective as of the first day of each plan year.

                                       18
<PAGE>

          (vi)    The Company shall establish a payroll deduction system to
     assist it in making salary reduction contributions. The Committee from
     time to time may adopt policies or rules governing the manner in which
     such contributions may be made so that the plan may be administered
     conveniently.

          2.1.4   Limitations on salary reduction contributions:

          (i)     Subject to the provisions of Section 2.1.4(vi), all
     deferral elections made by highly compensated participants with
     respect to any plan year shall be valid only if one of the tests set
     forth in Section 2.1.4(ii) is satisfied for such plan year.

          (ii)    For each plan year, the ADP for the group of highly
     compensated participants for such plan year shall bear to the ADP for
     the group of nonhighly compensated participants for such plan year a
     relationship that satisfies either of the following tests:

                  (a)    The ADP for the group of highly compensated
          participants is not more than the ADP for the group of
          nonhighly compensated participants multiplied by 1.25; or

                  (b)    The ADP for the group of highly compensated
          participants is not more than the ADP for the group of
          nonhighly compensated participants multiplied by 2, and the
          excess of the ADP for the group of highly compensated
          participants over the ADP for the group of nonhighly
          compensated participants is not more than 2 percentage
          points (or such lesser amount as the Secretary of the
          Treasury shall prescribe by regulation to prevent the
          multiple use of this alternative limitation with respect to
          any highly compensated participant).

     For purposes of applying the provisions of this paragraph (ii), the
     following provisions shall apply:

                  (1)    A participant is a highly compensated
          participant for a particular plan year if he meets the
          definition of a highly compensated participant in effect for
          that plan year. A participant is a nonhighly compensated
          participant for a particular plan year if he does not meet
          the definition of a highly compensated participant in effect
          for that plan year.

                  (2)    Pursuant to regulations issued by the
          Secretary of the Treasury, the Committee may elect to
          include all or part of the matching contributions under the
          plan or any other qualified plan that it sponsors for
          purposes of calculating the ADP with respect to each
          participant. Notwithstanding the foregoing, matching
          contributions shall be treated as salary reduction
          contributions for purposes of calculating the ADP of
                                       19
<PAGE>

          each participant only if the conditions described in Section
          1.401(k)-1(b)(5) of the Treasury Regulations are satisfied.
          Matching contributions which are treated as salary reduction
          contributions pursuant to the provisions of this
          subparagraph (1) shall not be distributable other than upon
          one of the events described in Section 5.8(a) through (f).

                 (3)  If 2 or more plans of the Participating Employer
          or an affiliated employer that include cash or deferred
          arrangements described in Section 401(k) of the Code are
          aggregated for purposes of Section 410(b) of the Code (other
          than for purposes of the average benefit percentage test),
          the cash or deferred arrangements included in such plans
          shall be treated as one arrangement. Notwithstanding the
          foregoing, plans may be aggregated in order to satisfy the
          tests set forth in Section 2.1.4(ii) only if they have the
          same plan year and use the same ADP testing method.

                 (4)  If a highly compensated participant is a
          participant under 2 or more cash or deferred arrangements
          (described in Section 401(k) of the Code) of the
          Participating Employer or an affiliated employer, all such
          cash or deferred arrangements shall be treated as one cash
          or deferred arrangement for the purpose of determining the
          ADP with respect to such highly compensated participant.
          Notwithstanding the foregoing, the provisions of this
          subparagraph (4) shall not apply if the plans of which such
          cash or deferred arrangements are a part may not be
          aggregated for purposes of Section 410(b) of the Code (other
          than the average benefit percentage test).

                 (5)  The group of highly compensated participants and
          the group of nonhighly compensated participants shall
          include any participant defined as such, regardless of
          whether he elects to make a salary reduction contribution
          under the plan.

                 (6)  The Company shall maintain records sufficient to
          demonstrate satisfaction of the ADP test.

                 (7)  Notwithstanding anything to the contrary in the
          plan, the determination and treatment of salary reduction
          contributions and the ADP of any participant shall satisfy
          Section 1.401(k)-1(b) of the Treasury Regulations and such
          other requirements as may be prescribed by the Secretary of
          the Treasury.

          (iii)  If at the end of any plan year neither of the tests set
     forth in Section 2.1.4(ii) is satisfied, then within 2 1/2 calendar
     months following the end of each plan year, but in no event later than
     the year-end adjustment date following the close of such 2 1/2 month
     period (the "distribution date"), the salary reduction contribution
     for such plan year of each highly compensated participant shall be
     reduced by his share of the

                                       20
<PAGE>

     excess contribution for such plan year. Reductions shall be made
     pursuant to the steps in the following order:

               (1)  Step one: The actual deferral percentage of the
          highly compensated participant with the highest actual
          deferral percentage shall be reduced by the amount required
          to cause the highly compensated participant's actual
          deferral percentage to equal the actual deferral percentage
          of the highly compensated participant with the next highest
          actual deferral percentage. This process shall be repeated
          until the plan satisfies one of the tests set forth in
          Section 2.1.4(ii). The dollar amount of each reduction made
          pursuant to this step one shall be determined for each
          highly compensated participant. Such amount shall not be
          distributed to the affected highly compensated participant,
          but instead shall be used in steps two and three below.

               (2)  Step two: The dollar amount of the reduction
          determined for each highly compensated participant in
          accordance with step one above shall be aggregated. Such
          amount shall be allocated in accordance with step three
          below.

               (3)  Step three: The salary reduction contributions of
          the highly compensated participant with the highest dollar
          amount of salary reduction contributions shall be reduced by
          the amount required to cause that highly compensated
          participant's salary reduction contributions to equal the
          dollar amount of the salary reduction contributions of the
          highly compensated participant with the next highest dollar
          amount of salary reduction contributions. This process shall
          be repeated until the total amount of salary reduction
          contributions so reduced equals the aggregate dollar amount
          determined in step two above.

     All salary reduction contributions so reduced, adjusted for income and
     losses allocable thereto, shall be designated by the Company as excess
     contributions and distributed to the participant no later than the
     distribution date. The income or loss allocable to the participant's
     share of the excess contribution for the plan year of such excess
     contribution shall be determined by multiplying the amount of the
     income or loss allocable to the participant's salary reduction
     contributions (and any matching contributions treated as salary
     reduction contributions) for such plan year by a fraction the
     numerator of which is the excess contribution on behalf of the
     participant for such plan year, and the denominator of which is equal
     to the sum of: (i) the balance in his account attributable to salary
     reduction contributions (and any matching contributions treated as
     salary reduction contributions) as of the beginning of such plan year;
     and (ii) the participant's salary reduction contributions for such
     plan year (and any matching contributions treated as salary reduction
     contributions). Income or loss allocable to the participant's share of
     the excess contribution shall not include income or loss for the
     period between the end of the plan year and the date of distribution.
     The excess contribution that otherwise would be distributed to the
     participant shall be reduced in accordance with Treasury Regulations
     by the amount of any excess elective deferrals

                                       21
<PAGE>

     previously distributed to the participant. The amount of any excess
     contribution shall be treated as an annual addition for purposes of
     Section 19 for the plan year in which such excess contribution was
     made. Distributions of excess contributions to participants may be
     made notwithstanding any other provision of the plan or Code. In no
     event may the amount of the excess contributions distributed for a
     plan year with respect to any highly compensated participant exceed
     the amount of salary reduction contributions made in behalf of the
     highly compensated participant for such plan year, as adjusted for
     income and losses allocable thereto.

          (iv)  In lieu of applying the three-step process described in
     Section 2.1.4(iii), the Company may, within 30 days after the end of
     the plan year, make a qualified nonelective contribution with respect
     to such plan year on behalf of nonhighly compensated participants in
     an amount determined by the Company to be sufficient to satisfy one of
     the tests set forth in Section 2.1.4(ii). Such qualified nonelective
     contribution shall be allocated to the QNEC accounts of those
     participants entitled to share in such contribution pursuant to the
     provisions of Section 2.1.5(ii). On such allocation, the qualified
     nonelective contribution shall be considered a salary reduction
     contribution subject to all provisions of the plan regarding salary
     reduction contributions other than Section 4.1. The Company shall pay
     such qualified nonelective contribution with respect to a plan year to
     the Trustee within 30 days after the end of such plan year.
     Notwithstanding anything contrary contained in the plan, qualified
     nonelective contributions shall be treated as salary reduction
     contributions for purposes of the tests set forth in Section 2.1.4(ii)
     only if the conditions described in Section 1.401(k)-1(b)(5) of the
     Treasury Regulations are satisfied.

          (v)   If at any time during a plan year the Company in its
     discretion determines that neither of the tests set forth in Section
     2.1.4(ii) will be met for such plan year, then the Company in its
     discretion shall have the unilateral right during the plan year to
     require prospective reduction of the percentage of the compensation of
     highly compensated participants that may be subject to deferral
     elections for part or all of the balance of such year.

          (vi)  Notwithstanding anything to the contrary in the plan, for
     purposes of applying the tests set forth in Section 2.1.4, the plan
     shall be treated as comprising two plans, one which benefits the
     eligible employees who have not yet attained age 21 and completed a
     year of service ("testing plan A") and one which benefits all other
     eligible employees in accordance with Section 1.410(b)-6 (b)(3)
     ("testing plan B"). Testing plan B is intended to satisfy the
     nondiscrimination requirements set forth in Section 2.1.4 by
     compliance with the safe harbor methods described in Section
     401(k)(12) of the Code (the "401(k) safe harbor"). Notwithstanding the
     foregoing, if for any plan year testing plan B does not comply with
     the 401(k) safe harbor, the salary reduction contributions made on
     behalf of the participants in testing plan B shall satisfy the
     requirements of Section 2.1.4. Testing plan A is not intended to
     satisfy the 401(k) safe harbor. Consequently, with respect to each
     plan year, the salary reduction contributions made on behalf of the
     participants in testing plan A shall satisfy the requirements of
     Section 2.1.4.

                                       22
<PAGE>

                  2.1.5    Allocation to salary reduction contribution (before-
         tax) accounts:

                  (i)      Salary reduction contributions made by the
         Participating Employer shall be allocated to the salary reduction
         contribution (before-tax) account of a participant as of the last day
         of the payroll period for which such contribution is made. The salary
         reduction contribution (before-tax) account of each participant shall
         be accounted for separately from the participant's other accounts under
         the plan.

                  (ii)     If the Company elects to make a qualified nonelective
         contribution with respect to any plan year, such contribution shall be
         allocated to the QNEC account of each nonhighly compensated participant
         with respect to whom a salary reduction contribution was made to the
         trust for such plan year. Such allocation shall be in the proportion
         that each such participant's compensation bears to the total
         compensation of all such participants. Qualified nonelective
         contributions made for a plan year shall be allocated to a
         participant's QNEC account as of the adjustment date the contribution
         is received in the trust by the Trustee.

                  2.2      Matching Contributions:

                  2.2.1    Amount and allocation of matching contributions: For
         each payroll period during a plan year, the Participating Employer
         shall make a contribution to the plan on behalf of each participant.
         The matching contribution for each payroll period shall equal the sum
         of:

                           (i)    100 percent of the amount of the salary
                  reduction contribution made on behalf of such participant
                  during such payroll period up to 4 percent of his compensation
                  with respect to such payroll period (the "basic matching
                  contribution"). The amount of the salary reduction
                  contribution made on behalf of the participant during such
                  payroll period in excess of 4 percent shall be disregarded in
                  determining the amount of the participant's basic matching
                  contribution.

                           (ii)   100 percent of the amount of the salary
                  reduction contribution made on behalf of such participant
                  during such payroll period in excess of 4 percent but not in
                  excess of 6 percent of his compensation with respect to such
                  payroll period (the "supplemental matching contribution"). The
                  amount of the salary reduction contribution made on behalf of
                  the participant during such payroll period in excess of 6
                  percent shall be disregarded in determining the amount of the
                  participant's supplemental matching contribution.

         The basic matching contribution made with respect to each participant
         shall be allocated to his Employer basic matching contribution account.
         The supplemental matching contribution made with respect to each
         participant shall be allocated to his Employer supplemental matching
         contribution account. Matching contributions shall be paid by the
         Participating Employer to the Trustee as soon as administratively
         feasible following

                                       23
<PAGE>

         the end of the payroll period for which such contributions are being
         made, but in no event later than the last day of the next following
         calendar quarter.

                  2.2.2    Limitations on matching contributions: Subject to the
         provisions of Section 2.2.6, the following provisions shall apply with
         respect to matching contributions under the plan:

                           (A)   Contribution percentage limitation: For each
                  plan year the contribution percentage for the group of highly
                  compensated participants for such plan year shall bear to the
                  contribution percentage for the group of nonhighly compensated
                  participants for such plan year a relationship that satisfies
                  either of the following tests:

                                 (i)   The contribution percentage for the
                           group of highly compensated participants is not more
                           than the contribution percentage for the group of
                           nonhighly compensated participants multiplied by
                           1.25; or

                                 (ii)  The contribution percentage for the
                           group of highly compensated participants is not more
                           than the contribution percentage for the group of
                           nonhighly compensated participants multiplied by 2,
                           and the excess of the contribution percentage for the
                           group of highly compensated participants over the
                           contribution percentage for the group of nonhighly
                           compensated participants is not more than 2
                           percentage points (or such lesser amount as the
                           Secretary of the Treasury shall prescribe by
                           regulations to prevent the multiple use of this
                           alternative limitation with respect to any highly
                           compensated participant).

                           (B)   For purposes of applying the provisions of this
                  Section 2.2.2, the following provisions shall apply:

                                 (i)   A participant is a highly compensated
                           participant for a particular plan year if he meets
                           the definition of a highly compensated participant in
                           effect for that plan year. A participant is a
                           nonhighly compensated participant for a particular
                           plan year if he does not meet the definition of a
                           highly compensated participant in effect for that
                           plan year.

                                 (ii)  Pursuant to regulations issued by the
                           Secretary of the Treasury, the Committee may elect to
                           take into account elective deferrals under the plan
                           or

                                       24
<PAGE>

                           any other qualified plan of the Participating
                           Employer for purposes of computing the contribution
                           percentages.

                                  (iii)  If 2 or more plans of the
                           Participating Employer or an affiliated employer are
                           aggregated for purposes of Sections 401(a)(4) or
                           410(b) of the Code (other than for purposes of the
                           average benefit percentage test), the contribution
                           percentage of each participant under the plan shall
                           be determined as if all such plans were a single
                           plan. Notwithstanding the foregoing, plans may be
                           aggregated in order to satisfy the tests set forth in
                           Section 2.2.2(A) only if they have the same plan year
                           and use the same contribution percentage testing
                           method.

                                  (iv)   If a highly compensated participant is
                           a participant in 2 or more plans described in Section
                           401(a) of the Code or cash or deferred arrangements
                           described in Section 401(k) of the Code maintained by
                           the Participating Employer or an affiliated employer
                           to which matching contributions, nondeductible
                           voluntary contributions or elective deferrals are
                           made on behalf of such highly compensated
                           participant, all such plans and arrangements shall be
                           treated as a single plan for the purpose of
                           determining the contribution percentage of such
                           highly compensated participant. Notwithstanding the
                           foregoing, the provisions of this subparagraph (iv)
                           shall not apply if the plans may not be aggregated
                           for purposes of Section 410(b) of the Code.

                                   (v)   The determination of who is a highly
                           compensated participant or a nonhighly compensated
                           participant shall include any employee who is
                           eligible to receive matching contributions or, if the
                           Committee takes elective deferrals into account, make
                           elective deferrals.

                                   (vi)  The Company shall maintain records
                           sufficient to demonstrate satisfaction of the tests
                           set forth in Section 2.2.2(A) and the amount of
                           elective deferrals, if any, used in such tests.

                                   (vii) Notwithstanding anything to the
                           contrary in the plan, the determination and treatment
                           of matching contributions and the contribution
                           percentage of any participant shall satisfy Section
                           1.401(m)-1(b) of

                                       25
<PAGE>

                           the Treasury Regulations and such other requirements
                           as may be prescribed by the Secretary of the
                           Treasury.

                  2.2.3    Correction of excess matching contributions: If at
         the end of any plan year, neither of the tests set forth in Section
         2.2.2(A) is satisfied, the Committee shall adjust the matching
         contributions of the highly compensated participants within 2 1/2
         calendar months following the end of each plan year, but in no event
         later than the year-end adjustment date following the close of such 2
         1/2 month period (the "distribution date"). The matching contribution
         of each highly compensated participant shall be reduced by his share of
         the excess aggregate contributions for such plan year. Reductions shall
         be made pursuant to the following procedure:

                           (1) Step one: The contribution percentage of the
                  highly compensated participant with the highest contribution
                  percentage shall be reduced by the amount required to cause
                  the highly compensated participant's contribution percentage
                  to equal the contribution percentage of the highly compensated
                  participant with the next highest contribution percentage.
                  This process shall be repeated until the plan satisfies one of
                  the tests set forth in Section 2.2.2(A). The dollar amount of
                  each reduction made pursuant to this step one shall be
                  determined for each highly compensated participant. Such
                  amount shall not be distributed to the affected highly
                  compensated participant, but instead shall be used in steps
                  two and three below.

                           (2) Step two: The dollar amount of the reduction
                  determined for each highly compensated participant in
                  accordance with step one above shall be aggregated. Such
                  amount shall be allocated in accordance with step three below.

                           (3) Step three: The matching contributions of the
                  highly compensated participant with the highest dollar amount
                  of matching contributions shall be reduced by the amount
                  required to cause that highly compensated participant's
                  matching contributions to equal the dollar amount of the
                  matching contributions of the highly compensated participant
                  with the next highest dollar amount of matching contributions.
                  This process shall be repeated until the total amount of
                  matching contributions so reduced equals the aggregate dollar
                  amount determined in step two above.

