Document:

<PAGE>   1

                                                                     EXHIBIT 4.2

                              AMENDED AND RESTATED

                                     BYLAWS

                                       OF

                           INDUS INTERNATIONAL, INC.
                            (a Delaware corporation)

<PAGE>   2

                               TABLE OF CONTENTS

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                                                                                    PAGE
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<S>                                                                                 <C>
ARTICLE I CORPORATE OFFICES.........................................................  -1-
     1.1    REGISTERED OFFICE.......................................................  -1-
     1.2    OTHER OFFICES...........................................................  -1-
     1.3    BOOKS AND RECORDS The books and records.................................  -1-

ARTICLE II MEETINGS OF STOCKHOLDERS.................................................  -1-
     2.1    PLACE OF MEETINGS.......................................................  -1-
     2.2    ANNUAL MEETING..........................................................  -1-
     2.3    SPECIAL MEETING.........................................................  -2-
     2.4    NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS..........................  -2-
     2.6    NOTICE OF STOCKHOLDERS' MEETINGS........................................  -4-
     2.7    MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE............................  -4-
     2.8    QUORUM..................................................................  -5-
     2.9    ADJOURNED MEETING; NOTICE...............................................  -5-
     2.10   VOTING..................................................................  -5-
     2.11   VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT.......................  -6-
     2.12   RECORD DATE FOR STOCKHOLDER NOTICE: VOTING; GIVING CONSENTS.............  -6-
     2.13   PROXIES.................................................................  -7-
     2.14   INSPECTORS OF ELECTION..................................................  -7-

ARTICLE III DIRECTORS...............................................................  -8-
     3.1    POWERS..................................................................  -8-
     3.2    NUMBER AND TERM OF OFFICE...............................................  -8-
     3.3    RESIGNATION AND VACANCIES...............................................  -8-
     3.4    REMOVAL.................................................................  -9-
     3.5    PLACE OF MEETINGS; MEETINGS BY TELEPHONE................................  -9-
     3.6    FIRST MEETINGS.......................................................... -10-
     3.7    REGULAR MEETINGS........................................................ -10-
     3.8    SPECIAL MEETINGS; NOTICE................................................ -10-
     3.9    QUORUM.................................................................. -11-
     3.10   WAIVER OF NOTICE........................................................ -11-
     3.11   ADJOURNMENT............................................................. -11-
     3.12   NOTICE OF ADJOURNMENT................................................... -11-
     3.13   BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING....................... -11-
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                                TABLE OF CONTENTS
                                   (CONTINUED)

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                                                                                    PAGE
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<S>                                                                                 <C>
     3.14   ORGANIZATION........................................................... -12-
     3.15   FEES AND COMPENSATION OF DIRECTORS..................................... -12-
     3.16   APPROVAL OF LOANS TO OFFICERS.......................................... -12-

ARTICLE IV COMMITTEES.............................................................. -12-
     4.1    COMMITTEES OF DIRECTORS................................................ -12-
     4.2    MEETINGS AND ACTION OF COMMITTEES...................................... -13-

ARTICLE V OFFICERS................................................................. -13-
     5.1    OFFICERS............................................................... -13-
     5.2    ELECTION OF OFFICERS................................................... -13-
     5.3    SUBORDINATE OFFICERS................................................... -14-
     5.4    REMOVAL AND RESIGNATION OF OFFICERS.................................... -14-
     5.5    VACANCIES IN OFFICES................................................... -14-
     5.6    CHAIRMAN OF THE BOARD.................................................. -14-
     5.7    CHIEF EXECUTIVE OFFICER................................................ -15-
     5.9    VICE PRESIDENTS........................................................ -15-
     5.10   SECRETARY.............................................................. -15-
     5.11   CHIEF FINANCIAL OFFICER................................................ -16-

ARTICLE VI  INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND
            OTHER AGENTS........................................................... -16-

     6.6    INSURANCE.............................................................. -18-
     6.7    NON-EXCLUSIVITY OF RIGHTS.............................................. -19-
     6.8    SURVIVAL OF RIGHTS..................................................... -19-
     6.9    CORPORATION BOUND...................................................... -19-
     6.10   PRECLUSION............................................................. -19-
     6.11   INVALIDITY OF ANY PROVISIONS OF THIS ARTICLE........................... -19-
     6.12   AMENDMENTS............................................................. -20-

ARTICLE VII RECORDS AND REPORTS.................................................... -20-
     7.1    MAINTENANCE AND INSPECTION OF RECORDS.................................. -20-
     7.2    INSPECTION BY DIRECTORS................................................ -20-
     7.3    ANNUAL STATEMENT TO STOCKHOLDERS....................................... -21-
     7.4    REPRESENTATION OF SHARES OF OTHER CORPORATIONS......................... -21-

ARTICLE VIII GENERAL MATTERS....................................................... -21-
     8.1    RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING.................. -21-
     8.2    CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS.............................. -22-
     8.3    CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED...................... -22-
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                               TABLE OF CONTENTS
                                  (CONTINUED)

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     8.4    STOCK CERTIFICATES; PARTLY PAID SHARES................................. -22-
     8.5    SPECIAL DESIGNATION ON CERTIFICATES.................................... -23-
     8.6    LOST CERTIFICATES...................................................... -23-
     8.7    CONSTRUCTION; DEFINITIONS.............................................. -23-

ARTICLE IX AMENDMENTS.............................................................. -23-

ARTICLE X DISSOLUTION.............................................................. -24-

ARTICLE XI CUSTODIAN............................................................... -24-
     11.1    APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES........................... -24-
     11.2    DUTIES OF CUSTODIAN................................................... -25-
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<PAGE>   5

                                     BYLAWS

                                       OF

                           INDUS INTERNATIONAL, INC.
                            (A DELAWARE CORPORATION)

                                   ARTICLE I

                               CORPORATE OFFICES

         1.1      REGISTERED OFFICE

         The registered office of the Corporation shall be fixed in the
Certificate of Incorporation of the Corporation.

         1.2      OTHER OFFICES

         The Board of Directors may at any time establish branch or subordinate
offices at any place or places where the Corporation is qualified to do
business.

         1.3      BOOKS AND RECORDS

         The books and records of the Corporation may be kept outside the State
of Delaware at such place or places as may from time to time be designated by
the Board of Directors.

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

         2.1      PLACE OF MEETINGS

         Meetings of stockholders shall be held at any place within or outside
the State of Delaware designated by the Board of Directors. In the absence of
any such designation, stockholders' meetings shall be held at the registered
office of the Corporation.

         2.2      ANNUAL MEETING

                  (a) The annual meeting of stockholders shall be held each year
on a date and at a time designated by the Board of Directors. In the absence of
such designation, the annual meeting of stockholders shall be held on the first
Tuesday in May of each year at 2:00 p.m. However, if such day falls on a legal
holiday, then the meeting shall be held at the same time and place on the next
succeeding full

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business day. At the meeting, directors shall be elected, and any other proper
business may be transacted.

         2.3      SPECIAL MEETING

         A special meeting of the stockholders may be called at any time by (i)
the chairman of the Board of Directors, (ii) a president, (iii) the chief
executive officer or (iv) any two directors, but such special meetings may not
be called by any other person or persons.

         2.4      NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS

                  (A)      Annual Meetings of Stockholders. (1) Nominations of
persons for election to the Board of Directors of the Corporation and the
proposal of business to be considered by the stockholders may be made at an
annual meeting of stockholders (a) pursuant to the Corporation's notice of
meeting, (b) by or at the direction of the Board of Directors or (c) by any
stockholder of the Corporation who was a stockholder of record at the time of
giving of notice provided for in this Bylaw, who is entitled to vote at the
meeting and who complies with the notice procedures set forth in this Bylaw.

                           (2)      For nominations or other business to be
properly brought before an annual meeting by a stockholder pursuant to clause
(c) of paragraph (A)(1) of this Bylaw, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation and such other
business must otherwise be a proper matter for stockholder action. To be timely,
a stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on the
60th day nor earlier than the close of business on the 90th day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is more than 30 days
before or more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the close of
business on the 90th day prior to such annual meeting and not later than the
close of business on the later of the 60th day prior to such annual meeting or
the 10th day following the day on which public announcement of the date of such
meeting is first made by the Corporation. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time period
for the giving of a stockholder's notice as described above. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or is otherwise required, in each
case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Rule 14a-11 thereunder (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected); (b) as to any other business that the
stockholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (c) as to the stockholder giving the notice and the beneficial

                                      -2-

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owner, if any, on whose behalf the nomination or proposal is made (i) the name
and address of such stockholder, as they appear on the Corporation's books, and
of such beneficial owner and (ii) the class and number of shares of the
Corporation which are owned beneficially and of record by such stockholder and
such beneficial owner.

                           (3)      Notwithstanding anything in the second
sentence of paragraph (A)(2) of this Bylaw to the contrary, in the event that
the number of directors to be elected to the Board of Directors of the
Corporation is increased and there is no public announcement by the Corporation
naming all of the nominees for director or specifying the size of the increased
Board of Directors at least 70 days prior to the first anniversary of the
preceding year's annual meeting, a stockholder's notice required by this Bylaw
shall also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary at
the principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.

                  (B)      Special Meetings of Stockholders. Only such business
shall be conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of stockholders at which directors are to be elected pursuant to
the Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this Bylaw, who shall be entitled to vote at the meeting and who
complies with the notice procedures set forth in this Bylaw. In the event the
Corporation calls a special meeting of stockholders for the purpose of electing
one or more directors to the Board of Directors, any such stockholder may
nominate a person or persons (as the case may be), for election to such
position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by paragraph (A)(2) of this Bylaw shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a stockholder's notice as described
above.

                  (C)      General. (1) Only such persons who are nominated in
accordance with the procedures set forth in this Bylaw shall be eligible to
serve as directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Bylaw. Except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws, the Chairman of the meeting shall
have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in this Bylaw and, if any
proposed nomination or business is not in compliance with this Bylaw, to declare
that such defective proposal or nomination shall be disregarded.

                                      -3-

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                           (2)      For purposes of this Bylaw, "public
announcement" shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

                           (3)      Notwithstanding the foregoing provisions of
this Bylaw, a stockholder shall also comply with all applicable requirements of
the Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect
any rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.

         2.5      ORGANIZATION

         Meetings of stockholders shall be presided over by the chairman of the
board, if any, or in his absence by the vice chairman of the board, if any, or
in his absence by the chief executive officer, if any, or in his absence by a
president, if any, or in the absence of a president, or in the absence of the
foregoing persons by a chairman designated by the Board of Directors, or in the
absence of such designation by a chairman chosen at the meeting. The secretary
shall act as secretary of the meeting, but in his absence the chairman of the
meeting may appoint any person to act as secretary of the meeting.

         2.6      NOTICE OF STOCKHOLDERS' MEETINGS

         Except as set forth in Section 2.3, all notices of meetings of
stockholders shall be sent or otherwise given in accordance with Section 2.6 of
these Bylaws not less than ten (10) nor more than sixty (60) days before the
date of the meeting. The notice shall specify the place, date, and hour of the
meeting and (i) in the case of a special meeting, the general nature of the
business to be transacted (no business other than that specified in the notice
may be transacted) or (ii) in the case of the annual meeting, those matters
which the Board of Directors, at the time of giving the notice, intends to
present for action by the stockholders (but any proper matter may be presented
at the meeting for such action). The notice of any meeting at which directors
are to be elected shall include the name of any nominee or nominees who, at the
time of the notice, the board intends to present for election.

         2.7      MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE

         Written notice of any meeting of stockholders shall be given either
personally or by first-class mail or by telegraphic or other written
communication. Notices not personally delivered shall be sent charges prepaid
and shall be addressed to the stockholder at the address of that stockholder
appearing on the books of the Corporation or given by the stockholder to the
Corporation for the purpose of notice. If no such address appears on the
Corporation's books or is given, notice shall be deemed to have been given if
sent to that stockholder by mail or telegraphic or other written communication
to the Corporation's principal executive office, or if published at least once
in a newspaper of general circulation in the county where that office is
located. Notice shall be deemed to have been given at the

                                      -4-
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time when delivered personally or deposited in the mail or sent by telegram or
other means of written communication.

         An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the Corporation giving the notice, shall be prima facie
evidence of the giving of such notice.

         2.8      QUORUM

         The presence in person or by proxy of the holders of a majority the
voting power of the shares entitled to vote thereat constitutes a quorum for the
transaction of business at all meetings of stockholders; provided, however, that
in the case of any vote to be taken by classes, the holders of a majority of the
votes entitled to be cast by the stockholders of a particular class shall
constitute a quorum for the transaction of business by such class. The
stockholders present at a duly called or held meeting at which a quorum is
present may continue to do business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the voting
power of the shares required to constitute a quorum.

         2.9      ADJOURNED MEETING; NOTICE

         Any stockholders' meeting, annual or special, whether or not a quorum
is present, may be adjourned from time to time by the chairman of the meeting or
by the vote of the majority of the voting power of the shares represented at
that meeting, either in person or by proxy. In the absence of a quorum, no other
business may be transacted at that meeting except as provided in Section 2.7 of
these Bylaws.

         When any meeting of stockholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place are announced at the meeting at which the
adjournment is taken. However, if a new record date for the adjourned meeting is
fixed or if the adjournment is for more than thirty (30) days from the date set
for the original meeting, then notice of the adjourned meeting shall be given.
Notice of any such adjourned meeting shall be given to each stockholder of
record entitled to vote at the adjourned meeting in accordance with the
provisions of Sections 2.5 and 2.6 of these Bylaws. At any adjourned meeting the
Corporation may transact any business which might have been transacted at the
original meeting.

         2.10     VOTING

         Voting at any meeting of stockholders need not be by ballot; provided,
however, that elections for directors shall be by written ballot, unless
otherwise provided for in the Certificate of Incorporation.

         The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.11 of these Bylaws,
subject to the provisions of Sections 217 and 218 of the General Corporation Law
of Delaware (relating to voting rights of fiduciaries, pledgors and joint
owners, and to voting trusts and other voting agreements).

                                      -5-
<PAGE>   10

         Each stockholder shall be entitled to that number of votes for each
share held as it set forth in the Certificate of Incorporation of the
Corporation, as amended or restated, or in the resolution or resolutions adopted
by the Board of Directors providing for the issuance of such stock, except as
may otherwise be required by law.

         Any stockholder entitled to vote on any matter may vote part of the
shares in favor of the proposal and refrain from voting the remaining shares or,
except when the matter is the election of directors, may vote them against the
proposal; but if the stockholder fails to specify the number of shares which the
stockholder is voting affirmatively, it will be conclusively presumed that the
stockholder's approving vote is with respect to all shares which the stockholder
is entitled to vote.

         If a quorum is present, the affirmative vote of the voting power of the
shares represented, in person or by proxy, and voting at a duly held meeting
(which shares voting affirmatively also constitute at least a majority of the
voting power of the required quorum) shall be the act of the stockholders,
unless the vote of a greater number or a vote by classes is required by law or
by the Certificate of Incorporation.

         2.11     VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT

         The transactions of any meeting of stockholders, either annual or
special, however called and noticed, and wherever held, shall be as valid as
though they had been taken at a meeting duly held after regular call and notice,
if a quorum be present either in person or by proxy, and if, either before or
after the meeting, each person entitled to vote, who was not present in person
or by proxy, signs a written waiver of notice or a consent to the holding of the
meeting or an approval of the minutes thereof. The waiver of notice or consent
or approval need not specify either the business to be transacted or the purpose
of any annual or special meeting of stockholders. All such waivers, consents,
and approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.

         Attendance by a person at a meeting shall also constitute a waiver of
notice of and presence at that meeting, except when the person objects at the
beginning of the meeting to the transaction of any business because the meeting
is not lawfully called or convened. Attendance at a meeting is not a waiver of
any right to object to the consideration of matters required by law to be
included in the notice of the meeting but not so included, if that objection is
expressly made at the meeting.

         2.12     RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS

         For purposes of determining the stockholders entitled to notice of any
meeting or to vote thereat, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
before the date of any such meeting, and in such event only stockholders of
record on the date so fixed are entitled to notice and to vote notwithstanding
any transfer of any shares on the books of the Corporation after the record
date.

         If the Board of Directors does not so fix a record date, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the business day next
preceding the day on which notice is given, or, if notice is waived, at the
close

                                      -6-

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of business on the business day next preceding the day on which the meeting is
held. The record date for any other purpose shall be as provided in Article VIII
of these Bylaws.

         2.13     PROXIES

         Every person entitled to vote for Directors, or on any other matter,
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the secretary
of the Corporation, but no such proxy shall be voted or acted upon after three
(3) years from its date, unless the proxy provides for a longer period. A proxy
shall be deemed signed if the stockholder's name is placed on the proxy (whether
by manual signature, typewriting, telegraphic transmission or otherwise) by the
stockholder or the stockholder's attorney-in-fact. A duly executed proxy shall
be irrevocable if it states that it is irrevocable and if, and only as long as,
it is coupled with an interest sufficient in law to support an irrevocable
power. A stockholder may revoke any proxy which is not irrevocable by attending
the meeting and voting in person or by filing an instrument in writing revoking
the proxy or another duly executed proxy bearing a later date with the secretary
of the Corporation.

         2.14     INSPECTORS OF ELECTION

         Before any meeting of stockholders, the Board of Directors may appoint
an inspector or inspectors of election to act at the meeting or its adjournment.
If no inspector of election is so appointed, then the chairman of the meeting
may, and on the request of any stockholder or a stockholder's proxy shall,
appoint an inspector or inspectors of election to act at the meeting. The number
of inspectors shall be either one (1) or three (3). If inspectors are appointed
at a meeting pursuant to the request of one (1) or more stockholders or proxies,
then the holders of a majority of the voting power of shares or their proxies
present at the meeting shall determine whether one (1) or three (3) inspectors
are to be appointed. If any person appointed as inspector fails to appear or
fails or refuses to act, then the chairman of the meeting may, and upon the
request of any stockholder or a stockholder's proxy shall, appoint a person to
fill that vacancy.

