Document:

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                                                                     EXHIBIT 4.5

                              CLARCOR 401(K) PLAN

                       Initially Effective January 1, 2004

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                                TABLE OF CONTENTS

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<S>      <C>     <C>                                                           <C>
 ARTICLE I       GENERAL ....................................................   1
         1.1     Purpose
         1.2     Source of Funds ............................................   1
         1.3     Effective Date
         1.4     Appendices .................................................   1
         1.5     Definitions
         1.6     Internal Revenue Service Approval ..........................   8
 ARTICLE 2       ELIGIBILITY AND PARTICIPATION ..............................   9
         2.1     Eligibility Requirements ...................................   9
         2.2     Enrollment Form ............................................  10
         2.3     Leaves of Absence ..........................................  10
         2.4     Qualified Military Service .................................  10
 ARTICLE 3       CONTRIBUTIONS ..............................................  11
         3.1     Employer Contributions .....................................  11
         3.2     Before-Tax Contributions ...................................  11
         3.3     Limitations on Before-Tax Contributions ....................  12
         3.4     Matching Employer Contribution .............................  13
         3.5     Rollover Contribution ......................................  13
 ARTICLE 4       ACCOUNTING PROVISIONS AND ALLOCATIONS ......................  15
         4.1     Participant's Accounts .....................................  15
         4.2     Investment Funds ...........................................  15
         4.3     Allocation Procedure .......................................  16
         4.4     Determination of Value of Trust Fund .......................  16
         4.5     Allocation of Net Earnings or Losses .......................  17
         4.6     Allocation of Before-Tax Contributions .....................  17
         4.7     Allocation of Matching Employer Contributions ..............  17
         4.8     Provisional Annual Addition ................................  17
         4.9     Limitation on Annual Additions .............................  17
 ARTICLE 5       AMOUNT OF PAYMENTS TO PARTICIPANTS .........................  20
         5.1     General Rule ...............................................  20
         5.2     Normal Retirement ..........................................  20
         5.3     Death ......................................................  20
         5.4     Disability .................................................  20
         5.5     Vesting ....................................................  20
 ARTICLE 6       DISTRIBUTIONS ..............................................  21
         6.1     Commencement and Form of Distributions .....................  21
         6.2     Distributions to Beneficiaries .............................  22
         6.3     Beneficiary Designations ...................................  22
         6.4     Deferred Distributions .....................................  23
         6.5     Form of Elections and Applications for Benefits ............  23
         6.6     Distribution from Company Stock Fund .......................  24
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                                TABLE OF CONTENTS
                                   (continued)

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         6.7     Unclaimed Distributions ....................................  24
         6.8     Loans ......................................................  24
         6.9     Withdrawals From Accounts Prior to Termination of
                 Employment .................................................  27
         6.10    Facility of Payment ........................................  28
         6.11    Claims Procedure ...........................................  29
         6.12    Eligible Rollover Distributions ............................  30
         6.13    Required Minimum Distributions .............................  31
 ARTICLE 7       TOP-HEAVY PLAN REQUIREMENTS ................................  35
         7.1     Definitions ................................................  35
         7.2     Top-Heavy Plan Requirements ................................  38
ARTICLE 8        POWERS AND DUTIES OF PLAN COMMITTEE ........................  39
         8.1     Appointment of Plan Committee ..............................  39
         8.2     Powers and Duties of Committee .............................  39
         8.3     Committee Procedures .......................................  40
         8.4     Consultation with Advisors .................................  40
         8.5     Committee Members as Participants ..........................  40
         8.6     Records and Reports ........................................  40
         8.7     Investment Policy ..........................................  41
         8.8     Designation of Other Fiduciaries ...........................  41
         8.9     Obligations of Committee ...................................  41
         8.10    Indemnification of Committee ...............................  42
 ARTICLE 9       TRUSTEE AND TRUST FUND .....................................  43
         9.1     TrustFund ..................................................  43
         9.2     Payments to Trust Fund and Expenses ........................  43
         9.3     Trustee's Responsibilities .................................  43
         9.4     Reversion to an Employer ...................................  43
         9.5     Voting of Company Stock ....................................  43
         9.6     Allocation of Assets .......................................  44
ARTICLE 10       AMENDMENT OR TERMINATION ...................................  45
        10.1     Amendment ..................................................  45
        10.2     Termination ................................................  45
        10.3     Form of Amendment, Discontinuance of Employer
                 Contributions, and Termination .............................  45
        10.4     Limitations on Amendments ..................................  45
        10.5     Level of Benefits Upon Merger ..............................  46
        10.6     Vesting Upon Termination or Discontinuance of Employer
                 Contributions; Liquidation of Trust ........................  46
ARTICLE 11       MISCELLANEOUS ..............................................  47
        11.1     No Guarantee of Employment, Etc ............................  47
        11.2     Nonalienation ..............................................  47
        11.3     Qualified Domestic Relations Order .........................  47
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                                TABLE OF CONTENTS
                                   (continued)

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        11.4     Controlling Law ............................................  47
        11.5     Severability ...............................................  47
        11.6     Notification of Addresses ..................................  47
        11.7     Gender and Number ..........................................  48
ARTICLE 12       ADOPTION BY AFFILIATES .....................................  49
        12.1     Adoption of Plan ...........................................  49
        12.2     The Company as Agent for Employer ..........................  49
        12.3     Adoption of Amendments .....................................  49
        12.4     Termination ................................................  49
        12.5     Data to Be Furnished by Employers ..........................  49
        12.6     Joint Employees ............................................  so
        12.7     Expenses ...................................................  50
        12.8     Withdrawal .................................................  50
        12.9     Prior Plans ................................................  50
ARTICLE 13       CHANGE IN CONTROL OF EMPLOYER ..............................  51
        13.1     Change in Control - Defined ................................  51
        13.2     Intent .....................................................  51
        13.3     Prohibitions on Change in Control ..........................  51

PART-TIME EMPLOYEE APPENDIX .................................................  53

TRANSFERRED ACCOUNT APPENDIX ................................................  56
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                                    ARTICLE 1

                                     GENERAL

         1.1 Purpose. It is the intention of the Employer to provide for the
administration of the CLARCOR 401(k) Plan and a Trust Fund in conjunction
therewith for the benefit of eligible employees of the Employer, in accordance
with the provisions of Code Sections 401 and 501 and in accordance with other
provisions of law relating to profit sharing plans containing a Code Section
401(k) arrangement. This Plan is adopted, funded and maintained for the benefit
of eligible employees of the Employer who do not accrue a benefit under the
CLARCOR Inc. Pension Plan, a defined benefit pension plan. Except as otherwise
provided in this Plan or the Trust, upon the transfer by the Employer of any
funds to the Trust Fund in accordance with the provisions of this Plan, all
interest of the Employer therein shall cease and terminate, and no part of the
Trust Fund shall be used for, or diverted to, purposes other than the exclusive
benefit of Participants and their beneficiaries. This Plan reflects certain
provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001
("EGTRRA"). The provisions of the Plan relating to EGTRRA are intended to
demonstrate good faith compliance with the requirements of EGTRRA and are to be
construed in accordance with EGTRRA and guidance issued thereunder.

         1.2 Source of Funds.

                 (a) The Trust Fund shall be created, funded and maintained by
contributions of the Employer, by contributions of the Participants, and by such
net earnings as are obtained from the investment of the funds of the Trust Fund.

                 (b) Initial Plan Account balances shall be established for
Participants as of the effective date of this Plan from a transfer of the assets
and liabilities constituting the accounts of such Participants under the CLARCOR
Inc. 401(k) Retirement Savings Plan ("Prior_Plan") immediately prior to the
effective date of this Plan, and as more particularly described in the
Transferred Account Appendix. Such transfer shall be implemented and
administered so as to qualify as a "spin-off' or a "transfer of assets and
liabilities" from the Prior Plan to the Plan under Code Section 401(a)(12) and
Code Section 414(1).

         1.3 Effective Date. The provisions of the Plan shall be effective
January 1, 2004.

         1.4 Appendices. To the extent that provisions set forth in an Appendix
to this Plan are different from the terms of the Plan as set forth herein, the
provisions of such Appendix shall govern over any relevant terms of the Plan
with respect to the Participants who are employees of the Employer to which such
Appendix applies.

         1.5 Definitions. Certain terms are capitalized and have the respective
meanings set forth in the Plan.

         "Account" means each of the individual accounts established pursuant to
Article 4 representing a Participant's allocable share of the Trust Fund.

         "Accounts" means the collective individual accounts established
pursuant to Article 4.

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         "Active Participant" means a Participant who, on a given date, is
employed by the Employer as an Eligible Employee.

         "Affiliate" means any corporation or enterprise, other than the
Company, which, as of a given date, is a member of the same controlled group of
corporations, the same group of trades or businesses under common control or the
same affiliated service group, determined in accordance with Code Sections
414(b), (c), (in) or (o), as is the Company. For purposes of determining the
amount of a Participant's Annual Addition or Total Compensation and applying the
limitations of Code Section 415 set forth in Article 4 "Affiliate" shall include
any corporation or enterprise, other than the Company, which, as of a given
date, is a member of the same controlled group of corporations or the same group
of trades or businesses under common control, determined in accordance with Code
Sections 414(b) or (c) as modified by Code Section 415(h), as is the Company.

         "After-Tax Account" is defined in the Transferred Account Appendix.

         "Annual Addition" means for any Limitation Year, the sum of (a) all
Before-Tax Contributions, Matching Employer Contributions, and forfeitures
allocated to the Accounts of a Participant under this Plan; (b) any other
employer contributions, forfeitures and employee after-tax contributions
allocated to such Participant under this or any other defined contribution plan
maintained by the Employer or an Affiliate; and (c) amounts allocated to an
individual medical account as defined in Code Section 41 5(l)(2) and amounts
attributable to post-retirement medical benefits allocated to the separate
account of a "key employee," as described in Code Section 41 9A(d)(3) maintained
by the Employer or an Affiliate.

         "Basic Before-Tax Contributions" and "Supplemental Before-Tax
Contributions" mean, with respect to a Participant, the contributions made on
behalf of such Participant by the Employer as described in Section 3.2 and, with
respect to the Employer, the sum of all such contributions made on behalf of all
Participants. "Before-Tax Contributions" means, with respect to a Participant,
the sum of the Basic Before-Tax Contributions and the Supplemental Before-Tax
Contributions made on behalf of such Participant by the Employer as described in
Section 3.2 and, with respect to the Employer, the sum of all such contributions
made on behalf of all Participants.

         "Business Day" means each day on which the Federal Reserve, the New
York Stock Exchange and the Trustee are open for business, or if different and
to the extent applicable, each day as of which trades are recognized under the
rules governing an investment fund of the Plan.

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

         "Committee" means the plan administrator and named fiduciary appointed
pursuant to Section 8.1.

         "Company" means CLARCOR Inc., a Delaware corporation, a predecessor of
such corporation, or any successor to it in ownership of all or substantially
all of its assets.

         "Compensation" means a Participant's "Considered Compensation" or
"Total Compensation," as follows:

                                        2

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                 (a) "Considered Compensation" is the Participant's Total
Compensation for the Plan Year paid while he was an Active Participant but
excluding reimbursements or other expense allowances, fringe benefits (cash and
noncash), moving expenses, deferred compensation, amounts realized from the
exercise of a non-qualified stock option or when restricted stock (or property)
held by the Participant becomes freely transferable or is no longer subject to a
substantial risk of forfeiture, and welfare benefits; provided, however, that
Considered Compensation shall not include any amount in excess of $205,000 as
adjusted by the Commissioner of the Internal Revenue Service for increases in
the cost of living in accordance with Code Section 401 (a)( I 7)(B). The
cost-of-living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the determination
period, and the denominator of which is 12.

                 (b) "Total Compensation" for a period is the Participant's
wages as defined in Code Section 340 1(a) for purposes of income tax withholding
at the source, and all other payments of compensation to the Participant by the
Employer for which the Employer is required to furnish the Participant a written
statement under Code Sections 6041(d), 6051 (a)(3) and 6052, but determined
without regard to any rules under Code Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed; but excluding amounts paid or reimbursed by the
Employer for moving expenses incurred by the Participant; but including amounts
excluded from the Participant's income for the period under Code Sections 125,
402(e)(3), 402(g)(3), 402(h) and 457.

         "Defined Contribution Dollar Limitation" means an amount equal to
$41,000 (as adjusted by the Secretary of the Treasury pursuant to Code Section
415(d)), prorated for any Limitation Year of less than 12 months.

         "Eligible Employee" means any employee of the Employer (including those
employees so identified pursuant to an Appendix of this Plan) but excluding: (i)
any employee who accrues a benefit during the Plan Year under the CLARCOR Inc.
Pension Plan, (ii) the Chief Financial Officer serving as such on the effective
date of this Plan, (iii) any employee who is a nonresident alien who receives no
earned income from the Employer which constitutes income from services within
the United States, (iv) any employee who is a Member of a Collective Bargaining
Unit, and (v) any employee who is an individual providing services to the
Employer in the capacity of, or who is or was designated by the Employer as, a
Leased Employee or an independent contractor.

         "Employer" means the Company and any Affiliate which adopts this Plan
pursuant to Article 12.

         "Employment Commencement Date" means the first date on which an
individual performs duties for the Employer or an Affiliate as an employee;
provided that in the case of an employee who returns to service following his
Severance Date, the employee's "Employment Commencement Date" is the first date
on which he performs duties for the Employer or an Affiliate as an employee
following such Severance Date.

                                        3

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         "Entry Date" means the first day of each payroll period.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
from time to time amended.

         "Excess Forfeiture Suspense Account" is the account described in
Section 4.9.

         "Excess Tentative Employer Contribution" is the excess contribution
described in Section 4.12.

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

         "Highly Compensated Employee" means an employee of the Employer or an
Affiliate who:

                 (a) was a Five-Percent Owner at any time during the Plan Year
or the preceding Plan Year; or

                 (b) received Total Compensation in excess of $90,000 (as
adjusted for increases in the cost of living by the Secretary of the Treasury)
during the preceding Plan Year and was among the top 20% of the employees
(disregarding those employees excludable under Code Section 414(q)(5) when
ranked on the basis of Total Compensation paid for that year).

         To the extent required by Code Section 41 4(q)(6), a former employee
who was a Highly Compensated Employee when he separated from service with the
Employer and all Affiliates or at any time after attaining age 55 shall be
treated as a Highly Compensated Employee.

         "Hour of Service" is defined in the Part-Time Employee Appendix.

         "Individual Beneficiary" means a natural person designated by the
Participant in accordance with Section 6.3 to receive all or any portion of the
amounts remaining in the Participant's Accounts at the time of the Participant's
death. "Individual Beneficiary" also means a natural person who is a beneficiary
of a trust designated by the Participant in accordance with Section 6.3 to
receive all or a portion of such amount, provided the trust complies with the
requirements of Code Section 401 (a)(9) and regulations promulgated thereunder.

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

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

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

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

                                        4

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                 Contributions or benefits provided a Leased Employee by the
         leasing organization which are attributable to services performed for
         the Employer shall be treated as provided by the Employer. To the
         extent and for the purposes required by Code Sections 414(n) and (o), a
         Leased Employee shall be deemed to be an employee of the Employer,
         unless:

                         (i)      he is covered by a money purchase pension plan
         providing:

                                  (A) a nonintegrated employer contribution rate
                 of at least 10 percent of compensation, as defined in Code
                 Section 415(c)(3), but including amounts contributed pursuant
                 to a salary reduction agreement which are excludable from the
                 employee's gross income under Code Sections 125, 132(f)(4),
                 402(e)(3), 402(h) or 403(b),

                                  (B) immediate participation, and

                                  (C) full and immediate vesting; and

                         (ii)     Leased Employees do not constitute more than
         20 percent of the Employer's nonhighly compensated workforce.

         "Limitation Year" means the Plan Year.

         "Matching Employer Contributions" means the contributions described in
Section 3.4.

         "Member of a Collective Bargaining Unit" means any employee who is
included in a collective bargaining unit and whose terms and conditions of
employment are or were covered by a collective bargaining agreement if there is
evidence that retirement benefits were the subject of good-faith bargaining
between representatives of such employee and the Employer, unless such
collective bargaining agreement makes this Plan applicable to such employee. It
is acknowledged that the collective bargaining agreement covering hourly
employees of the Hayward, California Purolator Products Group Plant expressly
provides for participation under the Plan, and therefore such employees are not
Members of a Collective Bargaining Unit (as defined under the Plan) hereunder
for so long as such collective bargaining agreement so provides.

         "Non-Highly Compensated Employee" means, for any Plan Year, any
employee of the Employer or Affiliate who was not a Highly Compensated Employee
for such Plan Year.

         "Normal Retirement Date" means a Participant's 60th birthday.

         "One-Percent Owner" means an employee described in Code Section
4l6(i)(I).

         "One-Year Break In Service" is a one-year period, commencing on an
employee's Severance Date, during which such employee does not perform duties
for the Employer or an Affiliate. Solely for purposes of determining whether a
One-Year Break in Service has occurred, absences shall be disregarded if the
employee otherwise would normally have been credited with service but for the
employee's absence on a maternity or patemity absence. No more than one

                                        5

<PAGE>

year of absence on a single maternity or paternity absence shall be so
disregarded. A maternity or paternity absence is an absence from work:

                 (a)     by reason of pregnancy of the employee;

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

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

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

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

         For Part-Time Employees, a "One Year Break in Service" is defined in
the Part-Time Employee Appendix.

         "Participant" means:

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

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

         "Part-Time Employee" means an Eligible Employee who either (i)
customarily works less than thirty (30) hours per week or (ii) is a Temporary
Employee.

         "Plan" means this CLARCOR 401(k) Plan.

         "Plan Year" means a 12-month period beginning on January 1 and ending
on December 31. References to specific Plan Years are made herein by reference
to the calendar year of the first day of the Plan Year.

         "Prior Plan" means the CLARCOR 40 1(k) Retirement Savings Plan.

         "Prior Plan Matching Account" is defined in the Transferred Account
Appendix.

         "Provisional Annual Addition" is the amount described in Section 4.8.

         "Qualified Military Service" means the performance of duty on a
voluntary or involuntary basis in the Uniformed Services of the United States by
an Eligible Employee provided he is reemployed by the Employer or an Affiliate
within the applicable time period specified in Chapter 43 of Title 38 of the
United States Code (Employment and Reemployment Rights of Members of the
Uniformed Services) and the total length of all such absences does not exceed
the maximum specified by law for the retention of reemployment rights. The term

                                        6
<PAGE>
"Uniformed Services of the United States" means the Armed Forces, the Army
National Guard and the Air National Guard when engaged in active duty for
training, inactive duty training, or full-time National Guard duty, or full-time
duty in the commissioned corps of the Public Health Service.