         All matching contributions so reduced, adjusted for income and losses
         allocable thereto, shall be designated by the Participating Employer as
         excess aggregate contributions and distributed to the participant no
         later than the distribution date. The income or loss allocable to the
         participant's share of the excess aggregate contributions for the plan
         year of such excess aggregate contributions shall be determined by
         multiplying the amount of the income or loss allocable to the
         participant's matching contributions and any elective deferrals treated
         as matching contributions for such plan year by a fraction the
         numerator of which is the excess aggregate contributions of the
         participant for such

                                       26
<PAGE>

         plan year, and the denominator of which is equal to the sum of: (i) the
         balance in the participant's account attributable to matching
         contributions and any elective deferrals treated as matching
         contributions as of the beginning of such plan year; and (ii) the
         matching contributions and any elective deferrals treated as matching
         contributions which were made on behalf of the participant for such
         plan year. The income or loss allocable to the participant's share of
         the excess aggregate contributions for the plan year shall not include
         income or loss for the period between the end of the plan year and the
         date of distribution. Distributions to participants of excess aggregate
         contributions may be made notwithstanding any other provision of the
         plan or Code. The amount of any excess aggregate contribution shall be
         treated as an annual addition for purposes of Section 19 for the plan
         year in which such excess aggregate contribution was made.

                  2.2.4 Forfeiture of matching contributions: Notwithstanding
         anything to the contrary in the plan, if all or part of a participant's
         salary reduction contribution is treated as an excess contribution, an
         excess elective deferral or an excess aggregate contribution, the
         matching contribution made with respect to such salary reduction
         contribution, adjusted for income and losses allocable thereto, and
         which is not distributed in order to enable the plan to comply with one
         of the tests set forth in Section 2.2.2(A) shall be forfeited by the
         participant within 2 1/2 calendar months following the end of the plan
         year for which the matching contribution was made (the "forfeiture
         date"). The income or loss allocable to the forfeited matching
         contribution for the plan year of such matching contribution shall be
         determined by multiplying the amount of the income or loss allocable to
         the participant's matching contributions for such plan year by a
         fraction, the numerator of which is the forfeited matching contribution
         for such plan year, and the denominator of which is equal to the sum
         of: (i) the balance in the participant's account attributable to
         matching contributions as of the beginning of such plan year; and (ii)
         the matching contributions made on behalf of the participant for such
         plan year. Income or loss allocable to the forfeited matching
         contribution shall not include income or loss for the period between
         the end of the plan year and the forfeiture date. Forfeitures of
         matching contributions (including income or losses allocable thereto)
         shall reduce the amount of matching contributions which the
         Participating Employer otherwise is obligated to make pursuant to
         Section 2.2, if any.

                  2.2.5 Multiple use: If multiple use of the alternative
         limitation (as defined in Treasury Regulation Section 1.401(m)-2)
         exists with respect to any plan year, the Committee shall reduce the
         contribution percentage of each highly compensated participant by
         applying the three-step process described in Section 2.2.3 of the plan.

                  2.2.6 Nondiscrimination testing: Notwithstanding anything to
         the contrary in the plan, for purposes of applying the tests set forth
         in Section 2.2.2, the plan shall be comprised of testing plan A (as
         defined in Section 2.1.4(vi)) and testing plan B (as defined in Section
         2.1.4(vi)). Testing plan B is intended to satisfy the nondiscrimination
         requirements set forth in Section 2.2.2 by compliance with the safe
         harbor methods described in Section 401(m)(11) of the Code (the "401(m)
         safe harbor"). Notwithstanding the foregoing, if for any plan year the
         plan does not comply with the 401(m) safe harbor, the matching
         contributions made on behalf of the participants in testing plan B
         shall satisfy the requirements of Section 2.2.2. Testing plan A is
         deemed

                                       27
<PAGE>

         to satisfy the requirements of Section 2.2.2 since participants in
         testing plan A are not eligible to receive matching contributions.

                  2.3 Discretionary Supplemental Employer Contributions: In
addition to the contributions provided for in Section 2.1 and 2.2, the
Participating Employer may from time to time make a supplemental contribution
(the "supplemental employer contribution") on behalf of each participant who
becomes an eligible employee as a result of a corporate transaction (as defined
in this Section 2.3) involving the Participating Employer and is designated by
the Committee to receive a supplemental employer contribution. The purpose of
the supplemental employer contribution is to make up for all or any portion of
the contribution the participant would have received under his former employer's
tax-qualified defined contribution plan had the corporate transaction not
occurred during the applicable plan year. The Committee shall determine whether
a supplemental employer contribution shall be made by the Participating Employer
pursuant to the provisions of this Section 2.3 and the amount thereof, and shall
designate the participants eligible to receive such contribution. The
supplemental employer contribution for a plan year, if any, shall be allocated
among the eligible participants in the same proportion that the compensation of
each such participant bears to the compensation of all eligible participants for
such plan year. For purposes of this Section 2.3, a corporate transaction means
any corporate transaction resulting in an individual's transfer of employment
from an unrelated entity to the Participating Employer, including without
limitation, a corporate merger or consolidation and a sale of the assets of a
trade or business. Supplemental employer contributions shall be credited to the
eligible participants' Employer profit sharing contribution accounts.

                  2.4 General Limitations: In no event shall a Participating
Employer contribute an amount (including salary reduction contributions,
matching contributions, supplemental employer contributions and qualified
nonelective contributions) for any limitation year (as defined in Section 19.4)
which would cause the annual addition limitations in Section 19 to be exceeded.
Each contribution to

                                       28
<PAGE>

the plan by a Participating Employer shall be conditioned on being deductible
under Section 404 of the Code for the plan year for which such contribution is
made. The initial contribution to the plan shall be conditioned on the plan
being qualified under Section 401(a) of the Code.

                  Section 3         Vesting:
                  ---------         -------
                  3.1   General: Except as otherwise provided in this Section
3.1, the interest of a participant in his account shall be fully vested at all
times. Notwithstanding the foregoing, a participant who engages in misconduct
including, but not limit ed to, embezzlement, larceny, theft, and other
dishonest acts, or who engages in direct competition with a Participating
Employer or any other affiliated employer while a participant shall forfeit his
interest in his Employer supplemental matching contribution account and his ESOP
account, if any, if he terminates service prior to the earlier of attainment of
his normal retirement age or completion of 5 or more years of service. For
purposes of this Section 3.1, all years of service of an employee shall be taken
into account.

                  3.2   Forfeitures: The amounts forfeited pursuant to Section
3.1 shall be combined with the amounts forfeited by all other participants
during such plan year. The aggregate of such forfeitures shall be applied as
follows:

                  (i)   First, to restore amounts previously forfeited from
         accounts in accordance with Section 5.4.1; and

                  (ii)  Second, to reduce the amount of matching contributions
         which the Participating Employer is otherwise obligated to make
         pursuant to Section 2.2.

                  3.3   Change in Vesting Schedule: If an amendment to the plan
directly or indirectly affects the determination of a participant's vested
percentage, or the plan is deemed amended by an automatic change to or from the
top-heavy vesting schedule in Section 18.2.2, each participant in service with
at least 3 years of service may irrevocably elect to have his vested percentage
determined without regard to such amendment. The participant may make such
election during the period beginning on the date such amendment is adopted and
ending on the date that is 60 days after the latest of the date

                                       29
<PAGE>

(a) such amendment is adopted; (b) such amendment is effective; or (c) the
Committee advises the participant in writing of such amendment.

                  3.4 Predecessor Plan: In no event shall the vested percentage
of the accrued benefit of a participant on the effective date who was a
participant in the predecessor plan immediately preceding such effective date be
less than the vested percentage of his accrued benefit under the predecessor
plan had such plan continued in effect through the date such vested percentage
is determined.
                  Section 4.   Pretermination Distributions; Loans:
                  ---------    -----------------------------------

                                       30
<PAGE>

                  4.1 Hardship Distributions: A participant in service may file
a written request with the Committee for a distribution from his salary
reduction contribution (before-tax) account and his Employer basic matching
contribution account due to hardship. A distribution will be on account of
hardship only if the distribution is on account of an immediate and heavy
financial need of the participant and is necessary to satisfy such financial
need. The request must specify the nature of the hardship, the total amount
requested, and the total amount of the actual expense incurred or to be incurred
on account of the hardship. The Committee, in its discretion, shall determine
whether a hardship constitutes an immediate and heavy financial need, and the
decision of the Committee to grant or deny a hardship distribution shall be
final; provided, that all participants who request such distributions and are
similarly situated shall be treated alike and in a nondiscriminatory manner. If
the Committee determines that a hardship exists, the Committee shall direct the
Trustee to make a distribution to the participant of the amount approved by the
Committee. The distribution shall be made in cash from the participant's
separate accounts which are available for a hardship distribution as provided in
this Section 4.1. The amount available for such distribution shall be determined
as of the adjustment date the hardship distribution request is actually
processed by the Trustee. In no event shall the amount available for a hardship
distribution exceed the amount in the participant's separate accounts available
for a hardship distribution as of such adjustment date (reduced by any previous
hardship distribution not reflected as of such adjustment date), excluding
income credited to such accounts after December 31, 1988. Notwithstanding the
foregoing, with respect to a participant who was a participant in the United
Carolina Bancshares Corporation Dollar Plus Savings Plan on June 30, 1997, in no
event shall the amount available for a hardship distribution exceed the amount
in such participant's separate accounts available for a hardship distribution as
of such adjustment date (reduced by any previous hardship distribution not
reflected as of such adjustment date), excluding all income credited to such
accounts. The circumstances giving rise to hardship shall be limited to:

                                       31
<PAGE>

                  (i)     Expenses for medical care described in Section 213(d)
         of the Code previously incurred by the participant, the participant's
         spouse, or any dependent of the participant (as defined in Section 152
         of the Code), or expenses necessary for such persons to obtain such
         medical care;

                  (ii)    Costs directly related to the purchase (excluding
         mortgage payments) of a principal residence of the participant;

                  (iii)   Payment of tuition, related educational fees and room
         and board expenses, for the next 12 months of post-secondary education
         for the participant, the participant's spouse or any dependent of the
         participant; or

                  (iv)    The need to prevent eviction of the participant from
         his principal residence, or foreclosure on the mortgage of the
         participant's principal residence.

A hardship distribution shall not be made in excess of the amount of the
immediate and heavy financial need of the participant. The amount of the
immediate and heavy financial need of the participant may include any amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the receipt of the hardship distribution.
The following special provisions shall apply to all hardship distributions:

                  (a)   No hardship distribution shall be made until the
         participant has obtained all distributions and all nontaxable loans
         currently available under all tax-qualified retirement plans of the
         Participating Employer and its affiliated employers, including, without
         limitation, distributions pursuant to Sections 4.2 and 4.3 and loans
         pursuant to Section 4.4;

                  (b)   Except as otherwise provided in Regulation Section
         1.401(k)-1(d)(2)(iv)(B)(4), the participant's elective deferrals under
         all of the qualified and nonqualified plans of deferred compensation
         maintained by the Participating Employer and its affiliated employers,
         shall be suspended for a period of 12 months following receipt of the
         hardship distribution; and

                  (c)   The participant may not make elective deferrals to any
         tax-qualified plans of deferred compensation maintained by the
         Participating Employer and its affiliated employers for his taxable
         year immediately following the taxable year of the hardship
         distribution in excess of the applicable limit under Section 402(g) of
         the Code for such next taxable year, reduced by the amount of his
         elective deferrals for the taxable year of the hardship distribution.

Any distribution made pursuant to this Section 4.1 shall be withdrawn from the
participant's separate accounts described below in the following order of
priority:

                                       32
<PAGE>

          (i)  salary reduction contribution (before-tax) account; and

          (ii) Employer basic matching contribution account.

With respect to each such account, the amount of the withdrawal shall be
withdrawn by the Trustee from the participant's fund accounts (as defined in
Section 7.1.1) with respect to such account on a pro rata basis. The Committee
from time to time may adopt additional policies or rules governing the manner in
which hardship distributions are made so that the plan may conveniently be
administered.

          4.2  Distributions After Age 59 1/2: In accordance with procedures
adopted by the Committee, a participant who has attained age 59 1/2 may withdraw
all or any portion of his account. The balance in the participant's account
available for withdrawal pursuant to the provisions of this Section 4.2 shall be
determined as of the date the withdrawal request is actually processed by the
Trustee. Any withdrawal made pursuant to this Section 4.2 shall be withdrawn by
the Trustee from the participant's fund accounts (as defined in Section 7.1.1)
with respect to such account on a pro rata basis.

          4.3  Distributions Prior to Age 59 1/2: In accordance with procedures
adopted by the Committee, a participant who has not yet attained age 59 1/2 may
withdraw all or any portion of his voluntary contribution (after-tax) account,
if any, his Employer supplemental matching contribution account, his Employer
profit sharing contribution account, if any, his ESOP account, if any, his prior
plan account, if any, and his rollover account, if any. Only two withdrawals may
be made by a participant pursuant to the provisions of this Section 4.3 during
each plan year. Notwithstanding the foregoing, no amount shall be withdrawn from
the Employer supplemental matching contribution account, the prior plan account
(excluding for this purpose any amount attributable to after-tax employee
contributions), his Employer profit sharing contribution account or the ESOP
account unless the participant has been a participant in the plan (including for
this purpose his participation in the predecessor plan) for at least 60 months
or unless the amounts being withdrawn have been in the participant's account
(including for this purpose his account under the predecessor plan) for at least
24

                                       33
<PAGE>

months. The balance in the participant's account available for withdrawal
pursuant to the provisions of this Section 4.3 shall be determined as of the
date the withdrawal request is actually processed by the Trustee. Any withdrawal
made pursuant to this Section 4.3 shall be withdrawn by the Trustee from the
participant's separate accounts described below in the following order of
priority:

          (i)    voluntary contribution (after-tax) account;

          (ii)   the portion of the participant's prior plan account
                 attributable to after-tax employee contributions and earnings
                 thereon;

          (iii)  the remaining portion of the participant's prior plan account;

          (iv)   Employer profit sharing contribution account;

          (v)    Employer supplemental matching contribution account;

          (vi)   rollover account; and

          (vii)  ESOP account.

With respect to each such account, the amount of the withdrawal shall be
withdrawn by the Trustee from the participant's fund accounts (as defined in
Section 7.1.1) with respect to such account on a pro rata basis.

          4.4    Loans: The Committee, in accordance with its uniform,
nondiscriminatory policy, shall direct the Trustee to permit any participant in
service or a participant or beneficiary who is a party-in-interest as defined in
Section 3(14) of ERISA (the "borrower"), to borrow from his vested account
(excluding for this purpose his ESOP account, if any, and his PAYSOP account, if
any), subject to the following requirements:

          4.4.1  Loans shall be withdrawn from the participant's fund
     accounts (as defined in Section 7.1.1) on a pro rata basis. Loans
     shall be available to all borrowers on a reasonably equivalent basis.
     Loans shall not be available to highly compensated participants in an
     amount greater than to nonhighly compensated participants. In no
     event shall the principal amount of the loan be less than $1,000. A
     participant may have only one loan outstanding at any time and only
     one loan request may be submitted in a plan year. In no event shall a
     participant be entitled to borrow from his ESOP account, if any, or
     his PAYSOP account, if any. Notwithstanding the foregoing, if a
     participant

                                       34
<PAGE>

     who was a participant in a predecessor plan that is merged into this plan
     has more than one loan outstanding under the predecessor plan as of the
     date of such plan merger, such loans shall remain outstanding and be
     payable in accordance with their terms.

          4.4.2  The Trustee shall provide to each borrower who is approved for
     a loan a statement of the charges involved in the loan transaction,
     including the amount financed and the annual interest rate. The borrower
     shall execute any documents as the Committee deems necessary or advisable
     to consummate the loan and provide reasonable safeguards.

          4.4.3  The principal amount of any loan made to a borrower, when added
     to the outstanding balance of all loans from the plan, shall not exceed the
     lesser of:

                 (i)  $50,000, reduced by the excess of: (a) the
          highest outstanding balance of loans from the plan during
          the one-year period ending on the day before the date such
          loan is made, over (b) the outstanding balance of loans from
          the plan on the date such loan is made; or

                 (ii) One-half of the vested accrued benefit of the
          borrower. The vested accrued benefit shall be determined as
          of the adjustment date the loan is actually processed by the
          Trustee.

     For the purpose of this limitation, the principal amounts of all loans from
     all plans of the Participating Employer and affiliated employers shall be
     aggregated.

          4.4.4  Each loan shall require that payment of principal and interest
     shall be amortized in level payments over a period of not less than 12
     months nor more than 60 months from the date of the loan. Each
     Participating Employer shall establish a procedure for withholding from the
     regular payroll checks of a participant the amounts necessary to satisfy
     the repayment obligation under the note. All amounts so withheld shall be
     transferred immediately to the Trustee.

          4.4.5  Each loan shall be secured by a pledge of up to 50 percent of
     the vested accrued benefit of the borrower, as determined on the date of
     such loan.

          4.4.6  A loan shall bear a reasonable rate of interest determined as
     of the date of origination of the loan in the manner established by the
     Committee. The principal amount of the loan shall be an investment
     allocated solely to the account of the borrower, and the interest paid
     thereon shall be allocated solely to the account of the borrower.

          4.4.7  In addition to the provisions of this Section 4.4, each loan
     shall be subject to and made in accordance with the Plan Loan Rules
     attached hereto as Exhibit C.

                                       35
<PAGE>

          4.5       Termination of Service Prior To Distribution: If a
participant's termination of service occurs after a request for a hardship
distribution or loan is approved in accordance with the provisions of this
Section 4 but prior to distribution, such approval shall be void, and the vested
accrued benefit of such participant shall be payable hereunder as if such
approval had not been made.