         Such inspectors shall:

                  (a)      determine the number of shares outstanding and the
voting power of each, the number of shares represented at the meeting, the
existence of a quorum, and the authenticity, validity, and effect of proxies;

                  (b)      receive votes, ballots or consents;

                  (c)      hear and determine all challenges and questions in
any way arising in connection with the right to vote;

                  (d)      count and tabulate all votes or consents;

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<PAGE>   12

                  (e)      determine when the polls shall close;

                  (f)      determine the result; and

                  (g) do any other acts that may be proper to conduct the
election or vote with fairness to all stockholders.

                                  ARTICLE III

                                   DIRECTORS

         3.1      POWERS

         Subject to the provisions of the General Corporation Law of
Delaware and to any limitations in the Certificate of Incorporation or these
Bylaws relating to action required to be approved by the stockholders or by the
outstanding shares, the business and affairs of the Corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
Board of Directors.

         3.2      NUMBER AND TERM OF OFFICE

         The authorized number of directors shall be eight (8). An indefinite
number of directors may be fixed, or the definite number of directors may be
changed, by a duly adopted amendment to the Certificate of Incorporation or by
an amendment to this bylaw adopted by the vote or written consent of holders of
a majority of the voting power of the outstanding shares entitled to vote or by
resolution of a majority of the Board of Directors.

         No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.
If for any cause, the directors shall not have been elected at an annual
meeting, they may be elected as soon thereafter as convenient at a special
meeting of the stockholders called for that purpose in the manner provided in
these Bylaws.

         3.3      RESIGNATION AND VACANCIES

         Any director may resign effective on giving written notice to the
chairman of the board, the chief executive officer, a president, the secretary
or the Board of Directors, unless the notice specifies a later time for that
resignation to become effective. If the resignation of a director is effective
at a future time, the Board of Directors may elect a successor to take office
when the resignation becomes effective.

         Unless otherwise provided in the Certificate of Incorporation or these
Bylaws:

                  (i)      Vacancies in the Board of Directors may be filled by
a majority of the remaining directors, even if less than a quorum, or by a sole
remaining director. Each director so elected shall hold

                                      -8-

<PAGE>   13

office until the next annual meeting of the stockholders and until a successor
has been elected and qualified.

                  (ii)     Vacancies and newly created directorships resulting
from any increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.

                  (iii)    Whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more directors by the provisions
of the Certificate of Incorporation, vacancies and newly created directorships
of such class or classes or series may be filled by a majority of the directors
elected by such class or classes or series thereof then in office, or by a sole
remaining director so elected.

         If at any time, by reason of death or resignation or other cause, the
Corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the Certificate of Incorporation or these Bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided
in Section 211 of the General Corporation Law of Delaware.

         3.4      REMOVAL

         Subject to any limitations imposed by law, and unless otherwise
provided in the Certificate of Incorporation, the Board of Directors, or any
individual director, may be removed from office at any time by the affirmative
vote of the holders of at least a majority of the voting power of the then
outstanding shares of the capital stock of the Corporation entitled to vote at
an election of directors.

         3.5      PLACE OF MEETINGS; MEETINGS BY TELEPHONE

         Regular meetings of the Board of Directors may be held at any place
within or outside the State of Delaware that has been designated from time to
time by resolution of the Board of Directors. In the absence of such a
designation, regular meetings shall be held at the principal executive office of
the Corporation. Special meetings of the Board of Directors may be held at any
place within or outside the State of Delaware that has been designated in the
notice of the meeting or, if not stated in the notice or if there is no notice,
at the principal executive office of the Corporation.

         Any meeting, regular or special, may be held by conference telephone or
similar communication equipment, so long as all directors participating in the
meeting can hear one another; and all such directors shall be deemed to be
present in person at the meeting.

                                      -9-
<PAGE>   14

         3.6      FIRST MEETINGS

         The first meeting of each newly elected Board of Directors shall be
held at such time and place as shall be fixed by the vote of the stockholders at
the annual meeting and no notice of such meeting shall be necessary to the newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present. In the event of the failure of the stockholders to fix the
time or place of such first meeting of the newly elected Board of Directors, or
in the event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors, or as shall be specified in a written waiver signed by all
of the directors.

         3.7      REGULAR MEETINGS

         Regular meetings of the Board of Directors may be held without notice
if the times of such meetings are fixed by the Board of Directors.

         3.8      SPECIAL MEETINGS; NOTICE

         Special meetings of the Board of Directors for any purpose or purposes
may be called at any time by the chairman of the board, the chief executive
officer, the president, the secretary or any two directors.

         Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the Corporation. If the notice is mailed, it
shall be deposited in the United States mail at least seven (7) days before the
time of the holding of the meeting. If the notice is delivered personally or by
telephone or telegram, it shall be delivered personally or by telephone or to
the telegraph company at least forty-eight (48) hours before the time of the
holding of the meeting. Any oral notice given personally or by telephone may be
communicated either to the director or to a person at the office of the
director who the person giving the notice has reason to believe will promptly
communicate it to the director. The notice need not specify the purpose or the
place of the meeting, if the meeting is to be held at the principal executive
office of the Corporation.

                                      -10-

<PAGE>   15

         3.9      QUORUM

         A majority of the authorized number of directors shall constitute a
quorum for the transaction of business, except to adjourn as provided in Section
3.12 of these Bylaws. Every act or decision done or made by a majority of the
directors present at a duly held meeting at which a quorum is present shall be
regarded as the act of the Board of Directors, subject to the provisions of the
Certificate of Incorporation and applicable law.

         A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for that
meeting.

         3.10     WAIVER OF NOTICE

         Notice of a meeting need not be given to any director (i) who signs a
waiver of notice or a consent to holding the meeting or an approval of the
minutes thereof, whether before or after the meeting, or (ii) who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to such directors. All such waivers, consents, and approvals shall be
filed with the corporate records or made part of the minutes of the meeting. A
waiver of notice need not specify the purpose of any regular or special meeting
of the Board of Directors.

         3.11     ADJOURNMENT

         A majority of the directors present, whether or not constituting a
quorum, may adjourn any meeting to another time and place.

         3.12     NOTICE OF ADJOURNMENT

         Notice of the time and place of holding an adjourned meeting need not
be given if announced unless the meeting is adjourned for more than twenty-four
(24) hours. If the meeting is adjourned for more than twenty-four (24) hours,
then notice of the time and place of the adjourned meeting shall be given before
the adjourned meeting takes place, in the manner specified in Section 3.8 of
these Bylaws, to the directors who were not present at the time of the
adjournment.

         3.13     BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING

         Any action required or permitted to be taken by the Board of Directors
may be taken without a meeting, provided that all members of the Board of
Directors individually or collectively consent in writing to that action. Such
action by written consent shall have the same force and effect as a unanimous
vote of the Board of Directors. Such written consent and any counterparts
thereof shall be filed with the minutes of the proceedings of the board.

                                      -11-

<PAGE>   16
         3.14     ORGANIZATION

         Meetings of the Board of Directors shall be presided over by the
chairman of the board, if any, or in his absence by the vice chairman of the
board, if any, or in his absence by the chief executive officer, or in his
absence, the president, or in their absence by a chairman chosen at the meeting.
The secretary shall act as secretary of the meeting, but in his absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting.

         3.15     FEES AND COMPENSATION OF DIRECTORS

         Directors and members of committees may receive such compensation, if
any, for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the Board of Directors. This Section 3.15 shall not
be construed to preclude any director from serving the Corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.

         3.16     APPROVAL OF LOANS TO OFFICERS

         The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the Corporation or of its
subsidiary, including any officer or employee who is a director of the
Corporation or its subsidiary, whenever, in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
Corporation. The loan, guaranty or other assistance may be with or without
interest and may be unsecured, or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of shares of
stock of the Corporation. Nothing contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the Corporation at
common law or under any statute.

                                   ARTICLE IV

                                   COMMITTEES

         4.1      COMMITTEES OF DIRECTORS

         The Board of Directors may, by resolution adopted by a majority of the
authorized number of directors, designate one (1) or more committees, each
consisting of two or more directors, to serve at the pleasure of the Board of
Directors. The Board of Directors may designate one (1) or more directors as
alternate members of any committee, who may replace any absent member at any
meeting of the committee. The appointment of members or alternate members of a
committee requires the vote of a majority of the authorized number of directors.
Any committee, to the extent provided in the resolution of the board, shall have
all the authority of the board, but no such committee shall have the power or
authority to (i) amend the Certificate of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board

                                      -12-

<PAGE>   17

of Directors as provided in Section 151(a) of the General Corporation Law of
Delaware, fix any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the Corporation), (ii) adopt an agreement of merger or
consolidation under Sections 251, 252, 255, 256, 257, 258, 263 or 264 of the
General Corporation Law of Delaware, (iii) recommend to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, (iv) recommend to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, or (v) amend the Bylaws of the
Corporation; and, unless the board resolution establishing the committee, the
Bylaws or the Certificate of Incorporation expressly so provide, no such
committee shall have the power or authority to declare a dividend, to authorize
the issuance of stock, or to adopt a certificate of ownership and merger
pursuant to Section 253 of the General Corporation Law of Delaware.

         4.2      MEETINGS AND ACTION OF COMMITTEES

         Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these Bylaws, Section
3.5 (place of meetings), Section 3.7 (regular meetings), Section 3.8 (special
meetings and notice), Section 3.9 (quorum), Section 3.10 (waiver of notice),
Section 3.11 (adjournment), Section 3.12 (notice of adjournment), and Section
3.13 (action without meeting), with such changes in the context of those Bylaws
as are necessary to substitute the committee and its members for the Board of
Directors and its members; provided, however, that the time of regular meetings
of committees may be determined either by resolution of the Board of Directors
or by resolution of the committee, that special meetings of committees may also
be called by resolution of the Board of Directors, and that notice of special
meetings of committees shall also be given to all alternate members, who shall
have the right to attend all meetings of the committee. The Board of Directors
may adopt rules for the government of any committee not inconsistent with the
provisions of these Bylaws.

                                   ARTICLE V

                                    OFFICERS

         5.1      OFFICERS

         The officers of the Corporation shall consist of a chairman of the
board, a chief executive officer, a secretary and a chief financial officer.
The corporation may also have, at the discretion of the Board of Directors, a
vice chairman, one or more presidents, one or more vice presidents, a treasurer,
one or more assistant secretaries, one or more assistant treasurers, and such
other officers as may be appointed in accordance with the provisions of Section
5.3 of these Bylaws. Any number of offices may be held by the same person.

                                     -13-

<PAGE>   18

         5.2      ELECTION OF OFFICERS

         The officers of the Corporation, except such officers as may be
appointed in accordance with the provisions of Section 5.3 or Section 5.5 of
these Bylaws, shall be chosen by the Board of Directors, subject to the rights,
if any, of an officer under any contract of employment.

         5.3      SUBORDINATE OFFICERS

         The Board of Directors may appoint, or may empower the chief executive
officer to appoint, such other officers as the business of the Corporation may
require, each of whom shall hold office for such period, have such authority,
and perform such duties as are provided in these Bylaws or as the Board of
Directors may from time to time determine.

         5.4      REMOVAL AND RESIGNATION OF OFFICERS

         Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by the
Board of Directors at any regular or special meeting of the board or, except in
case of an officer chosen by the Board of Directors, by any officer upon whom
such power of removal may be conferred by the Board of Directors.

         Any officer may resign at any time by giving written notice to the
Corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the Corporation under any contract to which the officer is a
party.

         5.5      VACANCIES IN OFFICES

         A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these Bylaws for regular appointments to that office.

         5.6      CHAIRMAN OF THE BOARD

         The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the Board of Directors and exercise and perform
such other powers and duties as may from time to time be assigned to him by the
Board of Directors or as may be prescribed by these Bylaws. If there is no chief
executive officer, then the chairman of the board shall also be the chief
executive officer of the Corporation and shall have the powers and duties
prescribed in Section 5.7 of these Bylaws. The chairman of the board shall
report to the Board of Directors.

         5.7      CHIEF EXECUTIVE OFFICER

         Subject to such supervisory powers, if any, as may be given by the
Board of Directors to the chairman of the board, if there be such an officer,
the chief executive officer of the Corporation shall be the Corporation's
general manager, and shall, subject to the control of the Board of Directors,
have

                                      -14-

<PAGE>   19

general supervision, direction, and control of the business and the officers of
the Corporation. The chief executive officer shall preside at all meetings of
the stockholders and, in the absence or nonexistence of a chairman of the board,
at all meetings of the Board of Directors. The chief executive officer shall
have the general powers and duties of management usually vested in the chief
executive officer of a corporation, and shall have such other powers and duties
as may be prescribed by the Board of Directors or these Bylaws.

         5.8      PRESIDENT

         In the absence or disability of the chief executive officer, the
presidents, if any, in order of their rank as fixed by the Board of Directors
or, if not ranked, a president designated by the Board of Directors, shall
perform all the duties of the chief executive officer and when so acting shall
have all the powers of, and be subject to all the restrictions upon, the chief
executive officer. The presidents shall exercise and perform other such powers
and duties as may from time to time be prescribed for them respectively by the
Board of Directors, these Bylaws, or the chief executive officer. A president
shall have authority to execute in the name of the Corporation bonds, contracts,
deeds, leases and other written instruments pertaining to the regular course of
his duties which implement policies established by the Board of Directors.

         5.9      VICE PRESIDENTS

         The vice presidents shall have such powers and perform such other
duties as from time to time may be prescribed for them respectively by the Board
of Directors, these Bylaws, the chairman of the board or the chief executive
officer.

         5.10     SECRETARY

         The secretary shall keep or cause to be kept, at the principal
executive office of the Corporation or such other place as the Board of
Directors may direct, a book of minutes of all meetings and actions of
directors, committees of directors and stockholders. The minutes shall show the
time and place of each meeting, whether regular or special (and, if special, how
authorized and the notice given), the names of those present at directors'
meetings or committee meetings, the number of shares present or represented at
stockholders' meetings, and the proceedings thereof.

         The secretary shall keep, or cause to be kept, at the principal
executive office of the Corporation or at the office of the Corporation's
transfer agent or registrar, as determined by resolution of the Board of
Directors, a share register, or a duplicate share register, showing the names of
all stockholders and their addresses, the number and classes of shares held by
each, the number and date of certificates evidencing such shares, and the number
and date of cancellation of every certificate surrendered for cancellation.

         The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the Board of Directors required to be given by law or
by these Bylaws. He or she shall keep the seal of

                                      -15-

<PAGE>   20

the Corporation, if one be adopted, in safe custody and shall have such other
powers and perform such other duties as may be prescribed by the Board of
Directors or by these Bylaws.

         5.11     CHIEF FINANCIAL OFFICER

         The chief financial officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the Corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings and shares. The books of account shall at all reasonable times
be open to inspection by any director.

         The chief financial officer shall deposit all money and other valuables
in the name and to the credit of the Corporation with such depositaries; as may
be designated by the Board of Directors. He or she shall disburse the funds of
the Corporation as may be ordered by the Board of Directors, shall render to the
chief executive officer and directors, whenever they request it, an account of
all of his or her transactions as chief financial officer and of the financial
condition of the Corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or these Bylaws.

         5.12     TREASURER

         In the absence or disability of the chief financial officer, the
treasurer shall perform all the duties of the chief financial officer and when
so acting shall have all the powers of, and be subject to all the restrictions
upon, the chief financial officer. The treasurer shall have such other powers
and perform such other duties as from time to time may be prescribed
respectively by the Board of Directors or these Bylaws.

                                   ARTICLE VI

       INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS

         6.1      ACTIONS BY OTHERS

         The Corporation (1) shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director or an officer of the Corporation and (2)
except as otherwise required by Section 6.4 of this Article VI, may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was an employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee, agent of or participant in another
corporation,

                                      -16-

<PAGE>   21

partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.

         6.2      ACTIONS BY OR IN THE RIGHT OF THE CORPORATION

         The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he or she is or was a director or officer of the
Corporation, and the Corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he or she is or was an employee or agent of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, agent of or participant in another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection with the defense or settlement of such action or suit if he or she
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the Corporation unless and
only to the extent that the Delaware Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Delaware Court of Chancery or such other court shall deem proper.

         6.3      SUCCESSFUL DEFENSE

         To the extent that a person who is or was a director, officer, employee
or agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section 6.1 or Section
6.2 of this Article, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.

                                      -17-

<PAGE>   22

         6.4      RIGHT TO INDEMNIFICATION

         The right to indemnification conferred in this Article VI shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition, such expenses to be paid by the Corporation within 20 days after
the receipt by the Corporation of a statement or statements from the claimant
requesting such payment or payments of expenses from time to time; provided,
however, that if the General Corporation Law of the State of Delaware requires,
the payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking by or on behalf of such director or officer,
to repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Article VI or
otherwise.

         6.5      SPECIFIC AUTHORIZATION

         To obtain indemnification under this Article VI, a claimant shall
submit to the Corporation a written request, including therein or therewith such
documentation and information as is reasonably available to the claimant and is
reasonably necessary to determine whether and to what extent the claimant is
entitled to indemnification. Any indemnification under Section 6.1 or Section
6.2 of this Article VI (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Sections 6.1 and 6.2. Such determination shall be made by (a) the
stockholders, (b) the Board of Directors by a majority vote of a quorum
consisting of Disinterested Directors, or (c) (1) even if such quorum is not
obtainable, if a quorum of Disinterested Directors so directs or (2) if a Change
of Control shall have occurred, by an Independent Counsel in a written opinion,
which Independent Counsel shall be selected by a majority vote of a quorum of
Disinterested Directors or, if a Change of Control shall have occurred, by the
claimant. If it is so determined that the claimant is entitled to
indemnification, payment to the claimant shall be made within 10 days after such
determination.

         6.6      INSURANCE

         The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have the power to indemnify him or her
against such liability under the provisions of the General Corporation Law of
Delaware.

                                      -18-

<PAGE>   23

         6.7      NON-EXCLUSIVITY OF RIGHTS

         The rights conferred on any person by this Bylaw shall not be exclusive
of any other right which such person may have or hereafter acquire under any
statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding office.
The corporation is specifically authorized to enter into individual contracts
with any or all of its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent not prohibited by the
General Corporation Law of Delaware.

         6.8      SURVIVAL OF RIGHTS

         The rights conferred on any person by this Bylaw shall continue as to a
person who has ceased to be a director, officer, employee or other agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.