         "Required Beginning Date" means:

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

                 (b) for a Participant who is a Five-Percent Owner with respect
to the Plan Year in which he attains age 70-1/4, the April 1 following the
calendar year in which the Participant attains age 70-1/4.

         "Rollover Account" means the individual Account established pursuant to
Article 4 representing a Participant's allocable share of the Trust Fund
attributable to Rollover Contributions.

         "Rollover Contribution" means:

                 (a) Direct Rollovers: All or a portion of a direct rollover of
an eligible rollover distribution from a qualified plan described in Code
Section 401(a) or 403(a), other than after-tax employee contributions; an
annuity contract described in Code Section 403(b), other than after-tax employee
contributions; and an eligible plan under Code Section 457(b) which is
maintained by a state, political subdivision of a state or any agency or
instrumentality of a state or political subdivision of a state.

                 (b) Participant Rollover Contributions from Other Plans: All or
a portion of an employee contribution of an eligible rollover distribution from
a qualified plan described in Code Section 401(a) or 403(a); an annuity contract
described in Code Section 403(b); and an eligible plan under Code Section 457(b)
which is maintained by a state, political subdivision of a state, or any agency
or instrumentality of a state or political subdivision of a state; and which is
rolled over by the employee to this Plan within 60 days following his receipt
thereof.

                 (c) Participant Rollover Contributions from IRAs: An employee
rollover contribution of all or the portion of a distribution from an individual
retirement account or annuity described in Code Section 408(a) or 408(b) that is
eligible to be rolled over and would otherwise be includible in gross income.

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

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

                 (b) the first day following any one-year period during which he
performed no duties for the Employer and all Affiliates, except that for an
employee on an approved leave of absence which exceeds 12 months, the Severance
Date shall be the last day of such leave, unless the employee immediately
returns to work following such leave.

                                        7
<PAGE>
         "Temporary Employee" means an individual hired by the Employer or an
Affiliate or through an outside agency or contractor for an indefinite period
anticipated to be of short duration.

         "Tentative Employer Contribution" is the contribution described in
Section 3.1.

         "Trust" or "Trust Fund" means the Trust established in accordance with
Article 9.

         "Trustee" means the Trustee or Trustees under the Trust referred to in
Article 9.

         "Valuation Date" means each Business Day as of which the value of each
Account shall be determined.

         "Year of Service" is a unit of service credited to an employee for
purposes of determining an employee's eligibility to participate in the Plan and
the percentage of the balance in a Participant's Matching Account (including any
Prior Plan Matching Account under the Transferred Account Appendix) which is
nonforfeitable. An employee who is reemployed shall retain service credited to
him in his previous employment with the Employer or an Affiliate, except as
otherwise provided in the Plan.

                 (a) An employee shall be credited with one Year of Service for
each full year in the period commencing on his Employment Commencement Date and
ending on his Severance Date. An employee shall also be credited with 1/365 of a
Year of Service for each additional day in such period for which he did not
receive credit pursuant to the preceding sentence.

                 (b) A former employee who is reemployed and who performs duties
for the Employer or an Affiliate within one year after the date he last
performed duties for the Employer or an Affiliate shall also be credited with
1/3 65 of a Year of Service for each day in the period commencing on his
Severance Date and ending on his Employment Commencement Date following such
Severance Date.

         For Part-Time Employees, "Year of Service" is defined in the Part-Time
Employee Appendix.

         1.6 Internal Revenue Service Approval. Notwithstanding anything herein
to the contrary, in the event the Internal Revenue Service does not issue an
initial determination letter stating that the Plan and Trust are qualified under
Code Sections 401 and 501, all contributions made by the Employer, as adjusted
by the net earnings or losses thereon, shall be returned to it by the Trustee
and the Plan and Trust shall thereupon terminate. No Participant shall have any
right or claim to any asset of the Trust Fund or any benefit under the Plan
before such a determination letter has been issued.

                                        8
<PAGE>
                                    ARTICLE 2

                          ELIGIBILITY AXD PARTICIPATION

         2.1     Eligibility Requirements.

                 (a) Every Eligible Employee, other than a Part-Time Employee,
who is not eligible under subsection (b) below shall first be eligible to
participate, if he is then employed by the Employer, on the Entry Date
coinciding with or next following the later of:

                         (i)  the date on which he has completed three
             months of service for the Employer or an Affiliate, or

                         (ii) his 21st birthday.

For this purpose, a Participant shall have completed "three months of service"
if he is continuously employed from his Employment Commencement Date through the
three-month anniversary of his Employment Commencement Date.

                 (b) Any former employee of the Employer or an Affiliate who was
a Participant, other than a Part-Time Employee, and is reemployed by the
Employer as an Eligible Employee, shall be eligible to participate immediately
as of the date of such reemployment if such employee:

                         (i)  has not incurred a One-Year Break in Service; or

                         (ii) had a nonforfeitable right to any part of the
         balance in his Matching Account (including any Prior Plan Matching
         Account under the Transferred Account Appendix) on the date his most
         recent employment with the Employer and all Affiliates terminated; or

                         (iii) has attained age 21 and has incurred a One-Year
         Break in Service, but the number of years and portions thereof in the
         period after the employee's Severance Date and before he next performs
         duties for the Employer or an Affiliate is less than the greater of 5
         or the aggregate number of Years of Service and portions thereof before
         such One-Year Break in Service (excluding any Years of Service and
         portions thereof previously disregarded).

                 (c) Notwithstanding any provision of this Plan to the contrary,
any individual who was providing services to the Employer in the capacity of, or
who was designated by the Employer as, an independent contractor or a Leased
Employee, and who is subsequently reclassified as an Eligible Employee for the
purposes of this Plan (regardless of whether such reclassification is
retrospective or prospective), shall be eligible to participate in the Plan on a
prospective basis only from the date of the re-classification and shall not have
any retroactive claim for benefits.

                 (d) For Part-Time Employees, see the Part-Time Employee
Appendix.

                                        9
<PAGE>
         2.2 Enrollment Form. Each Eligible Employee shall execute and file with
the Committee an enrollment form signifying his election to become a Participant
and specifying the rate of his contributions pursuant to Section 3.2. Subject to
such rules as shall be prescribed by the Committee, an Eligible Employee who has
met the eligibility requirements of Section 2.1 shall become a Participant as of
the Entry Date coinciding with or next following the date on which such
eligibility requirements are met.

         2.3 Leaves of Absence. During the period that any Participant is
granted a leave of absence, he shall share in the Matching Employer
Contributions, forfeitures, and the net earnings or losses of the Trust Fund in
the same manner and subject to the same conditions as if he were not on leave of
absence. Any such leave of absence must be requested and granted in writing and
pursuant to the Employer's established leave policy, which shall be administered
in a uniform and nondiscriminatory manner to similarly situated employees. For
Part-Time Employees, see the Part-Time Employee Appendix.

         2.4 Qualified Military Service. Notwithstanding any provision of this
Plan to the contrary, contributions, benefits and service credit with respect to
Qualified Military Service will be provided in accordance with Code Section
414(u).

                                       10
<PAGE>
                                    ARTICLE 3

                                  CONTRIBUTIONS

         3.1 Employer Contributions. Subject to the right reserved to the
Employer to alter, amend or discontinue this Plan and the Trust, the Employer
shall for each Plan Year contribute to the Trust Fund an amount equal to the sum
of:
                 (a)     the Before-Tax Contribution; and

                 (b)     the Matching Employer Contribution.

Such sum, which is known as the "Tentative Employer Contribution," shall be
reduced by an amount equal to the Excess Tentative Employer Contribution (as
provided in Section 4.9 provided that in no event shall the Tentative Employer
Contribution, as reduced by the Excess Tentative Employer Contribution, exceed
the amount deductible by the Employer for said year for federal income tax
purposes.

         3.2 Before-Tax Contributions.

                 (a) Subject to the provisions of Section 3.1 and ~~jonj~, each
Active Participant may for each payroll period elect to have the Employer make a
Basic Before-Tax Contribution on his behalf in an amount not in excess of 5%
(stated in one-quarter percentages) of his Considered Compensation. Each Active
Participant who elects to make the maximum Basic Before-Tax Contribution may in
addition to his Basic Before-Tax Contribution elect to have the Employer make a
Supplemental Before-Tax Contribution on his behalf in an amount not in excess of
45% (stated in one-quarter percentages) of his Considered Compensation.

                 (b) Any election under subsection 3.2(a) above shall be
effected by payroll deductions, and shall be deemed to be a continuing election
until changed by the Participant. An Active Participant may change his election
from time to time by either filing written notice with the Committee or by
utilizing any other system approved by the Committee, subject to such
limitations and conditions as the Committee shall prescribe. Any such election
may either discontinue or change such contributions effective as of the next
succeeding payroll period by which it is administratively feasible to process
the request.

                 (c) Any limitation under subsection 3.2(a) to the contrary
notwithstanding, all employees who are eligible to make Before-Tax Contributions
under this Plan and who will have attained age 50 before the close of the
calendar year shall be eligible to make catch-up contributions in accordance
with, and subject to the limitations of, Code Section 414(v), which shall be
treated as Supplemental Before-Tax Contributions.

                 (d) The amount of the Before-Tax Contributions, including any
catch-up contributions, to be made pursuant to a Participant's election shall
reduce the compensation otherwise payable to him by the Employer.

                                       11

<PAGE>

         3.3     Limitations on Before-Tax Contributions.

                 (a) In no event shall a Participant's Before-Tax Contributions
during any calendar year (other than catch-up contributions) exceed the dollar
limitation in effect under Code Section 402(g) at the beginning of such calendar
year; provided, however that contributions made under Section 2.4 shall be
subject to such limitation for the year to which they relate instead of the year
they are actually made. If a Participant's Before-Tax Contributions, together
with any additional elective contributions to any other qualified cash or
deferred arrangement, and any elective deferrals under a tax-sheltered annuity
program or a simplified employee pension plan, exceed such dollar limitation for
any calendar year, such excess, and any earnings allocable thereto, shall be
distributed to the Participant by April 15 of the following year; provided that,
if such excess contributions were made to a plan or arrangement not maintained
by the Employer or an Affiliate, the Participant must first notify the Committee
of the amount of such excess allocable to this Plan by March 1 of the following
year.

                 (b) Notwithstanding anything in the foregoing to the contrary,
catch-up contributions under subsection 3.2(c) shall not be taken into account
for purposes of the provisions of the Plan implementing the required limitations
of Code Sections 402(g) and 415. The Plan shall not be treated as failing to
satisfy the provisions of the Plan implementing the requirements of Code
Sections 401(k)(3), 401(k)(1 1), 401(k)(12), 410(b), or 416, as applicable, by
reason of any such catch-up contributions. Participants who are eligible to make
catch-up contributions under subsection 3.2(c), and whose Before-Tax
Contribution elections would cause their Before-Tax Contributions to exceed the
Code Section 402(g) dollar limitation then in effect, shall be deemed to have
elected to make catch-up contributions up to the maximum permitted under Code
Section 4 14(v) and their Before-Tax Contribution elections.

                 (c) The Plan is intended to satisfy the nondiscrimination
requirements of Code Section 401(k)(3)(A)(ii) pursuant to the alternative method
under Code Section 401(k)(12). In accordance therewith, from and after the
effective date of the Plan set forth in ~ the Employer shall make such Matching
Employer Contributions set forth in Section 3 4 and shall comply with such
notice and explanation procedures as shall be prescribed by applicable Treasury
Regulations or other official guidance of general applicability.

                 (d) Net earnings or losses to be refunded with the excess
Before-Tax Contributions shall be equal to the net earnings or losses on such
contributions for the Plan Year in which the contributions were made. The net
earnings or losses allocable to the excess Before-Tax Contributions for the Plan
Year shall be determined in the manner set forth in Article 4.

                 (e) The amount of each Participant's Basic Before-Tax
Contribution and Supplemental Before-Tax Contribution is also subject to the
provisions of Sections 4.9. For the purpose of avoiding the necessity of
adjustments pursuant to this Section 3.3 or ~c!jopA.Q, orto comply w'ith any
applicable law or regulation, the Committee may adopt such rules as it deems
necessary or desirable to:

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

                                       12

<PAGE>

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

         3.4 Matching Employer Contribution. Subject to the provisions of
Section 3.1, each Employer shall pay to the Trustee for each Plan Year for each
Active Participant an amount which, when added to the forfeitures of such
Employer's Matching Employer Contributions for the Plan Year, shall be known as
the "Matching Employer Contribution," equal to the sum of:

                 (a) 100% of the amount of the Participant's Basic Before-Tax
Contributions that does not exceed 3% of such Participant's Considered
Compensation, plus

                 (b) 50% of the amount of the Participant's Basic Before-Tax
Contributions that exceeds 3%, but does not exceed 5%, of such Participant's
Considered Compensation.

                 The amount of each Participant's Matching Employer Contribution
is subject to the provisions of Section 4.9.

         3.5 Rollover Contribution.

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

                 (b) An Eligible Employee who is not eligible to participate in
the Plan solely by reason of failing to meet the eligibility requirements of
Article 2 and who reasonably expects to become a Participant when such
requirements are met, may be a Participant in the Plan solely for the limited
purpose of making a Rollover Contribution, selecting investment options in
accordance with Section 4.2, and the withdrawal of Rollover Contributions in
accordance with subsection 3.5(e) below, subject to the same conditions as any
other Participant.

                 (c) If the Committee determines after a Rollover Contribution
has been made that such Rollover Contribution did not in fact constitute a
Rollover Contribution as defined in
    ~jofl.5 the amount of such Rollover Contribution and any earnings thereon
shall be returned to the Participant.

                 (d) Each Participant's Rollover Contribution shall be credited
to his Rollover Account as of the Valuation Date coinciding with or next
succeeding the date on which such amount is received by the Trustee, and
invested in accordance with Section 4.2. A Participant's Rollover Account shall
be fully vested and nonforfeitable.

                 (e) Amounts may be distributed from a Participant's Rollover
Account under the same terms and conditions and subject to the same restrictions
as apply to withdrawals or distributions of a Participant's Before-Tax Account
pursuant to Articles 5 and 6; provided, upon request of the Participant, the
Committee shall direct payment to such Participant at any time of

                                       13

<PAGE>

any amount not in excess of the balance of his Rollover Account on the Valuation
Date coinciding with or immediately preceding such Committee action, provided,
however, that the minimum withdrawal shall be at least $100, or the
Participant's entire balance of his Rollover Account, whichever is less.

                                       14
<PAGE>

                                    ARTICLE 4

                      ACCOUNTING PROVISIONS AND ALLOCATIONS

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

         4.2 Investment Funds.

                 (a) The Trust Fund shall be divided into separate investment
funds, including a Company Stock Fund, (each a "Fund") as provided in this
Section 4.2. The Company Stock Fund shall be invested in common stock of the
Company. Such stock shall be acquired by the Trustee from the Company or on the
open market at such times as the Committee may direct. Each Fund as may from
time to time be established shall be a common fund in which each Participant
shall have an undivided interest in the respective assets of the Fund; provided
all loans made pursuant to Article 6 shall, together with any income or expense
of such loans, be accounted for separately and will not be included in any of
the adjustments resulting from the application of this Section 4.2. Except as
otherwise provided, the value of each Participant's Accounts in such Funds shall
be measured by the proportion that the net credits to his Accounts bear to the
total net credits to the Accounts of all Participants and beneficiaries as of
the date that such share is being determined. For purposes of allocation of
income and valuation, each Fund shall be considered separately. No Fund shall
share in the gains and losses of any other, and no Fund shall be valued by
taking into account any assets or distributions from any other.

                 (b) Each Fund shall be established and invested by the Trustee
in accordance with investment policies determined, or as the Trustee may be
directed, from time to time by the Committee. The Committee may from time to
time also direct that Funds be terminated or added or that Funds with similar
investment objectives be consolidated.

                 (c) Participant investment elections shall be made as follows:

                         (i) A Participant may from time to time elect to have
         all contributions to his Accounts credited in a percentage in
         increments of 1% to one or more of the Funds. All future contributions
         to his Accounts shall be credited to such Funds in accordance with such
         election.

                         (ii) Subject to any restriction on transfers which
         results from the investment medium chosen for a Fund, a Participant may
         elect to transfer a percentage in increments of 1% of his Accounts held
         in any Fund to one or more different Funds. Loans or repayments made
         pursuant to Article 6 shall be treated as transfers to and from various
         Funds in accordance with uniform rules established by the Committee.

                         (iii) Elections under this Section shall be made by
         filing with the Committee a written form required thereby or by
         utilizing the telephone voice system or any other system approved by
         the Committee. Such election must be made at such times

                                       15

<PAGE>

         and in accordance with procedures and limitations established by the
         Committee. If a Participant fails to make a valid election for any
         year, the prior year's election shall remain in effect or, in the case
         of a new Participant who fails to make a valid election, all
         contributions shall be invested in the intermediate term U.S. Treasury
         securities fixed-income fund or the fund most similar to such a fund.

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

                 (e) The Plan is intended to constitute a plan described in
Section 404(c) of the Employee Retirement Income Security Act and 29 C.F.R.
Section 2550.404c-1. To the extent permitted by law, the fiduciary of the Plan
shall be relieved of liability for any losses which are the direct and necessary
result of investment instructions given by any Participant.

         4.3 Allocation Procedure.

                 (a)     As of each Valuation Date, the Committee shall:

                         (i)      first, allocate the net earnings or losses of
         the Trust Fund pursuant to Section 4.5; and

                         (ii)     second, allocate Before-Tax Contributions
         pursuant to Section 4.6; and

                         (iii)    third, allocate Matching Employer
         Contributions pursuant to Section 4.7; and

                         (iv)     fourth, allocate Rollover Contributions
         pursuant to Section 3.5;

each to the extent they have been contributed to the Trust since the most recent
Valuation Date; provided for Part-Time Employees, see the Part-Time Employee
Appendix.

                 (b) All contributions to the Trust made by or on behalf of a
Participant shall be deposited in the form of cash or other acceptable assets in
the Trust Fund as soon as practicable, but in the case of Before-Tax
Contributions not later than fifteen business days following the last day of the
calendar month in which such contributions are received by the Employer either
directly or via payroll deduction, and shall be credited to the appropriate
Accounts of such Participant as of the Valuation Date received by the Trust
Fund; provided that, any contributions made with respect to a Plan Year must be
credited to the appropriate Accounts of such Participant not later than as of
the last day of such Plan Year. All contributions to the Trust shall be credited
at the values determined as of the date received by the Trust Fund.