          Section 5      Termination Distributions:
          ---------      -------------------------
          5.1       Distributions on Account of Retirement or Disability:

          5.1.1     Distributions to participants: As of the adjustment date
     coincident with or next following the date a participant retires or
     terminates service on account of disability, his vested accrued benefit,
     determined as of such adjustment date, shall be paid to him or applied for
     his benefit under one of the following options, as elected by the
     participant:

                    (a)  Term certain: Payment to him of his
          vested accrued benefit in approximately equal
          monthly installments over a whole number of years,
          as elected by the participant (the "term"), not
          exceeding the life expectancy of the participant
          or the joint life expectancy of the participant
          and his beneficiary; provided that in no event
          shall monthly installments be less than $100 per
          month. If the participant dies before expiration
          of the term, payments shall continue to his
          beneficiary for the remainder of the term.

                    (b)  Lump sum: Payment to him of his
          vested accrued benefit in a single lump sum
          payment.

                    (c)  Combination of term certain and
          lump sum: Payment to him of his vested accrued
          benefit in any combination of the forms of payment
          described in (a) and (b) above.

                    (d)  Direct rollover: Payment to an
          eligible retirement plan as provided in Section
          15.

     Such election must be made in writing and filed with the Committee on or
     before the adjustment date as of which payment is to commence and shall be
     irrevocable on or after such adjustment date. If a participant fails to
     elect one of the foregoing options, his vested accrued benefit shall be
     paid to him under Section 5.1.1(b).

          5.1.2     Applicable provisions: The following provisions shall apply
     for purposes of this Section 5.1:

                    (a)  Deferral: Subject to the provisions
          of Section 5.1.2(b), a participant's benefit shall
          remain in the plan until the participant elects

                                       36
<PAGE>

          to receive a distribution of his benefit in
          accordance with the provisions of this Section 5
          and procedures adopted by the Committee.

                    (b)  Required distribution: A
          participant's benefit must be distributed or begin
          to be distributed no later than the participant's
          required beginning date (as defined in Section
          5.3.3(f)).

                    (c)  Required minimum distribution: If
          all or any portion of a participant's benefit is
          to be distributed in installments, the total
          amount of the distributions for each calendar year
          must be equal to or greater than the amount
          obtained by dividing the participant's benefit (as
          defined in Section 5.3.3(e)) by the lesser of (i)
          the applicable life expectancy (as defined in
          Section 5.3.3(a)), or (ii) if the participant's
          spouse is not the designated beneficiary (as
          defined in Section 5.3.3(b)), the applicable
          divisor determined from the table set forth in
          Section 1.401(a)(9)-2 Q&A 4 of the Treasury
          Regulations (the "minimum distribution").
          Distributions after the death of the participant
          shall be made using the applicable life expectancy
          without regard to Section 1.401(a)(9)-2 of the
          Treasury Regulations. The minimum distribution
          required for the participant's first distribution
          calendar year (as defined in Section 5.3.3(c))
          must be made on or before the participant's
          required beginning date. The minimum distributions
          for other calendar years, including the minimum
          distribution for the distribution calendar year in
          which the participant's required beginning date
          occurs, must be made on or before December 31 of
          each such distribution calendar year.

                    (d)  Form of distribution: Distributions
          from the plan shall be made in cash.
          Notwithstanding the foregoing, if a portion of a
          participant's vested accrued benefit is invested
          in Company stock, such participant may direct the
          Committee to distribute such portion of his
          accrued benefit in shares of Company stock.

                    (e)  Distributions following return to
          service: Notwithstanding the foregoing provisions
          of this Section 5.1, if a participant receiving
          benefit payments from the plan reenters service
          prior to his normal retirement date, such payments
          shall cease during the period he is in service.
          When he subsequently retires, dies or otherwise
          terminates service, his then vested accrued
          benefit shall be payable to or with respect to him
          pursuant to the applicable provisions of the plan.

                    (f)  Direction of investment: If all or
          any portion of the accrued benefit of a
          participant is payable to him in installments,
          such participant shall continue to be eligible to
          direct the Trustee as to the investment and
          reinvestment of his accrued benefit pursuant to
          the provisions of Section 7. His accrued benefit
          shall continue to be adjusted as of each
          adjustment date pursuant to Section 6 and the
          amount of the installment payments to him shall be
          adjusted as of each

                                       37
<PAGE>

          year-end adjustment date to reflect the adjusted
          amount of his accrued benefit as of such
          adjustment date.

                     (g)  Predecessor plan: Notwithstanding
          any other provision hereof, if a participant in
          the predecessor plan is receiving benefits under
          the predecessor plan as of the effective date, the
          amount of the benefit payable to such participant
          and the manner and time for payment thereof shall
          be determined in accordance with the provisions of
          the predecessor plan. If a participant in a
          predecessor plan separated from service prior to
          the effective date of this plan and is entitled to
          a deferred benefit commencing after the effective
          date, the amount of such benefit shall be
          determined in accordance with the provisions of
          the predecessor plan, and the manner and time of
          payment shall be determined under the plan.

                     (h)  Required consent: Subject to the
          provisions of Section 12.1, any distribution to a
          participant who has a vested accrued benefit which
          exceeds the cash-out limit (as defined in this
          Section 5.1.2(h)) shall require the participant's
          consent if such distribution is to commence prior
          to the participant's attainment of normal
          retirement age. The consent requirements of this
          Section 5.1.2(h) shall be deemed satisfied if the
          participant's vested accrued benefit does not
          exceed the cash-out limit. If a participant has
          begun to receive benefit payments in installments
          and at least one installment payment has not yet
          been made, the vested accrued benefit of the
          participant is deemed to exceed the cash-out limit
          if his vested accrued benefit exceeded the cash-
          out limit in effect as of the date payment of his
          benefit first commenced. The cash-out limit in
          effect for dates in plan years beginning before
          January 1, 2000 is $3,500. The cash-out limit in
          effect for dates in plan years beginning on or
          after January 1, 2000 is $5,000. Thereafter, the
          cash-out limit in effect on a particular date is
          the amount described in Section 411(a)(11)(A) for
          the plan year which includes such date.

          5.2        Distributions on Account of Death: On the death of the
participant, the following provisions shall apply:

          5.2.1      Death after distributions begin: If the
     participant dies after distribution of his vested accrued benefit
     has begun, payments shall continue following his death only if
     his benefit was payable under an option providing for such
     payments, and any remaining portion of his vested accrued benefit
     shall continue to be distributed to his beneficiary at least as
     rapidly as under the method of distribution in effect at his
     death.

          5.2.2      Death before distributions begin: If the
     participant dies before distribution of his vested accrued
     benefit begins, payment of his vested accrued benefit to his
     beneficiary shall commence as of any adjustment date following
     the date of the participant's death, as elected by the
     beneficiary. The participant's vested accrued

                                       38
<PAGE>

     benefit shall be payable under a method of payment described in
     Section 5.1.1, as elected by the beneficiary. Distribution of the
     participant's entire vested accrued benefit must be completed no
     later than December 31 of the calendar year containing the 5th
     anniversary of the participant's death; provided, however, that
     if payment is to be made to a designated beneficiary (as defined
     in Section 5.3.3(b)), distribution of the participant's entire
     vested accrued benefit may be made in substantially equal
     installments over a period not exceeding the life expectancy of
     the designated beneficiary.

          5.3       Special  Provisions  and  Definitions:  The following
provisions apply for purposes of this Section 5:

          5.3.1     Small amount: Notwithstanding any other provision
of the plan, if the vested accrued benefit of a participant does not
exceed the cash-out limit as of the adjustment date coincident with
his termination of service for any reason, including death, then such
benefit shall be paid in a lump sum as soon as practicable following
such termination of service to the person entitled thereto without
regard to any election made by the participant or beneficiary.

          5.3.2     Designation of beneficiary: The beneficiary or
beneficiaries of a participant shall be determined in accordance with
the following provisions:

                    (a)  Surviving spouse: If the
          participant dies leaving a surviving spouse, the
          participant's beneficiary shall be such spouse
          unless the participant designates another
          beneficiary (which may include more than one
          person, natural or otherwise, and one or more
          contingent beneficiaries) by filing a qualified
          election with the Committee. A "qualified
          election" means a beneficiary designation by the
          participant on a form provided the Committee,
          which contains a consent and acknowledgment of the
          effect of such consent executed by the surviving
          spouse and witnessed by a representative of the
          Committee or a notary public. Consent of the
          spouse shall not be required if the spouse cannot
          be located or if other circumstances exist which
          excuse obtaining the consent under applicable law
          or regulations. The qualified election of a
          participant may be revoked at any time by action
          of the participant alone, in which case the
          surviving spouse shall be the beneficiary. Any
          other change in beneficiary shall be made only by
          the filing of a revised qualified election. If a
          beneficiary named in a qualified election dies
          before receiving any payment due him from the
          trust fund, the payment shall be made to the
          contingent beneficiary, if any, named in the
          qualified election. If there is no such contingent
          beneficiary, the payment shall be made to the
          surviving spouse. If the surviving spouse dies
          before receiving all payments due under the plan,
          the remaining payments shall be made to the estate
          of the surviving spouse.

                                       39
<PAGE>

                    (b)  Other beneficiary: If a participant
          dies without leaving a surviving spouse, the
          participant's beneficiary (which may include more
          than one person, natural or otherwise, and one or
          more contingent beneficiaries) shall be the
          beneficiary designated by the participant on the
          beneficiary designation form filed with the
          Committee. Designation of a beneficiary under this
          subparagraph (b) shall be revocable by the
          participant at any time prior to death. If the
          participant fails to designate a beneficiary, the
          benefit of the participant shall be payable to his
          estate. If a beneficiary is entitled to receive
          payments from the trust fund and dies before
          receiving all payments due him, remaining payments
          shall be made to the contingent beneficiary, if
          any. If there is no contingent beneficiary, such
          payments shall be made to the estate of the
          beneficiary.

                    (c)  Disclaimer: Any beneficiary may
          disclaim all or any part of the benefit to which
          such beneficiary is entitled hereunder by filing a
          disclaimer with the Committee at least 10 days
          before payment of such benefit is to commence.
          Such disclaimer shall be made in form satisfactory
          to the Committee and shall be irrevocable when
          filed. The benefit disclaimed shall be payable
          from the trust fund in the same manner as if the
          beneficiary who filed the disclaimer dies on the
          date of such filing.

          5.3.3     Definitions:  The following definitions apply for purposes
     of this Section 5:

                    (a)  "Applicable life expectancy" means
          the life expectancy (or joint and last survivor
          expectancy) calculated using the attained age of
          the participant (or designated beneficiary) as of
          the participant's (or designated beneficiary's)
          birthday in the applicable calendar year reduced
          by one for each calendar year which has elapsed
          since the date the life expectancy was calculated.
          If life expectancy is being recalculated, the
          applicable life expectancy is the life expectancy
          as so calculated. The applicable calendar year is
          the first distribution calendar year, and, if life
          expectancy is being recalculated, each succeeding
          calendar year.

                    (b)  "Designated beneficiary" of a
          participant means any beneficiary who is a natural
          person.

                    (c)  "Distribution calendar year" means
          a calendar year for which a distribution is
          required to satisfy the requirements of Section
          5.1.2(c). For distributions beginning before the
          participant's death, the first distribution
          calendar year shall be the calendar year
          immediately preceding the calendar year containing
          the participant's required beginning date. For
          distributions beginning after the participant's
          death, the first distribution calendar year shall
          be the

                                       40
<PAGE>

          calendar year in which distributions are required
          to begin pursuant to Section 5.2.

                    (d)  "Life expectancy" means life
          expectancy and joint and last survivor life
          expectancy computed by use of the expected return
          multiples in Tables V and VI of Section 1.72-9 of
          the Treasury Regulations. Unless otherwise elected
          by the participant, or spouse, in the case of
          distributions described in Section 5.2.2, by the
          time distributions are required to begin, life
          expectancy shall be recalculated annually. Such
          election shall be irrevocable as to the
          participant or spouse. The life expectancy of a
          nonspouse beneficiary may not be recalculated.

                    (e)  "Participant's benefit" means his
          accrued benefit as of the year-end adjustment date
          in the calendar year immediately preceding the
          distribution calendar year (the "valuation
          calendar year") increased by any contribution or
          forfeiture allocated to the participant's account
          as of any date in the valuation calendar year
          after such year-end adjustment date and decreased
          by any distribution made in the valuation calendar
          year after such year-end adjustment date.
          Notwithstanding the foregoing, if any portion of
          the minimum distribution for the first
          distribution calendar year is made in the second
          distribution calendar year on or before the
          required beginning date, the amount of the minimum
          distribution made in the second distribution
          calendar year shall be treated as if it had been
          made in the immediately preceding distribution
          calendar year.

                    (f)  "Required beginning date" means
          April 1 of the calendar year following the later
          of (A) the calendar year in which the participant
          attains age 70 1/2, or (B) the calendar year in
          which the participant retires. Notwithstanding the
          foregoing, the required beginning date of a
          participant who is a 5 percent owner (as defined
          in Section 416 of the Code) shall be April 1 of
          the calendar year following the calendar year in
          which the participant attains age 70 1/2.

Notwithstanding anything to the contrary contained in the plan, all
distributions under this Section 5 shall be determined and made in accordance
with Section 401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the Treasury
Regulations, which are incorporated herein by reference.

          5.4  Distributions on Account of Other Termination of Service: The
following provisions shall apply if a participant terminates service for reasons
other than retirement, disability or death:

                                       41
<PAGE>

               5.4.1     Election to receive benefit following termination: The
     participant may elect to receive his vested accrued benefit as of any
     adjustment date following the date of his termination of service for any
     reason other than retirement, disability or death. The adjustment date as
     of which payment is to commence shall be referred to herein as his
     "distribution adjustment date." The manner of distribution shall be
     determined under the applicable provisions of Section 5.1. The
     participant's election shall be made on or before the distribution
     adjustment date in accordance with procedures adopted by the Committee.
     Such election shall be disregarded if the participant is in service on the
     distribution adjustment date. The following provisions shall apply if the
     participant is not fully vested in his accrued benefit as of his
     distribution adjustment date:

                    (a)  The amount in his account which is not vested
               shall be forfeited pursuant to Section 3.2.

                    (b)  If he reenters service and repays to the
               trust the full amount of the distribution received from
               the trust on or before the earlier of the year-end
               adjustment date of the plan year in which he incurs his
               5th consecutive break in service following termination
               or the 5th anniversary of the date he reenters service,
               such repaid amount shall be credited as of the
               adjustment date coincident with or next following such
               repayment to the subaccount or subaccounts of the
               participant from which the distribution was previously
               made to the participant. Following such repayment, the
               Trustee shall credit to his subaccount or subaccounts
               from forfeitures taken as of the adjustment date on or
               next following the date of repayment, the amount
               previously forfeited from each such subaccount, if any.
               If forfeitures are not sufficient to credit this amount
               to the participant, such amount shall be contributed by
               the Participating Employer to the Trustee on or before
               such adjustment date.

               5.4.2     Future distribution: If any part of a the participant's
     vested accrued benefit is not distributed pursuant to Section 5.4.1, it
     shall be held under the plan until the earlier of his normal retirement
     date or the date of his death, whereupon it shall be paid to him or his
     beneficiary in the same manner as if the participant were then in service.
     If the vested accrued benefit of a participant is held in the plan for
     future payment, the participant shall continue to be eligible to direct the
     investment and reinvestment of his accrued benefit pursuant to the
     provisions of Section 7.

               5.4.3     Waiver of election period: If a distribution is one to
     which Sections 401(a)(11) and 417 of the Code do not apply, such
     distribution may commence less than 30 days after the date the notice
     required under Section 1.411(a)-11(c) of the Treasury Regulations is given,
     provided that:

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

                                       42
<PAGE>

            (b)   the participant, after receiving the notice, affirmatively
      elects a distribution.

If a distribution is made pursuant to this Section 5.4 to a participant before
he attains age 55, the Committee shall advise him that an additional income tax
may be imposed in an amount equal to 10 percent of the portion of the amount
that is includible in his gross income for such taxable year.

      5.5   Directions: In accordance with procedures adopted by the Committee,
the Trustee shall be notified of a participant's request for a withdrawal or a
loan, retirement, disability, death or termination of service. The Trustee shall
be directed to make a distribution to the person or persons entitled thereto
from the trust at such time and in such manner as required by the provisions of
this Section 5.

      5.6   Distributions to Alternate Payees: All rights and benefits,
including elections, provided to a participant in the 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 has
not reached the "earliest retirement age" under the plan. For purposes of this
Section 5.6, "alternate payee," "qualified domestic relations order" and
"earliest retirement age" shall have the meaning set forth under Section 414(p)
of the Code.

      5.7   Valuation: Notwithstanding any provision in this Section 5 to the
contrary, the value of a participant's vested accrued benefit for purposes of
any distribution made pursuant to this Section 5 shall be determined as of the
adjustment date such distribution is actually processed by the Trustee. No
additional earnings, losses or expenses shall be credited or debited to the
participant's account following the adjustment date such distribution is
actually processed by the Trustee.

      5.8   Distributions from Salary Reduction Contribution (before-tax)
Accounts, Employer Basic Matching Contribution Accounts and QNEC Accounts:
Notwithstanding anything

                                       43
<PAGE>

to the contrary contained elsewhere in the plan, a participant's salary
reduction contribution (before-tax) account, Employer basic matching
contribution account, if any, and QNEC account, if any, shall not be
distributable other than upon:

            (a)   The participant's separation from service, death, or
      disability;

            (b)   Termination of the plan without establishment or maintenance
      of another defined contribution plan other than an employee stock
      ownership plan as defined in Section 4975(e)(7) of the Code, a simplified
      employee pension plan as defined in Section 408(k) of the Code, or a
      SIMPLE IRA plan as defined in Section 408(p) of the Code;

            (c)   The date of the sale or other disposition by the Participating
      Employer to an unrelated entity of substantially all of the assets (within
      the meaning of Section 409(d)(2) of the Code) used by the Participating
      Employer in a trade or business of the Participating Employer, where (i)
      the participant is employed by such trade or business and continues
      employment with the entity acquiring such assets, and (ii) the
      Participating Employer continues to maintain the plan after the sale or
      other disposition. The sale of 85 percent of the assets used in the trade
      or business shall be deemed a sale of "substantially all" of the assets
      used in such trade or business;

            (d)   The date of the sale or other disposition by the Participating
      Employer of the Participating Employer's interest in a subsidiary (within
      the meaning of Section 409(d)(3) of the Code) to an unrelated entity,
      where (i) the participant is employed by such subsidiary and continues
      employment with such subsidiary following such sale or other disposition,
      and (ii) the Participating Employer continues to maintain the plan after
      the sale or other disposition;

            (e)   The participant's attainment of age 59 1/2; or

            (f)   The participant's hardship (as defined in Section 4.1).