         6.9      CORPORATION BOUND

         If a determination shall have been made pursuant to Section 6.5 of this
Article VI that the claimant is entitled to indemnification, the Corporation
shall be bound by such determination.

         6.10     PRECLUSION

         The corporation shall be precluded from asserting that the procedures
and presumptions of this Article VI are not valid, binding and enforceable and
shall stipulate in any judicial proceeding that the Corporation is bound by all
the provisions of Article VI.

         6.11     INVALIDITY OF ANY PROVISIONS OF THIS ARTICLE

         The invalidity or unenforceability of any provision of this Article VI
shall not affect the validity or enforceability of the remaining provisions of
this Article VI, and, to the fullest extent possible, such provisions of this
Article VI (including, without limitation, each such portion of any Section of
this Article VI containing any such provision held to be invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

                                      -19-

<PAGE>   24

         6.12     AMENDMENTS

         Any repeal or modification of this Bylaw shall only be prospective and
shall not affect the rights under this Bylaw in effect at the time of the
alleged occurrence of any action or omission to act that is the cause of any
proceeding against any agent of the Corporation.

                                  ARTICLE VII

                              RECORDS AND REPORTS

         7.1      MAINTENANCE AND INSPECTION OF RECORDS

         The corporation shall, either at its principal executive office or at
such place or places as designated by the Board of Directors, keep a record of
its stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these Bylaws as amended to date,
accounting books and other records.

         Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
Corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
Corporation at its registered office in Delaware or at its principal place of
business.

         The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.

         7.2      INSPECTION BY DIRECTORS

         Any director shall have the right to examine the Corporation's stock
ledger, a list of its stockholders and its other books and records for a purpose
reasonably related to his or her position as a director. The Court of Chancery
is hereby vested with the exclusive jurisdiction to determine whether a director
is entitled to the inspection sought. The Court may summarily order the
Corporation to permit

                                      -20-

<PAGE>   25

the director to inspect any and all books and records, the stock ledger, and the
stock list and to make copies or extracts therefrom. The Court may, in its
discretion, prescribe any limitations or conditions with reference to the
inspection, or award such other and further relief as the Court may deem just
and proper.

         7.3      ANNUAL STATEMENT TO STOCKHOLDERS

         The Board of Directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the Corporation.

         7.4      REPRESENTATION OF SHARES OF OTHER CORPORATIONS

         The chairman of the board, the chief executive officer, the president,
any vice president, the chief financial officer, the secretary or assistant
secretary of this corporation, or any other person authorized by the Board of
Directors or the chief executive officer or the president or a vice president,
is authorized to vote, represent, and exercise on behalf of this corporation all
rights incident to any and all shares of any other corporation or corporations
standing in the name of this corporation. The authority herein granted may be
exercised either by such person directly or by any other person authorized to do
so by proxy or power of attorney duly executed by such person having the
authority.

                                  ARTICLE VIII

                                GENERAL MATTERS

         8.1      RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING

         For purposes of determining the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any other lawful
action (other than action by stockholders by written consent without a meeting),
the Board of Directors may fix, in advance, a record date, which shall not be
more than sixty (60) days before any such action. In that case, only
stockholders of record at the close of business on the date so fixed are
entitled to receive the dividend, distribution or allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Corporation after the record date so fixed, except as
otherwise provided by law.

         If the Board of Directors does not so fix a record date, then the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board adopts the applicable resolution
or the sixtieth (60th) day before the date of that action, whichever is later.

                                      -21-

<PAGE>   26

         8.2      CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS

         From time to time, the Board of Directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the Corporation, and only the persons so authorized
shall sign or endorse those instruments.

         8.3      CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED

         The Board of Directors, except as otherwise provided in these Bylaws,
may authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
Corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the Board of Directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the Corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.

         8.4      STOCK CERTIFICATES; PARTLY PAID SHARES

         The shares of a corporation shall be represented by certificates,
provided that the Board of Directors of the Corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
Corporation. Notwithstanding the adoption of such a resolution by the Board of
Directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the Corporation by, the chairman or vice-chairman
of the Board of Directors, or the chief executive officer or the president or
vice-president, and by the chief financial officer, the secretary or an
assistant secretary of such corporation representing the number of shares
registered in certificate form. Any or all of the signatures on the certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate has
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the Corporation with the same effect as if he or
she were such officer, transfer agent or registrar at the date of issue.

         The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, upon the books and records of the Corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the Corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.

                                      -22-

<PAGE>   27

         8.5      SPECIAL DESIGNATION ON CERTIFICATES

         If the Corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the Corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the Corporation shall issue to represent
such class or series of stock a statement that the Corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.

         8.6      LOST CERTIFICATES

         Except as provided in this Section 8.6, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the Corporation and canceled at the same time. The Board of
Directors may, in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of replacement
certificates on such terms and conditions as the Board of Directors may require;
the Board of Directors may require indemnification of the Corporation secured by
a bond or other adequate security sufficient to protect the Corporation against
any claim that may be made against it, including any expense or liability, on
account of the alleged loss, theft or destruction of the certificate or the
issuance of the replacement certificate.

         8.7      CONSTRUCTION; DEFINITIONS

         Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the General Corporation Law of Delaware shall
govern the construction of these Bylaws. Without limiting the generality of this
provision, the singular number includes the plural, the plural number includes
the singular, and the term "person" includes both a corporation and a natural
person.

                                   ARTICLE IX

                                   AMENDMENTS

         Subject to Section 6.9 hereof, the Bylaws of the Corporation may be
adopted, amended or repealed and new Bylaws adopted by the affirmative vote of
stockholders holding a majority of the voting power of stock entitled to vote or
by the Board of Directors.

                                      -23-

<PAGE>   28

                                   ARTICLE X

                                  DISSOLUTION

         If it should be deemed advisable in the judgment of the Board of
Directors of the Corporation that the Corporation should be dissolved, the
board, after the adoption of a resolution to that effect by a majority of the
whole board at any meeting called for that purpose, shall cause notice to be
mailed to each stockholder entitled to vote thereon of the adoption of the
resolution and of a meeting of stockholders to take action upon the resolution.

         At the meeting a vote shall be taken for and against the proposed
dissolution. If a majority of the voting power of the outstanding stock of the
Corporation entitled to vote thereon votes for the proposed dissolution, then a
certificate stating that the dissolution has been authorized in accordance with
the provisions of Section 275 of the General Corporation Law of Delaware and
setting forth the names and residences of the directors and officers shall be
executed, acknowledged, and filed and shall become effective in accordance with
Section 103 of the General Corporation Law of Delaware. Upon such certificate's
becoming effective in accordance with Section 103 of the General Corporation Law
of Delaware, the Corporation shall be dissolved.

         Whenever stockholders holding a majority of the voting power of stock
entitled to vote on a dissolution consent in writing, either in person or by
duly authorized attorney, to a dissolution, no meeting of directors or
stockholders shall be necessary. The consent shall be filed and shall become
effective in accordance with Section 103 of the General Corporation Law of
Delaware. Upon such consent's becoming effective in accordance with Section 103
of the General Corporation Law of Delaware, the Corporation shall be dissolved.
If the consent is signed by an attorney, then the original power of attorney or
a photocopy thereof shall be attached to and filed with the consent. The consent
filed with the Secretary of State shall have attached to it the affidavit of the
secretary or some other officer of the Corporation stating that the consent has
been signed by or on behalf of all the stockholders entitled to vote on a
dissolution; in addition, there shall be attached to the consent a certification
by the secretary or some other officer of the Corporation setting forth the
names and residences of the directors and officers of the Corporation.

                                   ARTICLE XI

                                   CUSTODIAN

         11.1     APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES

         The Court of Chancery, upon application of any stockholder, may appoint
one or more persons to be custodians and, if the Corporation is insolvent, to be
receivers, of and for the Corporation when:

                  (i)      at any meeting held for the election of directors the
Stockholders are so divided that they have failed to elect successors to
directors whose terms have expired or would have expired upon qualification of
their successors; or

                                      -24-

<PAGE>   29

                  (ii)     the business of the Corporation is suffering or is
threatened with irreparable injury because the directors are so divided
respecting the management of the affairs of the Corporation that the required
vote for action by the Board of Directors cannot be obtained and the
stockholders are unable to terminate this division; or

                  (iii)    the Corporation has abandoned its business and has
failed within a reasonable time to take steps to dissolve, liquidate or
distribute its assets.

         11.2     DUTIES OF CUSTODIAN

         The custodian shall have all the powers and title of a receiver
appointed under Section 291 of the General Corporation Law of Delaware, but the
authority of the custodian shall be to continue the business of the Corporation
and not to liquidate its affairs and distribute its assets, except when the
Court of Chancery otherwise orders and except in cases arising under Sections
226(a)(3) or 352(a)(2) of the General Corporation Law of Delaware.

                                      -25-<PAGE>   1

                                                                     EXHIBIT 4.3

                       PROFIT-SHARING AND RETIREMENT PLAN
                                       OF
                                 FOOD LION, LLC
             (AS AMENDED AND RESTATED EFFECTIVE AS OF JULY 1, 2001)

                  THIS AMENDMENT AND RESTATEMENT is adopted effective as of the
1st day of July, 2001, by FOOD LION, LLC., a North Carolina limited liability
company (referred to herein as the "Company");

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

                  WHEREAS, the Company adopted effective as of December 15,
1960, a profit sharing plan known as the Profit-Sharing Retirement Plan of Food
Lion, Inc. (the "Plan"), for the purpose of providing retirement and related
benefits for eligible employees of the Company and their beneficiaries; and

                  WHEREAS, the Plan has been amended and restated from time to
time in accordance with the powers of amendment and restatement therein
contained; and

                  WHEREAS, the Company desires to further amend and restate the
Plan to add provisions to the Plan allowing for salary deferrals by participants
pursuant to Section 401(k) of the Internal Revenue Code;

                  WHEREAS, the Company desires to further amend and restate the
Plan to comply with changes in the Code (as defined herein) including the
Uniformed Services Employment and Reemployment Act of 1994, the Small Business
Job Protection Act of 1996, and the Taxpayer Relief Act of 1997;

                  NOW, THEREFORE, the Plan is restated effective as of July 1,
2001, or such earlier date as provided herein, or with respect to any provision
required under the Code as a condition for qualification if no effective date is
given, the earliest such date when Plan compliance with such provision would be
permitted under the Code, as follows:

                                       1
<PAGE>   2

                                    ARTICLE I
                                   DEFINITIONS

                  The following words and phrases when used herein shall have
the meaning set forth below unless a different meaning is plainly required by
the context:

                  1.1 Account - The account which includes the Participant's
Associate Savings Account, Employer Contribution Account, Qualified Nonelective
Contributions Account, ESOP Transfer Account, Mandatory Employer Stock Account,
and his Rollover Account.

                  1.2 Administrative Committee, or Committee - The body, which,
if appointed by the Company, shall be the plan administrator and shall have the
responsibility of the administrative management of the Plan, as provided in
Article VIII. In each instance where the Plan shall refer to the Committee, the
reference shall mean the Company for any period during which the Company has not
appointed a Committee.

                  1.3 Affiliated Employer - The Employer and any other company
which is a member of a controlled group of corporations that includes the
Employer within the meaning of section 414(b) of the Code, or related Employers
under common control within the meaning of section 414(c) of the Code, or
related employers which constitute an affiliated service group under section
414(m) of the Code, or employers related through the leasing of employees under
section 414(n) of the Code, or any other entity required to be aggregated with
the Employer pursuant to regulations under section 414(o) of the Code.

                  1.4 Annual Compensation - A Participant's compensation for the
Plan Year, including wages, salary, overtime pay, bonuses, commissions of all
kinds, and lump sum amounts paid for accrued unused vacation, but excluding
indirect payments such as non-taxable amounts paid to an Employee as an
allowance or reimbursement for travel expenses, amounts paid or reimbursed by
the Company for the Employee's moving expenses, payments of deferred
compensation, income from the exercise of stock options, the value of job
perquisites treated as income to the Employee, contributions to this or any
other profit sharing plan or pension plan, welfare plans, group insurance plans,
and any other payments or benefits not customarily regarded by the Employer as
being current remuneration for services except contributions paid in cash to
certain highly compensated participants in excess of the limits under Code
section 415. As permitted under the Code, "Annual Compensation" shall also
include Associate Savings contributions to this Plan, and salary reduction
contributions made by the Employer on behalf of the Employee under Code sections
125, 402(a)(8), 402(h) or 403(b); provided, however, that, for Plan Years
beginning on or after January 1, 1994, Annual Compensation shall not include any
amount in excess of $150,000, as adjusted pursuant to section 401(a)(17) of the
Code.

                  1.5 Associate Savings Account - The account into which a
Participant's Associate Savings Contributions shall be allocated. Amounts in the
Associate Savings Account are 100% nonforfeitable at all times.

                                       2
<PAGE>   3

                  1.6 Associate Savings Contributions - Amounts the Company
contributes to the Plan on behalf of a Participant pursuant to the Participant's
Associate Savings election as allowed under Code Section 401(k). For Associate
Savings contributions, the terms "deferral contributions" and "elective
deferrals" have the same meaning.

                  1.7 Authorized Leaves of Absence - Any absence authorized by
the Employer Under the Employer's standard personnel practices, provided that
all persons under similar circumstances must be treated alike in the granting of
such Authorized Leaves of Absence, and provided further that the Employee
returns to Employment within the period of authorized absence. An absence due to
service in the Armed Forces of the United States shall be considered an
Authorized Leave of Absence, provided that the Employee returns to Employment
with the Employer within the period during which his right to Reemployment is
preserved by law.

                  1.8 Beneficiary - Any person or persons (natural or otherwise)
that a Participant designates in accordance with Article VII to receive benefits
payable in the event of the death of the Participant, or in the absence of any
such designated person, such other person determined to be a beneficiary under
Article VII hereof.

                  1.9 Board - The Board of Directors of the Company.

                  1.10 Break in Service - A Plan Year in which the subject
individual completes no more than 500 Hours of Service, but not including a Plan
Year the last day of which the individual is on an Authorized Leave of Absence.

                  1.11 Code - The Internal Revenue Code of 1986, as amended from
time to time. All references herein to the Code shall be deemed to refer to the
Internal Revenue Code of 1986, and the regulations established pursuant thereto,
as they now exist or as they may hereafter be amended or modified. Any reference
to a specific section or subsection of the Code shall be deemed to refer to such
section or subsection and the regulations established thereto, as they now exist
or as they may hereafter be amended.

                  1.12 Company - Food Lion, LLC, a North Carolina limited
liability company.

                  1.13 Company Stock - American Depositary Shares, as evidenced
by American Depositary Receipts, representing the ordinary shares of
Etablissements Delhaize Freres et Cie "Le Lion" S.A. ("Delhaize Group"), and any
securities substituted for such stock by way of recapitalization,
reorganization, merger or consolidation.

                  1.14 Effective Date - The date upon which this amendment and
restatement of Plan is effective, namely July 1, 2001, unless otherwise
specifically noted.

                  1.15 Employee - Any person who is an Employee (such term
having its customary meaning) of the Employer receiving remuneration for
personal services rendered to the Employer (other than as an independent
contractor), or who is on an Authorized Leave of Absence, or who is a leased
employee within the meaning of section 413(n)(2) of the Code. Notwithstanding
the foregoing, if such leased employees constitute less than 20% of the

                                       3
<PAGE>   4

Employer's non-highly compensated work force within the meaning of section
414(n)(5)C(ii) of the Code, the term Employee shall not include those leased
employees covered by a plan described in section 414(n)(5)(B) of the Code.
Leased employees shall not be eligible to participate in this Plan.

                  1.16 Employer - Food Lion, LLC and every business enterprise
which is authorized by the Board to adopt this Plan and which duly adopts this
Plan, for the exclusive benefit of its eligible employees (and their
beneficiaries), in accordance with the provisions hereof.

                  1.17 Employer Contribution Account - The account maintained
for a Participant to record his share of the contributions of the Employer under
Section 3.1 of the Plan and adjustments relating thereto.

                  1.18 Employment - Service as an Employee of the Employer or
any Affiliated Employer. The term "Reemployment" shall mean Employment following
a Break in Service. The terms "Employed" and Reemployed" shall be used in the
same sense as the terms Employment and Reemployment, respectively.

                  1.19 Entry Date - The first day of each Plan Year for the
non-401(k) portion of the Plan. For the 401(k) Associate Savings portion of the
Plan, a Participant's Entry Date is as soon as administratively practicable
immediately following his completion of 500 Hours of Service in a twelve month
period based on his date of employment and each anniversary date thereof.

                  1.20 ERISA - Public Law 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.

                  1.21 ESOP Transfer Account - The account maintained for a
Participant to record amounts transferred to the Plan on behalf of the
Participant from the Employee Stock ownership Plan of Food Lion, L.L.C. (the
"ESOP"), which transferred amounts shall be fully vested.

                  1.22 Fiduciaries - The named fiduciaries who shall be the
Employers who adopt the Plan, the Committee and the Trustee, and any other
parties designated as fiduciaries by such named fiduciaries in accordance with
the powers herein provided, but only with respect to the specific
responsibilities of each for Plan and Trust administration as set forth herein
and in the Trust Agreement.

                  1.23 Forfeiture - The portion of the Participant's Employer
Contribution Account in which he is not vested at the time of his termination of
Employment and which shall be handled in accordance with Section 4.4.

                  1.24 Forfeiture Account - The account maintained for the
purpose of depositing Forfeitures and recording adjustments relating thereto as
provided in Section 4.4.

                                       4
<PAGE>   5

                  1.25 Gender and Number - The masculine gender wherever used
herein shall be deemed to include the feminine. Words in the singular shall be
read and construed as though used in the plural in all cases where they would so
apply, and vice versa.

                  1.26 Highly Compensated Employee means an Employee who:

                  (a) during the Plan Year or during the preceding Plan Year, is
a more than 5% owner of the Company (applying the constructive ownership rules
of Code Section 318); or

                  (b) during the preceding Plan Year had Compensation in excess
of $80,000 (as adjusted by the Commissioner of Internal Revenue for the relevant
year).