         4.4 Determination of Value of Trust Fund. As of each Valuation Date the
Trustee shall determine for the period then ended the sum of the net earnings or
losses of the Trust Fund (excluding loans made pursuant to Article 6 . Net
earnings or losses shall reflect accrued but unpaid interest, dividends, gains
or losses realized from the sale, exchange or collection of assets,

                                       16

<PAGE>
other income received, appreciation or depreciation in the fair market value of
assets, administrative expenses, and taxes and other expenses paid. Gains or
losses realized and adjustments for appreciation or depreciation in fair market
value shall be computed as to the difference between value as of the preceding
Valuation Date or date of purchase, whichever is later, and the value as of the
date of disposition or the current Valuation Date, whichever is earlier. To the
extent any assets of the Trust have been invested in one or more separate
investment trusts, mutual funds, investment contracts or similar investment
media, net earnings or losses attributable to the investments shall be
determined in accordance with the procedures of those investment media.

         4.5 Allocation of Net Earnings or Losses. As of each Valuation Date the
net earnings or losses of each separate investment Fund of the Trust Fund since
the prior Valuation Date shall be allocated to the Accounts (excluding loans
made pursuant to Article 6) of all Participants (or beneficiaries of deceased
Participants) having credits in the Fund both on such Valuation Date and the
prior Valuation Date. Such allocation shall be in the ratio that:

                 (a) the net credits to each such Account of each such
Participant on the prior Valuation Date, less the total amount of any
distributions or loans from such Account to such Participant since the prior
Valuation Date, bears to

                 (b) the total net credits to all such Accounts of all
Participants on the prior Valuation Date, less the total amount of distributions
or loans from all such Accounts to all Participants since the prior Valuation
Date.

Notwithstanding the foregoing, to the extent the assets of the Trust have been
invested in one or more separate investment trusts, mutual funds, investment
contracts or similar investment media, the net earnings or losses attributable
to such investments shall be allocated to the Accounts of Participants or
beneficiaries on the basis of the balances of such Accounts but in accordance
with the procedures of the respective investment media in which such assets are
invested.

         4.6 Allocation of Before-Tax Contributions. As of each Valuation Date,
the Before-Tax Contributions (including any catch-up contribution) made on
behalf of each Participant since the prior Valuation Date shall be allocated to
such Participant's Before-Tax Account.

         4.7 Allocation of Matching Employer Contributions. As of each Valuation
Date, the Matching Employer Contributions made on behalf of each Participant
since the prior Valuation Date shall be allocated to the Matching Account of
such Participant in accordance with Section 3.4.

         4.8 Provisional Annual Addition. The sum of the amounts allocated to
the Accounts of each Participant pursuant to Sections 4.6 and 4.7 for a Plan
Year shall be known as the "Provisional Annual Addition" and shall be subject to
the limitation on Annual Additions in Section 4.9.

         4.9 Limitation on Annual Additions.

                 (a)     For the purpose of complying with the restrictions on
Annual Additions to defined contribution plans imposed by Code Section 415, for
each Participant who has made

                                       17

<PAGE>
Before-Tax Contributions during the Plan Year, there shall be computed a Maximum
Annual Addition, which except as provided under subsection 3.2(c) and Code
Section 4 14(v), if applicable, shall be the lesser of:

                         (i)      100% of his Total Compensation for the Plan
                 Year; or

                         (ii)     the Defined Contribution Dollar Limitation for
                 the Plan Year.

If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different 12-consecutive-month-period, the Maximum Annual
Addition shall not exceed the Defined Contribution Dollar Limitation multiplied
by the following fraction:

                  Number of months in the short Limitation Year
                  ---------------------------------------------
                                       12

The limitation under subsection 4.9(a) shall not apply to any contribution for
medical benefits within the meaning of Code Section 41 9A(f)(2) after separation
from service which is otherwise treated as an Annual Addition, or any amount
otherwise treated as an annual addition under Code Section 41 5(l)(2).

                 (b) If the Maximum Annual Addition for a Participant equals or
exceeds the Provisional Annual Addition for that Participant, an amount equal to
the Provisional Annual Addition shall be allocated to the Participant's
respective Accounts.

                 (c) If the Provisional Annual Addition exceeds the Maximum
Annual Addition for that Participant, the Provisional Annual Addition shall be
reduced as set forth below until the Provisional Annual Addition as so reduced
equals the Maximum Annual Addition for such Participant by reducing, in the
following order:

                                  (i)     the Supplemental Before-Tax
                 Contributions, and

                                  (ii)    the Basic Before-Tax Contributions and
                 Matching Employer Contributions, proportionately.

The Provisional Annual Addition remaining after such reductions shall be
allocated to the Participant's respective Accounts, and any excess shall be
refunded or be a forfeiture, as the case may be, pursuant to subsection 4.9(f).

                 (d) The "Excess Tentative Employer Contribution" is an amount
equal to the sum of the reductions in the Tentative Employer Contribution
allocable to the Accounts of Participants pursuant to subsection 4.9(c) above.

                 (e) Contributions made under Section 2.4 shall be treated as
Annual Additions for the Plan Year to which they relate instead of the Plan Year
when they are actually made.

                 (f) Notwithstanding anything to the contrary in this Plan, any
Before-Tax Contributions reduced in accordance with subsection 4.9(c) shall be
distributed to the Participant with allocable earnings in accordance with
Treasury Regulation Section 1.41 5-6(b)(6)(iv),

                                       18

<PAGE>

Matching Employer Contributions reduced in accordance with subsection 4.9(c)
above shall be held in a suspense account and used to reduce the Matching
Employer Contribution described in iopi4, as applicable, in the next succeeding
Plan Year (and as such will be subject to the limitations of this Section 4.9
for such Plan Year).

                                       19

<PAGE>
                                    ARTICLE 5

                       AMOUNT OF PAYMENTS TO PARTICIPANTS

         5.1 General Rule.

                 (a) Upon the retirement, disability, resignation or dismissal
of a Participant or upon a Participant's Required Beginning Date, he, or in the
event of his death, his beneficiary, shall be entitled to receive from his
respective Accounts in the Trust Fund an amount equal to the Participant's
Before-Tax Account, Matching Account and Rollover Account, as of the Valuation
Date coinciding with or next succeeding the date on which the election to
receive such distribution is made.

                 (b) The time and manner of distribution of a Participant's
Accounts shall be determined in accordance with Article 6.

         5.2 Normal Retirement. Any Participant may retire on or after his
Normal Retirement Date. If the retirement of a Participant is deferred beyond
his Normal Retirement Date, he shall continue in full participation in the Plan
and Trust Fund.

         5.3 Death. As of the date any Participant shall die while in the employ
of the Employer or an Affiliate, the Participant's Accounts shall be payable in
accordance with Section 6.2, subject to the provisions of Section 6.13.

         5.4 Disability.

                 (a) As of the date any Participant shall have become totally
and permanently disabled because of physical or mental infirmity while in the
employ of the Employer or an Affiliate and his employment shall have terminated,
the Participant's Accounts shall be payable in accordance with ~c!iofi~i,
subject to the provisions of Section 6.14.

                 (b) A Participant shall be deemed totally and permanently
disabled if he has been determined to be totally disabled by the Social Security
Administration or under the Employer's long term disability plan; provided,
however, that disability hereunder shall not include any disability incurred or
resulting from the Participant having engaged in a criminal enterprise, or any
disability consisting of or resulting from the Participant's addiction to
narcotics or an intentionally self-inflicted injury.

                 (c) A Participant who is totally and permanently disabled
pursuant to subsection (b) may continue to participate in the Plan by making
contributions to the Plan from his short-term disability payments.

         5.5 Vesting. A Participant's interest in his Before-Tax Account,
Matching Account and Rollover Account shall be nonforfeitable at all times.

                                       20

<PAGE>

                                    ARTICLE 6

                                  DISTRIBUTIONS

         6.1 Commencement and Form of Distributions.

                 (a) Distribution of a Participant's Accounts in the Trust Fund
following termination of employment with the Employer and all Affiliates shall
commence on or as soon as practicable after the first to occur of:

                         (i) the date set forth in the Participant's request for
         distribution; provided that such date is not earlier than the date on
         which he is entitled to a distribution, the Committee has notified the
         Participant of the availability of such distribution in a manner that
         would satisfy the notice requirements of Section 1.411(a)-11(c) of the
         Treasury Regulations, and such notification is given not more than 90
         days prior to the distribution date requested by the Participant;
         provided, further, that such distribution may commence less than 30
         days after the date the notice required under Section 1.411(a)-I 1(c)
         of the Treasury Regulations is given if:

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

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

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

                 (b) In all events, distribution to a Participant during his
lifetime shall commence no later than the Required Beginning Date in accordance
with Section 6.13.

                 (c) The Accounts which are distributable to a Participant who
has terminated employment with the Employer and all Affiliates shall be
distributed in one or both of the following ways, as the Participant may request
by filing such notice as shall be prescribed by the Committee, and in accordance
with applicable laws and regulations:

                         (i)      by payment in a single sum; or

                         (ii)     by a direct rollover to an "eligible
             retirement plan" in accordance with Section 6.12.

                 (d) Notwithstanding anything in this Section 6.1 to the
contrary, if a Participant has terminated employment with the Employer and all
Affiliates, and if the nonforfeitable balance of such Participant's Accounts
does not exceed $5,000 at the time a distribution is to be made from the Plan
and distribution pursuant to this Section 6.1 has not

                                       21

<PAGE>

otherwise commenced, the Committee shall direct the Trustee to distribute such
amount in a lump sum payment to the individual so entitled and the payment
thereof shall be in full satisfaction of any liability of the Trust to such
individual; provided, the Participant's Account balance may be determined
without regard to the portion of the Account balance that is attributable to
Rollover Contributions set forth at Section 3.5.(and any earnings allocable to
the Rollover Contributions). Any Participant whose nonforfeitable balance in his
Accounts is 0% shall be deemed to have received a lump sum payment upon
termination of employment. A Participant may request by filing such notice as
shall be prescribed by the Committee, and in accordance with applicable laws and
regulations, a direct rollover of such single sum distribution to an eligible
retirement plan in accordance with Section 6.12.

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

         6.2 Distributions to Beneficiaries. The balance of a deceased
Participant's Accounts which is distributable to a beneficiary shall be paid in
a single sum not later than the date set forth at Section 6.13.

         6.3 Beneficiary Designations.

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

                 (b) The distributable balance of a deceased Participant's
Accounts shall be distributed to the persons effectively designated by the
Participant as his beneficiaries. To be effective, the designation shall be
filed with the Committee in such written form as the Committee requires and may
include successive contingent beneficiaries; provided that any designation by a
Participant who is married at the time of his death or, if earlier, the date his
benefit payments commence, that fails to name the Participant's surviving spouse
as the sole primary beneficiary shall not be effective unless such surviving
spouse has consented to the designation in writing, witnessed by a Plan
representative or notary public, acknowledging the effect of the designation and
the specific nonspouse beneficiary, including any class of beneficiaries or any
contingent beneficiary. Such consent shall be irrevocable with respect to such
beneficiary designation. Such consent shall not be required if, at the time of
filing such designation, the Participant established to the satisfaction of the
Committee that the consent of the Participant's spouse could not be obtained
because there is no spouse, such spouse could not be located or by reason of
such other circumstances as may be prescribed by regulations. Any consent (or
establishment that the consent could not be obtained) shall be effective only
with respect to such spouse. Any Participant may change his beneficiary
designation at any time by filing with the Committee a new beneficiary
designation (with such spousal consent as may be required).

                 (c) If a Participant dies, and to the knowledge of the
Committee after reasonable inquiry leaves no surviving spouse, has not filed an
effective beneficiary designation

                                       22

<PAGE>
or has revoked all such designations, or has filed an effective designation but
the beneficiary or beneficiaries predeceased him, the distributable portion of
the Participant's Accounts shall be paid in equal shares where applicable to the
first surviving class of the following classes of successive beneficiaries:

                         (i)      the surviving spouse of such Participant;

                         (ii)     the Participant's surviving children;

                         (iii)    the Participant's surviving parents;

                         (iv)     the Participant's surviving brothers and
                 sisters; or

                         (v)      the executor or administrator of the
                 Participant's estate.

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

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

                         (ii) if no such beneficiary has been named, to the
         executor or administrator of the beneficiary's estate, or to such other
         individual or individuals who are related to the deceased beneficiary
         as shall be determined by the Committee in its sole discretion.

                 (e) For all purposes under the Plan, a Domestic Partner of a
Hayward Participant shall be regarded as the Participant's spouse. A "Domestic
Partner" of a "Hayward Participant" is an individual domestic partner of a
Hayward Participant under a domestic partnership registered with the City of San
Francisco, California pursuant to applicable ordinance or with such other
governmental body pursuant to State or local law authorizing such registration,
and which domestic partnership has not ended by any manner other than the death
of either domestic partner. A "Hayward Participant" is a Participant who is
employed at the Company's Purolator Filtration Hayward, California facility
during such Domestic Partnership.

         6.4 Deferred Distributions. If distribution is made to a Participant or
to the beneficiary of a deceased Participant is deferred, the undistributed
nonforfeitable balance shall share in the net earnings or losses (including the
net adjustments in the value of the Trust Fund) as provided in Section 4.5.

         6.5 Form of Elections and Applications for Benefits. Any election,
revocation of an election or application for benefits pursuant to the Plan shall
not be effective unless it is:

                 (a) made on such form, if any, as the Committee may prescribe
for such purpose;

                                       23

<PAGE>
                 (b)     signed by the Participant and, if required by
                         Section 6.3, by the Participant's spouse; and

                 (c)     filed with the Committee.

         6.6 Distribution from Company Stock Fund. In the event a Participant's
Accounts are to be distributed in a lump sum, the Participant may elect to
receive the portion invested in the Company Stock Fund in shares of stock. Such
request must be received at least 15 days prior to the date of distribution.
Partial distributions, loans and hardship withdrawals shall be made in cash.
Distributions of Company common stock shall be in whole shares only, and any
fractional share shall be distributed in cash.

         6.7 Unclaimed Distributions. In the event any distribution cannot be
made because the person entitled thereto cannot be located and the distribution
remains unclaimed for 2 years after the distribution date established by the
Committee, then such amount shall be treated as a forfeiture and allocated in
accordance with Section 4.9. In the event such person subsequently files a valid
claim for such amount, such amount shall be restored to the Participant's
Accounts as follows:

                 (a) If a Participant is reemployed by the Employer or an
Affiliate without incurring 5 consecutive One-Year Breaks in Service, and before
distribution of the nonforfeitable portion of his Accounts, the amount of the
forfeiture shall be restored to his Before-Tax Account or Matching Account (or
both), as the case may be, as of the last day of the Plan Year in which he is
reemployed.

                 (b) Amounts restored to a Participant's Accounts above shall be
deducted from the forfeitures which otherwise would be allocable for the Plan
Year in which such reemployment or repayment occurs or, to the extent such
forfeitures are insufficient, shall require a supplemental contribution from the
Employer.

                 (c) Any forfeiture above of a Prior Plan Matching Account
(described in the Transferred Account Appendix) shall be restored as provided in
such Appendix.

         6.8 Loans.

                 (a) Upon the submission by the Participant of a written loan
application form as prescribed by the Committee, or by utilizing any other
system approved by the Committee, the Committee shall grant a loan to such
Participant from his Accounts as hereafter provided; provided, however, that if
the Committee reasonably believes that the Participant either does not intend to
repay the loan or lacks proper financial ability to repay the loan, it shall not
grant such a loan. A Participant shall not have more than one loan outstanding
at any time.

                 (b) The amount of any loan shall not be less than $1,000 and
shall not exceed 50% of the amount which the Participant would be entitled to
receive from his Accounts if he had resigned from the service of the Employer
and all Affiliates on the Valuation Date immediately preceding the date of such
authorization; provided, however, that the amount of such loan (when added to
the outstanding balance of all other loans to the Participant from the Plan)
shall not exceed $50,000 reduced by the excess (if any) of:

                                       24

<PAGE>

                         (i) the highest outstanding balance of loans to the
         Participant from the Plan during the one-year period ending on the day
         before the date on which such loan is made or modified; over

                         (ii) the outstanding balance of loans to the
         Participant from the Plan on the date on which such loan is made or
         modified.

                 (c) Such loans shall be made available on a reasonably
equivalent basis to all Participants and beneficiaries who have nonforfeitable
Account balances in the Plan and who either:

                         (i)  are active employees; or

                         (ii) are determined by the Committee to be "parties in
         interest" as that term is defined in Section 3(14) of ERISA, so long as
         the making of such loans does not discriminate in favor of Highly
         Compensated Employees.

                 (d) Loans shall be made and repaid on such terms and in
accordance with such loan procedures as the Committee may prescribe (consistent
with this Section 6.8), provided that any such loan shall be evidenced by a
promissory note, shall bear interest on the unpaid balance thereof at a
reasonable rate per annum to be set from time to time by the Committee that is
commensurate with the interest rates charged by persons in the business of
lending money for loans which would be made under similar circumstances, and
shall be secured by the Participant's segregated loan account but in no event
more than 50% of the Participant's nonforfeitable Account balances (determined
as of the date of the loan) and such other security as the Committee in its
discretion deems appropriate.

                 (e) Loans shall be an asset of the Participant's Accounts and
shall be treated in the manner of a segregated account.

                 (f) A reasonable loan processing fee shall be charged to the
Participant in connection with each loan application and a reasonable loan
maintenance fee shall be charged for each year during which all or any portion
of the loan remains outstanding.

                 (g) The funds needed to provide for the principal amount of the
loan shall come from liquidation of the Funds in which the Participant's
Accounts are invested, on a pro rata basis. Within each such Fund, the loan
amount shall be withdrawn from the Participant's Accounts and liquidated
according to the following schedule:

                         (i) first, from the Participant's Prior Plan After-Tax
         Account;

                         (ii) second, from the Participant's Rollover Account;

                         (iii) third, from the Participant's Before-Tax Account;
         and

                         (iv) fourth, equal amounts from the Participant's
         Matching Account and the vested portion of the Participant's Prior Plan
         Matching Account.

                                       25

<PAGE>

                 (h)     Repayment:

                         (i) Loans shall be repaid by the Participant by payroll
         deduction or any other method approved by the Committee that requires
         level amortization of principal and repayments not less frequently than
         quarterly. Such loans shall be repaid over a period not to exceed 5
         years (or such longer commercially reasonable period of time as
         established by the Committee for loans used to acquire a principal
         residence of the Participant as determined under the applicable Code
         provisions) in accordance with procedures established by the Committee
         from time to time. The loan shall be amortized in substantially equal
         payments over the term of the loan.