Notwithstanding anything to the contrary contained herein, an event shall not be
treated as described in clause (b), (c) or (d) above with respect to any
participant unless the participant receives a lump sum distribution (as defined
in Section 401(k)(10)(B)(ii) of the Code) by reason of the event.

            Section 6.        Adjustment of Accounts:
            ---------         ----------------------

                                       44
<PAGE>

            The Committee shall establish and maintain a salary reduction
contribution (before-tax) account, an Employer basic matching contribution
account and an Employer supplemental matching contribution account with respect
to each participant. The Committee shall also establish and maintain a voluntary
contribution (after-tax) account, an Employer profit sharing contribution
account, an ESOP account, a PAYSOP account, a prior plan account, a QNEC
account, a loan account, and a rollover account with respect to each participant
if any one or more of such accounts are required by the plan. The Committee
shall also keep an allocation suspense account if such account is required
pursuant to Section 19.2.

            6.1   Adjustment of Accounts: The account of each participant shall
be valued daily as of each adjustment date in accordance with the provisions of
this Section 6.1 and procedures adopted by the Trustee. The value of each
participant's account (other than that portion of his account attributable to
his loan account, if any) shall be converted to units. Thereafter, when the
participant's account is credited with an allocation of any salary reduction
contributions, matching contributions, supplemental employer contributions,
qualified nonelective contributions, direct transfers from another qualified
plan or rollover contributions, the value of such allocation shall be used to
purchase units and added to such participant's account. When any distributions,
withdrawals, transfers between investment funds, and/or administrative fees are
charged against the participant's account in accordance with the terms of the
plan, the number of units equal in value to the amount paid from the
participant's account shall be deducted from the outstanding units.

            6.2   Loan Account: Notwithstanding the provisions of this Section
6, the portion of the account of a participant evidenced by a note described in
Section 4.4.2 shall be maintained in a special loan account on behalf of the
participant. The loan account shall be a part of the account of the participant,
and there shall be credited to the loan account any payments of principal or
interest made with respect to such note. As of the close of business on each
adjustment date, any cash balances in the

                                       45
<PAGE>

loan account shall be debited to the loan account and shall be allocated among
the investment funds in accordance with the most recent effective future
contribution investment direction of the participant. If for any reason a
participant does not have a future contribution investment direction in effect,
such proceeds shall be invested by the Trustee in the investment fund designated
by the Committee.

            6.3   General: The Committee shall have and may exercise all powers
necessary or advisable in order to implement the provisions of this Section 6
and to ensure that the accounts maintained under the plan are fairly and
accurately adjusted as of each adjustment date.

            Section 7.        Participant Direction of Investments:
            ---------         ------------------------------------

            7.1   Participant Directed Investments: Notwithstanding any other
provision of the plan but subject to the provisions of Section 6, each
participant may direct the Trustee as to the investment or reinvestment of his
account, subject to the following provisions:

            7.1.1 Investment funds; fund accounts: The Committee shall determine
         from time to time the investment options ("investment funds") available
         to participants. Each participant shall be entitled to direct the
         Trustee as to the investment of contributions made on his behalf and
         the amount credited to his account among the investment funds. The
         Committee shall keep accounts subsidiary to each participant's separate
         accounts described in Section 1.1 (other than the loan account) with
         respect to the amount to his credit in each investment fund, the "fund
         accounts."

            7.1.2 Investment of contributions: In accordance with procedures
         adopted by the Committee, a participant may direct investment of any
         contribution allocable to his account among the investment funds in
         whole multiples of 5 percent. Such designation shall remain in effect
         unless and until the participant provides for a different designation.
         If for any reason a participant fails to direct the investment of the
         entire contribution allocable to his account, the contribution for
         which no direction is made shall be invested by the Trustee as directed
         by the Committee.

            7.1.3 Investment of account: Subject to the provisions of Section
         22.6, in accordance with procedures adopted by the Committee, a
         participant shall be entitled to reallocate the amount credited to his
         account or each of his fund accounts among the investment funds in
         whole multiples of 5 percent.

            7.1.4 Notice requirements: In accordance with procedures adopted by
         the Committee and the Trustee, the participants shall notify the
         Trustee of all directions made in accordance with this Section 7.1.

                                       46
<PAGE>

            7.1.5 Rights in directed investment funds: Notwithstanding the fact
         that all or a portion of a participant's account may be invested in an
         investment fund and may be expressed in units in a particular
         investment fund, such references shall mean the aggregate of the dollar
         amount which is credited to the participant's account at any point in
         time. Nothing contained in this Section 7 shall be deemed to give any
         participant any interest in any specific property in any investment
         fund or any interest in the plan, other than the right to receive
         payments or distributions in accordance with the plan or to exercise
         any other right specifically granted to the participant under the plan.

            7.1.6    Proxy voting:

                     (i)  Notwithstanding anything to the contrary in the plan,
            a participant whose account is invested in an investment fund which
            invests solely in shares of Company stock (his "Company stock fund
            account") or who has an ESOP account or a PAYSOP account shall be
            entitled to direct the Trustee as to the manner in which shares of
            Company stock allocated as of a record date to his Company stock
            fund account, his ESOP account and his PAYSOP account shall be
            voted, or shall be tendered in the event of a tender offer for such
            shares. The Trustee shall vote or tender such shares of Company
            stock as directed by the participant. If the participant
            instructions are not timely received with respect to such shares,
            the Trustee shall vote or tender such shares as directed by the
            Committee. The Committee shall provide for the solicitation and
            tabulation of voting or tender instructions from participants in a
            confidential manner. Prior to the voting or tendering of such
            shares, the Committee shall distribute to each participant who has a
            Company stock fund account, an ESOP account or a PAYSOP account the
            same information as is furnished to the shareholders of the Company
            in a proxy statement.

                     (ii) Notwithstanding anything to the contrary in the plan,
            a participant whose account is invested in an investment fund (other
            than an investment fund described in subparagraph (i)) shall be
            entitled to direct the Trustee as to the manner in which shares of
            such investment fund allocated as of a record date to his fund
            account shall be voted. The Trustee shall vote such shares as
            directed by the participant. If the participant instructions are not
            timely received with respect to such shares, the Trustee shall vote
            such shares as directed by the Committee. The Committee shall
            provide for the solicitation and tabulation of voting instructions
            from participants in a confidential manner. Prior to the voting of
            such shares, the Committee shall distribute to each participant who
            has shares in an investment fund to which the provisions of this
            subparagraph (ii) apply, the same information as is furnished to the
            other shareholders of the investment fund in a proxy statement.

                                       47
<PAGE>

            7.2   General: To the extent approved by the Trustee, the Committee
may establish any rules or resolutions necessary to implement the provisions of
this Section 7. The Trustee shall have and may exercise all powers necessary or
advisable in order to implement the provisions of this Section 7. If the Trustee
cannot transfer funds among the investment funds on an adjustment date as
provided in this Section 7, the Trustee shall effect such transfer as soon as
possible thereafter.

            Section 8.        Administration by Committee:
            ---------         ---------------------------

            8.1   Membership of Committee: The Committee shall consist of not
less than 3 individuals appointed by the Board to serve at the pleasure of the
Board. Any member of the Committee may resign, and his successor, if any, shall
be appointed by the Board. The Committee shall be responsible for the general
administration and interpretation of the plan and for carrying out its
provisions except to the extent all or any of such obligations specifically are
imposed on the Trustee or the Board or delegated to one or more other persons,
including the plan administrator. The Chairman of the Committee shall be the
plan administrator and agent for service of legal process on the plan.

            8.2   Committee Officers; Subcommittee: The members of the Committee
shall elect a chairman and may elect an acting chairman. They also shall elect a
secretary and may elect an acting secretary, either of whom may but need not be
a member of the Committee. The Committee may appoint from its membership such
subcommittees with such powers as the Committee determines and may authorize one
or more of its members or any agent to execute or deliver any instrument or make
any payment on behalf of the Committee.

            8.3   Committee Meetings: The Committee shall hold such meetings
upon such notice and at such places and intervals as it from time to time
determines. Notice of meetings shall not be required if waived in writing by all
members of the Committee at the time in office or if all such members are
present at the meeting.

                                       48
<PAGE>

            8.4   Transaction of Business: A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the Committee at any meeting
shall be by vote of a majority of those present and entitled to vote at any such
meeting. Resolutions may be adopted or other action taken without a meeting upon
written consent thereto signed by all members of the Committee.

            8.5   Committee Records: The Committee shall maintain full and
complete records of its deliberations and decisions. The minutes of its
proceedings shall be conclusive proof of the facts of the operation of the plan.
The records of the Committee shall contain all relevant data pertaining to
individual participants and their rights under the plan and in the trust fund.

            8.6   Establishment of Rules; Interactive Voice and Other Systems:
Subject to the limitations of the plan and ERISA, the Committee from time to
time may establish rules or bylaws for administration of the plan and
transaction of its business. The Committee may authorize the use of various
communication channels, including without limitation, an interactive voice
system and an interactive Internet site, which will allow participants to review
general information about their accounts and to initiate certain transactions
and elections under the plan. The Committee from time to time shall adopt
policies and rules governing the manner in which any such communication channel
will be utilized by participants so that the plan may be conveniently
administered.

            8.7   Conflicts of Interest: No individual member of the Committee
shall have any right to vote or decide on any matter relating solely to himself
or his rights or benefits under the plan (except that such member may sign
unanimous written consent to resolutions adopted or other action taken without a
meeting), except for elections as to payment of benefits.

            8.8   Correction of Errors: The Committee may correct errors and, so
far as practicable, may adjust any benefit or credit or payment accordingly. The
Committee in its discretion may waive any notice requirement in the plan;
provided, that a waiver of a requirement to notify the

                                       49
<PAGE>

Trustee shall be made only with the consent of the Trustee. A waiver of notice
in one case shall not be a waiver of notice in any other case. Any power or
authority the Committee has discretion to exercise under the plan shall be
exercised in a nondiscriminatory manner.

            8.9   Authority to Interpret Plan: Subject to objective plan terms
and the claims procedure set forth in Section 14, the Committee and plan
administrator shall have the duty and discretionary authority to interpret and
construe the provisions of the plan and decide any dispute which may arise
regarding the rights of participants hereunder, including the discretionary
authority to construe uncertain provisions of the plan and to make
determinations as to eligibility for participation and benefits under the plan.
Determinations by the Committee and plan administrator shall apply uniformly to
all persons similarly situated and shall be binding and conclusive upon all
interested persons. Such determinations shall only be set aside if the Committee
and the plan administrator are found to have acted arbitrarily and capriciously
in interpreting and construing the provisions of the plan.

            8.10  Third Party Advisor: The Committee may engage an attorney,
accountant or any other technical adviser on matters regarding the operation of
the plan and to perform such other duties as may be required in connection
therewith. The Committee may employ such clerical and related personnel as it
deems requisite or desirable in carrying out the provisions of the plan. The
Committee may delegate any one or more of its duties and responsibilities under
the plan to any person or persons, including but not limited to, the employees
of the Company and the plan administrator. From time to time, but no less
frequently than annually, the Committee shall review the financial condition of
the plan and determine the financial and liquidity needs of the plan as required
by ERISA. The Committee shall communicate such needs to the Company and Trustee
so that the funding policy and investment policy may be coordinated
appropriately to meet such needs.

                                       50
<PAGE>

            8.11  Compensation of Members: No member of the Committee, who
receives compensation from the Company for services as a full-time employee,
shall receive any fee or compensation for his services as such.

            8.12  Committee Expenses: The Committee shall be entitled to
reimbursement out of the trust fund for its reasonable expenses properly and
actually incurred in the performance of its duties in the administration of the
plan; provided, that the Company, in the discretion of the Board, may pay such
expenses.

            8.13 Indemnification of Committee: To the maximum extent permitted
by ERISA, no member of the Committee personally shall be liable by reason of any
contract or other instrument executed by him or on his behalf as a member of the
Committee or for any mistake of judgment made in good faith. The Company shall
indemnify and hold harmless, directly from its own assets (including the
proceeds of any insurance policy the premiums for which are paid from the
Company's own assets), each member of the Committee and each other officer,
employee, or director of the Company to whom any duty or power relating to the
administration or interpretation of the plan is delegated or allocated against
any unreimbursed or uninsured cost or expense (including any sum paid in
settlement of a claim with the prior written approval of the Board) arising out
of any act or omission to act in connection with the plan, unless arising out of
such person's own fraud, bad faith, willful misconduct or gross negligence.

            Section 9.        Management of Funds and Amendment of Plan:
            ---------         -----------------------------------------

            9.1   Fiduciary Duties: All assets of the plan shall be held in the
trust for the exclusive benefit of participants and their beneficiaries. Such
assets shall be administered as a trust fund to provide for the payment of
benefits as provided in the plan to participants or their successors in interest
out of the income and principal of the trust. All fiduciaries with respect to
the plan (as defined in ERISA) shall discharge their duties as such solely in
the interest of the participants and their

                                       51
<PAGE>

successors in interest and (i) for the exclusive purposes of providing benefits
to participants and their successors in interest and defraying reasonable
expenses of administering the plan as provided in Section 8.12 of the plan, (ii)
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of like character and
with like aims, and (iii) in accordance with the plan and trust agreement,
except to the extent such documents may be inconsistent with the then applicable
federal laws relating to fiduciary responsibility. The trust fund shall be used
for the exclusive benefit of participants and their beneficiaries and to pay
administrative expenses of the plan and trust. No portion of the trust fund
shall ever revert to or inure to the benefit of the Participating Employer or
any affiliated employers (except as otherwise provided in Sections 19 and 9.1).
Notwithstanding the foregoing provisions of this Section 9.1, the following
provisions shall apply:

            9.1.1  Initial qualification: If the plan receives an adverse
         determination with respect to the initial qualification of the plan
         under Section 401(a) of the Code, on written request of the Company,
         the Trustee shall return to the Company the amount of such contribution
         (increased by earnings attributable thereto and reduced by losses
         attributable thereto) within one calendar year after the date that
         qualification of the plan is denied; provided, that the application for
         the determination is made by the time prescribed by law for filing the
         Company's federal income tax return for the taxable year in which the
         plan is adopted or such later date as the Secretary of the Treasury may
         prescribe;

            9.1.2  Disallowed contribution: On written request of the Company,
         the Trustee shall return a disallowed contribution to the extent the
         deduction is disallowed under Section 404 of the Code (reduced by
         losses attributable thereto, but not increased by earnings attributable
         thereto) to the Company within one year after the date the deduction is
         disallowed; and

            9.1.3  Mistake of fact: If a contribution or any portion thereof is
         made by the Participating Employer by mistake of fact, on written
         request of the Company, the Trustee shall return the contribution or
         such portion (reduced by losses attributable thereto, but not increased
         by earnings attributable thereto) to such Participating Employer within
         one year after the date of payment to the Trustee.

            9.2    Trust Agreement: The Company, on behalf of each Participating
Employer, and the Trustee shall enter into an appropriate trust agreement for
the administration of the trust.

                                       52
<PAGE>

The trust agreement shall contain such powers and reservations as to investment,
reinvestment, control and disbursement of the funds of the trust, and such other
provisions not inconsistent with the provisions of the plan and its nature and
purposes, as shall be agreed on and set forth therein. Such agreement shall
provide that the Board may remove the Trustee at any time upon reasonable
notice, the Trustee may resign at any time upon reasonable notice, and on such
removal or resignation the Board shall designate a successor trustee.

            9.3   Authority to Amend: The Board, acting on behalf of the
Participating Employer, shall have the right at any time and from time to time
to amend or terminate the plan and the trust agreement; provided, that (i)
except as provided in Section 9.1, no such amendment shall have the effect of
diverting the trust fund to purposes other than the exclusive benefit of
participants, and (ii) no such amendment that alters the duties,
responsibilities or liabilities of the Trustee shall be made unless the Trustee
consents thereto in writing. No amendment to the plan shall decrease a
participant's accrued benefit as of the date of such amendment. A plan amendment
which has the effect of (a) eliminating a retirement-type subsidy or (b)
eliminating an optional form of distribution shall be treated as reducing
accrued benefits. Notwithstanding the foregoing, and until otherwise decided by
the Board, the officer of the Company specifically designated in resolutions
adopted by the Board shall have the authority to amend the plan to (i) comply
with changes in laws or government rules or regulations applicable to the plan;
(ii) maintain the tax-qualified status of the plan; (iii) provide for the merger
or consolidation of another plan into this plan, or the transfer of the assets
or liabilities of another plan to this plan, and, in connection therewith to
comply with the provisions of the Treasury Regulations under Section 411(d)(6)
of the Code; and (iv) revise the Exhibits attached hereto. See Section 12 for
provisions regarding termination of the plan.

                                       53
<PAGE>

          9.4     Requirements of Writing: All requests, directions,
requisitions and instructions of the Committee to the Trustee shall be in
writing, signed by such person or persons as designated by the Committee.

          Section 10.    Allocation of Responsibilities Among Named Fiduciaries:
          ----------     ------------------------------------------------------

          10.1    Duties of Named Fiduciaries: The named fiduciaries with
respect to the plan and the fiduciary duties and other responsibilities
allocated to each, which shall be carried out in accordance with the other
applicable terms and provisions of the plan, shall be as follows:

          10.1.1  Board:

                  (i)   To appoint and remove members of the
          Committee; and

                  (ii)  To appoint and remove trustees under the plan.