                  The Plan Administrator must make the determination of who is a
Highly Compensated Employee consistent with Code Section 414(q) and regulations
issued under that Code section. The Company may make a calendar year data
election to determine the Highly Compensated Employees for the Plan Year, as
prescribed by Treasury regulations or by other guidance published in the
Internal Revenue Bulletin. A calendar year data election must apply to all plans
of the Company which reference the highly compensated employee definition in
Code Section 414(q). For purposes of this definition, if the current Plan Year
is the first year of the Plan, then the term "preceding Plan Year' means the 12
consecutive month period immediately preceding the current Plan Year.

                  1.27 Hour of Service - Each Employee shall be credited with an
Hour of Service for:

                  (1) Each hour for which an Employee is paid, or entitled to
payment, by the Employer for the performance of duties. These hours shall be
credited to the Employee for the computation period in which the duties are
performed; and

                  (2) Each hour for which an Employee is paid, or entitled to
payment by the Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), jury duty, military duty or leave of absence, provided, however,
that under this paragraph (2):

                           (i) No more than 500 Hours of Service shall be
                  credited for any single continuous period (whether or not such
                  period occurs in a single computation period) during which the
                  Employee performs no duties;

                           (ii) No hours shall be credited if such payment is
                  made or due under the plan maintained by the Employer solely
                  for purposes of complying with applicable worker's
                  compensation, unemployment insurance or disability insurance
                  laws; and

                                       5
<PAGE>   6

                           (iii) No hours shall be credited for a payment which
                  reimburses an Employee for medical or medically related
                  expenses incurred by the Employee; and

                  (3) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer. These hours shall be
credited to the Employee for the computation period to which the award or
agreement pertains rather than the period in which the award, agreement, or
payment is made. The same House of Service shall not be credited under
paragraphs (1) or (2), as the case may be, and this paragraph (3). Crediting of
hours for back pay awarded or agreed to with respect to periods described in
paragraph (2) shall be subject to the limitations of that paragraph.

                  (4) An Employee for whom the Employer or Affiliated Employer
maintains records of hours of which payment for the performance of duties is
made shall be credited with Hours of Service on the basis of such records. Any
other Employee shall be credited with Hours of Service on the basis of
forty-five hours for each week he is paid or entitled to payment for the
performance of duties for any part of such week. The provisions of this Section
1.22 shall apply in accordance with Department of Labor Regulations section
2530.200b-2(b), (c) and (f) which are incorporated herein by reference.

                  (5) For purposes of determining whether a Break in Service has
occurred for participation and vesting purposes, Hours of Service shall also
include hours of maternity for paternity absences in accordance with Section
2.2. During such absence, the Employee shall receive credit for Hours of Service
equal to the number of hours that normally would have been credited during the
absence, or if unknown, then eight hours per day of absence, provided that the
credit of Hours of Service on account of pregnancy or placement of a child with
the Employee by adoption shall not exceed 501 Hours of Service for each absence.
Hours of Service on account of pregnancy or adoption shall only be required to
be credited if in the Plan Year in which the maternity or paternity absence
begins, crediting of such hours is necessary to prevent a Break in Service in
that Plan Year; otherwise, such hours shall be credited in the following Plan
Year.

                  1.28 Mandatory Employer Stock Account - The account maintained
for a Participant to record amounts contributed by the Employer and required to
be invested in Company Stock in accordance with Section 6.2 hereof.

                  1.29 Nonhighly Compensated Employee means an Employee who is
not a Highly Compensated Employee.

                  1.30 Normal Retirement Age and Normal Retirement Date - The
Normal Retirement Age shall be the date a Participant attains age sixty (60).
The Normal Retirement Date shall be the first day of the month coincident with
or next following the attainment of his Normal Retirement Age. A Participant
shall be fully vested in his Employer Contribution Account upon attaining his
Normal Retirement Age.

                                       6
<PAGE>   7

                  1.31 Participant - Any Employee who has qualified under the
terms of the Plan for participation therein and who remains so qualified;
provided, that an Employee who has made a Rollover Contribution to the Plan
pursuant to Section 3.8 shall be deemed to be a Participant solely with respect
to the terms of the Plan that apply to the Employee's Rollover Account, and such
Employee shall not otherwise be deemed to be a Participant until the Employee
has qualified under the terms of Article II of the Plan.

                  1.32 Permanent and Total Disability - The loss or loss of use
of a member or bodily function or any other physical or mental condition which,
in the judgment of the Committee, based upon medical reports and other evidence
satisfactory to the Committee, presumably permanently prevents an Employee from
performing his regular duties with the Employer or any other duties the Employer
may assign him, by reason of a medically determined and indefinite duration. In
the event the Committee finds that a Permanent and Total Disability does not
exist, then it shall by certified mail so notify the Participant who shall have
the rights set forth in the claims procedure in Section 8.3.

                  1.33 Plan - The profit sharing plan as set forth herein, as
amended and/or restated from time to time. The Plan shall be known as the
Profit-Sharing and Retirement Plan of Food Lion, LLC.

                  1.34 Plan Administrator - The Committee or, in the absence of
a committee, the Company.

                  1.35 Plan Year - The annual payroll accounting period
established each year by the Company for purposes of reporting the annual
compensation of Employees on Treasury Form W-2.

                  1.36 Qualified Nonelective Contributions - Nonelective
contributions which are 100% nonforfeitable at all times and which are subject
to the Distribution Restrictions described in Section 3.2.2 below. Any
nonelective contributions allocated to a Participant's Qualified Nonelective
Contributions Account under the Plan automatically satisfy the definition of
qualified nonelective contributions.

                  1.37 Rollover Account - The account maintained for a
Participant to record amounts transferred to the Plan on behalf of the
Participant from another qualified retirement plan (within the meaning of
section 401(a) of the Code), or from an individual retirement account (within
the meaning of section 408 of the Code) which contained only amounts rolled into
such account from a qualified retirement plan.

                  1.38 Secretary - The Secretary of the Treasury.

                  1.39 Service - A Participant's period of Employment with the
Employer and any Affiliated Employer.

                                       7
<PAGE>   8

                  1.40 Trust (or Trust Fund) - The fund maintained under the
Plan in accordance with the terms of the trust agreement, as amended from time
to time, which constitutes a part of the Plan.

                  1.41 Trust Agreement - The agreement between the Employer and
the Trustee which establishes the Trust and provides for the administration of
the Trust.

                  1.42 Trustee(s) - The trustee of the Plan, on the Effective
Date, is AMVESCAP National Trust Company. The term Trustee shall also mean any
successor Trustee(s) designated in the manner provided in the Trust Agreement
and accepting such Trust as provided therein.

                  1.43 USERRA - Uniformed Services Employment and Reemployment
Act of 1994. In order for this Plan to comply with the provisions of USERRA,
effective October 13, 1996, 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). Loan
repayments will be suspended under this Plan as permitted under Code Section
414(u)(4).

                  1.44 Valuation Date - Any periodic and regularly scheduled
date for valuation of the assets of the Trust Fund and of the respective
Accounts of Participants. The particular Valuation Dates will be established and
may be revised, from time to time, by mutual consent of the Employer and the
Trustee. The Annual Valuation Date shall be the last day of each Plan Year.

                  1.45 Vested Interest - The value of a Participant's interest
in his Account that is or has become nonforfeitable under the Plan and will be
paid to the Participant or his Beneficiary in accordance with the terms hereof.
Because of fluctuations in asset value, contribution and Forfeiture allocations,
and other changes in the value of a Participant's Account, the dollar value of a
Participant's Vested Interest is not fixed until it is actually paid under the
provisions hereof.

                  1.46 Year of Service - The applicable 12-month period during
which the Employee completes at least 1,000 Hours of Service. Year of Service
and Hour of Service shall include Service with any Employer or Affiliated
Employer.

                                       8
<PAGE>   9

                                   SECTION II
                            PARTICIPATION AND SERVICE

                  2.1 Eligibility for Participation -

                  (a) Each Employee of the Employer shall be eligible to
participate in the Plan except that the following Employees shall not be
eligible to participate:

                           (i) An Employee included in a unit of Employees
         covered by a bona fide collective bargaining agreement with the
         Employer that does not specifically provide for coverage of such
         Employee under this Plan; provided that retirement benefits were the
         subject of good faith bargaining between the Employer and Employee
         representatives;

                           (ii) An Employee who is a non-resident alien and
         receives no earned income (within the meaning of section 911(d)(2) of
         the Code) from the Employer constituting income from sources within the
         United States (within the meaning of section 861(a)(3) of the Code);

                           (iii) An individual who is deemed to be an Employee
         because he is a leased employee;

                           (iv) An Employee who is employed by an Affiliated
         Employer which is not an adopting employer of the Plan;

                           (v) An individual who has signed an employment
         agreement, independent contractor agreement, or other personal services
         contract with the Employer stating that he or she is not eligible to
         participate in the Plan; and

                           (vi) An individual during the period when he or she
         is not designated as an "employee" in the Employer's employment
         records. Individuals excluded from being eligible Employees by this
         provision shall include, but not be limited to, individuals who are
         engaged by the Employer to perform services for the Employer in a
         relationship that the Employer characterizes as other than an
         employment relationship. For example, individuals engaged to perform
         services in a relationship which the Employer characterizes as that of
         an "independent contractor" with respect to the Employer shall not be
         eligible Employees. Likewise, individuals who services the Employer
         leases from a third party shall not be eligible Employees. Individuals
         described in this provision shall not be eligible Employees during that
         period, even if a determination is made by the Internal Revenue
         Service, the United States Department of Labor, another governmental
         agency, a court or other tribunal that the individual is an "employee"
         of the Employer during that period, for purposes of pertinent sections
         of the Code or for any other purpose. An individual who has not been an
         eligible Employee on account of this provision shall become an eligible
         Employee effective on the date as of which the

                                       9
<PAGE>   10

         Employer characterizes the individual as an "employee" in the
         Employer's employment records, if, on that date, the individual also
         meets the other requirements of this Article II.

                  (b) Any Employee of the Employer who was a Participant in the
Plan on the date immediately preceding the Effective Date shall automatically be
a Participant in the 401(k) Associate Savings Portion of the Plan as of the
Effective Date. Any Employee of the Employer who completed 500 Hours of Service
during the 12 month period ending April 30, 2001, shall become a Participant in
the 401(k) Associate Savings portion of the Plan on the Effective Date. Any
other Employee of the Employer shall become a Participant (i) in the 401(k)
Associate Savings portion of the Plan as of the Entry Date immediately following
his completion of 500 Hours of Service (or as soon as administratively
practicable thereafter) in any 12 month period ending on the last calendar day
of a month, and (ii) in the non-401(k) portion of the Plan as of the Entry Date
which falls within the first computation period during which he completes a Year
of Service. For purposes of eligibility for Plan participation in the non-401(k)
portion of the Plan, a Year of Service shall mean the first twelve-month period
during which an employee has at least 1,000 Hours of Service. The computation
period initially to be taken into account for purposes of eligibility shall be
the twelve-month period commencing with the date of the Employee's Employment,
whether such Employment commenced prior or subsequent to the Effective Date. In
the event that the Employee fails to have at least 1,000 Hours of Service during
this initial computation period, the eligibility computation period shall be the
first Plan Year commencing after the date of Employment and, if necessary,
succeeding Plan Years.

                  (c) A Participant's continued eligibility to participate under
the Plan shall be determined on a Plan Year basis. A Participant shall remain a
Participant until his Employment terminates or he incurs a Break in Service,
whichever first occurs. Upon the occurrence of either such event, his
participation shall cease.

                  2.2 Effect of Break in Service on Participation and Vesting -

                  (a) If an Employee has a Break in Service, and if he had not
previously satisfied the eligibility requirements of Section 2.1, then he must
satisfy the eligibility requirements of Section 2.1 as if he were a new Employee
whose Employment commenced on the first date that he completes an Hour of
Service after his Break in Service.

                  (b) In the case of an Employee who was a Participant in the
Plan when he incurred a Break in Service, he will again be considered a
Participant on the first date on which he completes an Hour of Service after the
Break in Service.

                  (c) In the case of an Employee who, at the time of a Break in
Service, does not have any Vested Interest in his Employer Contribution account,
his Years of Service prior to any period of consecutive one (1) year Breaks in
Service shall not be taken into account for purposes of eligibility and
determining his Vested Interest in Employer contributions after a Break in
Service if the number of consecutive one (1) year Breaks in Service within such
period equals or exceeds five (5) years.

                                       10
<PAGE>   11

                  (d) In the case of an Employee who, at the time of a Break in
Service, has a Vested Interest in his Employer Contribution Account, his Years
of Service before such Break in Service shall be counted for purposes of
eligibility and determining his Vested Interest in Employer contributions after
his Break in Service.

                  (e) A Participant (whether or not he had a Vested Interest in
his Employer Contribution Account at the time of his Break in Service) who
returns to Employment with the Employer after a Break in Serviced shall not have
his Years of Service after the Break in Service counted to determine his Vested
Interest in his Employer Contribution Account at the time he incurred a Break in
Service if the number of consecutive years constituting the Break in Service
equals or exceeds five (5) years at the time of his Reemployment.

                  (f) The Plan Year shall be the computation period for purposes
of determining whether a Break in Service has occurred. The first Plan Year
computation period for this purpose shall be, in the case of Employees who were
Participants on the Effective Date, the Plan Year commencing on said date, and
shall be, in the case of Employees who thereafter become Participants, the Plan
Year which includes the last day of the computation period during which the
Participant satisfied the requirements for participation as set forth in section
2.1 above.

                  (g) Maternity or Paternity Leave - In the case of an Employee
who is absent from the employ of the Employer on account of (i) the Employee's
pregnancy, (ii) the birth of a child of the Employee, (iii) the placement of a
child with the Employee in connection with the adoption of the child by the
Employee or (iv) an absence due to the need for caring for such child for a
period beginning immediately following such birth or placement, the Plan shall
treat as Hours of Service, solely for purposes of determining whether a Break in
Service has occurred, the following hours:

                           (i) the Hours of Service which otherwise would
         normally have been credited to such Employee but for such absence; or

                           (ii) if the Hours of Service in (i) cannot be
         determined, then eight (8) Hours of Service for each day of such
         absence;

provided, that such Hours of Service credited under this Section 2.2(g) shall
not exceed 501 Hours of Service for each absence.

                  The Hours of Service credited under this Section 2.2(g) shall
be credited in the Plan Year the absence begins only if an Employee would be
prevented from incurring a Break in Service in such Plan Year. In any other
case, such hours shall be credited in the immediately following Plan Year. The
Employee shall not be entitled to receive credit for maternity or paternity
leave under this Section 2.2(g) unless such Employee furnishes to the Plan
Administrator within such reasonable time period as the Plan Administrator may
establish evidence that the absence is on account of one of the four (4) reasons
specified in the first paragraph of this Section 2.2(g) and evidence of the
duration of such absence.

                                       11
<PAGE>   12

                  2.3 Inactive Employer Contribution Account Status - In the
event that any Participant (excluding an Employee whose Employment is
terminated) completes more than 500 Hours of Service but less than 1,000 Hours
of Service in any Plan Year of his participation, or if during a Plan Year a
Participant has no more than 500 Hours of Service but is on an Authorized Leave
of Absence, his Employer Contribution Account shall be placed on inactive status
until he incurs a Break in Service or if on an Authorized Leave of Absence,
until his Employment terminates. Such Participant shall not share in the
Employer's contribution made pursuant to section 3.1 or the allocations made
pursuant to Section 4.3 for any such Plan Year, but he shall continue to receive
allocations in accordance with section 4.2 In the event such Participant has
1,000 Hours of Service in a subsequent Plan Year, his Employer Contribution
Account shall revert to active status for such Plan Year with full rights and
privileges under this Plan restored.

                  2.4 Transfers of Employment Among Employers - In computing
Service hereunder, the period of an Employee's Employment with any Affiliated
Employer shall be counted for participation and vesting purposes, and a transfer
of an Employee from the employ of one such member to the employ of another
member shall not interrupt Employment. In the event any Participant during the
course of any Plan Year is employed simultaneously by more than one Employer, he
shall be entitled to an allocation under Section 4.3 hereof by taking into
account his aggregate Annual Compensation from such Employer.

                                       12
<PAGE>   13

                                   ARTICLE III
                                  CONTRIBUTIONS

                  3.1 Employer Contributions (Non-401(k) Portion of the Plan) -
For so long as the Plan continues in effect, the Employer may make a
contribution annually to the Trust under the Plan for the accounts of all
Participants who are actively Employed on the last day of the Plan Year and who
have a Year of Service for such Plan Year. The amount of each such contribution
(if any) shall be determined annually by the Board, taking into consideration
the then prevailing financial conditions and fiscal requirements of the Employer
and such other factors as the Board may deem pertinent and applicable under the
circumstances; notwithstanding the above, the Employer may make contributions to
the Plan without regard to current or accumulated profits. The contributions by
the Employer shall be credited to the Employer Contribution Accounts of
Participants in accordance with Article IV. The Employer shall pay to the
Trustee its contribution for each fiscal year before the close of such fiscal
year or within such other period thereafter as is described in section 404(a)(6)
of the Code.

                  3.2 Associate Savings Contributions (401(k) Portion of the
Plan). Effective July 1, 2001, the Plan shall include an Associate Savings
arrangement under Section 401(k) of the Code. Any Participant in the Plan may
elect to participate in the Associate Savings portion of the Plan. Under the
Associate Savings arrangement, a Participant may elect to have the Company
contribute to the Plan a percentage of his Compensation instead of receiving
that amount as Compensation. The Committee shall establish and change from time
to time in its sole discretion the maximum Associate Savings percentage
allowable under the Plan consistent with and not in violation of legal
limitations. The Associate Savings arrangement will apply only to Compensation
which becomes currently available to the Participant after the effective date of
his Associate Savings election. The Company will apply an Associate Savings
election to Compensation excluding bonuses (and to increases in such
Compensation). The Committee will provide Participants with a procedure for
making Associate Savings elections. Associate Savings elections must be in whole
percentages, and may be made, revoked or revised at any time effective as of the
second payroll period following the date of the election. The Company must make
Associate Savings contributions to the Trust within an administratively
reasonable period of time after withholding the corresponding Compensation from
the Participant.