                         (ii) Loan repayments may, however, be suspended during
         an authorized leave of absence of up to one year or until the date the
         loan matures, whichever is earlier.

                         (iii) Loan repayments may be suspended under this Plan
         as permitted under Code Section 4 14(u) during periods of Qualified
         Military Service.

                 (i) If, at the time benefits are to be distributed (or to
commence being distributed) to a Participant with respect to a severance of
employment or the death of the Participant, there remains any unpaid balance of
a loan hereunder, such unpaid balance shall become immediately due and payable
in full. Such unpaid balance, together with any accrued but unpaid interest on
the loan, shall be deducted from the Participant's Accounts, unless the
Participant or Beneficiary within a reasonable amount of time as determined by
the Employer repays the outstanding loan balance plus accrued interest in its
entirety, before any distribution of benefits is made. No loan shall be made or
remain outstanding with respect to a Participant under this Section 6.8 after
the time distributions to the Participant with respect to a severance of
employment are to be paid.

                 (j)     Default:

                         (i) Default occurs when any payment of principal or
         interest is not made as set forth in the promissory note. In the event
         of a default, the Participant shall be given a reasonable opportunity
         to cure such default. The cure period shall end on the last day of the
         calendar quarter following the calendar quarter in which the required
         payment was due.

                         (ii) After the cure period has expired, if such default
         is not cured, the unpaid balance of the loan shall become due and
         payable and shall be treated as a deemed distribution to the
         Participant for income tax purposes in accordance with the applicable
         provisions of the Code. In no event shall the Committee charge the
         Participant's Accounts for any unpaid balance of such loan, together
         with any accrued but unpaid interest on the loan, unless the amount so
         applied otherwise could be distributed in accordance with the Plan.

                                       26

<PAGE>
         6.9 Withdrawals From Accounts Prior to Termination of Employment.

                 (a) A Participant who has attained age 59-1/4 may elect to
withdraw from his Accounts, any amount not in excess of the nonforfeitable
balance of such Accounts determined as of the Valuation Date coinciding with or
immediately preceding the date of such withdrawal.

                 (b) A Participant who has not attained age 59-1/4 may withdraw
all or a portion of his Before-Tax Account upon the determination by the
Committee that he has incurred a financial hardship. Withdrawals on account of
financial hardship shall not exceed the least of:

                         (i) The amount of funds needed to satisfy the immediate
         and heavy financial need, taking into account any amounts necessary to
         pay any federal, state or local income taxes or penalties reasonably
         anticipated to result from such distribution;

                         (ii) The balance of the Participant's Before-Tax
         Account as of the Valuation Date coinciding with or immediately
         preceding the date of the withdrawal; and

                         (iii) (A) the sum of the Participant's Before-Tax
         Account as of December 31, 1988 (under the Prior Plan) plus the
         Participant's Before-Tax Contributions and Prior Plan Before-Tax
         Contributions made on or after January 1, 1989, reduced by (B) the
         aggregate amount distributed from the Participant's Before-Tax Account
         on or after January 1, 1989.

                 (c) In any case where the Participant claims financial
hardship, he shall submit a request for such distribution in accordance with
procedures prescribed by the Committee. The Committee shall determine whether
the Participant has a "financial hardship" on the basis of such written request
in accordance with this Section 6 9 and such determination shall be made in a
uniform and nondiscriminatory manner. As used herein "financial hardship" means
(A) an immediate and heavy financial need and (B) the funds necessary to meet
the Participant's needs are not reasonably available from his other resources.
Earnings credited to the Before-Tax Account of the Participant may not be
withdrawn.

                         (i) A distribution for any of the following expenses or
         events shall be deemed to constitute an immediate and heavy financial
         need:

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

                                  (B) the purchase (excluding mortgage payments)
                 of a Participant's principal residence;

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

                                       27

<PAGE>

                                  (D) preventing foreclosure on or eviction from
                 the Participant's principal residence; or

                                  (E) any other event or expense deemed an
                 immediate and heavy financial need by the Internal Revenue
                 Service.

                         (ii) Except as provided in subsection 6.9(c)(i), the
         determination of whether a distribution is necessary to satisfy the
         immediate and heavy financial need of the Participant shall be made by
         the Committee on the basis of all relevant facts and circumstances. The
         Committee shall determine that a distribution is necessary to satisfy
         the financial need if the Participant demonstrates to the satisfaction
         of the Committee that all of the following requirements are satisfied:

                                  (A) the distribution is not in excess of the
                 amount of the immediate and heavy financial need of the
                 Participant, taking into account any amounts necessary to pay
                 any federal, state or local income taxes or penalties
                 reasonably anticipated to result from the distribution;

                                  (B) the Participant has obtained all
                 distributions (other than hardship distributions), and all
                 nontaxable loans currently available under all of the plans
                 maintained by the Employer or any Affiliate; and

                                  (C) the Participant shall not be permitted to
                 make any contributions to any retirement plan (other than
                 mandatory employee contributions to a defined benefit plan)
                 maintained by the Employer or any Affiliate for 6 months after
                 receiving the hardship distribution.

                 (d) Any withdrawals under this Section 6.9 shall be made pro
rata from the Funds in which the Participant's Accounts are invested.

         6.10 Facility of Payment. When, in the Committee's opinion, a
Participant or beneficiary is under a legal disability or is incapacitated in
any way so as to be unable to manage his affairs, the Committee may direct the
Trustee to make payments:

                 (a)     directly to the Participant or beneficiary;

                 (b)     to a duly appointed guardian or conservator of the
Participant or beneficiary;

                 (c)     to a custodian for the Participant or beneficiary under
the Uniform Gifts to Minors Act;

                 (d)     to an adult relative of the Participant or beneficiary;
or

                 (e)     directly for the benefit of the Participant or
beneficiary.

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

                                       28
<PAGE>
         6.11 Claims Procedure.

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

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

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

                         (ii) specific references 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 Plan's claim review
         procedure.

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

                         (i) submit a written request for review to the
         Committee;

                         (ii) review pertinent documents; and

                         (iii) submit issues and comments in writing.

                 (d) The Committee shall notify the claimant of its decision on
review within 60 days of receipt of a request for review. The decision on review
shall be written in a manner calculated to be understood by the claimant and
shall include specific reasons for the decision and specific references to the
pertinent Plan provisions on which the decision is based.

                 (e) The 90-day and 60-day periods described in subsections
6.11(b) and 6.11(d), respectively, may be extended at the discretion of the
Committee for a second 90- or 60-day period, as the case may be, provided that
written notice of the extension is furnished to the claimant prior to the
termination of the initial period, indicating the special circumstances
requiring such extension of time and the date by which a final decision is
expected.

                 (f) Participants and beneficiaries shall not be entitled to
challenge the Committee's determinations in judicial or administrative
proceedings without first complying with the procedures in this Article. The
Committee's decisions made pursuant to this Section 6.11 are intended to be
final and binding on Participants, beneficiaries, alternate payees and others.
Further, no legal action may be commenced with respect to claimant's request for
benefits later than two (2) years after the claimant originally filed his claims
for benefits.

                                       29

<PAGE>

         6.12    Eligible Rollover Distributions.

                 (a) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this ~ij~le6 a di
stributee may elect, at the time and in the manner prescribed by the Committee,
to have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.

                 (b) 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 ten years or more; any distribution to the extent such
distribution is required under Code Section 401 (a)(9); the portion of any
distribution that is not includible in gross income (determined without regard
for the exclusion for net unrealized appreciation with respect to employer
securities); and any distribution that is a hardship distribution described in
Code Section 401 (k)(2)(B)(i)(IV).

                 (c) Eligible retirement plan: An "eligible retirement plan" is
an individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified trust described in Code Section 40 1(a),
that accepts the distributee's eligible rollover distribution. An eligible
retirement plan" shall also mean an annuity contract described in Code Section
403(b) and an eligible plan under Code Section 457(b) which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to separately account
for amounts transferred into such plan from this Plan. The definition of
eligible retirement plan shall also apply in the case of a distribution to a
surviving spouse, or to a spouse or former spouse who is the alternate payee
under a qualified domestic relation order, as defined in Code Section 414(p).

                 (d) A portion of a distribution shall not fail to be an
eligible rollover distribution merely because the portion consists of after-tax
contributions which are not includible in gross income. However, such portion
may be transferred only to an individual retirement account or annuity described
in Code Section 408(a) or Code Section 408(b), or to a qualified defined
contribution plan described in Code Section 401(a) or Code Section 403(a) that
agrees to separately account for amounts so transferred, including separately
accounting for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so includible.

                 (e) 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 Code Section
414(p), are "distributees" with regard to the interest of the spouse or former
spouse.

                                       30
<PAGE>
                 (f) Direct rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.

         6.13 Required Minimum Distributions. The minimum amount of any
distribution to a Participant shall be determined in accordance with this
Section 6.13; provided, that nothing in this Section 6.13 shall create a right
to a form of distribution not otherwise available under the Plan.

                 (a)     General Rules.

                         (i) Precedence. The requirements of this Section 6.13
         will take precedence over any inconsistent provisions of the Plan.

                         (ii) Requirements of Treasury Regulations Incorporated.
         All distributions required under this Section 6.13 will be determined
         and made in accordance with the Treasury Regulations under Code Section
         401 (a)(9).

                 (b)     Time and Manner of Distribution.

                         (i) Required Beginning Date. The Participant's entire
         interest will be distributed to the Participant no later than the
         Participant's Required Beginning Date.

                         (ii) Death of Participant Before Distributions Begin.
         If the Participant dies before distributions begin, the Participant's
         entire interest in the Plan will be distributed no later than as
         follows:

                                  (A) If the Participant dies before
                 distributions begin and there is a designated beneficiary, the
                 Participant's entire interest will be distributed to the
                 designated beneficiary by December 31 of the calendar year
                 containing the fifth anniversary of the participant's death.

                                  (B) If the Participant's surviving spouse is
                 the Participant's sole designated beneficiary and the surviving
                 spouse dies after the Participant but before distributions to
                 either the Participant or the surviving spouse begin, this
                 subsection 6.13(b)(ii)(B) will apply as if the surviving spouse
                 were the Participant.

                                  (C) If there is no designated beneficiary as
                 of September 30 of the year following the year of the
                 Participant's death, the Participant's entire interest will be
                 distributed by December 31 of the calendar year containing the
                 fifth anniversary of the Participant's death.

                                  (D) For purposes of this subsection 6.1
                 3(b)(ii) and subsection 6.13(d), unless subsection 6.1
                 3(b)(ii)(B) applies, distributions are considered to begin on
                 the Participant's Required Beginning Date. If subsection
                 6.13(b)(ii)(B) applies, distributions are considered to begin
                 on the date distributions are required to begin to the
                 surviving spouse under subsection 6.1 3(b)(ii)(A).

                                       31

<PAGE>

                         (iii) Forms of Distribution. Unless the Participant's
         interest is in any Account that is distributed only in a single lump
         sum on or before the Required Beginning Date, as of the first
         distribution calendar year distributions will be made in accordance
         with subsection 6.13(c) and subsection 6.13(d).

                         (iv) Compliance Savings Provision. As of the effective
         date of the Plan, pursuant to subsection 6.1(a), subsection 6.2(a) and
         subsection 6.1 3(b)(iii) of the Plan, a Participant's Accounts are
         distributable only in a single lump sum to the Participant or his
         beneficiaries. The provisions of subsection 6.13(c) and subsection
         6.13(d) shall apply only to the extent that, heretofore or hereafter,
         the Plan otherwise provides that any part of a Participant's Accounts
         is distributable in a form other than a single lump sum.

                 (c)     Required Minimum Distributions During Participant's
Lifetime. Subject to the provisions of Section 6.1 and subsection 6.1 3(b)(iv):

                         (i)      Amount of Required Minimum Distribution For
         Each Distribution Calendar Year. During the Participant's lifetime,
         the minimum amount that will be distributed for each distribution
         calendar year is the lesser of:

                                  (A) the quotient obtained by dividing the
                 Participant's Account balance by the distribution period in the
                 Uniform Lifetime Table set forth in Section 1.401 (a)(9)-9 of
                 the Treasury Regulations, using the Participant's age as of the
                 Participant's birthday in the distribution calendar year; or

                                  (B) if the Participant's sole designated
                 beneficiary for the distribution calendar year is the
                 Participant's spouse, the quotient obtained by dividing the
                 Participant's Account balance by the number in the Joint and
                 Last Survivor Table set forth in Section 1.401(a)(9)-9 of the
                 Treasury Regulations, using the Participant's and spouse's
                 attained ages as of the Participant's and spouse's birthdays in
                 the distribution calendar year.

                         (ii) Lifetime Required Minimum Distributions Continue
         Through Year of Participant's Death. Required minimum distributions
         will be determined under this subsection 6.13(c) beginning with the
         first distribution calendar year and up to and including the
         distribution calendar year that includes the Participant's date of
         death.

                 (d)     Required Minimum Distributions After Participant's
Death. Subject to the provisions of subsection 6.2(a) and subsection 6.1
3(b)(iv):

                         (i)  Death On or After Date Distributions Begin.

                                  (A) Participant Survived by Designated
                 Beneficiary: If the Participant dies on or after the date
                 distributions begin and there is a designated beneficiary, the
                 minimum amount that will be distributed for each distribution
                 calendar year after the year of the Participant's death is the
                 quotient obtained by dividing the Participant's Account balance
                 by the longer of the remaining life

                                       32

<PAGE>

                 expectancy of the Participant or the remaining life expectancy
                 of the Participant's designated beneficiary, determined as
                 follows:

                                          (1) The Participant's remaining life
                         expectancy is calculated using the age of the
                         Participant in the year of death, reduced by one for
                         each subsequent year.

                                          (2) If the Participant's surviving
                         spouse is the Participant's sole designated
                         beneficiary, the remaining life expectancy of the
                         surviving spouse is calculated for each distribution
                         calendar year after the year of the Participant's death
                         using the surviving spouse's age as of the spouse's
                         birthday in that year. For distribution calendar years
                         after the year of the surviving spouse's death, the
                         remaining life expectancy of the surviving spouse is
                         calculated using the age of the surviving spouse as of
                         the spouse's birthday in the calendar year of the
                         spouse's death, reduced by one for each subsequent
                         calendar year.

                                          (3) If the Participant's surviving
                         spouse is not the Participant's sole designated
                         beneficiary, the designated beneficiary's remaining
                         life expectancy is calculated using the age of the
                         beneficiary in the year following the year of the
                         Participant's death, reduced by one for each subsequent
                         year.

                                  (B) No Designated Beneficiary: If the
                 Participant dies on or after the date distributions begin and
                 there is no designated beneficiary as of September 30 of the
                 year after the year of the Participant's death, the minimum
                 amount that will be distributed for each distribution calendar
                 year after the year of the Participant's death is the quotient
                 obtained by dividing the Participant's Account balance by the
                 Participant's remaining life expectancy calculated using the
                 age of the Participant in the year of death, reduced by one for
                 each subsequent year.

                         (ii)     Death Before Date Distributions Begin.

                                  (A) Participant Survived by Designated
                 Beneficiary: If the Participant dies before the date
                 distributions begin and there is a designated beneficiary, the
                 Participant's entire interest will be distributed to the
                 designated beneficiary by December 31 of the calendar year
                 containing the fifth anniversary of the participant's death.

                                  (B) No Designated Beneficiary: If the
                 Participant dies before the date distributions begin and there
                 is no designated beneficiary as of September 30 of the year
                 following the year of the Participant's death, distribution of
                 the Participant's entire interest will be completed by December
                 31 of the calendar year containing the fifth anniversary of the
                 Participant's death.

                                  (C) Death of Surviving Spouse Before
                 Distributions to Surviving Spouse Are Required to Begin: If
                 the Participant dies before the date

                                       33

<PAGE>

                 distributions begin, the Participant's surviving spouse is the
                 Participant's sole designated beneficiary, and the surviving
                 spouse dies before distributions are required to begin to the
                 surviving spouse under subsection 6.13(b)(ii)(B), this
                 subsection 6.13(d)(ii) will apply as if the surviving spouse
                 were the Participant.

                 (e)     Definitions.

                         (i) Designated beneficiary. The "designated
         beneficiary" means the individual who is designated as the beneficiary
         under Section 6.3 of the Plan and is the designated beneficiary under
         Code Section 401 (a)(9) and Section 1.401 (a)(9)- 1, Q&A-4, of the
         Treasury Regulations.

                         (ii) Distribution calendar year. The "distribution
         calendar year" means a calendar year for which a minimum distribution
         is required. For distributions beginning before the Participant's
         death, the first distribution calendar year is the calendar year
         immediately preceding the calendar year which contains the
         Participant's required beginning date. For distributions beginning
         after the Participant's death, the first distribution calendar year is
         the calendar year in which distributions are required to begin under
         subsection 6.13(b)(ii). The required minimum distribution for the
         Participant's first distribution calendar year will be made on or
         before the Participant's Required Beginning Date. The required minimum
         distribution for other distribution calendar years, including the
         required minimum distribution for the distribution calendar year in
         which the Participant's required beginning date occurs, will be made on
         or before December 31 of that distribution calendar year.

                         (iii) Life expectancy. "Life expectancy" means the life
         expectancy as computed by use of the Single Life Table in Section
         1.401(a)(9)-9 of the Treasury Regulations.

                         (iv) Participant's Account balance. The "Account
         balance" means the Account balance as of the last Valuation Date in the
         calendar year immediately preceding the distribution calendar year
         ("valuation calendar year") increased by the amount of any
         contributions made and allocated or forfeitures allocated to the
         Account balance as of dates in the valuation calendar year after such
         Valuation Date and decreased by distributions made in the valuation
         calendar year after such Valuation Date. The Account balance for the
         valuation calendar year includes any amounts rolled over or transferred
         to the Plan either in the valuation calendar year or in the
         distribution calendar year if distributed or transferred in the
         valuation calendar year.

                                       34
<PAGE>

                                    ARTICLE 7

                           TOP-HEAVY PLAN REQUIREMENTS

         7.1     Definitions. For purposes of this Article 7:

                 (a) A "Key Employee" is any employee or former employee
(including any deceased employee) who at any time during the Plan Year that
includes the determination date was an officer of the Employer having annual
compensation greater than $130,000 (as adjusted under Code Section 41 6(i)( 1)
for plan years beginning after December 31, 2003), a 5-percent owner of the
Employer, or a 1-percent owner of the Employer having annual compensation of
more than $150,000. For this purpose, "annual compensation" means compensation
within the meaning of Code Section 415(c)(3).