          10.1.2  Committee:

                  (i)   To interpret the provisions of the plan and
          determine the rights of participants under the plan, except
          to the extent otherwise provided in Section 14 relating to
          the claims procedure;

                  (ii)  To administer the plan in accordance with its
          terms, except to the extent powers to administer the plan
          specifically are delegated to another named fiduciary or
          other person or persons as provided in the plan;

                  (iii) To account for the interests of participants
          in the plan; and

                  (iv)  To direct the Trustee in the distribution of
          trust assets.

          10.1.3  Plan administrator:

                  (i)   To file such reports as may be required with
          the United States Department of Labor, the Internal Revenue
          Service and any other government agency to which reports may
          be required to be submitted from time to time;

                  (ii)  To comply with requirements of the law for
          disclosure of plan provisions and other information relating
          to the plan to participants and other interested parties;
          and

                                       54
<PAGE>

                  (iii) To administer the claims procedure to the
          extent provided in Section 14.

          10.1.4   Trustee:

                  (i)   To invest and reinvest trust assets subject to
          the provisions of Section 7;

                  (ii)  To make distributions to participants as
          directed by the Committee;

                  (iii) To render annual accountings to the Company as
          provided in the trust agreement; and

                  (iv)  Otherwise to hold, administer and control the
          assets of the trust as provided in the plan and trust
          agreement.

          10.2    Co-fiduciary Liability: Except as otherwise provided in ERISA,
a named fiduciary shall not be responsible or liable for any act or omission of
another named fiduciary with respect to fiduciary responsibilities allocated to
such other named fiduciaries. A named fiduciary of the plan shall be responsible
and liable only for its own acts or omissions with respect to fiduciary duties
specifically allocated to it and designated as its responsibility.

          Section 11.  Benefits Not Assignable; Facility of Payments:
          ----------   ---------------------------------------------

          11.1    Benefits Not Assignable: Except as otherwise provided in
Section 5.6 and this Section 11.1, no portion of the accrued benefit of any
participant shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge. Any attempt so to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the
same shall be void. No portion of such accrued benefit shall be payable in any
manner to any assignee, receiver or trustee, liable for the participant's debts,
contracts, liabilities, engagements or torts, or be subject to any legal process
to levy upon or attach. Notwithstanding the foregoing, an offset to a
participant's accrued benefit against an amount that the participant is ordered
or required to pay the plan with respect to a judgment, order, or

                                       55
<PAGE>

decree issued, or a settlement entered into, on or after August 5, 1997, shall
be permitted in accordance with Code Sections 401(a)(13)(C) and (D).

          11.2   Payments to Minors and Others: If any individual entitled to
receive a payment under the plan shall be physically, mentally or legally
incapable of receiving or acknowledging receipt of such payment, the Committee,
upon the receipt of satisfactory evidence of his incapacity and satisfactory
evidence that another person or institution is maintaining him and that no
guardian or committee has been appointed for him, may cause the payment
otherwise payable to him to be made to such person or institution so maintaining
him. Payment to such person or institution shall be in full satisfaction of all
claims by or through the participant to the extent of the amount thereof.

          Section 12.  Termination of Plan and Trust; Merger or Consolidation of
          ----------   ---------------------------------------------------------
Plan:
----

                                       56
<PAGE>

          12.1   Complete Termination: In the event of a termination of the plan
(including a cessation of contributions which results in a termination of the
plan), all contributions to the plan shall cease and no additional participants
shall enter the plan. The assets under the plan shall remain or become fully
vested in the participants, beneficiaries or other successors in interest. Such
vested benefit of each such individual shall be held in the plan for
distribution in accordance with the provisions of Section 5; provided, that the
Committee in its discretion may provide at any time for liquidation of the trust
and distribution to the participants of their accrued benefits as provided in
Section 5. If, upon termination, the plan does not offer an annuity option
(purchased from a commercial provider) and neither the Participating Employer
nor any affiliated employer maintains another defined contribution plan (other
than an employee stock ownership plan defined in Section 4975(e)(7) of the
Code), the participant's accrued benefit may, without the participant's consent,
be distributed to the participant. However, if the Participating Employer or any
affiliated employer maintains another defined contribution plan (other than an
employee stock ownership plan defined in Section 4975(e)(7) of the Code), the
participant's accrued benefit may, without the participant's consent, be
transferred to such other plan if the participant does not consent to an
immediate distribution. Notwithstanding the foregoing, all distributions upon
termination of the plan shall be subject to the limitations set forth in Section
5.8 of the plan. For purposes of the plan, a termination of contributions or a
suspension or reduction of such contributions amounting in effect to a
termination of contributions shall be a termination of the plan.

          12.2   Partial Termination: In the event of a partial termination of
the plan, the provisions of Section 12.1 regarding a complete termination shall
apply in determining interests and rights of the participants and their
beneficiaries with respect to whom the partial termination occurs and to the
portion of the trust fund allocable to such participants and beneficiaries.

                                       57
<PAGE>

          12.3   Merger or Consolidation: In the event of any merger or
consolidation of the plan with any other plan, or a transfer of assets or
liabilities of the plan to any other plan (which merged, consolidated or
transferee plan is referred to in this Section 12.3 as the "successor plan"),
the amount each participant would receive if the successor plan (and this plan,
if he has any interest remaining therein) were terminated immediately after the
merger, consolidation or transfer shall equal or be greater than the amount he
would have received if this plan (and the successor plan, if he had any interest
therein immediately prior to the merger, consolidation or transfer) were
terminated immediately preceding the merger, consolidation or transfer. From
time to time, the Company or one of its affiliated employers will acquire the
assets and employees of other companies by corporate merger or otherwise. In
connection therewith, the Company or one of its affiliated employers will become
the sponsor of the tax-qualified defined contribution plan or plans maintained
by the acquired company (the "acquired plans"). From time to time, pursuant to a
Retirement Plan Merger Agreement, one or more acquired plans will be merged into
this plan. The Retirement Plan Merger Agreements providing for such plan mergers
will be attached hereto as Exhibit D.

          12.4   Protection of Benefits: No termination, partial termination,
merger or consolidation or transfer of assets of the plan shall reduce a
participant's accrued benefit or eliminate an optional form of distribution. For
purposes of this Section 12.4, a termination, partial termination, merger or
consolidation of the plan that has the effect of decreasing a participant's
accrued benefit or eliminating an optional form of benefit with respect to
benefits attributable to service before the amendment shall be treated as
reducing an accrued benefit.

          Section 13.  Communication to Employees:
          ----------   --------------------------

          The Company shall communicate the principal terms of the plan to the
participants and beneficiaries in accordance with the requirements of ERISA. The
Company shall make available for inspection by participants and their
beneficiaries, during reasonable hours at the principal office of the

                                       58
<PAGE>

Company and at such other places as may be required by ERISA, a copy of the
plan, trust agreement and such other documents as may be required by ERISA.

          Section 14.  Claims Procedure:
          ----------   ----------------

          The following claims procedure shall apply with respect to the
plan:

          14.1   Filing of a Claim for Benefits: If a participant or beneficiary
(the "claimant") believes he is entitled to benefits under the plan that are not
being paid to him or accrued for his benefit, he may file a written claim
therefor with the plan administrator. If the plan administrator is the claimant,
all actions required to be taken by the plan administrator pursuant to this
Section 14 shall be taken instead by another member of the Committee designated
by the Committee.

          14.2   Notification to Claimant of Decision: Within 90 days after
receipt of a claim by the plan administrator, or within 180 days if special
circumstances require an extension of time, the plan administrator shall notify
the claimant of its decision with regard to the claim. If special circumstances
require an extension of time, a written notice of the extension shall be
furnished to the claimant prior to commencement of the extension setting forth
the special circumstances and the date by which the decision will be furnished.
If such claim is wholly or partially denied, notice thereof shall be written in
a manner calculated to be understood by the claimant and shall set forth: (i)
the specific reason or reasons for the denial; (ii) specific reference to
pertinent plan provisions on which the denial is based; (iii) a description of
any additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary; and
(iv) an explanation of the procedure for review of the denial. If the plan
administrator fails to notify the claimant of the decision in timely manner, the
claim shall be deemed denied as of the close of the initial 90-day period (or
the extension period, if applicable).

          14.3   Procedure for Review: Within 60 days following receipt by the
claimant of notice denying his claim in whole or in part, or, if such notice is
not given, within 60 days following the

                                       59
<PAGE>

latest date on which such notice timely could have been given, the claimant may
appeal denial of the claim by filing a written application for review with the
Committee. Following such request for review, the Committee shall fully and
fairly review the decision denying the claim. Prior to the decision of the
Committee, the claimant shall be given an opportunity to review pertinent
documents and submit issues and comments in writing.

          14.4    Decision on Review: The decision on review of a claim denied
in whole or in part by the plan administrator shall be made in the following
manner:

          14.4.1  Notification to claimant of decision: Within 60 days
     following receipt by the Committee of the request for review, or
     within 120 days if special circumstances require an extension of
     time, the Committee shall notify the claimant in writing of its
     decision with regard to the claim. If special circumstances
     require an extension of time, written notice of the extension
     shall be furnished to the claimant prior to the commencement of
     the extension. If the decision on review is not furnished in a
     timely manner, the claim shall be deemed denied as of the close
     of the initial 60-day period (or the extension period, if
     applicable).

          14.4.2  Format and content of decision: The decision on
     review of a claim that is denied in whole or in part shall set
     forth specific reasons for the decision written in a manner
     calculated to be understood by the claimant and shall cite the
     pertinent plan provisions on which the decision is based.

          14.4.3  Effect of decision: The decision of the Committee
     shall be final and conclusive.

          14.5    Action by Authorized Representative of Claimant: All actions
set forth in this Section 14 to be taken by the claimant may be taken by a
representative of the claimant duly authorized by him to act on his behalf on
such matters. The plan administrator and the Committee may require such evidence
as either reasonably deems necessary or advisable of the authority of any such
representative to act.

          Section 15.  Portability of Participant Accounts:
          ----------   -----------------------------------

          Notwithstanding any provision of the plan to the contrary that would
otherwise limit a distributee's election under this Section 15, a distributee
may elect, at the time and in the manner

                                       60
<PAGE>

prescribed by the Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.

          15.1     Definitions: The following definitions shall apply
     for purposes of this Section 15:

          15.1.1.  Eligible rollover distribution: An eligible
     rollover distribution is any distribution of all or any portion
     of the balance to the credit of the distributee, except that an
     eligible rollover distribution does not include: any distribution
     that is one of a series of substantially equal periodic payments
     (not less frequently than annually) made for the life (or life
     expectancy) of the distributee or the joint lives (or joint life
     expectancies) of the distributee and the distributee's designated
     beneficiary, or for a specified period of 10 years or more; any
     distribution to the extent such distribution is required under
     Section 401(a)(9) of the Code; any hardship distribution
     described in Section 401(k)(2)(B)(i)(iv); and the portion of any
     distribution that is not includible in gross income (determined
     without regard to the exclusion for net unrealized appreciation
     with respect to employer securities).

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

          15.1.3   Distributee: A distributee includes an employee or
     former employee. In addition, the employee's or former employee's
     surviving spouse and the employee's or former employee's spouse
     or former spouse who is the alternate payee under a qualified
     domestic relations order, as defined in Section 414(p) of the
     Code, are distributees with regard to the interest of the spouse
     or former spouse.

          15.1.4   Direct rollover: A direct rollover is a payment by
     the plan to the eligible retirement plan specified by the
     distributee.

          15.2     Construction: Notwithstanding anything contained in this
Section 15 to the contrary, the provisions of this Section 15 shall at all times
be construed and enforced according to the requirements of Section 401(a)(31) of
the Code and the Treasury Regulations thereunder, as the same may be amended
from time to time.

                                       61
<PAGE>

          Section 16.  Rollovers:
          ----------   ---------

          An eligible employee who receives a distribution of all or part of his
interest from another retirement plan (including another plan maintained by the
Participating Employer or an affiliated employer) which is qualified under
Section 401(a) of the Code on the date of distribution may, with the consent of
the Committee in accordance with procedures adopted by the Committee, transfer
all or a part of such distribution to the Trustee under this plan. The amount so
transferred may only include cash, shares of Company stock or other property
approved by the Committee. In applying the provisions of this Section 16, the
following provisions shall apply:

          16.1  Timing: The transfer to the Trustee must occur on or before 60
days following receipt by the eligible employee of such distribution. If such
distribution previously was deposited in an individual retirement account or
individual retirement annuity as defined in Section 408 of the Code, the
transfer must occur on or before 60 days following receipt by the eligible
employee of all or any portion of the balance to his credit under such
individual retirement account or individual retirement annuity.

          16.2  Eligibility: The distribution made to the eligible employee must
be an eligible rollover distribution as defined in Section 15.1.1.

          16.3  Maximum Amount: The amount transferred to the Trustee shall be
limited to the maximum rollover amount as provided in Section 402(c)(2) of the
Code.

          16.4  Accounting: The amount transferred to the Trustee shall be
credited to the eligible employee's rollover account. The assets in the rollover
account shall be administered by the Trustee in the same manner as other trust
assets.

          16.5  Transfers Prior to Becoming a Participant: If an eligible
employee who makes such a transfer has not completed the participation
requirements of Section 1.31, his rollover account shall represent his sole
interest in the plan until he becomes a participant.

                                       62
<PAGE>

          Section 17.  Special Provisions Relating to Transfers From Qualified
          ----------   -------------------------------------------------------
Plans:
-----

          With the approval of the Committee and in accordance with procedures
adopted by the Committee, the Trustee shall receive and hold as a part of the
trust fund assets transferred (the "transferred assets") directly from the
trustee or custodian of any other retirement plan (the "transferor plan") that
is qualified under Section 401(a) of the Code. Such transferred assets may only
include cash or shares of Company stock. In applying the provisions of this
Section 17, the following provisions shall apply:

          17.1   Accounting: The transferred assets of each participant shall be
credited to the subaccounts of the participant as described in Section 1.1 as
determined by the Committee, taking into account the applicable vesting
schedule, the source of the transferred assets, amounts subject to special tax
treatment and withdrawal rules. Additional subaccounts shall be established, if
required, to accommodate these objectives.

          17.2   Liability of Trustee: The Trustee under the plan shall not be
liable or responsible for any acts or omissions in the administration of any
transferor plan or the trust thereunder of any other person or entity who was
trustee, custodian or other fiduciary under such transferor plan. The Trustee
under the plan shall be held harmless from such liability or responsibility.

          17.3   Protected Benefits Under Section 411(d)(6) of the Code: The
protected benefits of the transferor plan, as defined in Section 411(d)(6) of
the Code, shall be preserved with respect to the transferred assets.

          17.4   Authority of Committee: To the extent not inconsistent with the
provisions of this Section 17, the Committee may make rules or bylaws
supplementing and implementing the provisions of this Section 17.

          17.5   Impermissible Transfers: Notwithstanding any provisions of this
Section 17 to the contrary, the Committee shall not permit nor the Trustee
accept any direct or indirect transfers (as

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<PAGE>

that term is defined and interpreted under Section 401(a)(11) of the Code and
the Treasury Regulations thereunder) from a defined benefit plan, money purchase
plan (including a target benefit plan), stock bonus or profit-sharing plan which
would otherwise have provided for a life annuity form of payment to the
employee.

          Section 18.  Special Top-Heavy Provisions:
          ----------   ----------------------------

          The following special provisions shall apply and supersede any
conflicting provision in the plan with respect to any plan year in which the
plan is determined to be top-heavy (as described in Section 18.1.7):

          18.1    Definitions: The following definitions shall apply for
purposes of this Section 18:

          18.1.1  "Company" means the Participating Employer and its
     affiliated employers.

          18.1.2  "Company contributions" for purposes of Section
     18.2.1 may include matching contributions to the extent permitted
     under Section 416 of the Code and the regulations issued
     thereunder.

          18.1.3  "Determination date" means the last day of the
     preceding plan year.

          18.1.4  "Key employee" means any employee or former employee
     (and the beneficiaries of such employee) who at any time during
     the determination period is an officer of the Company if such
     individual's annual statutory compensation exceeds 50 percent of
     the dollar limitation under Section 415(b)(1)(A) of the Code, an
     owner (or considered an owner under Section 318 of the Code) of
     one of the 10 largest interests in the Company if such
     individual's statutory compensation exceeds 100 percent of the
     dollar limitation under Section 415(c)(1)(A) of the Code, a 5
     percent owner of the Company, or a 1 percent owner of the Company
     who has an annual statutory compensation of more than $150,000.
     Annual statutory compensation means statutory compensation as
     defined in Section 1.41 of the plan. The determination period
     shall be the plan year containing the determination date and the
     preceding 4 plan years. The determination of who is a key
     employee will be made in accordance with Section 416(i)(1) of the
     Code. A non-key employee means any employee who is not a key
     employee.

          18.1.5  "Permissive aggregation group" means the required
     aggregation group and any other plan or plans of the Company
     which, when considered as a group with the

                                       64
<PAGE>

     required aggregation group, would continue to satisfy the requirements
     of Sections 401(a)(4) and 410 of the Code.

          18.1.6  "Required aggregation group" means (i) each qualified
     plan of the Company in which at least one key employee participates or
     participated at any time during the determination period (regardless
     of whether the plan has terminated), and (ii) any other qualified plan
     of the Company which enables a plan described in (i) to meet the
     requirements of Section 401(a)(4) or 410 of the Code.

          18.1.7  "Top-heavy plan" means, for any plan year beginning after
     December 31, 1983, the plan if any of the following conditions exists:

                  (i)   The top-heavy ratio for the plan exceeds 60
          percent and the plan is not part of any required aggregation
          group or permissive aggregation group.

                  (ii)  This plan is a part of a required aggregation
          group but not part of a permissive aggregation group and the
          top-heavy ratio for such group exceeds 60 percent.

                  (iii) This plan is a part of a required aggregation
          group and part of a permissive aggregation group and the top-
          heavy ratio for the permissive aggregation group exceeds 60
          percent.