                  3.2.1 Annual Associate Savings Limitation. A Participant's
Associate Savings for a calendar year may not exceed the Code Section 402(g)
limitation ($10,500 for Plan Years beginning on or after 1/1/2001). The Code
Section 402(g) limitation is the greater of $7,000 or the adjusted amount
determined by the Secretary of the Treasury. If, pursuant to an Associate
Savings agreement, the Company determines the Participant's Associate Savings
contributions to the Plan for a calendar year would exceed the Code Section
402(g) limitation, the Company will suspend the Participant's Associate Savings
agreement, if any, until the following January 1. If the Committee determines a
Participant's Associate Savings contributions already contributed to the Plan
for a calendar year exceed the Code Section 402(g) limitation, the Committee
will distribute the amount in excess of the Code Section 402(g) limitation (the
"Excess Deferral"), as adjusted for allocable income, no later than April 15 of
the following calendar year. If the Committee distributes the Excess Deferral by
the appropriate April 15, it may make the distribution irrespective of any other
provision under this Plan or under the Code. The Committee will reduce the
amount of Excess

                                       13
<PAGE>   14

Deferrals for a calendar year distributable to the Participant by the amount of
Excess Contributions (as determined in Section 3.2.2), if any, previously
distributed to the Participant for the Plan Year beginning in that calendar
year.

         If a Participant participates in another plan under which he makes
elective deferrals pursuant to a Code Section 401(k) arrangement, elective
deferrals under a Simplified Employee Pension, or Associate Savings
contributions to a tax-sheltered annuity, irrespective of whether the Company
maintains the other plan, he may provide the Committee a written claim for
deferrals made for a calendar year which are in excess of the Code Section
402(g) limitation (also "Excess Deferrals"). The Employee must submit the claim
no later than the March 1 following the close of the particular calendar year
and the claim must specify the amount of the Participant's elective deferrals
under this Plan which are Excess Deferrals. If the Committee receives a timely
claim, it will distribute the Excess Deferral (as adjusted for allocable income)
the Participant has assigned to this Plan, in accordance with the distribution
procedure described in the immediately preceding paragraph.

         For purposes of making a distribution of Excess Deferrals pursuant to
this Section, allocable income means net income or net loss allocable to the
Excess Deferrals for the calendar year in which the Participant made the Excess
Deferral, determined in a manner which is uniform, nondiscriminatory and
reasonably reflective of the manner used by the Plan to allocate income to
Participants' Accounts.

                  3.2.2 Actual Deferral Percentage ("ADP") Test. For each Plan
Year, the Committee must determine whether the Plan's Associate Savings
Contributions satisfy either of the following ADP tests:

                  (i) The average ADP for the Highly Compensated Group does not
         exceed 1.25 times the average ADP of the Nonhighly Compensated Group
         for the previous Plan Year; or

                  (ii) The average ADP for the Highly Compensated Group does not
         exceed the average ADP for the Nonhighly Compensated Group for the
         previous Plan Year by more than two percentage points and the average
         ADP for the Highly Compensated Group is not more than twice the average
         ADP for the Nonhighly Compensated Group for the previous Plan Year.

         SPECIAL ADP TEST DEFINITIONS:

         "Distribution Restrictions" means the Participant may not receive a
         distribution of the specified contributions (nor earnings on those
         contributions) except in the event of (1) the Participant's death,
         disability, termination of employment or attainment of age 59 1/2, (2)
         financial hardship satisfying the requirements of Code Section 401(k)
         and the applicable Treasury regulations, (3) a plan termination,
         without establishment of a successor defined contribution plan (other
         than an ESOP), (4) a sale of substantially all of the assets (within
         the meaning of Code Section 409(d)(2)) used in a trade or business, but
         only to an employee who continues employment with the corporation
         acquiring those assets, or (5) a sale by a corporation of its interest
         in a subsidiary (within the meaning of Code Section 409(d)(3)), but
         only to an employee who continues employment with the subsidiary. A
         distribution on

                                       14
<PAGE>   15

         account of financial hardship, as described in clause (2), may not
         include earnings on elective deferrals and Qualified Nonelective
         Contributions, nor any earnings on such contributions. A distribution
         described in clauses (3), (4) or (5) must be a lump sum distribution,
         as required under Code Section 401(k)(10).

         "Excess Contributions" means, for purposes of the ADP test, the amount
         of deferral contributions made by the Highly Compensated Employees
         which causes the Plan to fail to satisfy the ADP test.

         "Eligible Employee" means, for purposes of the ADP test, a Participant
         who is eligible to enter into an Associate Savings agreement for the
         Plan Year, irrespective of whether he actually enters into such an
         agreement.

         "Highly Compensated Group" means the group of Eligible Employees who
         are Highly Compensated Employees for the Plan Year.

         "Nonhighly Compensated Group" means the group of Eligible Employees who
         are Nonhighly Compensated Employees for the Plan Year.

         "Nonelective Contributions" are contributions made by the Company which
         are not subject to a deferral election by an Employee.

                  (A) CALCULATION OF ADP. The average ADP for a group is the
         average of the separate ADPs calculated for each Eligible Employee who
         is a member of that group. An Eligible Employee's ADP for a Plan Year
         is the ratio of the Eligible Employee's deferral contributions for the
         Plan Year to the Employee's Compensation for the Plan Year. In
         determining the ADP, any Highly Compensated Employee's excess deferrals
         as described above to this Plan or any other plan of the Company are
         included, and any Nonhighly Compensated Employee's excess deferrals are
         disregarded. For the Play Year ending December 17, 2001, the "average
         ADP for the Nonhighly Compensated Group for the previous Plan Year"
         shall be three percent.

                   (B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED
         EMPLOYEES. To determine the ADP of any Highly Compensated Employee, the
         deferral contributions taken into account must include any elective
         deferrals made by the Highly Compensated Employee under any other Code
         Section 401(k) arrangement maintained by the Company, unless the
         elective deferrals are to an ESOP. If the plans containing the Code
         Section 401(k) arrangements have different plan years, the Committee
         will determine the combined deferral contributions on the basis of the
         plan years ending in the same calendar year.

                  (C) AGGREGATION OF CERTAIN CODE SECTION 401(K) ARRANGEMENTS.
         If the Company treats two plans as a unit for coverage or
         nondiscrimination purposes, the Company must combine the Code Section
         401(k) arrangements under such plans to determine whether either plan
         satisfies the ADP test. This aggregation rule applies to the ADP
         determination for all Eligible Employees, irrespective of whether an
         Eligible Employee is a Highly Compensated Employee or a Nonhighly
         Compensated Employee. An

                                       15
<PAGE>   16

         aggregation of Code Section 401(k) arrangements under this paragraph
         does not apply to plans which have different plan years and the
         Committee may not aggregate an ESOP (or the ESOP portion of a plan)
         with a non-ESOP plan (or non-ESOP portion of a plan).

                  (D) CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If the total
         amount of a Highly Compensated Employee's Excess Contributions for the
         Plan Year exceeds his deferral contributions or qualified matching
         contributions for the Plan Year, the Committee will treat the remaining
         portion of his Excess Contributions as attributable to Qualified
         Nonelective Contributions. The Committee will reduce the amount of
         Excess Contributions for a Plan Year distributable to a Highly
         Compensated Employee by the amount of excess deferrals (as determined
         above), if any, previously distributed to that Employee for the
         Employee's taxable year ending in that Plan Year.

                  (E) CALCULATION OF EXCESS CONTRIBUTIONS. If the Committee
         determines the Plan fails to satisfy the ADP test for a Plan Year, it
         may distribute the Excess Contributions, as adjusted for allocable
         income, during the next Plan Year. However, the Company may incur an
         excise tax with respect to the amount of Excess Contributions for a
         Plan Year not distributed to the appropriate Highly Compensated
         Employees during the first 2 1/2 months of that next Plan Year. The
         Committee will distribute to each Highly Compensated Employee his
         respective share of the Excess Contributions. The Committee will
         determine the total Excess Contributions by starting with the Highly
         Compensated Employee(s) who has the greatest ADP, reducing his ADP (but
         not below the next highest ADP), then, if necessary, reducing the ADP
         of the Highly Compensated Employee(s) at the next highest ADP level
         (including the ADP of the Highly Compensated Employee(s) whose ADP the
         Committee already has reduced), and continuing in this manner until the
         average ADP for the Highly Compensated Group satisfies the ADP test.

                  (F) DISTRIBUTION OF EXCESS CONTRIBUTIONS. After the Plan
         Administrator has determined the total excess contribution amount, the
         Trustee, as directed by the Plan Administrator, then will distribute to
         each Highly Compensated Employee his/her respective share(s) of the
         Excess Contributions. The Plan Administrator will determine the
         respective share(s) of Excess Contributions by starting with the Highly
         Compensated Employee(s) who has the highest dollar amount of elective
         contributions, reducing his/her elective contributions (but not below
         the next highest level of election contributions), then, if necessary,
         reducing the elective contributions of the Highly Compensated
         Employee(s) at the next highest level of elective contributions,
         including the elective contributions of the Highly Compensated
         Employee(s) whose elective contributions the Plan Administrator already
         has reduced (but not below the next highest level of elective
         contributions), and continuing in this manner until the Trustee has
         distributed all Excess Contributions.

                                       16
<PAGE>   17

         (G) ALLOCABLE INCOME. To determine the amount of the corrective
         distribution required under this Section, the Committee must calculate
         the allocable income for the Plan Year in which the Excess
         Contributions arose. "Allocable income" means net income or net loss.
         To calculate allocable income for the Plan Year, the Committee will use
         a uniform and nondiscriminatory method which reasonably reflects the
         manner used by the Plan to allocate income to Participants' Accounts.

                  3.3 Employee's Voluntary Contributions - Employee voluntary
contributions are not permitted under the Plan.

                  3.4 Fund for Exclusive Benefit of Participants - The assets of
the Trust Fund shall be held hereunder for the exclusive benefit of the
Participants and their Beneficiaries for the purpose of distributing to such
Participants and Beneficiaries both the corpus and income of the Trust Fund in
accordance with the provisions of Article V hereof, provided, however, the
assets of the Trust Fund may be used for the payment of taxes, Trustee and
investment management fees and other administration expenses, including, but not
limited to, fees for services rendered to the Plan or Trust by attorneys,
accountants and consultants, which shall be paid from the Trust Fund except in
those cases where the Company elects to pay such expenses. No part of the Trust
Fund corpus or income shall be used for or diverted to purposes other than for
the exclusive benefit of Participants and beneficiaries under the Plan, whether
by operation of low or natural termination of contracts, by power or revocation
or amendment, by the happening of a contingency, by collateral arrangement or by
any other means; provided that the Employer hereby reserves the right to amend
or revoked the Plan at any time as provided in Articles IX and X hereof.

                  To the extent permitted by the Code and notwithstanding
anything herein to the contrary, upon the Employer's request, a contribution
which was made by a mistake of fact, or conditioned upon the deductibility of
the contribution under section 404 of the Code, shall be returned to the
Employer within one year after the payment of the contributions or the
disallowance of the deduction for such contribution (to the extent disallowed),
whichever is applicable.

                  3.5 ESOP Transfer Accounts - There shall be no withdrawals of
any portion of any ESOP Transfer Account by any Participant until such time as
he is otherwise eligible to receive the amount credited to his Employer
Contribution Account under this Plan (or would have been eligible, had he been
vested in any part of his Employer Contribution Account), provided, however, and
notwithstanding the foregoing, in the event of the termination of a
Participant's Employment with the Employer, as contemplated under Section 5.5 of
the Plan, for any reason prior to retirement or death, such terminated
Participant shall have the right to receive all, but not less than all, of the
amount standing to his credit in his ESOP Transfer Account, upon written request
submitted to the Plan Administrator at any time after such termination. Upon
receipt of any such request, the amount in such ESOP Transfer Account shall be
distributed as directed by the terminated Participant as promptly as practicable
thereafter.

                                       17
<PAGE>   18

                  3.6 Military Service - Notwithstanding any provision of the
Plan to the contrary, contributions, benefits and service credit with respect to
qualified military service shall be provided in accordance with Code section
414(u).

                  3.7 Trust to Trust Transfers - The Plan, subject to the
approval of the Committee, may accept a transfer of assets from another
qualified retirement plan sponsored by an Affiliated Employer for the benefit of
a former employee of such Affiliated Employer who becomes an Employee of the
Company. The Plan shall not accept any direct or indirect transfers from a plan
which is subject to Section 401(a)(11) of the Code.

The Committee may direct the Trustee to transfer the assets credited to the
Account of a Participant or Former Participant to another employer's retirement
plan, provided immediately prior to the transfer, the transferee plan contains a
provision permitting such transfer and is qualified under Section 401(a) of the
Code and the related trust is exempt under Section 501(a) of the Code.

                  3.8 Rollovers - An Employee who receives a distribution of his
entire interest from another retirement plan that is qualified under section
401(a) of the Code on the date of distribution may, with the written consent of
the Plan Administrator and in accordance with procedures adopted by the Plan
Administrator, transfer all or a part of such distribution to the Trustee under
the Plan. The amount so transferred may only include cash. In applying the
provisions of this Section 3.8, the following provisions shall apply:

                  3.8.1 Employees Eligible: An Employee shall be eligible to
         roll an amount into the Plan pursuant to this Section 3.8 only if the
         Employee is otherwise eligible to participate in the Plan under Section
         2.1(a) (without regard to the service conditions contained in Section
         2.1(b)). If an Employee who makes such a transfer has not completed the
         serviced requirements of Section 2.1(b), his Rollover Account shall
         represent his sole interest in the Plan until he becomes a Participant.

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

                  3.8.3 Distributions Eligible for Rollover: The distribution
         made to the Participant must be an "Eligible Rollover Distribution" (as
         defined in Section 5.1(iii) of the Plan). The amount transferred to the
         Trust shall be limited to the maximum rollover amount as provided in
         section 402(c)(2) of the Code.

                  3.8.4 Accounting: The amount transferred to the Trustee shall
         be credited to the Participant's Rollover Account. The assets in the
         Rollover Account shall be administered by the trustee in the same
         manner as other trust assets. The other provisions of this Plan
         notwithstanding, however, no part of the Participant's Roller Account
         may, within the

                                       18
<PAGE>   19

         meaning of any state of federal securities law, be invested or deemed
         invested, whether at the direction of the Participant or any other
         person, in stock or securities issued by the Employer or any of its
         affiliates.

                  3.8.5 Distributions: There shall be no withdrawals of any
         portion of any Rollover Account by any Participant until such time as
         he is otherwise eligible to receive the amount credited to his Employer
         Contribution Account under this Plan (or would have been eligible, had
         he been vested in any part of his Employer Contribution Account);
         provided, however, that in the event of the termination of a
         Participant's Employment with the Employer, as contemplated under
         Section 5.5 of the Plan, for any reason prior to retirement or death,
         such terminated Participant shall have the right to receive all, but
         not less than all, of the amount standing to his credit in his Rollover
         Account, upon written request submitted to the Plan Administrator at
         any time after such termination. Upon receipt of any such request, the
         amount in such Rollover Account shall be distributed as directed by the
         terminated Participant as promptly as practicable thereafter.

                                       19
<PAGE>   20

                                   ARTICLE IV
                            INTEREST OF PARTICIPANTS

                  4.1 Accounts of Participants - The Trustee shall, as
applicable, maintain five separate accounts on its books for each Participant,
for record keeping purposes only: (i) ESOP Transfer Account, (ii) Employer
Contribution Account, (iii) Associate Savings Account, (iv) Qualified
Nonelective Contributions Account, (v) Rollover Account and (vi) Mandatory
Employer Stock Account. The maintenance of individual accounts is primarily for
accounting purposes, and a segregation of the assets of the Trust Fund to each
account shall not be required. Distributions and withdrawals made from an
account shall be charged to the accounts as of the date paid. The Trustee may
create subaccounts for any Account, including subaccounts to reflect the
investment directions of Participants in accordance with Section 6.2.

                  4.2 Allocation of Income, Expenses, Fluctuations in Asset
Value, Etc. - As of the close of business on each Valuation Date, the Trustee
shall:

                  (a) Determine, in such reasonable ways and from such
information as the Trustee may deem appropriate the fair market value of the
Trust Fund, including the fair market value of the separate investment funds of
the Trust Fund in accordance with Section 6.2, but excluding any contributions
to the Plan since the next preceding Valuation Date.

                  (b) Make appropriate adjustments in the Associate Savings
Account, Qualified Nonelective Contributions Account, ESOP Transfer Account,
Rollover Account, Employer Contribution Account and Mandatory Employer Stock
Account of all Participants, former Participants and Beneficiaries who have
unpaid balances in their accounts at such time, by allocating pro rata among
such accounts based on the respective balances thereof as of the next preceding
Valuation Date (but after first reducing each such Account balance by any
distribution from the Account since the next preceding Valuation Date), any
increases and decreases in the value of the assets of the Trust Fund (or the
separate investment funds in which the Participant has directed an investment in
accordance with Section 6.2) and nay income (other than contributions),
expenses, and realized gains and losses of the Trust Fund (or the separate
investment funds) since such preceding Valuation Date.

                  4.3 Allocation of Contributions - As of each Annual Valuation
Date, and after the allocation provided in Section 4.1 above, the current
contribution of the Employer shall be allocated to the respective Employer
Contribution Accounts of all Participants who are employed by the Employer on
the last day of such Plan Year and who have a Year of Service for such Plan Year
in the same proportion as the Annual Compensation of each such Participant for
such year bears to the aggregate Annual Compensation of all such Participants
for such year.

                  4.4 Disposition of Forfeitures -

                  (a) Participants Who Terminate Employment - In the case of an
Employee who has terminated Employment and who was a Participant except for such
termination of his Employment, the amount standing to his credit in his Employer
Contribution Account in which he has no Vested Interest shall be forfeited. Such
forfeiture shall take place at a time and in the

                                       20
<PAGE>   21

manner, at the sole discretion of the Plan Administrator, after the Participant
terminates Employment, as set forth in the Plan's Administration Manual. After
termination of his Employment, a former Employee's Vested Interest shall be
distributed or held for distribution in accordance with Sections 5.6 and 5.7
hereof.