                 The determination of who is a Key Employee will be made in
accordance with Code Section 41 6(i)( 1) and the regulations thereunder.

                 (b)     This Plan is "Top-Heavy" if any of the following
         conditions exists:

                         (i) The Top-Heavy Ratio for this Plan exceeds 60% and
         this Plan is not part of any Required Aggregation Group or Permissive
         Aggregation Group of plans;

                         (ii) This Plan is a part of a Required Aggregation
         Group of plans but not part of a Permissive Aggregation Group and the
         Top-Heavy Ratio for the group of plans exceeds 60%;

                         (iii) This Plan is a part of a Required Aggregation
         Group and part of a Permissive Aggregation Group of plans and the
         Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60%.

                 (c)     The "Top-Heavy Ratio" shall be determined as follows:

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

                                       35

<PAGE>

                         (ii) If the Employer maintains one or more defined
         contribution plans (including any Simplified Employee Pension Plan) and
         the Employer maintains or has maintained one or more defined benefit
         plans which during the 5-year period ending on the Top-Heavy
         Determination Date(s) has or has had any accrued benefits, the
         Top-Heavy Ratio for any Required or Permissive Aggregation Group as
         appropriate is a fraction, the numerator of which is the sum of account
         balances under the aggregated defined contribution plan or plans for
         all Key Employees, determined in accordance with subsection 7.1 (c)(i)
         above, and the Present Value of accrued benefits under the aggregated
         defined benefit plan or plans for all Key Employees as of the Top-Heavy
         Determination Date(s), and the denominator of which is the sum of the
         account balances under the aggregated defined contribution plan or
         plans for all Participants, determined in accordance with subsection
         7.1 (c)(i) above, and the Present Value of accrued benefits under the
         aggregated defined benefit plan or plans for all Participants as of the
         Top-Heavy Determination Date(s), all determined in accordance with Code
         Section 416 and the regulations thereunder. The accrued benefits under
         a defined benefit plan in both the numerator and denominator of the
         Top-Heavy Ratio are increased for any distribution of an accrued
         benefit made in the 5-year period ending on the Top-Heavy Determination
         Date.

                         (iii) For purposes of subsection 7.1(c)(i) and
         subsection 7.1(c)(ii) above the value of account balances and the
         Present Value of accrued benefits will be determined as of the most
         recent valuation date that falls within or ends with the 12-month
         period ending on the Top-Heavy Determination Date, except as provided
         in Code Section 416 and the regulations thereunder for the first and
         second plan years of a defined benefit plan. The account balances and
         accrued benefits of a Participant:

                                  (A) who is not a Key Employee but who was a
                 Key Employee in a prior year, or

                                  (B) who has not been credited with at least
                 one hour of service with any employer maintaining the Plan at
                 any time during the 5-year period ending on the Top-Heavy
                 Determination Date,

will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to
which distributions, rollovers, and transfers are taken into account, will be
made in accordance with Code Section 416 and the regulations thereunder.
Deductible employee contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans the value of account
balances and accrued benefits will be calculated with reference to the Top-Heavy
Determination Date(s) that fall within the same calendar year. The accrued
benefit of a Participant other than a Key Employee shall be determined under (1)
the method, if any, that uniformly applies for accrual purposes under all
defined benefit plans maintained by the Employer, or (2) if there is no such
method, as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Code Section 411 (b)( 1 )(C).

                 (d) "Permissive Aggregation Group" means the Required
Aggregation Group of plans plus any other plan or plans of the Employer which,
when considered as a group with

                                       36

<PAGE>

the Required Aggregation Group, would continue to satisfy the requirements of
Code Sections 401 (a)(4) and 410.

                 (e) "Required Aggregation Group" means:

                         (i) each qualified plan of the Employer in which at
         least one Key Employee participates or participated at any time during
         the Determination Period (regardless of whether the plan has
         terminated), and

                         (ii) any other qualified plan of the Employer which
         enables a plan described in subsection 7.1 (e)(i) to meet the
         requirements of Code Section 401 (a)(4) or Code Section 410.

                 (f) "Top-Heavy Determination Date" means, for any Plan Year
subsequent to the first Plan Year, the last day of the preceding Plan Year or,
for the first Plan Year of the Plan, the last day of that year.

                 (g) "Present Value" shall be based on the interest assumption
and post-retirement mortality assumption specified in the defined benefit plan.

                 (h) "Employer" means the Employer and all Affiliates except for
purposes of determining ownership under Code Section 416(i)(1).

                 (i) This subsection 7.1(i) shall apply for purposes of
determining the present values of accrued benefits and the amounts of account
balances of employees as of the determination date.

                         (i) The present values of accrued benefits and the
         amounts of account balances of an employee as of the determination date
         shall be increased by the distributions made with respect to the
         employee under the Plan and any plan aggregated with the Plan under
         Code Section 41 6(g)(2) during the 1-year period ending on the
         determination date. The preceding sentence shall also apply to
         distributions under a terminated plan which, had it not been
         terminated, would have been aggregated with the Plan under Code Section
         41 6(g)(2)(A)(i). In the case of a distribution made for a reason other
         than separation from service, death, or disability, this provision
         shall be applied by substituting "5-year period" for "1-year period."

                         (ii) Employees not performing services during year
         ending on the determination date. The accrued benefits and accounts of
         any individual who has not performed services for the employer during
         the 1-year period ending on the determination date shall not be taken
         into account.

                 (j) Matching Employer Contributions shall be taken into account
for purposes of satisfying the minimum contribution requirements of Code Section
41 6(c)(2) and Section 7.2 of the Plan. The preceding sentence shall apply with
respect to Matching Employer Contributions under the Plan or, if the Plan
provides that the minimum contribution requirement shall be met in another plan,
such other plan. Matching Employer Contributions that are used to satisfy the
minimum contribution requirements shall be treated as matching contributions for

                                       37
<PAGE>
purposes of the actual contribution percentage test and other requirements of
Code Section 401(m).

         7.2     Top-Heavy Plan Requirements.

                 (a) Except as otherwise provided in (b) and (c) below, the
Employer contributions and forfeitures allocated on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of three percent of
such Participant's Total Compensation, as limited by Code Section 401(a)(17), or
the largest percentage of Employer contributions and forfeitures, as a
percentage of any Key Employee's Section 415 Compensation, as limited by Code
Section 401 (a)( 17), allocated on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under other
Plan provisions, the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the year because of
(A) the Participant's failure to complete 1,000 Hours of Service (or any
equivalent provided in the Plan), (B) the Participant's failure to make
mandatory employee contributions to the Plan, or (C) Total Compensation less
than a stated amount.

                 (b) The provision in subsection 7.2(a) above shall not apply to
any Participant who was not employed by the Employer or an Affiliate on the last
day of the Plan Year.

                 (c) The provision in subsection 7.2(a) above shall not apply to
any Participant to the extent the Participant is covered under any other plan or
plans of the Employer and the Employer's contribution and forfeitures allocated
under such plan or plans are equal to or exceed the amount required to be
allocated under subsection 7.2(a) above.

                 (d) The minimum allocation required (to the extent required to
be nonforfeitable under Code Section 416(b)) may not be forfeited under Code
Section 41 1(a)(3)(B) or Code Section 411 (a)(3)(D).

                                       38

<PAGE>

                                    ARTICLE 8

                       POWERS AND DUTIES OF PLAN COMMITTEE

         8.1 Appointment of Plan Committee.

                 (a) The Board of Directors of the Company (the "Board of
Directors") may name a Plan Committee (the "Committee") to consist of not less
than 2 persons to serve as administrator and a named fiduciary of the Plan. Any
person, including directors, shareholders, officers and employees of the
Employer, shall be eligible to serve on the Committee. Every person appointed a
member of the Committee shall signify his acceptance in writing to the Board of
Directors. In the event the Board of Directors does not appoint a Committee
pursuant to this Section 8.1, the Company shall act as the administrator and a
named fiduciary of the Plan and all references to the Committee shall mean
references to the Company so acting as administrator and a named fiduciary of
the Plan.

                 (b) Members of the Committee shall serve at the pleasure of the
Board of Directors and may be removed by the Board of Directors at any time with
or without cause. Any member of the Committee may resign by delivering his
written resignation to the Board of Directors, and such resignation shall become
effective at delivery or at any later date specified therein. Vacancies in the
Committee shall be filled by the Board of Directors.

                 (c) Usual and reasonable expenses of the Committee may be paid
in whole or in part by the Employer and any such expenses not paid by the
Employer shall be paid by the Trustee out of the principal or income of the
Trust Fund. The members of the Committee shall not receive any compensation for
their services as such.

         8.2 Powers and Duties of Committee. The Committee shall have final and
binding discretionary authority to control and manage the operation and
administration of the Plan, including all rights and powers necessary or
convenient to the carrying out of its functions hereunder, whether or not such
rights and powers are specifically enumerated herein. In exercising its
responsibilities hereunder, the Committee may manage and administer the Plan
through the use of agents who may include employees of the Employer.

         Without limiting the generality of the foregoing, and in addition to
the other powers set forth in this Article 8 the Committee shall have the
following discretionary authorities:

                 (a) To construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of any benefits
hereunder.

                 (b) To prescribe procedures to be followed by Participants or
beneficiaries filing applications for benefits.

                 (c) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan.

                 (d) To request and receive from the Employer, Participants and
others such information as shall be necessary for the proper administration of
the Plan.

                                       39

<PAGE>

                 (e) To furnish the Employer upon request such annual and other
reports with respect to the administration of the Plan as are reasonable and
appropriate.

                 (t) To receive, review and maintain on file reports of the
financial condition and of the receipts and disbursements of the Trust Fund from
the Trustee.

                 (g)     To amend the Plan in accordance with Article 10.

         8.3     Committee Procedures.

                 (a) The Committee may adopt such bylaws and regulations as it
deems desirable for the conduct of its affairs.

                 (b) A majority of the members of the Committee at the time in
office shall constitute a quorum for the transaction of business. All
resolutions or other actions taken by the Committee at any meeting shall be by
the vote of the majority of the members of the Committee present at the meeting.
The Committee may act without a meeting by written consent of a majority of its
members.

                 (c) The Committee may elect one of its members as chairman and
may appoint a secretary, who may or may not be a Committee member, and shall
advise the Trustee and the Employer of such actions in writing. The secretary
shall keep a record of all actions of the Committee and shall forward all
necessary communications to the Employer or the Trustee.

                 (d) Filing or delivery of any document with or to the secretary
of the Committee in person or by registered or certified mail, addressed in care
of the Employer, shall be deemed a filing with or delivery to the Committee.

         8.4 Consultation with Advisors. The Committee (or any fiduciary
designated by the Committee pursuant to Section 8.8 may employ or consult with
counsel, actuaries, accountants, physicians or other advisors (who may be
counsel, actuaries, accountants, physicians or other advisors for the Employer).

         8.5 Committee Members as Participants. Any Committee member may also be
a Participant, but no Committee member shall have power to take part in any
discretionary decision or action affecting his own interest as a Participant
under this Plan unless such decision or action is upon a matter which affects
all other Participants similarly situated and confers no special right, benefit
or privilege not simultaneously conferred upon all other such Participants.

         8.6 Records and Reports. The Committee shall take all such action as it
deems necessary or appropriate to comply with governmental laws and regulations
relating to the maintenance of records, notifications to Participants,
registrations with the Internal Revenue Service, reports to the U.S. Department
of Labor and all other requirements applicable to the Plan.

                                       40

<PAGE>

         8.7     Investment Policy.

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

                 (b) Subject to the provisions of Section 4.2 relating to
investment direction of Participants, and to subsection 8.7(c), the Trustee
shall have exclusive authority and discretion to manage and control the assets
of the Trust pursuant to an investment policy coordinated with the needs of the
Plan as determined by the Committee.

                 (c) The Committee may in its discretion appoint one or more
Investment Managers to manage (including the power to direct the Trustee to
acquire and dispose of) any assets of the Plan pursuant to an investment policy
coordinated with the needs of the Plan as determined by the Committee, in which
event the Trustee shall not be liable for the acts or omissions of any such
Investment Manager or be under any obligation to invest or otherwise manage any
asset of the Plan which is subject to the management of any such Investment
Manager except as directed. Any such Investment Manager shall acknowledge in
writing that he is a fiduciary with respect to the Plan.

                 (d) The term "Investment Manager" shall mean: (i) a registered
investment adviser under the Investment Advisers Act of 1940; (ii) a bank as
defined in the Investment Advisers Act of 1940; or (iii) an insurance company
qualified under the laws of more than one state to manage, acquire and dispose
of plan assets.

         8.8 Designation of Other Fiduciaries. The Committee may designate in
writing other persons to carry out a specified part or parts of its
responsibilities hereunder (including the power to designate other persons to
carry out a part of such designated responsibility), but not including the power
to appoint Investment Managers. Any such designation shall be accepted by the
designated person, who shall acknowledge in writing that he is a fiduciary with
respect to the Plan.

         8.9 Obligations of Committee.

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

                 (b) The Committee is hereby authorized to act solely upon the
basis of such notifications from the Employer and to rely upon any document or
signature believed by the

                                       41

<PAGE>

Committee to be genuine and shall be fully protected in so doing. For the
purpose of this Section, a letter or other written instrument signed in the name
of the Employer by any officer thereof shall constitute a notification
therefrom; except that any action by the Company or its Board of Directors with
respect to the appointment or removal of a member of the Committee or the
amendment of the Plan and Trust or the designation of a group of employees to
which the Plan is applicable shall be evidenced by an instrument in writing,
signed by a duly authorized officer or officers, certifying that said action has
been authorized and directed by a resolution of the Board of Directors of the
Company.

                 (c) The Committee shall notify the Trustee of its actions and
determinations affecting the responsibilities of the Trustee and shall give the
Trustee directions as to payments or other distributions from the Trust Fund to
the extent they may be necessary for the Trustee to fulfill the terms of the
Trust Agreement.

                 (d) The Committee shall be under no obligation to enforce
payment of contributions hereunder or to determine whether contributions
delivered to the Trustee comply with the provisions hereof relating to
contributions, and is obligated only to administer this Plan pursuant to the
terms hereof.

         8.10 Indemnification of Committee. The Company shall indemnify members
of the Committee and its authorized delegates who are employees of the Employer
for any liability or expenses, including attorneys' fees, incurred in the
defense of any threatened or pending action, suit or proceeding by reason of
their status as members of the Committee or its authorized delegates, to the
full extent permitted by the law of the Employer's state of incorporation.

                                       42

<PAGE>

                                    ARTICLE 9

                             TRUSTEE AND TRUST FUND

         9.1 Trust Fund. A Trust Fund to be known as the CLARCOR 40 1(k)
Retirement and Savings Trust (herein referred to as the "Trust" or the "Trust
Fund") has been established by the execution of a trust agreement with one or
more Trustees and is maintained for the purposes of this Plan. The assets of the
Trust will be held, invested and disposed of by the Trustee, in accordance with
the terms of the Trust, for the benefit of the Participants and their
beneficiaries.

         9.2 Payments to Trust Fund and Expenses. All contributions hereunder
will be paid into and credited to the Trust Fund and all benefits hereunder and
expenses chargeable thereto will be paid from the Trust Fund and charged
thereto.

         9.3 Trustee's Responsibilities. The powers, duties and responsibilities
of the Trustee shall be as set forth in the Trust Agreement and nothing
contained in this Plan, either expressly or by implication, shall impose any
additional powers, duties or responsibilities upon the Trustee.

         9.4 Reversion to an Employer. An Employer has no beneficial interest in
the Trust Fund and no part of the Trust Fund shall ever revert or be repaid to
an Employer, directly or indirectly, except that an Employer shall upon written
request have a right to recover:

                 (a) within one year of the date of payment of a contribution by
such Employer, any amount (less any losses attributable thereto) contributed
through a mistake of fact;

                 (b) within one year of the date on which any deduction for a
contribution by such Employer under Code Section 404 is disallowed, an amount
equal to the amount disallowed (less any losses attributable thereto); and

                 (c) at the termination of the Plan, any amounts with respect to
its employees remaining in the Excess Forfeiture Suspense Account.

         9.5 Voting of Company Stock. A Participant shall be entitled to direct
the Trustee as to the manner in which voting and other rights will be exercised
with respect to the shares of Company common stock allocated to the
Participant's Accounts. All Participants whose Accounts include investments in
the Company Stock Fund shall be notified within a reasonable time before such
rights are to be exercised. Such notification shall include all information
distributed by the Company to shareholders regarding the exercise of such
rights. To the extent that a Participant fails to provide the Trustee with
timely voting or exercise directions, the Trustee shall vote or exercise such
rights respecting such shares in the same proportion that the shares (and
fractional shares) of Company Stock in the Company Stock Fund for which the
Trustee received timely voting or exercise directions from Participants are to
be voted or exercised, except in the case where the Trustee determines that to
do so would be inconsistent with the provisions of Title I of ERISA; provided,
in the event of a tender offer for Company Stock, the Trustee shall not tender
any shares (or fractional shares) of Company Stock in the Company Stock Fund for
which it does not receive timely directions to tender such shares (or fractional
shares) from Participants, except in the case where the Trustee determines that
to do so

                                       43

<PAGE>

would be inconsistent with the provisions of Title I of ERISA. The Committee may
establish such additional procedures with respect to voting and other rights as
it, in its discretion, deems appropriate.

         9.6 Allocation of Assets. The Trust Fund may also include assets
attributable to contributions made by the Company and its Affiliates to fund
other defined contribution plans maintained by the Company and its Affiliates.
In this event, separate accounting for assets in the Trust Fund shall be kept by
the Company and Trustee so that the value of assets attributable to the Plan is
readily ascertainable.

                                       44

<PAGE>

                                   ARTICLE 10

                            AMENDMENT OR TERMINATION

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

         10.2 Termination. Subject to the provisions of Article 13 the Company
further reserves the right to terminate this Plan at any time.

         10.3 Form of Amendment, Discontinuance of Employer Contributions, and
Termination. Any such amendment, discontinuance of Employer contributions or
termination shall be made only by resolution of the Board of Directors of the
Company or by any person so duly authorized by the Board of Directors.

         10.4 Limitations on Amendments. The provisions of this Article are
subject to the following restrictions:

                 (a) Except as provided in Section 9.4 no amendment shall
operate either directly or indirectly to give the Employer any interest
whatsoever in any funds or property held by the Trustee under the terms hereof,
or to permit corpus or income of the Trust to be used for or diverted to
purposes other than the exclusive benefit of the Participants and their
beneficiaries.