          18.1.8  "Top-heavy ratio" means the following:

                  (i)   If the Company maintains one or more defined
          contribution plans (including any simplified employee
          pension plan) and has not maintained any defined benefit
          plan which during the 5 year period ending on the
          determination date(s) has or has had accrued benefits, the
          top-heavy ratio for this plan alone or for the required or
          permissive aggregation group, as appropriate, shall be a
          fraction, the numerator of which is the sum of the accrued
          benefits of all key employees as of the determination
          date(s) including any part of any accrued benefit
          distributed in the 5 year period ending on the determination
          date(s), and the denominator of which is the sum of all
          accrued benefits including any part of any accrued benefit
          distributed in the 5 year period ending on the determination
          date(s), both computed in accordance with Section 416 of the
          Code. Both the numerator and denominator of the top-heavy
          ratio are increased to reflect any contribution not actually
          made as of the determination date, but which is required to
          be taken into account on that date under Section 416 of the
          Code.

                  (ii)  If the Company maintains one or more defined
          contribution plans (including any simplified employee
          pension plan) and the Company maintains or has maintained
          one or more defined benefit plans which during the 5 year
          period ending on the determination date(s)

                                       65
<PAGE>

          has or has had any accrued benefits, the top-heavy ratio for
          any required or permissive aggregation group as appropriate
          is a fraction, the numerator of which is the sum of accrued
          benefits under the aggregated defined contribution plan or
          plans for all key employees, determined in accordance with
          paragraph (i) above, and the present value of accrued
          benefits under the aggregated defined benefit plan or plans
          for all key employees as of the determination date(s), and
          the denominator of which is the sum of the accrued benefits
          under the aggregated defined contribution plan or plans for
          all participants, determined in accordance with paragraph
          (i) above, and the present value of accrued benefits under
          the defined benefit plan or plans for all participants as of
          the determination date(s), all determined in accordance with
          Section 416 of the Code. The accrued benefits under a
          defined benefit plan in both the numerator and denominator
          of the top-heavy ratio are increased for any distribution of
          an accrued benefit made in the 5 year period ending on the
          determination date.

               (iii)     For purposes of paragraphs (i) and (ii)
          above, the value of account balances and the present value
          of accrued benefits will be determined as of the most recent
          valuation date that falls within or ends with the 12-month
          period ending on the determination date, except as provided
          in Section 416 of the Code for the first and second plan
          years of a defined benefit plan. The account balances and
          accrued benefits of a participant who (a) is not a key
          employee but who was a key employee in a prior year, or (b)
          is not credited with at least one hour of service with any
          employer maintaining the plan at any time during the 5 year
          period ending on the determination date will be disregarded.
          Calculation of the top-heavy ratio, and the extent to which
          distributions, rollovers, and transfers are taken into
          account shall be made in accordance with Section 416 of the
          Code. Deductible employee contributions will not be taken
          into account for purposes of computing the top-heavy ratio.
          When aggregating plans, the value of account balances and
          accrued benefits will be calculated with reference to the
          determination dates that fall within the same calendar year.
          The accrued benefit of a participant other than a key
          employee shall be determined under (a) the method, if any,
          that uniformly applies for accrual purposes under all
          defined benefit plans maintained by the Company, or (b) if
          there is no such method, as if such benefit accrued not more
          rapidly than the slowest accrual rate permitted under the
          fractional rule of Section 411(b)(1)(C) of the Code.

          18.1.9   "Valuation date" means the year-end adjustment date as
     defined in Section 1.4.

          18.2     Top-Heavy Requirements: Notwithstanding any other provisions
of the plan, the plan must satisfy the following requirements for any plan year
in which the plan is a top-heavy plan:

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<PAGE>

          18.2.1   Minimum allocation requirements: Except as otherwise
     provided in (a) and (b) below, the Company contributions allocated to
     his account on behalf of any participant who is not a key employee
     shall not be less than the lesser of 3 percent of such participant's
     statutory compensation or, if the Company has no defined benefit plan
     which designates this plan to satisfy Section 416 of the Code, the
     largest percentage of Company contributions allocated on behalf of any
     key employee for that year. The minimum allocation shall be determined
     without regard to any Social Security contribution. This minimum
     allocation shall be made even though, under other plan provisions, the
     participant otherwise is not entitled to receive an allocation, or
     would have received a lesser allocation for the year, because of (i)
     the participant's failure to complete 1,000 hours of service (or any
     equivalent provided in the plan), (ii) the participant's failure to
     make mandatory employee contributions to the plan, or (iii) statutory
     compensation less than a stated amount. The provisions of this Section
     18.2.1 shall not apply: (a) to any participant who was not employed by
     the Company on the last day of the plan year, or (b) to any
     participant to the extent the participant is covered under any other
     plan or plans of the Company that provide that the minimum allocation
     or benefit requirement applicable to top-heavy plans shall be met in
     the other plan or plans. The minimum allocation required (to the
     extent required to be nonforfeitable under Section 416(b) of the Code)
     shall not be forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of
     the Code. If any additional Company contribution is required to be
     made on behalf of a participant to satisfy the provisions of this
     Section 18.2.1, such Company contribution shall be allocated to the
     Employer supplemental matching contribution account of the
     participant. Notwithstanding the foregoing, if the Company maintains
     any other defined contribution plan, the Company shall provide a
     minimum allocation under one such plan equal to 3 percent of statutory
     compensation for each non-key employee who is entitled to a minimum
     allocation under each of the plans.

          18.2.2   Minimum vesting requirements: For any plan year in which
     the plan is top-heavy, "3 or more years of service" shall be
     substituted for "5 or more years of service" in Section 3.1. The
     provisions of this Section 18.2.2 shall apply to all benefits within
     the meaning of Section 411(a)(7) of the Code, including benefits
     accrued before the plan became top-heavy. Further, no reduction in
     vested benefits shall occur in the event the plan's status as top-
     heavy changes for any plan year. However, this Section 18.2.2 shall
     not apply to the account of any employee who does not complete an hour
     of service after the plan first becomes top-heavy, and such employee's
     vested interest in such accounts shall be determined without regard to
     this Section 18.

          Section 19.    Limitations on Allocations:
          ----------     --------------------------

          19.1     Limitations: Subject to the provisions of Sections 19.3 and
19.4, in no event shall the sum of the annual additions to the account of a
participant for any limitation year beginning on or after January 1, 1987, under
this plan and any other defined contribution plan (as defined in Section 19.4)
of the Company, exceed in the aggregate the lesser of: (a) $30,000, referred to
herein as

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<PAGE>

the "dollar limitation," or (b) 25 percent of such participant's statutory
compensation received during the limitation year, referred to herein as the
"statutory compensation limitation." The amount of the dollar limitation shall
be adjusted in accordance with the Code to reflect increases in the cost of
living. If the limitations provided in this Section 19.1 would be exceeded for
any limitation year with respect to any participant, any required reduction in
the annual additions to his account shall be made as provided in Section 19.2.

          19.2    Adjustments: If, as a result of a reasonable error in
estimating a participant's statutory compensation, a reasonable error in
determining the amount of elective deferrals that may be made by a participant
under the limitations of this Section 19, or other limited facts and
circumstances, the dollar limitation or statutory compensation limitation set
forth in Section 19.1 would be exceeded for any limitation year, such excess
with respect to a participant for such limitation year shall be disposed of as
follows:

          (i)     First, salary reduction contributions, and any gains
     attributable thereto, to the extent of any excess shall be distributed
     to the participant.

          (ii)    Thereafter, if further reductions are necessary, then
     such participant's share of the employer contributions (other than
     salary reduction contributions) for the limitation year shall be
     reduced to the extent of any such remaining excess. The amount of the
     reduction shall be reallocated among the remaining participants in the
     ratio that each such participant's statutory compensation during the
     limitation year in question bears to the aggregate statutory
     compensation of all such participants during such limitation year and
     before any salary reduction contributions, matching contributions, or
     supplemental employer contributions for such limitation year are
     allocated. If all of the amount of such reduction with respect to the
     participant and the amount of any reduction with respect to any other
     participant cannot be reallocated without causing the account of each
     other participant to exceed the dollar limitation or the statutory
     compensation limitation, then such amount shall be credited to a
     separate account, designated as the "allocation suspense account."

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<PAGE>

          (iii)   The allocation suspense account shall contain the excess
     amounts of employer contributions from all limitation years and
     earnings thereon. Such excess amounts shall be allocated for each
     succeeding limitation year among the accounts of participants in the
     ratio that each such participant's statutory compensation for the
     limitation year in question bears to the aggregate statutory
     compensation of all such participants during such limitation year and
     before any salary reduction contributions, matching contributions, or
     supplemental employer contributions for such year are allocated. The
     allocation suspense account shall be invested by the Trustee in the
     investment fund designated by the Committee. The allocation suspense
     account shall be adjusted annually for additions thereto and
     distributions therefrom. If the plan is terminated, any balance in the
     allocation suspense account shall be returned to the Company.
     Notwithstanding the foregoing, each suspense account maintained under
     the ESOP portion of the predecessor plan because of the limitations of
     Section 415 of the Code shall continue to be allocated among the
     participants in accordance with the applicable provisions of the
     predecessor plan.

Notwithstanding the foregoing, in no event shall salary reduction contributions
be distributed pursuant to paragraph (i) of this Section 19.2 to a participant
who is a highly compensated employee. Any excess with respect to such a
participant shall be disposed of in the manner described in paragraph (ii) of
this Section 19.2.

          19.3    Participation in this Plan and a Defined Benefit Plan: This
Section 19.3 shall apply with respect to limitation years beginning prior to
January 1, 2000. If at any time a participant is a participant in the plan and
in a defined benefit plan of the Company, in no event shall the sum of the
defined benefit fraction (as defined in this Section 19.3) and the defined
contribution fraction (as defined in this Section 19.3) for any limitation year
exceed 1.0. For purposes of this Section 19.3, and except as otherwise provided
in this Section 19, the "defined benefit fraction" for any limitation year of a
defined benefit plan shall be a fraction the numerator of which is the projected
annual benefit of the participant under all defined benefit plans (as determined
as of the close of such limitation year), and the denominator of which is the
lesser of (i) the product of 1.25 and the dollar limitation in effect for
defined benefit plans for such limitation year (referred to herein as the
"defined benefit dollar limitation"), and (ii) the product of 1.4 and 100
percent of the participant's average annual statutory compensation for the
period of 3 consecutive calendar years (or the actual number of consecutive
years

                                       69
<PAGE>

of employment with the Company if the participant was employed by the Company
for less than 3 consecutive years) which will produce the highest average
(referred to herein as the "defined benefit statutory compensation limitation").
The "defined contribution fraction" for any limitation year of the plan shall be
a fraction the numerator of which is the sum of the annual additions to the
participant's accounts under the plan and all other defined contribution plans
maintained by the Company through the close of such limitation year, and the
denominator of which is the sum of the lesser of (A) or (B) for such limitation
year and each prior limitation year during which the participant was an employee
of the Company (regardless of whether a plan was in existence during those
years), where (A) is the product of 1.25 and the dollar limitation in effect for
such limitation year (determined without regard to Section 415(c)(6) of the
Code), and (B) is the product of 1.4 and the statutory compensation limitation
for the limitation year. If the limitation provided in this Section 19.3 would
be exceeded for any limitation year, the reduction in the sum of the defined
benefit fraction and the defined contribution fraction necessary to comply with
the limitation shall be made in the defined contribution fraction.

          19.4   Definitions: For the purpose of applying the rules of this
Section 19, the following provisions shall apply: (a) the "limitation year"
shall be the plan year; (b) "Social Security retirement age" means the age at
which a participant is eligible to retire and receive an unreduced benefit under
the Social Security Act; (c) all defined benefit plans of the Company shall be
considered as a single plan, and all defined contribution plans of the Company
shall be considered as a single plan; (d) "projected annual benefit" means the
annual normal retirement benefit payable in the form of a single life annuity
(with no ancillary benefits) to which a participant would be entitled under the
terms of the defined benefit plan if the following factors are assumed: (i) the
participant will continue employment with the Company until he reaches Social
Security retirement age (or until his then current age, if he has previously
reached Social Security retirement age); (ii) the participant's statutory

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<PAGE>

compensation for the limitation year will remain the same until the date the
participant attains Social Security retirement age; and (iii) all other relevant
factors used to determine benefits under the defined benefit plan for the
limitation year will remain constant for all future limitation years; (e) the
"annual addition" with respect to any limitation year of the plan beginning on
or after January 1, 1987 means the sum of the following items allocated on
behalf of a participant: (i) Company contributions, including, without
limitation, excess contributions, excess aggregate contributions; (ii) all
forfeitures; (iii) the amount of the participant's nondeductible employee
contributions for the limitation year (nondeductible employee contributions
shall be considered made with respect to a particular plan year if such
contributions actually are made by the participant during such plan year or
within 30 days after the close of such plan year); (iv) amounts allocated after
March 31, 1984 to an individual medical account, as defined in Section 415(l) of
the Code, which is part of a defined benefit plan maintained by the Company; and
(v) amounts derived from contributions paid or accrued after December 31, 1985,
in taxable years ending after such date, which are attributable to post-
retirement medical benefits allocated to the separate account of a key employee,
as defined in Section 419A(d) of the Code, under a welfare benefit fund, as
defined in Section 419(e) of the Code, maintained by the Company; provided, that
the following are not "annual additions": (1) transfers of funds from one
qualified plan to another; (2) rollover contributions (as defined in Sections
402(c)(4), 403(a)(4), 403(b)(8) and 408(d)(3) of the Code); (3) repayments of
loans made to a participant from the plan; (4) repayments of distributions
received by an employee pursuant to Section 411(a)(7)(B) of the Code; (5)
repayments of distributions received by an employee pursuant to Section
411(a)(3)(D) of the Code (mandatory contributions); (6) employee contributions
to a simplified employee pension which are excludible from gross income under
Section 408(k)(6) of the Code; (7) deductible employee contributions to a
qualified plan; and (8) excess elective deferrals distributed to a participant
pursuant to Section 2.1.1 of the plan; (f) "defined contribution plan" means a
plan, including this plan, that provides for an individual account for each

                                       71
<PAGE>

participant and for benefits based solely on the amount contributed to the
participant's account and any income, expenses, gains and losses, and
forfeitures of accounts of other participants that may be allocated to such
participant's account; and "defined benefit plan" means any plan that is not a
defined contribution plan; provided, that only plans which are described in
Section 415(k)(1) of the Code shall be included within the definition of a
defined contribution plan or a defined benefit plan, as the case may be; (g) any
affiliated employer shall be considered to be the Company; provided that for the
purposes of this Section 19, determination of the members of a controlled group
of employers and employers under common control pursuant to Sections 414(b) and
(c) of the Code shall be made by substituting the phrase "more than 50 percent"
for the phrase "at least 80 percent" where it appears in such Code sections; and
(h) notwithstanding anything in this Section 19 to the contrary, the
limitations, adjustments and other requirements prescribed in this Section 19
shall comply with Section 415 of the Code.

          Section 20.    Parties to the Plan; Transfers of Employees:
          ----------     -------------------------------------------

          The employers listed on Exhibit B are employer-parties to the plan. By
separate agreement with the Company, one or more additional employers may become
parties to the plan. The following provisions shall apply to all parties to the
plan except as otherwise expressly provided herein or in such separate
agreement:

          20.1   Application of Plan and Trust Agreement: The plan shall apply
as a single plan with respect to each Participating Employer as if it were only
one employer-party.

          20.2   Service with a Participating Employer: Service for purposes of
the plan shall be interchangeable among each Participating Employer and shall
not be deemed interrupted or terminated by the transfer at any time of an
employee from the service of one Participating Employer to service of another
Participating Employer. In addition, service as an ineligible employee shall be
taken into account in determining an employee's eligibility to become a
participant and his vested accrued benefit under the plan.

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<PAGE>

          20.3    Contributions by each Participating Employer: Notwithstanding
any provision of the plan to the contrary, the following special provisions
shall apply:

          20.3.1  Salary reduction contributions to the plan with respect
     to each Participating Employer shall be determined and paid separately
     by each Participating Employer in accordance with the provisions of
     the plan applicable to such Participating Employer. If a participant
     is in the service of more than one Participating Employer during a
     plan year, each such Participating Employer shall be responsible for
     any salary reduction contribution to be made to the plan pursuant to
     the participant's deferral election with respect to the compensation
     paid by such Participating Employer to such participant. If a
     participant who is eligible to make salary reduction contributions to
     the plan pursuant to Section 2.1 is transferred to ineligible employee
     status, he shall not be entitled to make any additional salary
     reduction contributions to the plan on or after the first payroll date
     which commences on or after the date he is transferred to ineligible
     employee status. If an individual who is not eligible to make salary
     reduction contributions to the plan pursuant to Section 2.1 is
     transferred to eligible employee status, he shall be entitled to make
     salary reduction contributions to the plan pursuant to Section 2.1 on
     and after the date he is transferred to eligible employee status.

          20.3.2  Matching contributions to the plan with respect to each
     Participating Employer shall be determined and paid separately by each
     Participating Employer in accordance with the provisions of the plan
     applicable to such Participating Employer. If a participant is in the
     service of more than one Participating Employer during a plan year,
     each such Participating Employer shall be responsible for any matching
     contributions to be made on behalf of such participant with respect to
     the salary reduction contributions made by such Participating Employer
     on behalf of such participant and the compensation paid by such
     Participating Employer to such participant. If a participant who is
     eligible to receive an allocation of matching contributions pursuant
     to Section 2.2 is transferred to ineligible employee status, he shall
     not be entitled to receive an allocation of matching contributions
     pursuant to Section 2.2 on or after the date he is transferred to
     ineligible employee status. If an individual who is not eligible to
     receive an allocation of matching contributions pursuant to Section
     2.2 is transferred to eligible employee status, he shall be entitled
     to receive an allocation of matching contributions pursuant to Section
     2.2 on and after the date he is transferred to eligible employee
     status.