                  (b) Reinstatement of Employer Contribution Account - If a
Participant who has no Vested Interest in his Employer Contribution Account
incurs a Break in Service, and if the Participant is Reemployed by the Employer
prior to incurring five (5) consecutive one (1) year Breaks in Service, upon
such Reemployment, the amount in his Employer Contribution Account (including
his Mandatory Employer Stock Account) at the time he terminated Employment shall
be restored, either out of the Forfeiture Account or by an additional Employer
contribution.

                  (c) Payment of Plan Expenses - Effective December 17, 2000,
Forfeitures may be used to reduce the Plan's ordinary and necessary
administrative expenses as described in Section 8.13. The Trustee will pay all
such Plan expenses, which may include reimbursement of the Employer, at the
direction of the Plan Administrator.

                  (d) Maintenance of Forfeiture Account - The Forfeiture Account
will be maintained, with earnings thereon, and used for the reinstatement of
Employer Contribution Account (including his Mandatory Employer Stock Account)
under Section 4.4(b) above and for the payment of Plan expenses under Sections
4.4(c) and 8.13 until such time as the Plan is (i) involved in either a merger
or spinoff with another plan, (ii) terminated, or (iii) amended to provide for
the complete discontinuance of contributions to the Plan (collectively the
"Allocation Events"). Prior to the occurrence of any of the Allocation Events,
there shall be no ongoing requirement to use or otherwise allocate any amount
from the Forfeiture Account except as the Plan Administrator shall direct. Upon
the occurrence of any of the Allocation Events, the entire balance remaining in
the Forfeiture Account after the payment of allowable plan expenses will be
allocated to Participants in the Plan as provided in Section 10.2 hereof. In no
event shall any amounts in the Forfeiture Account be used for any purposes other
than as stated in Sections 4.4(b), 4.4(c), 8.13 or 10.02 hereof. Effective
December 19, 1999, Forfeitures that are not allocated to reinstated Employer
Contribution Accounts pursuant to this Section 4.4(b) may be used, at the
election of the Plan Administrator, to reduce Employer contributions or for the
payment of Plan expenses as provided in Section 4.4(c).

                  4.5 Maximum Additions - Notwithstanding anything contained
herein to the contrary, the annual addition made to the accounts of a
Participant for any Plan Year shall not exceed the lesser of $35,000 (or, if
greater, 1/4 of the dollar limitation in effect under section 415(b)(1)(A) of
the Code) or 25% of the Participant's Annual Compensation for such Plan Year.
Such annual additions shall include the sum of Employer Contributions, Associate
Savings Contributions, Qualified Nonelective Contributions, Forfeitures, and
Employee Contributions (if permitted), but shall not include any rollover
contributions made pursuant to Section 3.4 or 3.6.

                  If such annual additions with respect to any Participant for
any Plan Year would exceed the limitation set forth in the immediately preceding
paragraph, the excess amounts shall be treated in accordance with the following
in the order indicated:

                                       21
<PAGE>   22

                  (a) Any excess shall be reallocated to the other Participants
in accordance with the method of allocation under Section 4.3 hereof to the
extent that such allocations do not cause the annual additions to any such other
Participant's account to exceed the limitations set forth in the first paragraph
of this Section 4.5

                  (b) To the extent that such allocation or reallocation of
excess amounts causes the limitations set forth in the first paragraph of this
Section 4.5 to be exceeded with respect to each Participant for the Plan Year,
then such amounts will be held unallocated in a suspense account, to be
allocated in the next Plan Year(s) in accordance with Section 4.3 hereof. If
such a suspense account is in existence at any time in accordance with this
provision, all amounts in such suspense account must be allocated before any
Employer contributions which would constitute such annual additions may be made
to the Plan. Investment gains and losses and other income shall not be allocated
to such suspense account. Upon termination of the Plan, any amount remaining in
such suspense account which is unallocable shall revert to the Employer.

                  Notwithstanding the foregoing, for Plan Years which commence
prior to January 1, 2000, the otherwise permissible annual additions for any
Participant under this Plan shall be further reduced to the extent necessary, as
determined by the Plan Administrator, to prevent disqualification of the Plan
under section 415(e) of the Code, which imposes additional limitations on the
benefits payable to Participants who also may be participating in another tax
qualified pension, profit sharing, savings or stock bonus plan of the Employer.
The Plan Administrator shall advise affected Participants of any additional
limitation on their annual additions required by the preceding sentence.

                  For purposes of applying the limitations imposed in this
Section 4.5, all defined contribution plans (as defined under ERISA) maintained
by the Employer or otherwise required to be aggregated under section 414 of the
Code will be considered to be a single defined contribution plan.

                  (c) Correction of Annual Additions Limitation. If, as a result
of a reasonable error in determining the amount of Associate Savings
Contributions an Employee may make without violating the limitations of this
Section with respect to Annual Additions, an Excess Amount results, the
Committee will return the Excess Amount (as adjusted for allocable income)
attributable to the Associate Savings Contributions. The Committee will make
this distribution before taking any corrective steps pursuant to Section 3.2.2.
The Committee will disregard any Associate Savings Contributions returned under
this for purposes of Sections 3.2.1.

                                       22
<PAGE>   23

                                    ARTICLE V
                                    BENEFITS

                  5.1 Normal Retirement Benefits - A Participant retiring under
the Plan at his Normal Retirement Date shall be entitled to receive the entire
amount of his interest in the Plan, computed as of the Valuation Date coincident
with or next preceding his Normal Retirement Date, the manner of payment of such
benefits to be determined under the provisions of Section 5.6 hereof. A
Participant's interest in his Employer Contribution Account shall become
nonforfeitable upon attainment of his Normal Retirement Age.

                  5.2 Disability Benefits - In the event a Participant shall
suffer a Permanent and Total Disability, he shall be entitled to retire under
the Plan for disability and to receive the entire account of his interest in the
Plan, computed as of the Valuation Date coincident with or next preceding the
date of his actual retirement for disability, the manner of the payment of such
benefits to him to be determined as provided in Section 5.6 hereof.

                  5.3 Postponed Retirement - Except as otherwise required by
law, a Participant may continue to be Employed by the Employer after his Normal
Retirement Date. In the event a Participant remains Employed after his Normal
Retirement Date, he shall continue to be a Participant just as if he had not yet
attained his Normal Retirement Date. When such a Participant actually retires,
he shall be entitled to receive the entire amount of his interest in the Plan
computed as of the date of his actual retirement if such date is a Valuation
Date, or if not a Valuation Date, then as of the Valuation Date next preceding
the date of his actual retirement, the manner of payment of such benefits to him
to be determined as provided in Section 5.6 hereof.

                  5.4 Death Benefits - In the event of the death of a
Participant, before or after his retirement hereunder, there shall be payable to
the Beneficiary or Beneficiaries designated by him (or, in accordance with
Article VII, to the Beneficiaries therein specified if no then-living
Beneficiary or Beneficiaries have been designated by such Participant) in
accordance with the provisions for payment of benefits under Section 5.6 hereof:

                  (a) If death precedes the commencement of payments to an
Employee of his Vested Interest in the Plan, the entire interest of the Employee
in the Plan, computed as of the Valuation Date coincident with or next preceding
his death shall be distributed within five (5) years after the death of such
Employee, the payment of such benefits to be made in such manner as may be
determined under the provisions of Section 5.6.

                  (b) If death occurs after distribution to the Employee of his
Vested Interest in the Plan has commenced, the undistributed balance of the
Vested Interest of such Employee shall be distributed in a lump sum to his
designated Beneficiary on or before the last day of the Plan Year in which the
Participant dies.

                  (c) For purposes of Section 5.4(a), a distribution to a child
shall be treated as if it had been paid to the surviving spouse of the Employee
is such amount will become payable

                                       23
<PAGE>   24

to the surviving spouse upon such child's reaching majority (or such other event
designated and permitted under the regulations.)

                  5.5 Termination Benefits -

                  (a) Vested Interest - If prior to retirement (including
retirement due to a Permanent and Total Disability) or death, the Participant's
Employment with the Employer (or former Participant who is still an Employee of
the Employer and who has not been paid his entire interest in the Plan) is
terminated for any reason whatsoever, such terminated Participant shall be
entitled to receive, in lieu of all other benefits and rights under this Plan,
the entire amount standing to his credit in his Associate Savings Account,
Qualified Nonelective Contributions Account, ESOP Transfer Account and his
Rollover Account, and the following percentage of the amounts standing to his
credit in his Employer Contribution Account and Mandatory Employer Stock Account
determined as of the Valuation Date coincident with or next preceding such
termination of his Employment:

                                                         PERCENTAGE SUBJECT
         YEARS OF SERVICE           VESTED PERCENTAGE       TO FORFEITURE
         ----------------           -----------------       -------------

         Less than 5                         0%                     100%
         5 or more                         100%                       0%

                  (b) For vesting purposes, Years of Service shall be calculated
on the basis of the Plan Year, and shall include all Plan Years in which an
Employee completes 1,000 or more Hours of Service, whether or not the Employee
receives an Employer contribution for such Plan Year.

                  (c) Time of Payment - Except as provided in Section 5.5(d), if
a Participant terminates employment after attaining age 60 or due to his death,
or terminates employment for any reason and consents to immediate distribution
of his benefit in accordance with Section 5.5(e), distribution of his Vested
Interest shall be made as soon as administratively feasible following the
Participant's termination of service and, if applicable, consent to
distribution.

         Benefits shall be payable in accordance with Section 5.6. Pending
commencement of payment thereof, the amount so payable shall be maintained as
provided in Section 5.7 hereof. Such payment shall be made to and accepted by
the Participant in full and final satisfaction and settlement of any and all of
his claims and rights under the Plan and in the Trust Fund.

         In the event a former Participant entitled to benefits under this
Section 5.5 dies before such benefits shall have been paid in full, then the
balance of such interest standing to his credit in his Account as of the date of
his death shall be payable to the Beneficiary or Beneficiaries designated by him
or to those specified in Article VII, in accordance with the provisions hereof
applicable to the payment of death benefits after retirement.

                  (d) Lump Sum Payment of Value of Small Benefits -
Notwithstanding any other provision of the Plan, if upon termination of
Employment, a Participant's Vested Interest in

                                       24
<PAGE>   25

his Account is not in excess of $3,500 ($5,000 for Plan Year 1998 and every Plan
Year thereafter) then the Plan Administrator shall direct the payment of such
interest in a lump sum to such Participant or his designated Beneficiary and
such distribution shall not require the consent of the Participant or his
Beneficiary.

                  (e) If upon termination of Employment, a Participant's Vested
Interest in his Account exceeds $5,000 and such termination is prior to age 60
and is not on account of death, no distribution shall be made to the Participant
shall until such time as the Participant consents to such distribution, attains
age 62, or dies. No more than 90 days and no less than 30 days before the date
as of which the Participant would be entitled to receive a distribution of his
Account, the Participant shall be provided with a notice explaining his rights
with regard to such distribution of his Account. No consent by a Participant to
a distribution shall be valid unless it is received after the Participant
receives the notice described in the preceding sentence and not more than 90
days before the date as of which the Participant receives the distribution.

                  5.6 Payment of Benefits - The benefits to which a retiring,
disabled, or otherwise terminated Participant is entitled upon his retirement,
disability or other termination of Employment, as the case may be, shall be paid
in a lump sum. Death benefits shall be payable to the Beneficiary in the form of
a lump sum.

                  5.7 Maintenance of Accounts Prior to Payout - After a
Participant's Employment terminates and prior to the distribution of all of his
benefits to him or to his Beneficiary(ies), as the case may be, the balance of
his Account, as it may exist from time to time, shall be maintained in the
following manner:

                  (a) Those amounts in his Employer Contribution account which
were not vested upon termination of his Employment, if any, shall be maintained
or applied in accordance with Section 4.4

                  (b) The Trustee shall segregate the former Participant's
Account as of the date his Employment terminated, and such segregated Account
shall not thereafter share in any allocations pursuant to Section 4.3. The
balance in such segregated Account shall remain invested as a part of the Trust
Fund pending distribution, sharing in the net income, net loss, net appreciation
and net depreciation of the Trust Fund in accordance with Section 4.2 and
Article VI to the same extent as if such Account had not been segregated, with
the Trustee (and former Participants as of May 1, 1994, having the same powers
of investment, reinvestment and commingling as for all other assets of the Trust
Fund). In the event the balance of a former Participant's Vested Interest is
distributed on a date other than a Valuation Date, the amount of such
distribution shall be the former Participant's Account balance as determined on
the Valuation Date next preceding the date of such distribution.

                  5.8 Commencement of Payments -

                  (a) Notwithstanding anything herein to the contrary, benefit
payments hereunder shall commence not later than sixty (60) days after the later
of (i) the date on which a Participant reaches his Normal Retirement Date, (ii)
the calendar year in which occurs the tenth anniversary of the year in which
such Participant commenced participation, or (iii) the Plan Year

                                       25
<PAGE>   26

in which such Participant's Employment with the Employer and any Affiliated
Employer terminates.

                  (b) Required Commencement Date - Notwithstanding any other
provision of this Plan to the contrary, payment of any Participant's Vested
Interest shall be made in a lump sum by the April 1 following the later of (i)
the calendar year in which the Participant attains age 70-1/2, or (ii) the Plan
year in which the Participant retires or otherwise separates from Employment;
provided, however, that in the case of a Participant who is a 5% owner at any
time during the Plan Year ending in the calendar year in which the Participant
attains age 70-1/2, payment shall be made by the April 1 following the calendar
year in which the Participant attains such age.

                  5.9 Errors in Participant's Accounts - When an error or
omission is discovered in any Account of a Participant, the Trustee shall be
authorized to make such equitable adjustments as may be appropriate as of the
Plan Year in which the error or omission is discovered.

                  5.10 Loans to Participants - This Section 5.11 shall be
effective as of May 1, 1994 or as soon as administratively practicable
thereafter as determined by the Plan Administrator. The Plan Administrator shall
administer the loan program. Upon written application of the Participant in such
form as may be specified by the Plan Administrator, the Plan Administrator may
direct the Trustee to make a loan to the Participant. The Plan Administrator
shall specify in a separate written document, which shall form a part of the
Plan, the basis on which loans shall be approved or denied and the limitations
(if any) on the types of loans available. The application and the resulting loan
must meet the terms and conditions specified in the following provisions of this
Section 5.11.

                  (a) A Participant may not have more than one (1) loan
outstanding at the same time.

                  (b) No loan shall be granted for less than one thousand
dollars ($1,000).

                  (c) The maximum permissible loan available to a Participant
shall not exceed the lesser of:

                           (i) fifty thousand dollars ($50,000) reduced by the
         excess (if any) of:

                                    (A) the highest outstanding balance of a
                           loan from the Plan during the one (1) year period
                           ending on the day before the date on which the loan
                           was made, over

                                    (B) the outstanding balance of a loan from
                           the Plan on the date on which such loan was made; or

                           (ii) one-half (1/2) of the present value of the
         Participant's Vested Interest under the Plan;

                                       26
<PAGE>   27

provided however, the amount available to be loaned to the Participant shall be
further limited by the requirement that based on the loan's interest rate,
amount of the requested loan and the repayment period, the projected biweekly
payroll deduction for repayment of principal and interest may not exceed thirty
percent (30%) of the Participant's biweekly regular wages (excluding overtime
pay, bonuses, and commissions of all kinds), which shall for these purposes be
the average biweekly regular wages for the Participant in the immediately
preceding plan Year quarter.

                  (d) The initial repayment period may not exceed forty-eight
(48) months.

                  (e) Loans made pursuant to this Section 5.11 shall be
available only to Participants who are actively Employed by the Employer at the
time the loan is made, former Participants and Beneficiaries who are parties-in
interest.

                  (f) The loan amount shall be withdrawn pro rata from the
Participant's Associate Savings Account, Qualified Nonelective Contributions
Account, ESOP Transfer Account, his Rollover Account and his Employer
Contribution Account. Any such loan withdrawals shall be prorated among the
Investment Funds in which the Participant's Associate Savings Account, Qualified
Nonelective Contributions Account, ESOP Transfer Account, his Rollover Account,
and his Employer Contribution Account are invested.

                  (g) Interest on any loan hereunder shall be based on a
reasonable rate of interest as determined by the Plan Administrator. The
interest rate shall provide the Plan with a return commensurate with the
interest rates charged by persons in the business of lending money for loans
which would be made in similar circumstances. The Plan Administrator shall
specify, in a separate written document forming part of the Plan, a procedure
for determining a reasonable interest rate. The interest rate, once fixed, shall
remain in effect for the duration of the loan.

                  (h) Notwithstanding the initial loan term provided in section
5.11(d), all loans must be repaid within a period of five (5) years, with a
minimum repayment period of twelve (12) months provided, however, if the purpose
of the loan is for the Participant to acquire his principal residence, the
period of the loan shall be ten (10) years, or less if a shorter period is
specified by the Participant. No loan from the Plan which is initially required
to be repaid within such 5-year period may be subsequently renewed or extended
for payment beyond such 5-year period provided that "10-year period" shall be
substituted for "5-year period" in the case of a loan to acquire the
Participant's principal residence. The repayment schedule of any loan hereunder
shall be determined at the time any such loan is made and a copy shall be
furnished the Trustee. Repayment of any loan shall be by payroll deduction (or
with Plan Administrator consent by a lump sum payment for final loan payments).
Except as may be provided in regulations, each loan to which this Section 5.11
applies must provide for a substantially level amortization of the loan with
payments being made not less frequent than quarterly.

                  (i) The loan shall be collateralized by a portion of the
borrowing Participant's account, equal to the lesser of: (i) the amount of the
loan, or (ii) fifty percent (50%) of the Participant's Account. Notwithstanding
the preceding, if the loan is for the purpose of

                                       27
<PAGE>   28

purchasing the Participant's primary residence, then the Plan Administrator may
also require such residence to collateralize the loan.

                  (j) A loan shall be in default if the Participant fails to
make any payment when due or if there occurs such other circumstances as may be
prescribed by the Plan Administrator in a separate written document which shall
form a part of the Plan. If a loan is in default, execution on the defaulting
Participant's Account shall be accomplished when and to the extent the Account
is distributed to the Participant, or at such other time deemed necessary by the
Plan Administrator to prevent a loss to the Plan and which is consistent with
the Code and applicable regulations.