                 (b) Except to the extent necessary to conform to the laws and
regulations or to the extent permitted by any applicable law or regulation, no
amendment shall operate either directly or indirectly to deprive any Participant
of his nonforfeitable beneficial interest in his Accounts as at the date of the
amendment.

                 (c) No amendment shall change any vesting schedule unless each
Participant who has completed 3 or more Years of Service is permitted to elect
to have the nonforfeitable percentage of his Matching Account (including any
Prior Plan Matching Account under the Transferred Account Appendix) computed
under the Plan without regard to such amendment. The period for making such
election shall commence no later than the date of the adoption of such amendment
and shall expire no earlier than 60 days after the latest of the following
dates: (i) the date the Plan amendment is adopted; (ii) the date the Plan
amendment becomes effective; or (iii) the date the Participant is issued written
notice of the Plan amendment by the Committee. Notwithstanding the foregoing, no
election need be offered to a Participant whose nonforfeitable percentage of his
Matching Account (including any Prior Plan Matching Account under the
Transferred Account Appendix) cannot at any time be lower than such percentage
determined without regard to such amendment.

                 (d) Except as permitted by applicable law, no amendment shall
eliminate or reduce an early retirement benefit or a retirement-type subsidy or
eliminate an optional form of benefit.

                                       45

<PAGE>

         10.5 Level of Benefits Upon Merger. This Plan shall not merge or
consolidate with, or transfer assets or liabilities to, any other plan, unless
each Participant shall be entitled to receive a benefit immediately after said
merger, consolidation or transfer (if such other plan were then terminated)
which shall be not less than the benefit he would have been entitled to receive
immediately before said merger, consolidation or transfer (if this Plan were
then terminated).

         10.6 Vesting Upon Termination or Discontinuance of Employer
Contributions; Liquidation of Trust.

                 (a) This Plan shall be deemed terminated if and only if the
Plan terminates by operation of law or pursuant to Section 10.2. In the event of
any termination or partial termination within the meaning of the Code, or in the
event the Employer permanently discontinues the making of contributions to the
Plan, the Matching Account (including any Prior Plan Matching Account under the
Transferred Account Appendix) of each affected Participant who is employed by
the Employer on the date of the occurrence of such event shall be
nonforfeitable; provided, however, that in no event shall any Participant or
beneficiary have recourse to other than the Trust Fund for the satisfaction of
benefits hereunder.

                 (b) In the event the Employer permanently discontinues the
making of contributions to the Plan, the Trustee shall make or commence
distribution to each Participant or his beneficiaries of the value of such
Participant's Accounts as provided herein within the time prescribed in Article
6. However, if, after such discontinuance, the Company shall determine it to be
impracticable to continue the Trust any longer, the Company may, in its
discretion, declare a distribution date and Valuation Date for all Participants
and beneficiaries, including each Participant or beneficiary whose Accounts are
being distributed in installments.

                 (c) The liquidation of the Trust, if any, in connection with
any Plan termination shall be accomplished by the Committee acting on behalf of
the Company. After directing that sufficient funds be set aside to provide for
the payment of all expenses incurred in the administration of the Plan and the
Trust, to the extent not paid or provided for by the Employer, the Committee
shall, as promptly as shall then be reasonable under the circumstances,
liquidate the Trust assets and distribute to each Participant or beneficiary his
Accounts in the Trust Fund. Notwithstanding the foregoing, if the Employer or an
Affiliate maintains another defined contribution plan, other than an employee
stock ownership plan (as defined in Code Section 4975(e) or Code Section 409) or
a simplified employee pension plan (as defined in Code Section 408(k)), the
Accounts of all Participants shall be transferred to the other plan; provided,
however, that if fewer than 2% of the Participants in this Plan at the time this
Plan is terminated are or were eligible to participate under such other defined
contribution plan at any time during the 24-month period beginning 12 months
before the time of termination, a Participant's Accounts shall be transferred to
the other plan only if the nonforfeitable balance of the Participant's Accounts
exceeds $5,000 and the Participant does not consent to the distribution of such
Accounts. Upon completion of such liquidation and distribution, the Trust shall
finally and completely terminate. In the event the Committee is no longer in
existence, the actions to be taken by the Committee pursuant to this Section
shall be taken by the Trustee.

                                       46

<PAGE>

                                   ARTICLE 11

                                  MISCELLANEOUS

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

         11.2 Nonalienation.

                 (a) Except as may be provided in the Plan with respect to loans
to Participants, no Participant shall have any right to sell, assign, pledge,
hypothecate, anticipate or in any way create a lien upon any part of the Trust
Fund. Except to the extent required by law or provided in the Plan, no interest
in the Trust Fund, or any part thereof, shall be assignable in or by operation
of law, or be subject to liability in any way for the debts or defaults of
Participants, their beneficiaries, spouses or heirs-at-law, whether to the
Employer or to others.

                 (b) Prior to the time that distributions are to be made
hereunder, the Participants, their spouses, beneficiaries, heirs-at-law or legal
representatives shall have no right to receive cash or other things of value
from the Employer or the Trustee from or as a result of the Plan and Trust.

         11.3 Qualified Domestic Relations Order. Notwithstanding anything in
this Plan to the contrary, the Committee shall distribute a Participant's
Accounts, or any portion thereof, in accordance with the terms of any domestic
relations order, which the Committee determines to be a qualified domestic
relations order described in Code Section 444(p). Further notwithstanding any
other provision of this Plan to the contrary, such distribution of a
Participant's Accounts, or any portion thereof, to an alternate payee under a
qualified domestic relations order shall, unless such order otherwise provides,
be made in a single sum as soon as administratively practicable after the
Committee has determined that a domestic relations order is a qualified domestic
relations order described in Code Section 414(p).

         11.4 Controlling Law. To the extent not preempted by the laws of the
United States of America, the laws of the State of Illinois shall be controlling
state law in all matters relating to the Plan.

         11.5 Severability. If any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining parts of this Plan, but this Plan shall be construed and enforced as
if said illegal or invalid provision had never been included herein.

         11.6 Notification of Addresses. Each Participant and each beneficiary
of a deceased Participant shall file with the Committee from time to time in
writing his post-office address and each change of post-office address. Any
communication, statement or notice addressed to the last post-office address
filed with the Committee, or if no such address was filed with the

                                       47

<PAGE>

Committee, then to the last post-office address of the Participant or
beneficiary as shown on the Employer's records, will be binding on the
Participant and his beneficiary for all purposes of this Plan and neither the
Committee nor the Employer shall be obliged to search for or ascertain the
whereabouts of any Participant or beneficiary.

         11.7 Gender and Number. Whenever the context requires or permits, the
gender and number of words shall be interchangeable.

                                       48

<PAGE>

                                   ARTICLE 12

                             ADOPTION BY AFFILIATES

         12.1 Adoption of Plan. Subject to any resolution or terms of any
agreement approved by the Board of Directors of the Company or a committee
thereof to the contrary, any Affiliate may adopt this Plan for the benefit of
its eligible employees if authorized to do so by the Board of Directors of the
Company. Such adoption shall be by resolution of such Affiliate's board of
directors, a certified copy of which shall be filed with the Company, the
Committee and the Trustee. Upon such adoption, such Affiliate shall become an
"Employer," and all terms and conditions of the Plan shall apply to eligible
employees of such Employer, subject to Section 1.4.

         12.2 The Company as Agent for Employer. Each Employer which has adopted
this Plan pursuant to Section 12.1 hereby irrevocably gives and grants to the
Company full and exclusive power conferred upon it by the terms of the Plan and
Trust to take or refrain from taking any and all action which such Employer
might otherwise take or refrain from taking with respect to the Plan, including
sole and exclusive power to exercise, enforce or waive any rights whatsoever
which such Employer might otherwise have with respect to the Trust, and each
such Employer, by adopting this Plan, irrevocably appoints the Company its agent
for such purposes. Neither the Trustee nor the Committee nor any other person
shall have any obligation to account to any such Employer or to follow the
instructions of or otherwise deal with any such Employer, the intention being
that all persons shall deal solely with the Company as if it were the sole
company which had adopted this Plan. Each such Employer shall contribute such
amounts as determined under Article 3.

         12.3 Adoption of Amendments.

                 (a) Any Employer which adopts this Plan pursuant to Section
12.1 may amend this Plan with respect to its own employees by resolution of its
board of directors, if authorized to do so by the Board of Directors of the
Company or any person so duly authorized by the Board of Directors of the
Company.

                 (b) Any Employer shall be deemed conclusively to have assented
to any amendment of this Plan by the Company without the necessity of any
affirmative action on the part of such Employer.

         12.4 Termination. Any Employer which adopts this Plan pursuant to
Section 12.1 may terminate this Plan with respect to its own employees by
resolution of its board of directors, if authorized to do so by the Board of
Directors of the Company, or any person so duly authorized by the Board of
Directors of the Company.

         12.5 Data to Be Furnished by Employers. Each Employer which adopts this
Plan pursuant to Section 12.1 shall furnish information and maintain such
records with respect to its Participants as called for hereunder, and its
determinations and notifications with respect thereto shall have the same force
and effect as comparable determinations by the Company with respect to its
Participants.

                                       49

<PAGE>

         12.6 Joint Employees. If a Participant receives Considered Compensation
during a Plan Year from more than one Employer, the total amount of such
Considered Compensation shall be considered for the purposes of the Plan, and
the respective Employers shall share in contributions to the Plan on account of
said Participant based on the Considered Compensation paid to such Participant
by the Employer.

         12.7 Expenses. Each Employer shall pay such part of any expenses
incurred in the administration of the Plan as the Company shall determine.

         12.8 Withdrawal. An Employer may withdraw from the Plan by giving 60
days' written notice of its intention to the Company and the Trustee, unless a
shorter notice shall be agreed to by the Company.

         12.9 Prior Plans. If an Employer adopting the Plan already maintains a
defined contribution plan covering employees who will be covered by this Plan,
it may, with the consent of the Company, provide in its resolution adopting this
Plan for the termination of its own plan or for the merger, restatement and
continuation, of its own plan by this Plan. In either case, such Employer may,
subject to the approval of the Company, provide in its resolution of adoption of
this Plan for the transfer of the assets of such plan to the Trust for this Plan
for the payment of benefits accrued under such other plan.

                                       50

<PAGE>
                                   ARTICLE 13

                          CHANGE IN CONTROL OF EMPLOYER

         13.1 Change in Control - Defined. "Change in Control" of the Employer
shall be deemed to have taken place if:

                 (a) a third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, becomes the beneficial owner of
shares of the Company having 15% or more of the total number of votes that may
be cast for the election of directors of the Company; or

                 (b) as the result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the Company before such
Transaction shall cease to constitute a majority of the Board of Directors of
the Company or any successor to the Company.

         13.2 Intent. Since financial transactions concerning the control of
corporations have involved the investment of retirement trust assets for the
direct or indirect purpose of acquiring such control over corporations, the
Employer and the Trustees intend by this Article 13 and the related Article 10
to prohibit the use of this Trust's assets for any purpose except the exclusive
benefit of participants in the event of a Change in Control. Therefore, all
other Sections of this Plan shall be subject to this Article 13 in the event of
a Change in Control.

         13.3 Prohibitions on Change in Control. In the event of a Change in
Control, the following acts are prohibited for a period of thirty-six (36)
months beginning on the first day of the month in which the Change occurs and
ending on the first day of the thirty-seventh (37th) calendar month thereafter:

                 (a) Amendment to this Article 13 or to Article 10 of this Plan.

                 (b) Amendment to any other section of this Plan or of any other
provision of the Plan which would allow any assets of the Trust to revert or
otherwise be paid to the Employer unless required by a final order of a court of
competent jurisdiction to maintain the status of the Plan as qualified under
Code Section 40 1(a).

                 (c) Investment of any portion of Trust assets in any employer
security as defined in Section 407 of ERISA.

                 (d) Investment in any security, bond, note or other financial
instrument in order to seek financial control of an entity.

                 (e) Investment in any security, bond, note or other financial
instrument in order to confer a benefit directly or indirectly upon any person
other than the Participants in their capacity as beneficiaries of this Plan.

                                       51

<PAGE>

                 (f) Merger of the Plan with any other plan except a plan
maintained by the Company or its subsidiaries prior to the Change in Control.

                 (g) Termination of the Plan unless all assets are distributed
to the persons entitled to benefits under the Plan within one year after the
termination has been approved by the Internal Revenue Service.

         IN WITNESS WHEREOF, the Company has caused this Plan to be signed by a
duly authorized officer on this 21 day of November, 2003.

                                             CLARCOR INC.

                                             By:/s/ Bruce A. Klein
                                                --------------------------------

                                             Title: CFO
                                                   -----------------------------

                                       52

<PAGE>
                           PART-TIME EMPLOYEE APPENDIX

         1.      Effective Date and Applicability. This Appendix and all
benefits accrued hereunder shall be effective on the initial effective date of
the Plan set forth in Section 1.3. Part-Time Employees shall be eligible to
participate in the Plan and to receive an allocation of the Matching Employer
Contribution as provided under this Appendix.

         2.      Terms and Conditions. All terms and conditions of the Plan
shall apply to Part-Time Employees, with the following exceptions:

                 (a)      DEFINITIONS.

                          (i)    "Entry Date" is the first day of a payroll
                 period.

                          (ii)   "Hour of Service~~ is:

                                 (A) each hour for which a Part-Time Employee is
                 paid or entitled to payment for the performance of duties for
                 the Employer or an Affiliate;

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

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

                                          (1) no more than 501 such Hours of
                          Service shall be credited for any continuous period
                          during which the Part-Time Employee performs no
                          duties;

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

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

                 The Hours of Service, if any, for which a Part-Time Employee is
                 credited for a period in which he performs no duties shall be
                 computed and credited to

                                       53

<PAGE>

                 computation periods in accordance with 29 C.F.R. Section
                 2530.200b-2 and other applicable regulations promulgated by the
                 Secretary of Labor. For purposes of computing the Hours of
                 Service to be credited to a Part-Time Employee for whom a
                 record of hours worked is not maintained, a Part-Time Employee
                 shall be credited with 10 Hours of Service for each day for
                 which he completes at least one Hour of Service. In addition, a
                 Part-Time Employee shall be credited with Hours of Service for
                 each week the employee is on a leave of absence in accordance
                 with subsection 2(b)(iii) of this Appendix.

                          (iii) "One -- Year Break In Service~~ is a 12 --
         consecutive -- month period commencing on the anniversary of his
         Employment Commencement Date ("Service Period") in which a Part-Time
         Employee completes 500 Hours of Service or less and on the last day of
         which the Participant is not employed by the Employer or an Affiliate.
         Solely for purposes of determining whether a One-Year Break in Service
         has occurred, "Hours of Service" shall also include each hour for which
         the Part-Time Employee otherwise would normally have been credited but
         for the employee's absence on a maternity or paternity absence. A
         maternity or paternity absence is an absence from work:

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

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

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

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

                 Any Part-Time Employee requesting such credit shall promptly
         furnish the Committee such information as the Committee requires to
         show that the absence from work is a maternity or paternity absence and
         the number of days for which there was such an absence. No more than
         501 hours shall be credited for a maternity or paternity absence. All
         such hours shall be credited in the Service Period in which the absence
         begins if necessary to prevent a One-Year Break in Service in such
         Service Period. If such hours are not necessary to prevent a One-Year
         Break in Service in such Service Period, the hours shall be credited in
         the succeeding Service Period if necessary to prevent a One-Year Break
         in Service in such Service Period. In the event the Committee is unable
         to determine the hours which otherwise would normally have been
         credited for such absence, the employee shall be credited with the
         number of hours per week equal to the hours customarily worked by the
         employee.

                          (iv) "Year of Service~~ is each 12 -- consecutive --
         month period, commencing on the date a Part-Time Employee's Employment
         Commencement Date and on each anniversary thereof, in which such
         employee completes 1,000 or more Hours of Service. In the case of a
         Part-Time Employee who incurs a One-Year Break in Service, "Year of
         Service" means each 12-consecutive-month period, commencing on the date
         the

                                       54

<PAGE>

         employee first completes an Hour of Service following the One-Year
         Break in Service and on each anniversary thereof, in which such
         employee completes 1,000 or more Hours of Service.

                 (b)      Eligibility  Requirements. In lieu of subsection
2.1(a) and subsection 2.1(b) of the Plan, the following shall apply to Part-Time
Employees:

                          (i) A Part-Time Employee shall first be eligible to
         participate, if he is then employed by the Employer, on the Entry Date
         coinciding with or next following the later of:

                                 (A)      the end of the first Year of Service
                 in which he completes 1,000 Hours of Service, or

                                 (B)      his 21st birthday.

                          (ii) Any former employee of the Employer or an
         Affiliate who was a Participant or could have become a Participant
         under subsection (i) above had he been employed on a prior Entry Date,
         and is reemployed by the Employer as an Eligible Employee, shall be
         eligible to participate immediately on the date of such reemployment if
         such employee:

                                 (A) has not incurred a One-Year Break in
                 Service; or

                                 (B) had a nonforfeitable right to any part of
                 the balance in his Matching Account (including any Prior Plan
                 Matching Account under the Transferred Account Appendix) on the
                 date his most recent employment with the Employer and all
                 Affiliates terminated (or would have had such right if he had
                 been a Participant); or

                                 (C) has attained age 21 and the number of
                 consecutive One-Year Breaks in Service which such employee
                 incurred since his most recent termination of employment with
                 the Employer and all Affiliates is less than 5.

                          (iii) Leaves of Absence. A Part-Time Employee who is
         on a leave of absence shall be credited, for each full week of such
         leave of absence, with the number of hours he customarily worked per
         week, if he is not otherwise credited with such Hours of Service. Any
         such leave of absence must be requested and granted in writing and
         pursuant to the Employer's established leave policy, which shall be
         administered in a uniform and nondiscriminatory manner to similarly
         situated employees.

                                       55

<PAGE>
                          TRANSFERRED ACCOUNT APPENDIX

         1. Effective Date and Applicability. This Appendix shall be effective
on the initial effective date of the Plan set forth in Section 1.3. This
Appendix governs the vesting and forfeiture of Prior Plan Matching Accounts and
the distribution of Prior Plan Matching Accounts and After-Tax Accounts of
Participants whose such Accounts were transferred to the Plan in a plan transfer
of assets and liabilities from the Prior Plan to this Plan in accordance with
the provisions of Code Section 40I(a)(12) and Code Section 414(1). A
Participant's "Prior Plan Matching Account" and "After-Tax Account" mean the
balance of his Matching Account and After-Tax Account under the Prior Plan on
the date of such transfer to the Plan.