          20.4    Authority of Board: Except as otherwise provided in Section
9.3, the Board shall have the power to amend or terminate the plan and trust
agreement as applied to each Participating Employer and the proper officers of
each Participating Employer shall be authorized to execute all documents and
take all other actions as shall be deemed necessary or advisable to effectuate
and carry out any such amendment as applied to such party.

                                       73
<PAGE>

               Section 21.   Compliance with the Uniformed Services Employment
               ----------    -------------------------------------------------
                             and  Reemployment
                             ------------------

               Notwithstanding any provision of the plan to the contrary, the
following special provisions shall apply with respect to a participant's
reemployment rights under the Uniformed Services Employment and Reemployment
Rights Act of 1994 ("USERRA"):

               21.1   Treatment of USERRA Contributions: Any contributions (the
"USERRA contributions") made to the plan by the Participating Employer or a
participant by reason of such participant's reemployment rights under USERRA,
shall not be subject to the maximum dollar limit in Section 2.1.1 or the annual
addition limitations in Section 19, and shall not be taken into account in
applying such limitations to other contributions under the plan or any other
plan, with respect to the plan year in which such USERRA contributions are made.
USERRA contributions shall, however, be subject to such limitations with respect
to the plan year to which the USERRA contributions relate. The plan shall not be
treated as failing to meet the requirements of Sections 401(a)(4), 401(k)(3),
401(k)(11), 401(k)(12), 401(m), 410(b) or 416 of the Code by reason of the
USERRA contributions.

               21.2   Rights With Respect to Salary Reduction Contributions:

               21.2.1 A participant who is entitled to reemployment rights under
         USERRA may elect to make additional salary reduction contributions (the
         "make-up contributions") to the plan during the period which begins on
         the date such participant reenters service with the Participating
         Employer and has the same length as the lesser of (i) the product of 3
         and the period of the participant's qualified military service which
         resulted in such rights, and (ii) 5 years. The maximum amount of the
         make-up contributions a participant may make to the plan pursuant to
         this Section 21.2 shall be the maximum amount that the participant
         could have made to the plan during the period of the participant's
         qualified military service if the participant had continued in service
         during such period and continued to receive his compensation from the
         Participating Employer. Proper adjustment shall be made to the amount
         determined under the preceding sentence for any salary reduction
         contributions actually made by the participant during his period of
         qualified military service.

               21.2.2 With respect to each participant who actually makes
         make-up contributions to the plan, the Participating Employer shall
         contribute to the trust under the plan the matching contributions with
         respect to such make-up contributions that

                                       74
<PAGE>

         would have been required by Section 2.2 had such make-up contributions
         been made during the period of the participant's qualified military
         service.

               21.2.3 Earnings shall not be credited to any contributions made
         pursuant to this Section 21 until such contributions are actually
         received by the plan.

               21.3   Special Service Crediting Rules: A participant entitled to
reemployment rights under USERRA shall not be treated as having incurred a break
in service by reason of such participant's period of qualified military service.
Each period of qualified military service shall be treated as service for
purposes of determining such participant's vested accrued benefit.

               21.4   Loans: If a participant who is entitled to reemployment
rights under USERRA has a plan loan outstanding, loan repayments may be
suspended during his period of qualified military service.

               21.5   Definitions: The following definitions shall apply for
purposes of this Section 21:

               21.5.1 "Qualified military service" means any service in the
         uniformed services (as defined in USERRA) by any participant if such
         participant is entitled to reemployment rights under USERRA with
         respect to such service.

                                       75
<PAGE>

               21.5.2 "Compensation" means the compensation the participant
         would have received during his period of qualified military service if
         the participant were not in qualified military service, determined
         based on the rate of pay the participant would have received from the
         Participating Employer but for his absence during his period of
         qualified military service. If the compensation the participant would
         have received during such period is not reasonably certain,
         compensation shall mean the participant's average compensation from the
         Participating Employer during the 12-month period immediately preceding
         his qualified military service (or, if shorter, the period of service
         immediately preceding his qualified military service).

               21.6   Construction: Notwithstanding anything contained in this
Section 21 to the contrary, the provisions of this Section 21 shall at all times
be construed and enforced according to the requirements of USERRA and Section
414(u) of the Code.

               Section 22.   Special Provisions Applicable to ESOP:
               ----------    -------------------------------------

               Notwithstanding any provision of the plan to the contrary, the
following special provisions shall apply to the ESOP:

               22.1   Investment: The ESOP is designed to invest primarily in
Company stock.

               22.2   Distributions: Distributions from the ESOP shall be made
in cash. Notwithstanding the foregoing, a participant or beneficiary may direct
the Committee to distribute his ESOP account in shares of Company stock.

               22.3   Restrictions on Company stock: Notwithstanding repayment
of an exempt loan or any amendment or termination of the ESOP that causes it to
cease to be a leveraged employee stock ownership plan with the meaning of
Section 4975(e)(7) of the Code, no Company stock acquired with the proceeds of
an exempt loan shall be subject to a put, call or other option, or buy-sell or
similar arrangement while such stock is held by and when distributed from the
ESOP, except as may be required by Regulation Section 54.4975-7(b)(10).

               22.4   Proxy Voting: The ESOP accounts shall be subject to the
pass-through voting requirements set forth in Section 7.1.6.

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<PAGE>

               22.5   Valuations: All purchases of Company stock by the ESOP
shall be made at a price not in excess of fair market value. All sales of
Company stock by the ESOP shall be made at a price not less than fair market
value. Any sale of Company stock to a disqualified person (as defined in Section
4975(e)(2) of the Code) or a party-in-interest (as defined in Section 3(14) of
ERISA) shall conform to the requirements of Section 408(e) of ERISA. For all
purposes of the ESOP, the fair market value of Company stock shall be the price
of the Company stock prevailing on a national securities exchange which is
registered under Section 6 of the Securities Exchange Act of 1934. Fair market
value shall be determined as of the applicable date of the transaction.

               22.6   Diversification: Each participant may elect quarterly, in
accordance with procedures adopted by the Committee, to have Company stock
allocated to his ESOP account transferred from his ESOP account to his Employer
supplemental matching contribution account, liquidated and invested in one or
more of the investment funds made available to participants pursuant to the
provisions of Section 7.1.1 (other than an investment fund that invests solely
in shares of Company stock), except that, unless a participant is a "qualified
participant" (a) no such transfer shall be allowed if the participant has a
Company stock fund account (as defined in Section 7.1.6) and (b) a participant
may not transfer Company stock from his ESOP account in any quarter in which the
participant has directed all or any portion of his account in an investment fund
which invests solely in shares of Company stock. A "qualified participant" is
any participant who has attained age 55 and has been a participant in the ESOP
for at least 10 plan years.

               22.7   Dividends: Cash dividends paid on shares of Company stock
allocated to the participant's ESOP account shall be either distributed to the
participant or reinvested in shares of Company stock, as determined by the
Committee.

               Section 23.   Miscellaneous Provisions:
               ----------    ------------------------

                                       77
<PAGE>

               23.1   Notices: Each participant who is not in service and each
beneficiary shall be responsible for furnishing the Committee with his current
address for mailing notices, reports, and benefit payments. Any notice required
or permitted to be given to such participant or beneficiary shall be deemed
given if directed to such address and mailed by first class mail. If any check
mailed to such address is returned as undeliverable to the addressee, mailing of
checks shall be suspended until the participant or beneficiary furnishes the
proper address. This provision shall not require the mailing of any notice or
notification otherwise permitted to be given by posting or other publication.

               23.2   Lost Distributees: A benefit shall be deemed forfeited if
the Committee is unable after a reasonable period of time to locate the
participant or beneficiary to whom payment is due; provided, that such benefit
shall be reinstated if a claim is made by or on behalf of the participant or
beneficiary for the forfeited benefit.

               23.3   Reliance on Data: The Company, Committee, Trustee, and
plan administrator may rely on any data provided by a participant or
beneficiary, including representations as to age, health, and marital status.
Such representations shall be binding on any party seeking to claim a benefit
through a participant, and the Company, Committee, Trustee and plan
administrator shall have no obligation to inquire into the accuracy of any
representation made at any time by a participant or beneficiary.

               23.4   Bonding: Every fiduciary, except a bank or an insurance
company, shall be bonded for each plan year to the extent required by ERISA. 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
cost of the bond shall be an expense of the trust and shall be paid by the
Trustee subject to the provisions of the trust agreement and of Section 8.12 of
the plan.

               23.5   Receipt and Release for Payments: Each participant by
participating in the plan conclusively shall be deemed to agree to look solely
to the assets held under the trust for payment of any benefit to which such
participant may be entitled by reason of such participation. Any payment

                                       78
<PAGE>

made from the plan to or with respect to any participant or beneficiary, or
pursuant to a disclaimer by a beneficiary, shall be in full satisfaction of all
claims hereunder against the plan, the Company and all fiduciaries with respect
to the plan to the extent of such payment. As a condition precedent to payment,
the recipient of any payment from the plan may be required by the Committee to
execute a receipt and release with respect thereto in such form as is acceptable
to the Committee.

               23.6   No Guarantee: The Trustee, Committee, Company and plan
administrator in no way guarantee the trust fund from loss or depreciation, nor
do they guarantee the payment of any money or other assets from the trust fund
that may be or become due to any person. Nothing herein contained shall give any
participant or beneficiary an interest in any specific part of the trust fund or
any other interest except the right to receive benefits from the trust fund in
accordance with the provisions of the plan and trust.

               23.7   Headings: The headings and subheadings of the plan are
inserted for convenience of reference and shall be ignored in any construction
of the provisions hereof.

               23.8   Continuation of Employment: The establishment of the plan
shall not confer any legal or other right upon any employee or person for
continuation of employment, nor shall it interfere with the right of the
Participating Employer to discharge any employee or to deal with him without
regard to the effect thereof under the plan.

               23.9   Construction: The provisions of the plan shall be
construed and enforced according to the laws of the State of North Carolina,
except to the extent such laws are superseded by the provisions of ERISA.

                                       79
<PAGE>

               IN WITNESS WHEREOF, the BB&T Corporation 401(k) Savings Plan is,
by authority of the Board of Directors of the Company, executed in behalf of the
Company, the 22 day of February, 2000.

                                      BB&T CORPORATION

                                      By: /s/ Robert E. Greene
                                         ---------------------------------
                                               Authorized Officer

Attest:

 /s/ Jerone C. Herring
------------------------
(Assistant) Secretary

[Corporate Seal]

                                       80
<PAGE>

                                                                       EXHIBIT A

                              TESTING COMPENSATION

               1.   "Compensation" means for any participant the wages, salary
and fees for professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered by the participant in the course of his service with the Participating
Employer to the extent that the amounts are includible in gross income
(including but not limited to commissions, compensation for services on the
basis of a percentage of profits, bonuses, fringe benefits, reimbursements or
other expense allowances under a nonaccountable plan as described in Treasury
Regulation Section 1.62-2(c)), plus the participant's elective deferrals (as
defined in Section 402(g)(3) of the Code) and any other amount which is
contributed or deferred by the Participating Employer at the election of the
participant and which is not includible in the gross income of the participant
by reason of Sections 125 or 457 of the Code; amounts described in Code Section
104(a)(3), 105(a) and 105(h), but only to the extent that such amounts are
includible in the gross income of the participant; amounts paid or reimbursed by
the Participating Employer for moving expenses incurred by the participant, but
only to the extent that at the time of the payment it is reasonable to believe
that these amounts are not deductible by the participant under Code Section 217;
the value of a non-qualified stock option granted to the participant by the
Participating Employer, but only to the extent that the value of the option is
includible in the gross income of the participant for the taxable year in which
granted; and the amount includible in the gross income of a participant upon
making the election described in Code Section 83(b); and excluding contributions
made by the Participating Employer to any plan of deferred compensation which
are not includible in the participant's gross income for the taxable year in
which contributed; contributions made by the Participating Employer under a
simplified employee pension plan; any distributions from a plan of deferred
compensation; amounts realized from the exercise of a non-qualified stock option
or from the sale or other disposition of stock acquired under a qualified stock
option; amounts realized when restricted stock (or property) held by the
participant either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; and any other amount paid by the Participating
Employer that receives special tax benefits or is excluded under the definition
of compensation under Section 415 of the Code and Treasury Regulation Section
1.415-2(d)(3). If elected by the Committee, compensation may be modified to
exclude any amounts contributed by the Participating Employer pursuant to a
salary reduction agreement which are not includible in the gross income of the
participant under Section 125, 402(e)(3), 402(h) or 403(b) of the Code.

               2.   "Compensation" means for any participant the wages, salary
and fees for professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered by the participant in the course of his service with the Participating
Employer to the extent that the amounts are includible in gross income
(including but not limited to commissions, compensation for services on the
basis of a percentage of profits, bonuses, fringe benefits, reimbursements or
other expense allowances under a nonaccountable plan as described in Treasury
Regulation Section 1.62-2(c)), plus the participant's elective deferrals (as
defined in Section 402(g)(3) of the Code) and any other amount which is
contributed or deferred by the Participating Employer at the election of the
participant and which is not includible in the gross income of the participant
by reason of Sections 125 or 457 of the Code; and excluding contributions made
by the Participating Employer to any plan of deferred compensation which are not
includible in the participant's gross income for the taxable year in which
contributed; contributions made by the Participating Employer under a simplified
employee pension plan; any distributions from a plan of

                                      A-1
<PAGE>

deferred compensation; amounts realized from the exercise of a non-qualified
stock option or from the sale or other disposition of stock acquired under a
qualified stock option; amounts realized when restricted stock (or property)
held by the participant either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture; and any other amount paid by the
Participating Employer that receives special tax benefits or is excluded under
the definition of compensation under Section 415 of the Code and Treasury
Regulation Section 1.415-2(d)(3). If elected by the Committee, compensation may
be modified to exclude any amounts contributed by the Participating Employer
pursuant to a salary reduction agreement which are not includible in the gross
income of the participant under Section 125, 402(e)(3), 402(h) or 403(b) of the
Code.

               3.   "Compensation" means for any participant his wages from the
Participating Employer as defined in Section 3401(a) of the Code and all other
payments of compensation to the participant by the Participating Employer (in
the course of the Participating Employer's trade or business) for which the
Participating Employer is required to furnish the participant a written
statement under Sections 6041(d) and 6051(a)(3) of the Code, but determined
without regard to any rules 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 Section 3401(a)(2) of the Code), plus
the participant's elective deferrals (as defined in Section 402(g)(3) of the
Code) and any other amount which is contributed or deferred by the Participating
Employer at the election of the participant and which is not includible in the
gross income of the participant by reason of Sections 125 or 457 of the Code. If
elected by the Committee, compensation may be modified to (i) exclude any
amounts contributed by the Participating Employer pursuant to a salary reduction
agreement which are not includible in the gross income of the participant under
Section 125, 402(e)(3), 402(h) or 403(b) of the Code; and/or (ii) exclude
amounts paid or reimbursed by the Participating Employer for moving expenses
incurred by the participant, but only to the extent that at the time of payment
it is reasonable to believe that these amounts are deductible by the participant
under Section 217 of the Code.

               4.   "Compensation" means for any participant his wages from the
Participating Employer as defined in Section 3401(a) of the Code, for federal
income tax withholding purposes, but determined without regard to any rules 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 Section 3401(a)(2) of the Code), plus the participant's elective
deferrals (as defined in Section 402(g)(3) of the Code) and any other amount
which is contributed or deferred by the Participating Employer at the election
of the participant and which is not includible in the gross income of the
participant by reason of Sections 125 or 457 of the Code. If elected by the
Committee, compensation may be modified to exclude any amounts contributed by
the Participating Employer pursuant to a salary reduction agreement which are
not includible in the gross income of the participant under Section 125,
402(e)(3), 402(h) or 403(b) of the Code.

                                      A-2
<PAGE>

                                                                       EXHIBIT B

                            Participating Employers

                       Branch Banking and Trust Company
              Branch Banking and Trust Company of South Carolina
                 Branch Banking and Trust Company of Virginia
                         BB&T Insurance Services, Inc.
                        BB&T Investment Services, Inc.
                           BB&T Leasing Corporation
                           Agency Technologies, Inc.
                      AutoBase Information Systems, Inc.
                        Regional Acceptance Corporation
                                Car Mart, Inc.
                             FARR Associates, Inc.
                    Prime Rate Premium Finance Corporation
                           BB&T Factors Corporation
                          Scott & Stringfellow, Inc.
                       Scott & Stringfellow Realty, Inc.
                    Scott & Stringfellow Capital Management
                       Freedom Financial Services, Inc.
                     Rose Shannis Financial Services, LLC

                                      B-1
<PAGE>

                                                                       EXHIBIT C

                                PLAN LOAN RULES
                             FOR PARTICIPANT LOANS

          This is an explanation of the rules for taking a personal loan from
your vested account under the Plan. All loans are made strictly in accordance
with the provisions of the Plan and in accordance with the rules adopted by the
Committee. In addition to the items outlined in these rules, it is important to
know that if you have not requested all loans available under any defined
contribution plan in which you participate, you will be restricted from taking a
hardship withdrawal under the Plan. In the case of any item not covered by this
explanation, or in the event of any conflict between this explanation and the
Plan, the Plan document always will control.

          1.   AMOUNT YOU CAN BORROW
               ---------------------

          The amount of any loan made to you must be at least $1,000. In
addition, the amount of your loan from this Plan, when added to the outstanding
balance of loans from any other tax-qualified retirement plan of the Company,
may not exceed the lesser of:

          (A)  $50,000, reduced by the highest outstanding balance of any plan
     loans to you during the one year period ending the day before the loan
     is made; or

          (B)  50 percent of the current fair market value of your vested
     account under the Plan.

          The money you receive from the loan will be taken from the investment
funds in which your account is invested on a pro rata basis.

          2.   REPAYMENTS
               ----------

          Period. The repayment period for a loan may not be less than 12 months
          ------
nor more than 60 months.