                  (k) If a Participant terminates Employment, any loan
outstanding to the Participant shall become immediately due and payable to the
Plan. If the portion of a Participant's Account securing his loan otherwise
become payable to the Participant hereunder, the amount of the loan that is due
shall be satisfied by applying against it the portion of the Participant's
Account that secures the loan. The Participant's Account shall be
correspondingly reduced prior to making the distribution to or on behalf of the
Participant.

                  (l) Loans shall be held by the Trustee as a segregated
investment of the borrowing Participant's Account and any loan principal and
interest payments thereon shall be credited solely to such borrowing
Participant's Account and be invested in accordance with the Participant's then
current investment election.

                  (m) Participants' requests for loans shall be processed as
soon as practical after a fully complete loan request is filed with the Plan
Administrator. In accordance with rules established by the Plan Administrator,
loan initiation charges and annual loan maintenance fees will be charged against
the Participant's Account.

                  5.11 No Other Benefits or Withdrawals - Except as expressly
provided for in this Article V or in Section 3.5, for so long as this plan
continues in effect, no individual, whether a Participant, former Participant,
Beneficiary or otherwise, shall be entitled to any payment or withdrawal of
funds from the Trust Fund. This prohibition applies to Trust Funds attributable
to individual contributions as well as those attributable to other sources.

                  5.12 Direct Transfer of Eligible Rollover Distributions -

                           (i) Notwithstanding any provision of the Plan to the
         contrary, with respect to any distribution made on or after January 1,
         1993, a Distributee may elect, at the time and in the manner prescribed
         by the Plan Administrator, to have any portion of an Eligible Rollover
         Distribution paid directly to an Eligible Retirement Plan specified by
         the Distributee in a Direct Rollover.

                           (ii) For the purposes of this Section 5.13, the
         following definitions shall apply:

                           (iii) "Eligible Rollover Distribution" shall mean any
         distribution of all or any portion of the balance to the credit of the
         Distributee in this Trust or in any other qualified trust described in
         section 401(a) of the Code which is exempt from tax under

                                       28
<PAGE>   29

         section 501(a) of the Code, except that an Eligible Rollover
         Distribution shall not include: any distribution that is one of a
         series of substantially equal periodic payments (not less frequently
         than annually) made for the life (or life expectancy) of the
         Distributee or the joint lives (or joint life expectancies) of the
         Distributee and the Distributee's designated Beneficiary, or for a
         specified period of ten years or more; any distribution to the extent
         such distribution is required under section 401(a)(9) of the Code; and
         the portion of any distribution that is not includable in gross income
         (determined without regard to the exclusion for net unrealized
         appreciation with respect to Company Stock).

                           (iv) "Eligible Retirement Plan" shall mean an
         individual retirement account described in section 408(a) of the Code,
         an individual retirement annuity described in section 408(b) of the
         Code, an annuity plan described in section 403(a) of the Code, or a
         qualified trust described in section 401(a) of the Code which is exempt
         from tax under section 501(a) of the Code, that accepts the
         Distributee's Eligible Rollover Distribution. However, in the case of
         an Eligible Rollover Distribution to the surviving spouse, an Eligible
         Retirement Plan shall mean only an individual retirement account or
         individual retirement annuity.

                           (v) "Distributee" shall mean an Employee or former
         Employee. In addition, the Employee's or former Employee's surviving
         spouse and the Employee's or former Employee's spouse or former spouse
         who is the alternate payee under a qualified domestic relations order,
         as defined in section 414(p) of the Code, are Distributees with regard
         to the interest of the spouse or former spouse.

                           (vi) "Direct Rollover" shall mean a payment to the
         Eligible Retirement Plan specified by the Distributee either by direct
         transfer from the Plan, or by delivery of the distribution check by the
         Distributee, provided such check is made out in a manner to ensure that
         it is negotiable only by the trustee of the Eligible Retirement Plan.

                           (vii) The Employer will provide the Participant a
         written notice as required by Code section 402(f) which provides a
         general description of the Distributee's distribution options and
         notice of the Distributee's other rights, if any, to defer receipt of
         the distribution. Such notice will be given within the time period
         specified in Reg.ss.1.411(a)-11(c); provided, however, that if the
         distribution is one to which Code sections 401(a)(11) and 417 do not
         apply, such distribution may commence less than 30 days after the
         required notice is given, provided that

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

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

                  5.14 In-Service Withdrawals

                                       29
<PAGE>   30

                  (a) A Participant who is an Employee and has attained age 59
1/2 may make withdrawals from the Accounts listed in paragraph (b) below.

                  (b) The withdrawal amount shall come only from the Vested
Interest of the Participant's Accounts, in the following priority order:

                           Associate Savings Account
                           Qualified Nonelective Contribution Account
                           Rollover Account
                           Employer Contribution Account (other than Mandatory
                           Employer Stock)
                           ESOP Transfer Account
                           Mandatory Employer Stock Account

                  (c) The maximum number of withdrawals permitted from these
Accounts after age 59 1/2 in any 12-month period is one.

                  (d) A withdrawal from a Participant's Account after age 59 1/2
shall not affect his or her ability to receive an allocation of further
contributions under the Plan.

                  (e) The following rules govern in-service withdrawals:

                           (i) The minimum amount for any type of withdrawal is
                  $1,000.

                           (ii) A Participant must submit a completed withdrawal
                  request form to the Administrator (or apply in such other
                  manner as the Plan Administrator may provide) to apply for any
                  type of withdrawal.

                           (iii) The Administrator is responsible for
                  determining that a withdrawal request conforms to the
                  requirements described in this Section and notifying the
                  Trustee of any payments to be made in a timely manner.

                            (iv) With respect to any such distributions,
                  notwithstanding any provision of the Plan to the contrary that
                  would otherwise limit a Distributee's election under this
                  Section, a Distributee may elect, at the time and in the
                  manner prescribed by the Plan Administrator, to have any
                  portion of an Eligible Rollover Distribution paid directly to
                  an Eligible Retirement Plan specified by the Distributee in a
                  Direct Rollover.

                                   ARTICLE VI
                   INVESTMENT OF CONTRIBUTIONS; COMPANY STOCK

                  6.1 Trust - All assets of and contributions to the plan shall
be held in Trust by the Trustee, pursuant to the terms of the Trust Agreement
entered into between the Company and the Trustee, the terms of which are
specifically incorporated by reference into this Plan document. The Trustee
shall hold and manage the assets of the Plan, subject to the right of the

                                       30
<PAGE>   31

Company to appoint an Investment Manager for all or any portion of the Trust
Fund and to the right of Participants to direct the investment of their Accounts
in accordance with section 6.2 below. It is expressly permissible under the Plan
for Trust assets to be invested in qualifying employer securities, as that term
is defined in section 407(d)(5) of ERISA, up to and including sixty percent
(60%) of total Trust Fund assets. If Company Stock is purchased other than on
the open market, it will be valued in good faith and based on all relevant
factors including current market value.

                  6.2 Participant Directed Investments - Effective as of May 1,
1994, a Participant shall have the exclusive right to direct the investment of
amounts credited to his Account in accordance with this Section 6.2.
Notwithstanding the previous sentence, for Plan Years beginning in 1999, the
Company may require that a portion of any Company contribution be exclusively
invested in Company Stock and not subject to Participant investment discretion.
Such amounts shall be held in the Participant's Mandatory Employer Stock
Account. Any such action by the Company shall be evidenced by a written
resolution of the Board and shall set forth the exact percentage of such
contribution to be invested in Company Stock.

                  (a) In General - A Participant shall direct the investment, or
change the direction of the investment, of the amounts credited to his Account
by communicating such direction to the Plan Administrator (or its agent) in
writing on forms provided by the Plan Administrator or through a telephone
enrollment system provided for such purpose (or through any other method made
available by the Plan Administrator), in accordance with such rules as may be
established by the Plan Administrator.

                  Any investment direction submitted by a Participant must
specify, in 1.0% increments, the percentage of his Account and ongoing
contributions to be invested in one or more of the separate investment funds
(the "Investment Funds") selected by the Committee from time to time pursuant to
Section 6.2(b) and must specify whether such investment instructions apply to
existing Account balances, future contributions, or both. To the extent
permitted by applicable law and regulations, if a Participant fails to submit a
statement of direction properly directing the investment of 100% of his Account,
any portion not properly directed shall be invested in the Stable Value Fund.

                  A Participant will be able to change his investment election
daily. A Participant's investment instruction shall take effect by the first
business day immediately following the day on which the Participant gives such
instruction.

                  (b) Investment Options - The separate Investment Funds made
available under the Plan from time to time shall be selected by the Committee,
and the Committee shall have the authority and discretion to add, remove or
substitute Investment Funds from time to time as it deems appropriate in
accordance with the procedures specified in Section 8.7.

                  (c) The Participant will have the sole responsibility for the
investment of his Account among the available Investment Funds, and no fiduciary
or other person will have any liability for any loss or diminution in value
resulting from a Participant's exercise of such investment responsibility. It is
intended that Section 404(c) of ERISA will apply to a

                                       31
<PAGE>   32

Participant's exercise of investment responsibilities under this Plan and that
the Plan Administrator will take all actions required to comply with the
provisions of Section 404(c) of ERISA.

                  (d) As of each Valuation Date, the Plan Administrator and the
Trustee shall determine the fair market value of the Investment Funds, and shall
determine the gain or loss experienced by each such Investment Fund since the
immediately preceding Valuation Date. Each Participant's Account shall be
credited with a percentage of such gain or debited with a percentage of such
loss by multiplying the aggregate gain or loss of the Investment Fund by a
fraction, the numerator of which for each Participant is the value of the
Participant's interest in the Investment Fund as of the immediately preceding
Valuation Date, increased by any contributions by or on behalf of the
Participant since the last Valuation Date and reduced by any distribution made
to the Participant that was not taken into account in determining the
Participant's interest in the Investment Fund as of the immediately preceding
Valuation Date, and the denominator of which is the sum of the numerator amounts
for all Participants.

                  (e) The Plan Administrator shall provide each Participant with
a statement of the value of his Account as invested in the various Investment
Funds maintained under this Plan. In no event shall such statements be furnished
less frequently than once each Plan Year.

                  6.3 Voting and Tender Offer Related to Company Stock -

                  (a) Voting or Tender by Trustee - Prior to May 1,1994, the
Trustee shall vote, tender or exchange any share of Company Stock held in the
Trust Fund as directed by the Plan Administrator.

                  (b) Voting as Directed by Participants - Effective as of May
1, 1994, notwithstanding anything in the Plan or Trust Agreement to the
contrary, each Participant who timely provides instructions to the Trustee shall
be entitled to direct the Trustee how to vote on any shares of Company Stock
allocated to his Account (the "Allocated Shares") with respect to any matter for
which shareholder approval is required. In the event that shares of Company
Stock are held as part of a Company Stock fund, Allocated Shares shall also
include any shares of Company Stock represented by units of the Company Stock
fund which are allocated to a Participant's Account. The voting instructions of
the Participant shall be transmitted to the Trustee by the Participant, either
directly or through an entity providing services to the Plan. Reasonable means
shall be employed to provide confidentiality with respect to the directions by
such Participant and such directions shall be held in confidence and shall not
be divulged or released to any person including the Company or any director,
officer, employee or agent of the Company, it being the intent of this provision
to ensure that the Company (and its directors, officers, employees and agents)
cannot determine the direction given by any Participant. Such instructions shall
be in such form and shall be filed in such manner and at such time as the
Trustee and the Plan Administrator may prescribe. The Trustee shall not vote any
Allocated Shares for which it does not receive timely instructions from
Participants; provided, however, effective March 26, 2001, the Trustee shall
vote any Allocated Shares for which it does not receive timely instructions from
Participants as directed by the Administrative Committee.

                                       32
<PAGE>   33

                  (c) Tender or Exchange Directed by Participant - Effective as
of May 1, 1994, the provisions of this Section 6.3 shall also apply in the event
any person, either alone or in conjunction with others, makes a tender offer, or
exchange offer, or otherwise offers to purchase or solicits an offer to sell to
such person one percent or more of the outstanding shares of Food Lion, L.L.C.
Company Stock (herein referred to as a "Tender Offer"). The Trustee may not take
any action in response to a Tender Offer except as otherwise provided in this
Section 6.3. Each Participant shall have the right to direct the Trustee to
sell, offer to sell, exchange or otherwise dispose of the Allocated Shares in
accordance with the provisions, conditions and terms of such Tender Offer and
the provisions of this Section 6.3. The tender directions of the Participants
shall be transmitted to the Trustee by the Participants, either directly or
through an entity providing services to the Plan. Reasonable means shall be
employed to provide confidentiality with respect t the tendering direction by
such Participant and such directions shall be held in confidence and shall not
be divulged or released to any person including the Company or any director,
officer, employee or agent of the Company, it being the intent of this provision
to ensure that the Company (and its directors, officers, employees and agents)
cannot determine the tendering direction given by any Participant. Such
instructions shall be in such form and shall be filed in such manner and at such
time as the Trustee and the Plan Administrator may prescribe. A Participant who
has directed the Trustee to tender or exchange he Allocated Shares in his
Account may, at any time prior to the tender or exchange offer withdrawal date,
or such earlier date as established by the Trustee and the Plan Administrator,
instruct the trustee to withdraw, and the Trustee shall withdraw, such Allocated
Shares from the tender or exchange offer prior to the withdrawal deadline. The
Trustee and the Plan Administrator may impose reasonable limits on the number of
instructions to tender or exchange or withdraw which a Participant may give to
the Trustee. The Trustee shall sell, offer to sell, exchange or otherwise
dispose of the Allocated Shares with respect to which it has received directions
to do so under this Section 6.3 and which have not been withdrawn. The proceeds
of a disposition directed by a Participant shall be allocated to such
Participant's Account. To the extent to which Participants do not instruct the
Trustee or do not issue valid directions to the Trustee to sell, offer to sell,
exchange or otherwise dispose of the Allocated Shares, such Participants shall
be deemed to have directed the Trustee that such Allocated Shares remain in the
Participant's Account subject to all provisions of the Plan; provided, however,
that effective March 26, 2001, The Administrative Committee shall provide
direction to the Trustee with respect to any Allocated Shares for which the
Trustee has no otherwise received instructions or valid directions from
Participants.

                  (d) Obligations of the Company - The Company shall use its
reasonable best efforts, in conjunction with the Plan Administrator and the
Trustee, to cause to de delivered to each Participant on a timely basis all
proxy materials, tender or exchange materials, notices and information as are
furnished to the Company's stockholders in respect of the exercise of voting
rights, and tender or exchange rights associated with Company Stock, together
with forms by which the Participant may confidentially instruct the Trustee, or
revoke such instruction, with respect to the Allocated Shares. Any Trustee shall
prominently note that a failure to return a form to direct the tender or
exchange of Allocated Shares within a specified reasonable period of time shall
be deemed to be a direction to the Trustee not to tender or exchange such
Allocated Shares.

                  (e) Compliance with Court Order - Notwithstanding the
foregoing provisions of this Section 6.3, the Trustee, after consultation with
the Plan Administrator, shall have the

                                       33
<PAGE>   34

right to change or modify its actions hereunder to the extent such change or
modification is mandated by the terms of any valid order of a court of competent
jurisdiction.

                                   ARTICLE VII
                           DESIGNATION OF BENEFICIARY

                  The Participant's entire interest in the Plan at his death, if
any, shall be paid to such Participant's surviving spouse (if such spouse is
then living) unless prior to the Participant's death, the spouse consents in a
writing witnessed by a Plan representative or a notary public to permit the
Participant to designate a person other than the spouse as the Participant's
Beneficiary. This provision shall not apply where it is established to the
satisfaction of the Plan Administrator that such consent cannot be obtained
because there is no spouse, because the spouse cannot be located, or because of
such other circumstances as may be permitted by the regulations. The Plan
Administrator shall provide to each Participant a written explanation of the
Participant's spouse's right to waive the surviving spouse benefits described in
this Article VII.

                  Subject to the foregoing, each Employee becoming a Participant
hereunder shall designate in writing, in such form and manner as shall be
prescribed by such rules and regulations as the Plan Administrator may
promulgate in this connection, a Beneficiary or Beneficiaries of any interest
under this Trust which may be payable with respect to such Participant in the
event of his death before or after retirement, or otherwise after termination of
Employment, which designation may include the designation of al alternate
Beneficiary or Beneficiaries. Subject to the spousal consent requirements above
and also to such rules and regulations as the Plan Administrator may promulgate,
a Participant may from time to time change such designation of Beneficiary or
Beneficiaries (or alternate Beneficiary or Beneficiaries). In the event benefits
become payable upon the death of a Participant and no Beneficiary has been
properly designated as above provided, or if the designated Beneficiary or
Beneficiaries shall have predeceased him, such benefits shall be payable in full
to the surviving spouse of the Participant, and if he has no surviving spouse,
to the Participant's estate.

                                       34
<PAGE>   35

                                  ARTICLE VIII
                                 ADMINISTRATION

                  8.1 Allocation of Responsibility Among Fiduciaries for Plan
and Trust Administration - The Fiduciaries shall have only those specified
powers, duties, responsibilities and obligations as are specifically given them
under this Plan and the Trust Agreement. In general, the Employer shall have the
sole responsibility for making the contributions provided for under Article III,
and the Company shall have the sole authority to appoint and remove the Trustee,
the Committee and any Investment Manager or Managers which it may select to
provide for managing all or any portion of the Trust, and to amend or terminate,
in whole or in part, this Plan and Trust. The Plan Administrator shall have the
sole responsibility for the administration of the Plan and the Trustee shall
have the sole responsibility for management of the assets held under the Trust
(except where an Investment Manager has been appointed and subject to the right
of Participants to direct the investment of their Accounts), all as more
specifically provided hereinafter and in the Trust Agreement. Each Fiduciary may
rely upon any direction, information or action of another Fiduciary in the
exercise of the latter's respective powers, duties, responsibilities and
obligations hereunder, as being proper under this Plan and the Trust Agreement,
and shall not be required under this Plan and the Trust Agreement to inquire
into the propriety of any such direction, information or action. It is intended
under this Plan and the Trust Agreement that each Fiduciary shall be responsible
for the proper exercise of its own powers, duties, responsibilities and
obligations under this Plan and the Trust Agreement and shall not be responsible
for any act or failure to act of another Fiduciary. No Fiduciary guarantees the
Trust Fund in any manner against investment loss or depreciation in asset value.