         2. Terms and Conditions. All terms and conditions of the Plan shall
apply to a Participant's Prior Plan Matching Account and After-Tax Account,
subject to the following provisions of this Appendix.

         3. Vesting of Prior Plan Matching Accounts. The nonforfeitable portion
of a Participant's Prior Plan Matching Account shall be determined as hereafter
set forth:

                 (a) Retirement. Any Participant may retire on or after his
Normal Retirement Date, at which date the forfeitable portion, if any, of his
Prior Plan Matching Account shall become nonforfeitable. If the retirement of a
Participant is deferred beyond his Normal Retirement Date, he shall continue in
full participation in the Plan and Trust Fund.

                 (b) Death. As of the date any Participant shall die while in
the employ of the Employer or an Affiliate, the forfeitable portion, if any, of
his Prior Plan Matching Account shall become nonforfeitable.

                 (c) Disability. As of the date any Participant shall have
become totally and permanently disabled because of physical or mental infirmity
while in the employ of the Employer or an Affiliate and his employment shall
have terminated, the forfeitable portion, if any, of his Prior Plan Matching
Account shall become nonforfeitable. The existence of such disability shall be
determined as set forth in Section 5.4.

                 (d) All Other Vesting. Except as otherwise provided in this
subsection 3(b), a Participant's nonforfeitable interest in his Prior Plan
Matching Account at any point in time shall be determined in accordance with the
following schedule:

<TABLE>
<CAPTION>
                                                         Nonforfeitable
                              Years of Service             Percentage
                              ----------------           --------------
<S>                                                      <C>
                              Less than 3                          0
                              3ormore                            100
</TABLE>

                 (e) Forfeiture of Unvested Account. Any part of the Prior Plan
Matching Account of such Participant which does not become nonforfeitable shall
be treated as a forfeiture.

                                       56
<PAGE>

         For Part-Time Employees, "Year of Service" and "One Year Break in
Service" shall have the meaning set forth in the Part-Time Employee Appendix.

         4.      Computation of Period of Service. For purposes of determining
the nonforfeitable percentage of the Participant's Prior Plan Matching Account,
all Years of Service shall be taken into account, except that the following
shall be disregarded:

                 (a) Years of Service before a One-Year Break in Service until
such Participant has completed one Year of Service after such One-Year Break in
Service;

                 (b) in the case of a Participant who incurs 5 or more
consecutive One-Year Breaks in Service, Years of Service completed after such
One-Year Breaks in Service for purposes of determining his nonforfeitable right
in the balance of his Prior Plan Matching Account determined as of the date such
One-Year Breaks in Service began; and

                 (c) in the case of a Participant whose nonforfeitable balance
of his Prior Plan Matching Account is 0, Years of Service before a period
consisting of 5 consecutive One-Year Breaks in Service if the number of
consecutive One-Year Breaks in Service equals or exceeds the aggregate number of
Years of Service before such One-Year Breaks in Service. Such aggregate number
of Years of Service before such One-Year Breaks in Service shall not include any
Years of Service disregarded by reason of any prior One-Year Breaks in Service.

         5.      Treatment of Forfeitures.

                 (a) Upon termination of a Participant's employment with the
Employer and all Affiliates, that part of his Prior Plan Matching Account which
becomes forfeitable pursuant to subsection 3(d) of this Transferred Account
Appendix shall be used to reduce the Matching Employer Contribution in Section
3.4 for the Plan Year at the end of the Plan Year in which the termination of
employment occurred if the Participant is not then reemployed by the Employer or
an Affiliate.

                 (b) If a Participant is reemployed by the Employer or an
Affiliate without incurring 5 consecutive One-Year Breaks in Service, and before
distribution of the nonforfeitable portion of his Prior Plan Matching Account,
the amount of the forfeiture shall be restored to his Prior Plan Matching
Account as of the last day of the Plan Year in which he is reemployed.

                 (c) Amounts restored to a Participant's Prior Plan Matching
Account above shall be deducted from the forfeitures which otherwise would be
allocable for the Plan Year in which such reemployment or repayment occurs or,
to the extent such forfeitures are insufficient, shall require a supplemental
contribution from the Employer.

         6.      Distribution of Prior Plan Matching Account. The nonforfeitable
portion of a Participant's Prior Plan Matching Account shall be distributed at
such time and in such manner as provided under the Plan for distributions of
Participants' Matching Accounts.

         7.      Distribution of After-Tax Contributions Prior to Termination of
Employment. Upon request of a Participant, the Committee shall direct payment to
such Participant of any amount not in excess of his After-Tax Account on the
Valuation Date coinciding with or

                                       57

<PAGE>

immediately succeeding such Committee action; provided, however, that the
minimum withdrawal is at least $100 or the entire balance of the Participant's
After-Tax Account, whichever is less. Any distribution hereunder shall be deemed
to be made first from the Participant's Prior Plan After-Tax Contributions made
prior to January 1, 1987, second, pro rata, from Prior Plan After-Tax
Contributions made after December 31, 1986 and from the earnings on such Prior
Plan After-Tax Contributions, and third, from the earnings on Prior Plan
After-Tax Contributions made prior to January 1, 1987.

         8.      Top-Heavy Vesting.

                 (a) For any Plan Year in which this Plan is Top-Heavy, the
following schedule shall be substituted for the schedule set forth in subsection
3(d) above, provided that subsection 3(d) shall apply to the extent that the
nonforfeitable percentage thereunder is greater than the following schedule:

<TABLE>
<CAPTION>
                                                       Nonforfeitable
                          Years of Service              Percentage
                          ----------------             --------------
<S>                                                    <C>
                          Less than 3                             0%
                          3 or more                             100%
</TABLE>

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

                 (b) If a Participant has 3 or more Years of Service as of the
last day of the Plan Year for which the nonforfeitable percentage of his Prior
Plan Matching Account was subject to subsection 7.2(f), he may elect to have the
nonforfeitable percentage of his Prior Plan Matching Account determined under
subsection 7.2(f) in any subsequent Plan Year when Section 7.2 is not
applicable.

                                       58<PAGE>
                                                                   EXHIBIT 10.14

                               INDUS INTERNATIONAL

                   THOMAS R. MADISON, JR. EMPLOYMENT AGREEMENT

      This Agreement is entered into as of April 29, 2003 (the "Effective
Date"), by and between Indus International, Inc. (the "Company"), and Thomas R.
Madison, Jr. (the "Executive").

      1. Duties and Scope of Employment.

            (a) Prior Agreement. Executive currently serves as Chairman of the
Board and Chief Executive Officer of the Company, pursuant to the terms of that
certain Employment Agreement, dated as of December 19, 2001, between Executive
and the Company (the "Prior Agreement"). From and after the Effective Date, the
Prior Agreement will be superseded in its entirety by this Agreement.

            (b) Positions and Duties. As of the Effective Date, Executive will
serve as Chairman of the Board and Chief Executive Officer. Executive will
render such business and professional services in the performance of his duties,
consistent with Executive's position within the Company, as shall reasonably be
assigned to him by the Company's Board of Directors (the "Board").

            (c) Obligations. During the Employment Term, Executive will perform
his duties faithfully and to the best of his ability and will devote his
business efforts and time to the Company at the Company's Atlanta, Georgia
offices. Executive understands and agrees that frequent travel may be necessary
in carrying out his duties hereunder including, without limitation, frequent
travel to the Company's global offices as well as client sites. During the
Employment Term, Executive agrees that he will not, without the prior approval
of the Board of Directors, (i) serve on the board of directors (or similar
governing body) of any other company, (ii) serve as a director or trustee of any
civic, educational or charitable organization, or (iii) actively engage in any
other employment, occupation or consulting activity with or without any direct
or indirect remuneration; provided, however, that Executive may serve in any
non-director or non-trustee capacity with any civic, educational or charitable
organization, and may continue to serve as a member of the board of directors of
Kiodex, Alogent, Evant and Horizons Foundation (charitable organization) ,
without the approval of the Board, so long as such activities do not materially
interfere with his duties and obligations under this Agreement.

      2. Employment Term. Executive's employment with the Company pursuant to
this Agreement (the "Employment Term") shall commence on the Effective Date and
shall continue until terminated as provided in Section 7 hereof.

      3. Compensation.

            (a) Base Salary. During the Employment Term, the Company will pay
Executive as compensation for his services a base salary at the annualized rate
of $400,000 (the "Base Salary"). The Base Salary will be paid periodically in
accordance with the Company's normal payroll practices and be subject to
applicable tax withholding. The Board, or the Compensation Committee

<PAGE>

of the Board, shall review the Base Salary each year and may increase, but not
decrease, the Base Salary at any time. Any increase in Base Salary shall not
limit or reduce any other obligations to the Executive under this Agreement. The
term "Base Salary" as used in this Agreement shall refer to the Base Salary as
it may be increased from time to time.

            (b) Annual Bonus. In addition to the Base Salary, Executive may
receive a discretionary performance bonus during each year of employment with
the Company under this Agreement equal to an amount, to be determined by the
Board or the Compensation Committee of the Board, of up to one hundred percent
(100%) of Base Salary; provided, however, that, the payment of any such bonus
shall be subject to Executive's continued employment with the Company through
the end of the applicable Company fiscal year. Such performance bonus, if any,
shall be determined by the Board, or the Compensation Committee of the Board,
based upon its evaluation of performance relative to the business plan and other
pertinent considerations.

      4. Employee Benefits; Indemnification. During the Employment Term,
Executive will be entitled to participate in the employee benefit plans
currently or hereafter maintained by the Company of general applicability to
other senior executives of the Company, including, without limitation, the
Company's group medical, dental, vision, disability, life insurance, and
flexible-spending account plans. The Company reserves the right to cancel or
change the benefit plans and programs it offers to its employees (including
Executive) at any time. During the Employment Term and for six (6) years
thereafter, Executive shall be entitled to director and officer liability
insurance coverage in the same amounts that any then current director or officer
shall be entitled to receive. In the event of a Change of Control, Executive
shall be entitled to director and officer liability insurance coverage in the
same amounts and for the same period of time that any then current director or
officer shall be entitled to receive following such Change of Control
transaction.

      5. Vacation. Executive will be entitled to paid vacation of four (4) weeks
per year in accordance with the Company's vacation policy, with the timing and
duration of specific vacations mutually and reasonably agreed to by the parties
hereto.

      6. Expenses. The Company will reimburse Executive for reasonable travel,
entertainment or other expenses incurred by Executive in the furtherance of or
in connection with the performance of Executive's duties hereunder. Such
expenses shall be reimbursed in accordance with the Company's expense
reimbursement policy as in effect from time to time.

      7. Termination and Severance.

            (a) Termination of Employment. Executive's employment may be
terminated (i) by the Company with or without Cause, (ii) by Executive for Good
Reason or no reason or (iii) by reason of Executive's death or Disability.

            (b) Termination Without Cause; Termination for Good Reason. If
Executive's employment with the Company is terminated (i) by the Company without
"Cause" (as defined herein) or (ii) by the Executive for "Good Reason" (as
defined herein), and Executive signs and does not revoke a standard release of
claims with the Company in a form satisfactory to the Company, then Executive
shall be entitled to receive as severance (i) an amount equal to Executive's
then-current Base Salary (less applicable withholding taxes), payable over a
period of twelve (12) months

                                      -2-
<PAGE>

from the date of such termination in accordance with the Company's normal
payroll policies, and (ii) a bonus payment equal to the maximum annual bonus
payment provided by this Agreement (equal to Executive's then-current Base
Salary), payable in a lump sum within thirty (30) days of such termination, and
(iii) the Company will pay for full COBRA benefits for Executive for the earlier
of eighteen (18) months or until Executive receives health, medical and/or
dental benefits, respectively, from a new employer, and (iv) any stock options
granted during the term of the Prior Agreement and any new stock options granted
during the term of this Agreement (collectively, the "Options"), to the extent
vested on the date of termination, may be exercised until fifteen (15) months
after the date of termination.

            (c) Voluntary Termination; Termination for Cause. If Executive's
employment with the Company is terminated by Executive without Good Reason or by
the Company for Cause, then (i) all vesting of the Options will terminate
immediately and all payments of compensation by the Company to Executive
hereunder will terminate immediately (except as to amounts already earned), and
(ii) Executive will only be eligible for severance benefits in accordance with
the Company's established policies as then in effect, if applicable.

            (d) Death or Disability. If Executive's employment with the Company
is terminated due to Executive's death or Disability (as defined herein), and
Executive or Executive's beneficiary or guardian signs and does not revoke a
release of claims with the Company in a form satisfactory to the Company, then
Executive or Executive's beneficiary shall be entitled to receive as severance
(i) an amount equal to Executive's then-current Base Salary (less applicable
withholding taxes), payable over a period of twelve (12) months from the date of
such termination in accordance with the Company's normal payroll policies, and
(ii) a bonus payment equal to the maximum bonus payment provided by this
Agreement (equal to Executive's then-current Base Salary), payable in a lump sum
within thirty (30) days of such termination, and (iii) with respect to a
termination for Disability, the Company will pay for full COBRA benefits for
Executive for the earlier of twelve (12) months or until Executive receives
health, medical and/or dental benefits, respectively, from a new employer, and
(iv) the Options, to the extent vested on the date of termination, may be
exercised until fifteen (15) months after the date of termination.

            (e) Mitigation of Severance. Any severance payments payable to
Executive pursuant to this Section 7 shall be reduced on a dollar-for-dollar
basis by the amount of any salary, bonus and other compensation Executive
receives from a new employer during the twelve (12) months following the
termination of Executive's employment with the Company.

      8. Change of Control Benefits. In the event of a "Change of Control" (as
defined in Section 10 of this Agreement) that occurs prior to the Executive's
termination of employment, then on the earlier of (A) the date six (6) months
after the date of the Change of Control or (B) upon the termination of
Executive's employment without Cause or for Good Reason, Executive's
then-outstanding Options shall immediately vest and become exercisable, and may
be exercised until fifteen (15) months after the date of termination. In all
other respects the Options shall continue to be bound by and subject to the
terms of their respective agreements.

      In the event that, following a Change of Control, (i) Executive's
employment is terminated without Cause or for Good Reason or (ii) Executive
terminates his employment with the Company with or without Good Reason at any
time after six (6) months following a Change in Control, and

                                      -3-
<PAGE>

Executive signs and does not revoke a standard release of claims with the
Company in a form satisfactory to the Company, then, Executive will receive the
severance benefits set forth in Section 7(b); provided, however, that the
severance payments described in Section 7(b)(i) shall be paid in a lump sum
within 15 days following Executive's termination.

      9. Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Executive
(i) constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") and (ii) but for this
Section 9, would be subject to the excise tax imposed by Section 4999 of the
Code, then the Executive's severance benefits under Section 4(a)(i) shall be
either:

            (i) delivered in full, or

            (ii) delivered as to such lesser extent which would result in no
portion of such severance benefits being subject to excise tax under Section
4999 of the Code,

      whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Section
4999, results in the receipt by the Executive on an after-tax basis, of the
greatest amount of severance benefits, notwithstanding that all or some portion
of such severance benefits may be taxable under Section 4999 of the Code. Unless
the Company and the Executive otherwise agree in writing, any determination
required under this Section 9 shall be made in writing by the Company's
independent public accountants immediately prior to a Change of Control (the
"Accountants"), whose determination shall be conclusive and binding upon the
Executive and the Company for all purposes. For purposes of making the
calculations required by this Section 9, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and the Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 9.

      10. Definitions.

            (a) Cause. For purposes of this Agreement, "Cause" is defined as (i)
an act of dishonesty made by Executive in connection with Executive's
responsibilities as an employee, (ii) Executive's conviction of, or plea of nolo
contendere to, a felony, (iii) Executive's gross misconduct, or (iv) Executive's
continued substantial violations of his employment duties after Executive has
received a written demand for performance from the Company which specifically
sets forth the factual basis for the Company's belief that Executive has not
substantially performed his duties.

            (b) Change of Control. For purposes of this Agreement, "Change of
Control" of the Company is defined as: (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
(and provided "person" for purposes of this definition shall not include any
funds managed by E.M. Warburg Pincus & Co. or Warburg Pincus LLC or their
affiliates ) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act),

                                      -4-
<PAGE>

directly or indirectly, of securities of the Company representing 50% or more of
the total voting power represented by the Company's then outstanding voting
securities; or (ii) a change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" will mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but will not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company); or (iii) the date of the consummation of a merger
or consolidation of the Company with any other corporation that has been
approved by the stockholders of the Company, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or such entity's parent) more than fifty percent (50%) of the
total voting power represented by the voting securities of the Company or such
surviving entity or such entity's parent outstanding immediately after such
merger or consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company; or (iv) the date of the consummation of the
sale or disposition by the Company of all or substantially all the Company's
assets.

            (c) Disability. "Disability" shall mean that the Executive has been
unable to perform his Company duties as the result of his incapacity due to
physical or mental illness, and such inability, at least twenty-six (26) weeks
after its commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such Agreement as to acceptability not to be
unreasonably withheld). Termination resulting from Disability may only be
effected after at least 30 days' written notice by the Company of its intention
to terminate the Executive's employment. In the event that the Executive resumes
the performance of substantially all of his duties hereunder before the
termination of his employment becomes effective, the notice of intent to
terminate shall automatically be deemed to have been revoked.

            (d) Good Reason. "Good Reason" means without the Executive's express
written consent (i) a significant reduction of the Executive's duties, position
or responsibilities, or the removal of such Executive from such position and
responsibilities, unless the Executive is provided with a comparable position
(i.e., a position of equal or greater organizational level, duties, authority,
compensation and status); (ii) a substantial reduction, without good business
reasons, of the facilities and perquisites (including office space and location)
available to the Executive immediately prior to such reduction; (iii) any
attempted reduction by the Company in the base compensation of the Executive as
in effect immediately prior to such attempted reduction; (iv) a material
reduction by the Company in the kind or level of benefits to which the Executive
was entitled immediately prior to such reduction with the result that such
Executive's overall benefits package is significantly reduced; or (v) the
relocation of the Executive to a facility or a location more than fifty (50)
miles from such Executive's then present location.

      11. Nondisclosure of Trade Secrets and Confidential Information.

            (a) Trade Secrets Defined. As used in this Agreement, the term
"Trade Secrets" shall mean all secret, proprietary or confidential information
regarding Company or Company

                                      -5-
<PAGE>

activities that fits within the definition of "trade secrets" under the Georgia
Trade Secrets Act. Without limiting the foregoing or any definition of Trade
Secrets, Trade Secrets protected hereunder shall include all source codes and
object codes for Company software and all website design information to the
extent that such information fits within the Georgia Trade Secrets Act. Nothing
in this Agreement is intended, or shall be construed, to limit the protections
of the Georgia Trade Secrets Act or any other applicable law protecting trade
secrets or other confidential information. "Trade Secrets" shall not include
information that has become generally available to the public by the act of one
who has the right to disclose such information without violating any right or
privilege of Company. This definition shall not limit any definition of "trade
secrets" or any equivalent term under the Georgia Trade Secrets Act or any other
state, local or federal law.