          Frequency. Generally, repayments will be withheld by the Company from
          ---------
each regular paycheck you receive in sufficient amounts to maintain your loan
repayment schedule until all principal and interest due are paid.

          Investments. Your loan repayments will be credited to your separate
          -----------
accounts from which the loan proceeds were obtained on a pro rata basis and
invested in the investment funds in the same manner as contributions are
invested, based on your current investment elections.

          3.   INTEREST RATE
               -------------

          Your loan must bear a reasonable rate of interest as determined by the
Committee at the time your loan is made. The Committee has determined the
appropriate interest rate to be "BB&T's Prime Rate plus 1 percent," as quoted on
the day the loan request is made. An annual statement of interest paid for each
year that the loan is outstanding is available upon request.

                                      C-1
<PAGE>

          4.   WHEN LOANS CAN BE TAKEN
               -----------------------

          If you wish to borrow from your vested account under the Plan, call
the BB&T Benefits Phone at 1-800-228-8076. You can have only one loan
outstanding at any time and only one loan request may be submitted in a plan
year. This means that if you already have a loan outstanding that has not been
repaid, you must repay that loan. Your loan generally will be disbursed to you
within 25 days from the date your loan request is made.

          Your loan will be processed based on the information you provide over
the BB&T Benefits Phone. You will not be required to sign a Loan Origination
Form prior to receiving the loan check. However, when you request your loan by
telephone, you will receive a Participant Loan Agreement setting forth the terms
of the loan and containing certain disclosures required by law. When you receive
and endorse, deposit or cash the loan check, you will agree to the terms of the
loan as set forth in the Participant Loan Agreement and the assignment of your
account as collateral for the loan (see paragraph 5 below) (i.e., your
                                                            ----
endorsement of the loan check signifies your agreement to repay the loan
pursuant to the terms of the Participant Loan Agreement).

          5.   SECURITY FOR YOUR LOAN
               ----------------------

          Your loan will be secured by a pledge of your vested account under the
Plan. In the normal course, your account will not automatically be used to repay
the loan or any interest due. However, if you terminate employment with the
Company for any reason, the remaining unpaid balance of your loan plus any
accrued interest will be recharacterized as a taxable distribution to you from
the Plan unless you fully repay the loan immediately following your termination
of employment or agree to continue making loan repayments by having your
checking or other designated account automatically drafted by the Trustee in
accordance with the loan repayment schedule. If your loan is recharacterized as
a taxable distribution, the unpaid balance plus any accrued interest will be
reported to the Internal Revenue Service ("IRS") by the Trustee as taxable
income to you for the year in which you terminate employment.

          6.   ACCELERATED LOAN REPAYMENTS
               ---------------------------

          Loans may be repaid in full ahead of schedule at any time without
penalty. Prepayments of less than the full amount outstanding will not be
                        ----
accepted. To repay your loan in full, you must contact BB&T Benefits Phone and
obtain a payoff amount. You should then submit a cashiers check or money order
in such amount to Institutional Trust Services, Raleigh, North Carolina 17401-
0401.

          7.   TERMINATION OF EMPLOYMENT
               -------------------------

          If you terminate employment with the Company for any reason and have
an outstanding loan balance, you may:

          (A)  fully repay the loan immediately following your termination;

          (B)  continue to make loan repayments by having your checking or other
     designated account automatically drafted by the Trustee in accordance with
     the loan repayment schedule; or

                                      C-2
<PAGE>

          (C)  have the loan balance recharacterized as a taxable distribution
     to you.

If your loan balance is recharacterized as a distribution as described above and
in paragraph 5 above, this distribution will be taxable income to you and may be
subject to tax penalties for early distribution if you are under age 59 1/2.

          8.   LEAVE OF ABSENCE
               ----------------

          If you are granted a leave of absence from the Company for any reason
and have an outstanding loan for which payroll deduction repayments are no
longer possible, you may:

          (A)  fully repay the loan at the time your leave begins;

          (B)  continue to make loan repayments by having your checking or other
     designated account automatically drafted by the Trustee in accordance with
     the loan repayment schedule;

          (C)  have the loan balance recharacterized as a taxable distribution
     to you; or

          (D)  suspend loan repayments for up to 12 months. Under this option,
     your loan repayments when you return to work may be doubled until you
     return to your original loan repayment schedule.

If you decide to suspend repayments, your loan must still be repaid within 60
months of the date the loan was originally issued. If your loan repayments are
suspended for more than 12 months or if the loan has not been repaid within 60
months of the date the loan was originally issued, the loan will be in default
and you will be treated as having received a taxable distribution equal to the
outstanding balance of your loan plus any accrued interest.

If you choose to continue to make loan repayments, but you fail to do so, the
loan will be in default and you will be treated as having received a taxable
distribution equal to the outstanding balance on your loan plus any accrued
interest.

If you are treated as having received a taxable distribution, the tax penalty
for early distribution may also apply.

                                      C-3
<PAGE>

          9.   DEFAULT AND FORECLOSURE
               -----------------------

          While you are working, loan repayments automatically will be withheld
from your paychecks to keep your loan obligation current. However, should your
paychecks stop because of an unpaid leave of absence, termination of employment,
or other reason, and you fail to make two scheduled loan repayments on the date
they are due (or, if you previously missed one scheduled repayment, you fail to
make one more scheduled repayment), your loan will be considered in default.
Upon default, the outstanding balance of the loan plus any accrued interest will
become due and payable immediately. The unpaid balance will be recharacterized
as a distribution to you as described in paragraph 5 above and will be reported
to you and to the IRS as a taxable distribution. The tax penalty for early
distribution may also apply. During the term of your loan you may miss one
scheduled repayment before your loan will be considered in default.

                                      C-4<PAGE>

                                                                   EXHIBIT 10(q)

                            1996 AMENDED AND RESTATED
                          SOUTHERN NATIONAL CORPORATION
                            SHORT-TERM INCENTIVE PLAN

1.   The Plan. The purpose of this 1996 Amended and Restated Southern National
     --------
     Corporation Short-Term Incentive Plan (the "Plan") is to provide select
     "key executives" of Southern National Corporation or an affiliate thereof
     (the "Company") with cash awards (the "Awards") based upon preestablished,
     objective performance goals, thereby promoting a closer identification of
     the participating employees' interests with the interests of the Company
     and its shareholders, and further stimulating such employees' efforts to
     enhance the efficiency, profitability, growth and value of the Company.

2.   Plan Administration. The Plan shall be administered by the Compensation
     -------------------
     Committee of the Board of Directors of the Company or a subcommittee
     thereof (the "Committee"). The Committee shall have full authority to
     interpret and administer the Plan and establish rules and regulations for
     the administration of the Plan. Any actions of the Committee may be taken
     by a written instrument signed by all of the members of the Committee and
     such action so taken by written consent shall be as fully effected as if it
     had been taken by a majority of the members at a meeting duly held and
     called. The decisions and determinations of the Committee in all matters
     regarding the Plan shall be in its sole discretion. Any decision made, or
     action taken, by the Committee in connection with the administration of the
     Plan shall be final, binding and conclusive. No member of the Committee
     shall be liable for any action, determination or decision made in good
     faith with respect to the Plan or any Award paid under it. Notwithstanding
     the foregoing, the Committee may delegate the administration of the Plan to
     one or more of its designees, but only with respect to matters regarding
     participants who are not in the executive management class. All matters
     regarding the participants in the executive management class shall be the
     sole responsibility of the Committee.

3.   Eligibility. The participants in the Plan (collectively, the "Participants"
     -----------
     or individually, a "Participant") shall be those key executives of the
     Company who are designated each year as Participants by the Committee. Such
     designation shall be made during the first 90 days of each calendar year.
     Participation in the Plan in any one calendar year does not guarantee that

                                       1
<PAGE>

     a key executive will be selected to participate in the Plan in any
     following calendar year.

4.   Size of Awards. Each calendar year, the Committee shall establish a target
     --------------
     award for each Participant in the Plan, which shall be expressed as a
     percentage of his "Base Compensation" (the "Target Award"). For this
     purpose, "Base Compensation" means the base compensation actually paid to
     the Participant during the calendar year; provided, however, that the Base
     Compensation of a Participant who is in the executive management class
     shall not exceed the limit established by the Committee (the "Base
     Compensation Limit"). If and to the extent the performance goals
     established for the Participant by the Committee pursuant to Section 5 are
     met, the Participant's Award shall range from the amount of his "Threshold
     Award" to the amount of his "Superior Award." A Participant's "Threshold
     Award" shall be equal to 25 percent of his Target Award and his Superior
     Award shall be equal to a maximum percentage (the "Maximum Percentage")
     established by the Committee of his Target Award. The Target Award of each
     Participant or class of Participants (e.g., executive management), the
                                           ----
     Maximum Percentage and the Base Compensation Limit shall be established in
     writing by the Committee within the first 90 days of each calendar year.

5.   Establishment of Performance Goals. Within the first 90 days of each
     ----------------------------------
     calendar year and at a time when the outcome is substantially uncertain,
     the Committee shall establish performance goals for each Participant. The
     performance goals established for each Participant or class of Participants
     (e.g., executive management) shall be in writing and shall be attached
      ----
     hereto as an Exhibit following establishment thereof. The following rules
     and guidelines shall apply in establishing performance goals:

     a.   Types of performance. The performance goals established by the
          --------------------
          Committee shall be based on one or more performance measures that
          apply to the Participant alone ("Individual Performance"), the
          Participant's business unit/function performance ("Business
          Unit/Function Performance"), the Company as a whole ("Corporate
          Performance"), or any combination of Individual Performance, Business
          Unit/Function Performance or Corporate Performance. If a Participant's
          performance goals are based on a combination of Individual
          Performance, Business Unit/Function Performance or Corporate
          Performance, the Committee shall weight the importance of each type of
          performance that applies to such Participant by assigning a percentage
          to it (the "Weighted Percentage"). In no event shall the aggregate
          Weighted Percentages exceed 100 percent.

                                       2
<PAGE>

     b.   Performance measures. The Committee shall establish the performance
          ---------------------
          measures that apply to Individual Performance, Business Unit/Function
          Performance and Corporate Performance.

          (i)   Individual Performance. The performance measures for Individual
                ----------------------
                Performance shall be established separately for each Participant
                whose performance goals are based in whole or in part on
                Individual Performance. Such performance measures shall be based
                on such business criteria as process improvement, sales, loan
                growth, deposit growth and expense management.

          (ii)  Business Unit/Function Performance. The performance measures for
                ----------------------------------
                Business Unit/Function Performance shall be established
                separately for each Participant whose performance goals are
                based in whole or in part on Business Unit/Function Performance.
                Such performance measures shall be based on such business
                criteria as achievement of financial or non-financial goals,
                growth, and market share.

          (iii) Corporate Performance. The performance measures for Corporate
                ---------------------
                Performance shall be established based on such factors as stock
                price, market share, sales, earnings per share, return on
                equity, return on average assets or expense management.

          If more than one business criteria is used as a performance measure
          for a type of performance (e.g., Corporate Performance), the Committee
                                     ---
          shall weight the importance of each business criteria by assigning a
          percentage to it. In no event shall the aggregate percentages exceed
          100 percent.

     c.   Levels of performance. The Committee shall establish a threshold,
          ---------------------
          target and superior level of performance with respect to each measure
          of performance. A Performance Value shall be assigned to each such
          level of performance as follows:

                Level of Performance                        Performance Value
                --------------------                        -----------------
                Threshold                                           25%
                Target                                             100%
                Superior                                    Maximum Percentage

          Interpolation shall be used to determine the Performance Value
          associated with performance between the threshold, target and superior
          performance levels. Performance below the threshold level shall have a
          0 value and performance above the superior level shall have a value
          equal to the Maximum Percentage.

                                       3
<PAGE>

     6.   Determination and Payment of Awards. The determination of the Award
          (if any) payable to a Participant shall be made as soon as practicable
          as of the end of each calendar year by the Committee. The amount of
          the Award shall be determined in accordance with the following
          formula:

                      (AxBxC) + (AxDxE) + (AxFxG) = Award

          where:

               (A)  is the Participant's Target Award;

               (B)  is the Participant's Weighted Percentage (if any) for
                    Individual Performance;

               (C)  is the Performance Value assigned to the level of
                    performance attained by the Participant for Individual
                    Performance;

               (D)  is the Participant's Weighted Percentage (if any) for
                    Business Unit/Function Performance;

               (E)  is the Performance Value assigned to the level of
                    performance attained by the Participant for Business
                    Unit/Function Performance;

               (F)  is the Participant's Weighted Percentage (if any) for
                    Corporate Performance; and

               (G)  is the Performance Value assigned to the level of
                    performance attained by the Participant for Corporate
                    Performance.

          The Award, if any, earned by a Participant with respect to a calendar
          year shall be paid to him in cash as soon as practicable following the
          determination of the Award and the Committee's written certification
          that the Participant achieved his performance goals. The Committee
          shall not have any discretion to increase the amount of an Award
          otherwise earned and payable pursuant to the terms of the Plan to a
          Participant who is in the executive management class. The Committee
          shall have the discretion to reduce or eliminate the amount of an
          Award otherwise earned and payable pursuant to the terms of the Plan
          to any Participant. No Award shall be paid to a Participant if his
          performance is below the threshold level of performance established by
          the Committee.

     7.   Termination For Reasons Other Than Death, Disability or Retirement. If
          ------------------------------------------------------------------
          a Participant's employment with the Company is terminated for any
          reason other than death, disability or retirement during a calendar
          year, he shall forfeit his right to receive any Award under this Plan,
          except that the Committee may elect, in its sole and absolute
          discretion, to pay an Award to such Participant based on his
          performance and Base Compensation for that portion of the calendar
          year during which he was employed.

                                       4
<PAGE>

     8.   Termination Due to Death, Disability or Retirement. If a Participant's
          --------------------------------------------------
          employment with the Company is terminated during a calendar year by
          reason of death, disability or retirement, and the Participant has
          been actively employed by the Company for a minimum of 6 calendar
          months during such calendar year, he shall be eligible for an Award
          based on his performance and Base Compensation for that portion of the
          calendar year in which he was employed. The determination and payment
          of such Award shall be made by the Committee at the end of such
          calendar year in the manner described in Section 6. If a Participant
          shall terminate employment during the calendar year for any reason
          with less than 6 calendar months of employment, he shall forfeit his
          right to receive any Award under this Plan, except that the Committee
          may elect, in its sole and absolute discretion, to pay an Award to
          such Participant based on his performance and Base Compensation for
          that portion of the calendar year during which he was employed.

     9.   No Implied Contract. Nothing contained in this Plan shall be construed
          -------------------
          as conferring upon any Participant the right or imposing upon him the
          obligation to continue in the employment of the Company, nor shall it
          be construed as imposing upon the Company the obligation to continue
          to employ the Participant.

                                       5
<PAGE>

     10.  Amendments. The Board of Directors of the Company may amend or
          ----------
          terminate the Plan in whole or in part at any time; provided, that no
          such action shall adversely affect any Award earned and payable under
          the Plan as of the date of such amendment or termination. .

     11.  Effective Date. The Plan, as amended and restated, shall become
          --------------
          effective on February 27, 1996, subject to the approval of the Board
          of Directors of the Company.

     12.  Miscellaneous.

          a.   Taxes. Any tax required to be withheld by any government
               -----
               authority shall be deducted from each Award.

          b.   Non-assignability. Awards under the Plan shall not be subject to
               -----------------
               anticipation, alienation, pledge, transfer or assignment by any
               person entitled thereto, except by designation of a beneficiary
               or by will or the laws of descent and distribution.

          c.   No trust. The obligation of the Company to make payments
               ---------
               hereunder shall constitute a liability of the Company to the
               Participants. Such payments shall be made from the general funds
               of the Company, and the Company shall not be required to
               establish or maintain any special or separate fund, or otherwise
               to segregate assets to assure that such payments shall be made,
               and neither the Participants nor their beneficiaries shall have
               any interest in any particular assets of the Company by reason of
               its obligations hereunder. Nothing contained in this Plan shall
               create or be construed as creating a trust of any kind or any
               other fiduciary relationship between the Company and the
               Participants or any other person. To the extent that any person
               acquires a right to receive payments from the Company hereunder,
               such right shall be no greater than the right of an unsecured
               creditor of the Company.

          d.   Facility of payments. If a Participant or any other person
               --------------------
               entitled to receive an Award under this Plan (the "recipient")
               shall, at the time payment of any such amount is due, be
               incapacitated so that such recipient cannot legally receive or
               acknowledge receipt of the payment, then the Committee, in its
               sole and absolute discretion, may direct that the payment be made
               to the legal guardian, attorney-in-fact or person with whom such
               recipient is residing, and such payment shall be in full
               satisfaction of the Company's obligation under the Plan with
               respect to such amount.

                                       6
<PAGE>

          e.   Beneficiary designation. Each Participant may designate a
               -----------------------
               beneficiary hereunder. Such designation shall be in writing,
               shall be made in the form and manner prescribed by the Committee,
               and shall be effective only if filed with the Committee prior to
               the Participant's death. A Participant may, at any time prior to
               his death, and without the consent of his beneficiary, change his
               designation of beneficiary by filing a written notice of such
               change with the Committee in the form and manner prescribed by
               the Committee. In the absence of a designated beneficiary, or if
               the designated beneficiary and any designated contingent
               beneficiary predecease theParticipant, the beneficiary shall be
               the Participant's surviving spouse, or if the Participant has no
               surviving spouse, the Participant's estate.

          f.   Governing Law. The Plan shall be construed and its provisions
               --------------
               enforced and administered in accordance with the laws of the
               State of North Carolina.

               This 1996 Amended and Restated Southern National Corporation
Short-Term Incentive Plan has been executed in behalf of the Company as of the
27th day of February, 1996.

                                                  SOUTHERN NATIONAL CORPORATION

                                                  By:    /s/ Kelly S. King
                                                     ---------------------------
                                                            President

Attest:

/s/ Jerone C. Herring
-----------------------------
Secretary

[Corporate Seal]

                                       7

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