            (b) Confidential Information Defined. As used in this Agreement, the
term "Confidential Information" shall mean all information regarding Company,
Company's activities, Company's business or Company's clients that is not
generally known to persons not employed (as employees or independent agents) by
Company, that is not generally disclosed by Company practice or authority to
persons not employed by Company and is the subject of reasonable efforts to keep
it confidential. Confidential Information shall include, but not be limited to
product code, product concepts, production techniques, technical information
regarding Company products or services, production processes and product/service
development, operations techniques, product/service formulas, information
concerning Company techniques for use and integration of its website and other
products/services, current and future development and expansion or contraction
plans of Company, sale/acquisition plans and contacts, marketing plans and
contacts, information concerning the legal affairs of Company and certain
information concerning the strategy, tactics and financial affairs of Company.
"Confidential Information" shall not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right or privilege of Company.
This definition shall not limit any definition of "confidential information" or
any equivalent term under the Georgia Trade Secrets Act or any other state,
local or federal law.

            (c) Nondisclosure of Confidential Information. During Executive's
employment hereunder and for a period of one (1) year after Executive's
employment with Company terminates for any reason, Executive shall not directly
or indirectly transmit or disclose any Trade Secrets or Confidential Information
to any person, concern or entity, or make use of any such Confidential
Information, directly or indirectly, for himself or for others, without the
prior express written consent of the Chief Executive Officer of Company. During
the term of this Agreement and perpetually thereafter, for so long as the
information remains a Trade Secret, Executive shall not directly or indirectly,
for himself or for others, without the prior express written consent of the
Chief Executive Officer of Company, transmit or disclose any Trade Secrets to
any person, concern or entity, or make use of any such Trade Secrets. Executive
warrants that he has not disclosed or used for his own benefit or the benefit of
anyone other than Company any Confidential Information or Trade Secrets prior to
the execution of this Agreement.

            (d) Enforceability of Covenants. Executive and Company agree that
Executive's obligations under these nondisclosure covenants are separate and
distinct from other provisions of this Agreement, and a failure or alleged
failure of Company to perform their obligations under any provision of this
Agreement or other agreements with Company shall not constitute a defense to the

                                      -6-
<PAGE>

enforceability of these nondisclosure covenants. Nothing in this provision or
this Agreement shall limit any rights or remedies otherwise available to Company
under federal, state or local law.

      12. Nonrecruitment, Nonsolicitation and Noncompetition Covenants.

            (a) Nonrecruitment of Employees. In consideration of the
compensation and benefits being paid and to be paid by Company to Executive
hereunder, Executive hereby agrees that, during employment with Company and for
one (1) year after the termination of Executive's employment, Executive shall
not, directly or indirectly solicit or recruit for employment or encourage to
leave employment with Company, on his own behalf or on behalf of any other
person or entity other than Company or any affiliate of Company, any person with
whom Executive worked during Executive's employment and who performed services
for Company clients or worked on Company products or services while employed by
Company and who has not thereafter ceased to be employed by Company for a period
of at least one (1) year. Executive agrees to exercise his best efforts to
prevent any of the activities listed in this section from occurring.

            (b) Nonsolicitation of Customers. In consideration of the
compensation and benefits being paid and to be paid by Company to Executive
hereunder, Executive hereby agrees that, during his employment with Company and
for one (1) year after the termination of Executive's employment, Executive
shall not, directly or indirectly, on behalf of himself or of anyone other than
Company, solicit, divert away, take away or attempt to solicit or take away any
Customer or Potential Customer of Company for purposes of providing or selling
products or services that are competitive with those provided by Company, if
Company is then still engaged in the provision or sale of that type of good or
service. For purposes of this covenant, "Customer" means any individual or
entity to whom Company has provided goods or services and with whom Executive
had, alone or in conjunction with others, Material Contact during the one (1)
year prior to the termination of Executive's employment and "Potential Customer"
means any individual or entity to whom the Company has actively sought to sell
products or services within the one (1) year immediately prior to the
termination of Executive's employment and with whom Executive had Material
Contact on the Company's behalf during that same time period. For purposes of
this covenant, Executive had "Material Contact" with a customer if (i) Executive
had business dealings with the customer on the Company's behalf; (ii) Executive
was responsible for supervising or coordinating the dealings between the
customer and the Company; or (iii) Executive obtained Trade Secrets or
Confidential Information (such terms having the same meanings as defined in
Section 11 above, but in each case relating to the Customer or Potential
Customer) about the customer as a result of Executive's association with the
Company.

            (c) Noncompetition. During the term of Executive's employment with
the Company, and for a period of one (1) year thereafter, Executive shall not,
without the prior written consent of the Board, which consent may be withheld at
the sole discretion of the Board, engage or participate in, as a business
executive or equity owner of any business or enterprise that directly competes
in the Business of the Company within the Restricted Area. For purposes of this
Section 12(c), the "Business" means the design, product development, sale,
marketing, implementation or support of computer software products and services
in the areas of enterprise asset management and customer information systems.
For purposes of this Section 12(c), the "Restricted Area" shall be the area that
is within a fifty (50) mile radius of the cities of Atlanta, Georgia, Columbia,
South Carolina and San Francisco, California. Nothing in this Section 12(c)
shall prohibit Executive from acquiring

                                      -7-
<PAGE>

or holding, for investment purposes only, less than five percent (5%) of the
outstanding publicly traded securities of any corporation which may compete
directly or indirectly with the Company.

            (d) Enforceability of Covenants. Executive acknowledges that the
Company has a present and future expectation of business within the geographic
areas served by the Company and from the present and proposed customers of the
Company. Executive acknowledges the reasonableness of the term, geographic area
and scope of the covenants set forth in this Agreement, and agrees that he will
not, in any action, suit or other proceeding, deny the reasonableness of, or
assert the unreasonableness of, the premises, consideration or scope of the
covenants set forth herein. Executive further acknowledges that complying with
the provisions contained in this Agreement will not preclude him from engaging
in a lawful profession, trade or business, or from becoming gainfully employed.
Executive and Company agree that Executive's obligations under the above
covenant are separate and distinct under this Agreement, and the failure or
alleged failure of Company to perform its obligations under any other provisions
of this Agreement shall not constitute a defense to the enforceability of this
covenant. Executive agrees that any breach of this covenant will result in
irreparable damage and injury to Company and that Company will be entitled to
injunctive relief in any court of competent jurisdiction without the necessity
of posting any bond. Executive also agrees that he shall be responsible for all
damages incurred by Company due to any breach of the restrictive covenants
contained in this Agreement and that Company shall be entitled to have Executive
pay all costs and attorneys' fees incurred by Company in enforcing the
restrictive covenants in this Agreement.

      13. Ownership of Protected Works.

            (a) Protected Works. The term "Protected Works" as used in this
Agreement means any and all ideas, inventions, formulas, source codes, object
codes, techniques, processes, concepts, systems, programs, software, software
integration techniques, hardware systems, schematics, flow charts, computer data
bases, client lists, trademarks, service marks, brand names, trade names,
compilations, documents, data, notes, designs, drawings, technical data and/or
training materials, including improvements thereto or derivatives therefrom,
whether or not patentable, or subject to copyright or trademark or trade secret
protection, developed and produced by Executive pursuant to this Agreement or
other agreements between Executive and Company and used or intended for use by
or on behalf of Company, or Company's clients.

            (b) Ownership and Assignment of Protected Works. Executive agrees
that any and all Protected Works developed by Executive during his employment or
other engagement with Company under this Agreement and during his employment
with, or other engagement by Company prior to the execution of this Agreement
(whether as employee or independent contractor) are the sole property of
Company, and that no compensation in addition to the amounts set forth in
Section 2 of this Agreement is due to Executive for development or transfer of
such Protected Works. Executive hereby assigns and agrees to assign all of his
respective rights, title and interest in Protected Works, including all patents
or patent applications, and all copyrights therein, to Company. Executive
further agrees at Company's request and without further consideration, but at
the expense of Company, that Executive will communicate to Company any facts
known to Executive and testify in any legal proceedings, sign all lawful papers,
make all rightful oaths, execute all divisional, continuing,
continuation-in-part, or reissue applications, all assignments, all registration
applications and all other instruments or papers to carry into full force and
effect, the

                                      -8-
<PAGE>

assignment, transfer and conveyance hereby made or intended to be made and
generally do everything possible for title to the Protected Works and all
patents or copyrights or trademarks or service marks therein to be clearly and
exclusively held by Company. Executive agrees that he will not apply for any
state, federal, or other jurisdiction's registration of rights in any of the
Protected Works and that he will not oppose or object in any way to applications
for registration of same by Company or others designated by Company. Executive
agrees to exercise reasonable care to avoid making the Protected Works available
to any third party. Executive also agrees that he shall be liable to Company for
all damages, including reasonable attorneys' fees and other expenses of
litigation, if the Protected Works are made available to third parties in any
manner by Executive without the express written consent of Company.

            (c) Executive agrees to disclose and describe to Company, as soon as
possible after their creation, (i) all copyrightable works, databases, data and
other "Protected Works," as defined in subsection (a) above, which are created
by Executive, either alone or with others, during the term of Executive's
employment, or in connection with the formation of Company, and (ii) all
Protected Works which are based in whole or in part upon Confidential
Information or Trade Secrets and are created by Executive, either alone or with
others, within one (1) year after Executive's leaving Company's employ.

            (d) There is no other contract or duty on Executive's part now in
existence to assign Protected Works to anyone other than Company. Executive will
not disclose or induce Company to use any confidential information or material
that Executive is now or shall become aware of which belongs to anyone other
than Company. During Executive's employment by Company, Executive will not
engage in any employment, consulting or other activity in any business
competitive with Company's business as presently conducted or as conducted at
any future time during Executive's employment.

      14. Rights to Materials and Return of Materials.

            All records, files, software, software code, memoranda, reports,
price lists, customer lists, drawings, plans, sketches, documents, technical
information, information on the use, development and integration of software,
and the like (together with all copies of such documents and things) relating to
the business of Company, which Executive shall use or prepare or come in contact
with in the course of, or as a result of, Executive's employment or other
engagement by Company shall, as between the parties to this Agreement, remain
the sole property of Company. Laptop computers, other computers, software and
related data, information and things provided to Executive by Company or
obtained by Executive, directly or indirectly, from Company, also shall remain
the sole property of Company. Upon the termination of Executive's employment or
upon the prior demand of Company, Executive shall immediately return all such
materials and things to Company and shall not retain any copies or remove or
participate in removing any such materials or things from the premises of
Company after termination or Company's request for return.

      15. Inventions, Discoveries and Improvements.

            (a) Executive will promptly disclose and describe to Company (i) all
inventions, improvements, discoveries and technical developments, whether or not
patentable, made or conceived by Executive, either alone or with others
("Inventions"), during the term of Executive's

                                      -9-
<PAGE>

employment with Company or other engagement with Company, provided that Company
shall receive such information in confidence and (ii) all Inventions which are
based in whole or in part upon Confidential Information or Trade Secrets and are
made or conceived by Executive, either alone or with others, within one (1) year
after Executive's leaving Company's employ. All such Inventions, whether
patentable or unpatentable, made, devised or discovered by Executive, whether by
himself or jointly with others, which relate or pertain in any way to the
business of Company, shall be used solely for the benefit of Company and become
and remain their sole and exclusive property. Executive agrees to execute an
assignment to Company or its nominee of Executive's entire right, title and
interest in and to such Inventions made or conceived by Executive, either alone
or with others, during the term of Executive's employment or within one (1) year
after Executive's leaving Company's employ, and to execute any other instruments
and documents that may be requested by Company for the purpose of applying for
and obtaining patents with respect to such Inventions in the United States and
in all foreign countries. Executive further agrees, whether or not in the employ
of Company, to cooperate to the extent and in the manner reasonably requested by
Company in the prosecution or defense of any patent claims or any litigation or
other proceedings involving any such Inventions, but all of Executive's
reasonable expenses in connection with such litigation or other proceedings
shall be paid by Company.

            (b) If a patent application or copyright registration is filed by
Executive or on Executive's behalf during Executive's employment or other
engagement with Company, whether before or after execution of this Agreement, or
within one (1) year after Executive's leaving Company's employ, describing an
Invention within the scope of Executive's work for Company or which otherwise
relates to a portion of Company's business of which Executive had knowledge
during Executive's employment with Company, it is to be conclusively presumed
that the Invention was conceived by Executive during the period of such
employment.

            (c) There is no other contract or duty on Executive's part now in
existence to assign Inventions other than to Company. Executive will not
disclose or induce Company to use any confidential information or material that
Executive is now or shall become aware of which belongs to anyone other than
Company. During Executive's employment by Company, Executive will not engage in
any employment, consulting or other activity in any business competitive with
Company's business as presently conducted or as conducted at any future time
during Executive's employment.

            (d) Executive warrants and represents that attached to this
Agreement as Exhibit A and incorporated in this Agreement by reference is a
complete list of all inventions, whether owned by Executive or by others,
conceived by Executive prior to Executive's employment by Company, that these
are the only inventions which are not subject to this Agreement, and that
Executive has not conceived or reduced to practice any invention not described
on such Exhibit A.

      16. Works Made for Hire. Company and Executive acknowledge that in the
course of Executive's employment (as employee or independent contractor) by
Company, Executive may from time to time create, and has previously created, for
Company copyrightable works. Such works may consist of manuals, pamphlets,
instructional materials, computer programs, software, software integration
techniques, software codes, and data, technical data, photographs, drawings,
logos, designs, artwork or other copyrightable material, or portions thereof,
and may be created within or without Company's facilities and before, during or
after normal business hours. All such works related to or useful in the business
of Company are specifically intended to be works made by hire

                                      -10-
<PAGE>

by Executive, and Executive shall cooperate with Company in the protection of
Company's copyrights in such works and, to the extent deemed desirable by
Company, the registration of such copyrights.

      17. Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive's death and (b) any successor of the Company. Any such successor of
the Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes. For this purpose, "successor" means any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. Any other attempted assignment, transfer, conveyance or other
disposition of Executive's right to compensation or other benefits will be null
and void.

      18. Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given (i) on the
date of delivery if delivered personally, (ii) one (1) day after being sent by a
well established commercial overnight service, or (iii) four (4) days after
being mailed by registered or certified mail, return receipt requested, prepaid
and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:

               If to the Company:
               Copies to each of the Chief Executive Officer and General Counsel
               at the Company's principal executive office

               If to Executive:

               at the last residential address known by the Company.

      19. Severability. The covenants set forth in this Agreement shall be
considered and construed as separate and independent covenants. Should any part
or provision of any covenant be held invalid, void or unenforceable in any court
of competent jurisdiction, such invalidity, voidness or unenforceability shall
not render invalid, void or unenforceable any other part or provision of this
Agreement. If any portion of the foregoing provisions is found to be invalid or
unenforceable by a court of competent jurisdiction because of its duration, the
territory, the definition of activities or the definition of information covered
is invalid or unreasonable in scope, the invalid or unreasonable term shall be
redefined, or a new enforceable term provided, such that the intent of Company
and Executive in agreeing to the provisions of this Agreement will not be
impaired and the provision in question shall be enforceable to the fullest
extent of the applicable laws.

                                      -11-
<PAGE>

      20. Arbitration.

            (a) With the exception of any dispute arising under Sections
11,12,13,14,15 and 16 of this Agreement, the Company and Executive agree that
any dispute or controversy arising out of, relating to, or in connection with
this Agreement, or the interpretation, validity, construction, performance,
breach, or termination thereof, shall be settled by binding arbitration to be
held in Cherokee County, Georgia in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association (the "Rules"). The arbitrator may grant injunctions or other relief
in such dispute or controversy. The decision of the arbitrator will be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction.

            (b) The arbitrator(s) will apply Georgia law to the merits of any
dispute or claim, without reference to rules of conflicts of law. The
arbitration proceedings will be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. The Executive hereby consents
to the personal jurisdiction of the state and federal courts located in Georgia
for any action or proceeding arising from or relating to this Agreement or
relating to any arbitration in which the parties are participants.

            (c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE
RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, DISCRIMINATION CLAIMS.

      All parties must initial here for Section 20 to be effective:

      _________

      _________

      21. Entire Agreement. This Agreement is intended by the parties hereto to
be the final expression of their agreement with respect to the subject matter
hereof and this is the complete and exclusive statement of the terms of their
agreement, notwithstanding any representations, statements or agreements to the
contrary heretofore made. This Agreement supersedes any former agreements
governing the same subject matter. This Agreement may be modified only by a
written instrument signed by each of the parties hereto expressly stating that
it is intended to amend this Agreement. Nothing in this Agreement or Executive's
employment shall be construed to give Executive any rights, of ownership or
otherwise, in any Protected Works, Inventions, Works Made for hire or other
software, hardware, data or systems that he creates or obtains, or has created.

                                      -12-
<PAGE>

      22. Tax Withholding. Company may withhold from any amounts payable under
this Agreement all federal, state, city or other taxes and withholdings as shall
be required pursuant to any applicable law, rule or regulation.

      23. Governing Law. This Agreement shall be deemed to be made in and shall
in all respects be interpreted, construed and governed by and in accordance with
the laws of the State of Georgia (without giving effect to the conflict of law
principles thereof). No provision of this Agreement or any related documents
shall be construed against, or interpreted to the disadvantage of, any party
hereto by any court or any governmental or judicial authority by reason of such
party having, or being deemed to have, structured or drafted such provision.

      24. Waiver. The waiver by any party to this Agreement of a breach of any
of the provisions of this Agreement shall not operate or be construed as a
waiver of any other or subsequent breach.

      25. Acknowledgment. Executive acknowledges that he has had the opportunity
to discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement. Company agrees to reimburse Executive for attorney fees related
to review of this Agreement.

                         [signatures on following page]

                                      -13-
<PAGE>

      IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by their duly authorized officers, as of the day and
year first above written.

INDUS INTERNATIONAL

By:         /s/ Adam V. Battani                     Date: 6/27/03
    ---------------------------------               --------------------

Title: Vice President and General Counsel

EXECUTIVE

      /s/ Thomas R. Madison, Jr.                    Date: 6/27/03
-------------------------------------               --------------------
Thomas R. Madison, Jr.

                                       14

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