                  8.2 Appointment of Administrative Committee - The Plan shall
be administered by the Company, or if the Board so elects, an Administrative
Committee consisting of at least three but not more than five persons appointed
by the Board. In the event a Committee is appointed to administer the Plan, the
following rules shall apply. Any member of such Committee may be removed at any
time by action of the Board and resign at any time by giving notice in writing
to the Board of his resignation. In the event of the removal or resignation of a
member of the Committee, a new member thereof shall be designated by the Board.
All usual and reasonable expenses of the Committee may be paid in whole or in
part by the Company, and any expenses not paid by the Company shall be paid by
the Trustee out of the principal or income of the Trust Fund. Any members of the
Committee who are Employees shall not receive compensation with respect to their
service for the Committee. The President of the Company (or in the event of the
President's inability or failure to act, any Vice President) shall certify in
writing to the Trustee, as promptly as practicable after any change of the
Committee the names of the persons then serving as the Committee. The Trustee
shall be entitled to rely on the names so certified as being the authorized and
acting Committee until notified of any change by subsequent certification.

                  8.3 Claims Procedure - The Plan Administrator shall have the
exclusive discretionary power to construe and interpret the Plan and the power
to determine all questions that may arise thereunder including, but not limited
to, (i) the eligibility of individuals to participate in the Plan, including
factual determinations regarding an individual's status as an Employee, which
determinations shall be reviewed under an arbitrary and capricious standard,

                                       35
<PAGE>   36

(ii) the amount of benefits to which any Participant or Beneficiary may become
entitled hereunder, and (iii) any situation not specifically covered by the
provisions of the Plan, and the Plan Administrator's decisions on such matters
shall be final and binding on all parties. If a request for a Plan distribution
by a Participant or Beneficiary is wholly or partially denied, the Plan
Administrator, or the designated party, will provide such claimant a
comprehensive written notice setting forth:

                  (a) The specific reason or reasons for such denial;

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

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

                  (d) A description of the Plan's claim review procedure. The
review procedure is available upon written request by the claimant to the Plan
Administrator within 60 days after receipt by the claimant of written notice of
the denial of the claim and includes the right to examine pertinent documents
and submit issues and comments in writing to the Plan Administrator. The
decision on review will be made within 60 days after receipt of the request for
review unless circumstances warrant an extension of time not to exceed an
additional 60 days and shall be in writing and drafted in a manner calculated to
be understood by the claimant, and include specific reasons for the decision
with references to the specific Plan provisions on which the decision is based.

                  8.4 Records and Reports - The Plan Administrator shall
exercise such authority and responsibility as it deems appropriate in order to
comply with ERISA and governmental regulations issued thereunder relating to
records of Participants' service, Account balances and the percentage of such
Account balances which are nonforfeitable under the Plan; notifications to
Participants; annual registration with the Internal Revenue Service; annual
reports to the Department of Labor; and such other documents or reports as may
be required by ERISA. The Employer shall from time to time make available to the
Plan Administrator such information with respect to the Employees, their dates
of employment, their compensation, and other matters as may be necessary or
desirable in connection with the performance by the Plan Administrator of its
duties with respect to the Plan. The Plan Administrator shall, in turn, furnish
to the Trustee such information and such rulings and decisions as the Trustee
may require or may request in connection with its performance of its duties as
Trustee of the Trust Fund hereby created.

                  8.5 Other Plan Administrator Powers and Duties - The Plan
Administrator shall have such duties and powers as may be necessary to discharge
its duties hereunder, including, but not by way of limitation, the following:

                  (a) the discretionary power to construe and interpret the
Plan, decide all questions of eligibility and determine the amount, manner and
time of payment of any benefits

                                       36
<PAGE>   37

hereunder and any such construction, interpretation or decision shall be final,
binding, and conclusive on all persons;

                  (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 Plan
Administrator determines to be appropriate, information explaining the Plan;

                  (d) to receive from the Employer and from Participants such
information as shall be necessary for the proper administration of the Plan;

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

                  (f) to receive, review and keep on file (as it deems
convenient or proper) reports of the financial condition, and of the receipts
and disbursements, of the Trust Fund from the Trustee (or any Investment
Manager), and to make such recommendations to the Trustee and take such actions
as allowed in the Trust Agreements as it deems advisable;

                  (g) to appoint or employ individuals or other parties to
assist in the administration of the Plan and any other agents it deems
advisable, including accountants and legal and actuarial counsel;

                  (h) to designate or employ persons to carry out any of the
Plan Administrator's fiduciary duties or responsibilities under the Plan; and

                  (i) subject to the provisions of Section 6.3, to direct the
Trustee as to the voting of stock held in the Trust Fund established hereby, or
as to any other actions that may be appropriate with respect thereto (such as
participation in reorganizations, etc.); provided that in the absence of any
such direction, the Trustee shall have the right to vote such stock and take
such other actions in its sole discretion.

                  The Plan Administrator shall have no power to add to, subtract
from or modify any of the terms of the Plan, or to change or add to any benefits
provided by the Plan, or to waive or fail to apply any requirements of
eligibility for a benefit under the Plan.

                  8.6 Rules and Decisions - The Plan Administrator may adopt
such by-laws, rules and regulations as it deems necessary, desirable, or
appropriate, provided that same shall not be in consistent with or contrary to
the express terms of this agreement. All such by-laws, rules, regulations and
decisions of the Plan Administrator shall be uniformly and consistently applied
to all Participants in similar circumstances. When making a determination or
calculation, the Plan Administrator shall be entitled to rely upon information
furnished by a Participant or Beneficiary, the Employer, the legal or actuarial
counsel of the Employer, or the Trustee.

                                       37
<PAGE>   38

                  8.7 Committee Procedures - The Committee may act at a meeting
or by unanimous written consent without a meeting. The Committee shall elect one
of its members as Chairman, appoint a Secretary, who may or may not be a
Committee Member, and advise the Trustee of such actions in writing. The
Secretary shall keep a record of all meetings and forward all necessary
communications to the Employer or the Trustee. A quorum of the Committee shall
consist of not less than two-thirds (2/3) of the members thereof and a majority
vote of those present shall control all matters acted upon at a meeting of the
Committee. A dissenting Committee Member, who, within a reasonable amount of
time after he has knowledge of any action or failure to act by the majority,
registers his dissent in writing and delivers such writing to the other
Committee Members, the Employer and the Trustee, shall not be responsible for
any such action or failure to act.

                  8.8 Authorization of Benefit Payments - The Plan Administrator
shall issue directions to the Trustee concerning all benefits which are to be
paid from the Trust Fund pursuant to the provisions of the Plan.

                  8.9 Application and Forms for Benefits - The Plan
Administrator may require a Participant or Beneficiary to complete and file with
the Plan Administrator an application for a benefit an d all other forms
approved by the Plan Administrator, and to furnish all pertinent information
requested by the Plan Administrator. The Plan Administrator may rely upon all
such information so furnished it, including but not limited to, the
Participant's current mailing address. To the extent the Plan Administrator uses
electronic mechanisms to implement "paperless administration" with respect to
notices, consents, voluntary tax withholding, enrollment, contribution
elections, beneficiary designations, and rollover elections, such paperless
administration shall be implemented in accordance with regulations and other
guidance promulgated by the Internal Revenue Service and the Department of
Labor.

                  8.10 Payment for Benefit of Disabled or Incapacitated Person -
Whenever, in the Plan Administrator's opinion, a person entitled to receive any
payment of a benefit or installment thereof hereunder is under a legal
disability or is incapacitated in any way so as to be unable to mange his
financial affairs, the Plan Administrator may direct the Trustee to make
payments to such person or to his legal representative or to a relative or
friend of such person for his benefit, or the Plan Administrator may direct the
Trustee to apply the payment for the benefit of such person in such manner as
the plan Administrator considers advisable. Any payment of a benefit or
installment thereof in accordance with the provisions of this Section shall be a
complete discharge of any liability for the making of such payment under the
provisions of the Plan.

                  8.11 Notices to Trustee - All notices from the Plan
Administrator or any Investment Manager to the Trustee shall be in writing, and
the Trustee may rely thereon in carrying out its duties and responsibilities
hereunder.

                  8.12 Indemnification - The Employer shall indemnify each
member of the Committee for any liability, assessment, loss, expense or other
cost, of any kind or description whatsoever, including legal fees and expenses,
actually incurred by a member on account of any action or proceeding, actual or
threatened, which arises as a result of being a member of the

                                       38
<PAGE>   39

Committee provided such action or allegation does not arise as a result of the
member's own negligence, willful misconduct or lack of good faith.

                  8.13 Payment of Expenses - All expenses incident to the
administration, termination or protection of the Plan and Trust, including but
not limited to, actuarial, legal, accounting, and Trustee's fees ("Plan
Expenses"), shall be paid by the Trustee from the Trust Fund and, until paid,
shall constitute a first and prior claim and lien against the Trust Fund;
provided, however, that the Trustee may reimburse the Employer for any expense
paid by the Employer that would otherwise have been properly chargeable to the
Plan as a Plan Expense.

                                       39
<PAGE>   40

                                   ARTICLE IX
                              AMENDMENT OF THE PLAN

                  The Company, through resolutions adopted by the Board, shall
have the right at any time by an instrument in writing, duly executed and
acknowledged and delivered to the Trustee, to modify, alter or amend this Plan
in whole or in part, provided, however, that the duties, powers and liability of
the Trustee hereunder shall not be substantially modified without its written
consent and provided further that any benefits which have actually accrued and
become payable hereunder shall not be affected thereby. No amendment shall be
made which shall cause or authorize any part of the Trust Fund to revert or be
refunded to the Employer or to be used for or diverted to purposes other than
the exclusive and sole benefit of the Participants or their Beneficiaries (other
than such part as is required to pay taxes and expenses of administration). The
Company, through resolutions adopted by the Board, shall have the limited right
to amend this Plan at any time, retroactively or otherwise, in such respects and
to such extent as may be necessary to qualify it under existing and applicable
laws and regulations so as to permit the full deduction for tax purposes of the
Employer's contributions made hereunder, and if and to the extent necessary to
accomplish such purpose may by such amendment, to the extent permitted by ERISA
and the Code, decrease or otherwise affect the rights of Participants to
benefits which have actually accrued and become payable hereunder, any provision
herein to the contrary notwithstanding.

                  No amendment to the Plan shall reduce a Participant's Account
balance or eliminate an optional form of distribution except to the extent
permissible under ERISA and Code sections 411, 412, or any other relevant Code
section, or regulations issued under ERISA or the Code. No amendment to the Plan
shall have the effect of decreasing a Participant's Account or Vested Interest
determined without regard to such amendment as of the later of the date such
amendment is adopted or the date it becomes effective.

                                       40
<PAGE>   41

                                    ARTICLE X
             DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION OF PLAN

                  10.1 Intention to Continue Plan - The Plan herein provided for
has been established by the Employer with the bona fide intention that it shall
be continued in operation. However, the Employer, through resolutions adopted by
its Board of Directors, reserves the right at any time to discontinue
contributions or to terminate the Plan.

                  10.2 Termination or Partial Termination of Plan - Should the
Employer, through resolutions adopted by its Board of Directors, decide to
terminate or partially terminate the Plan, the accounts of all Participants
affected thereby, shall become fully vested and nonforfeitable. The Trustee
shall be notified of any termination or partial termination in writing and shall
proceed at the direction of the Plan Administrator to liquidate the assets of
the Trust Fund. Upon termination of the Plan by an Employer, the Employer shall
not thereafter make any further contributions under the Plan, and no amount
shall thereafter be payable under the Plan to or in respect of any Participants
then employed by such Employer, except as provided in this Article X or except
as amounts may become payable under the Plan as a result of such Participants
continuing their participation in the Plan as a result of being employed by
other participating Employers. To the maximum extent permitted by ERISA,
transfers, distributions or other dispositions of assets of the Plan as provided
in this Article X shall constitute a complete discharge of all liabilities under
the Plan. Promptly upon any such termination the Trustee shall (i) pay any due
and accrued expenses and liabilities of the Trust and any expenses involved in
the termination of the Plan and appropriately adjust, as may be required, the
Forfeiture Account and all Accounts of Participants for such expenses and
charges; (ii) appropriately adjust, as of the date of such termination, the
Employer Contribution Accounts of Participants who are then Employed by the
Employer to which the termination applies, (treating, for this purpose, any
Participant whose Employment had previously terminated, but who had not yet
incurred a Break in Service prior to such date, as having incurred a Break in
Service immediately prior to such date); (iii) allocate to the Employer
Contribution Accounts of Participants who are then Employed by the Employer to
which the termination applies, (treating, for this purpose, any Participant
whose Employment had previously terminated, but who had not yet incurred a Break
in Service prior to such date, as having incurred a Break in Service immediately
prior to such date) the balance of the Forfeiture Account available for
allocation in the manner set forth in Section 4.3 hereof; and (iv) adjust for
income, gains and losses in the Trust Fund to such termination date in the
manner described in Section 4.2 hereof as if such termination date was an Annual
Valuation Date. The interest of each such Participant who is the Employed by
such Employer in the adjusted amount then credited to his Employer Contribution
Account and shall be nonforfeitable as of such date. The full current value of
each adjusted Account shall be paid from the Trust Fund to the Participant for
whom such Account is maintained in such manner of distribution specified in
Section 5.6 hereof and at such time or times as the Plan Administrator shall in
its sole discretion determine.

                  In the event of a partial termination of the Plan, the
payments, adjustments and distributions described above shall also be made, but
only with respect to the portion of the Plan being terminated.

                                       41
<PAGE>   42

                  Termination or partial termination of the Plan shall not
affect the payment of benefits, in accordance with Article V hereof, from the
Trust Fund except as specifically provided herein, nor shall such funds
thereafter be divested by reason of any provision hereof.

                  10.3 Discontinuance of Contributions - In the event of a
complete discontinuance by the Employer of the contributions to be made by it
hereunder, the accounts of Participants shall be treated, and the rights of
Participants shall be, as if the Plan was terminated as contemplated under
Section 10.2 immediately above on the effective date of such discontinuance or
the date such discontinuance is deemed to have been effective, including, but
not limited to, nonforfeitability of all amounts credited to the Employer
Contribution Accounts of Participants who are then Employed by such Employer.

                  The mere suspension of a contribution for a year or years
during which the Employer earns profits shall not in itself be deemed a
discontinuance within the meaning of this Section 103, unless such suspension
shall be deemed to have ripened into a discontinuance under the applicable
provisions of the Code, any valid regulations promulgated thereunder or any
rulings properly interpreting and applying same.

                  10.4 Internal Revenue Service Approval - Notwithstanding the
foregoing, the Trustee shall not be required to make any distribution from the
Trust in the event the Plan is terminated or contributions are completely
discontinued until such time as the Internal Revenue Service shall have
determined in writing that such termination or discontinuance will not adversely
affect the prior qualification of the Plan.

                                       42
<PAGE>   43

                                   ARTICLE XI
                                  MISCELLANEOUS

                  11.1 Participants' Rights; Acquittance - Except to the extent
required by law as in effect and applicable hereto, from time to time neither
the establishment of the Trust hereby created, nor any modification thereof, nor
the creation of any fund or account, nor the payment of any benefits, shall be
construed as giving to any Participant or other person any legal or equitable
right against the Employer, or any officer or Employee thereof, or the Trustee
or the Committee except as herein provided; nor shall any Participant have any
legal right, title or interest in this Trust or any of its assets, except in the
event and to the extent that benefits any actually accrue to him hereunder, and
the same limitations shall be applicable with respect to death benefits which
may be payable to the Beneficiaries of the Participant. Under no circumstances
shall the terms of Employment of any Participant be modified or in any way
affected hereby. This Plan and the Trust Agreement shall not constitute a
contract of Employment nor afford any individual any right to be retained in the
employ of the Employer.

                  11.2 Spendthrift Clause - To the extent permitted by law,
Participants are prohibited from anticipating, encumbering, alienating or
assigning any of their rights, claims or interest in this Trust or in any of the
assets thereof, and no undertaking or attempt to do so shall in any wind bind
the Plan Administrator or the Trustee or be of any force or effect whatsoever.
Furthermore, to the extent permitted by law, no such rights claims or interest
of a Participant in this Trust or in any of the assets thereof shall in any way
be subject to such Participant's debts, contracts or engagements, nor to
attachment, garnishment, levy or other legal or equitable process. Provided,
however, anything to the contrary herein notwithstanding, to the extent
permissible under applicable law, a Participant's interest hereunder is subject
to all bona fide and existing debts owed by such Participant to the Plan and
Trust, if any, and upon such Participant or the Beneficiary of such Participant
becoming entitled to receive payment of any benefit hereunder, the Trustee, if
it shall, prior to disbursement have received certified notice or confirmation
from the Plan Administrator in such form as it may reasonably require of the
fact and amount of such indebtedness, shall pay first from the benefits so
payable the amount of such indebtedness to the Plan and Trust with the
remainder, if any, being payable as otherwise provided herein.

                  In any action or proceeding involving the Trust Fund, or any
property constituting part or all thereof, or the administration thereof, the
Employer, the Plan Administrator, and the Trustee shall be the only necessary
parties and no Employees or former Employees of the Employer or their
Beneficiaries can any other person having or claiming to have an interest in the
Trust Fund or under the Plan shall be entitled to any notice or service of
process.

                  Any final judgment which is not appealed or appealable that
may be entered in any such action or proceeding shall be binding and conclusive
on the parties hereto, the Plan Administrator and all persons having or claiming
to have any interest in the Trust Fund or under the Plan.

                                       43
<PAGE>   44

                  The foregoing provision against the assignment of a
Participant's right in the Plan shall not apply in the case of a qualified
domestic relations order which is determined by the Plan Administrator to meet
the requirements of section 414(p) of the Code.

                  11.3 Participation of Affiliated Employers and Their Employees
- With the written consent of the Company, an Affiliated Employer may become a
party to this Plan and become an adopting Employer pursuant to authorization by
its Board of Directors. In the event an adopting Employer does so become a
party, it shall contribute to the Plan, and its Employees shall be entitled to
benefits thereunder, in accordance with its terms, subject to the following
special provisions:

                  (a) The contribution of each adopting Employer shall be
determined separately by its Board of Directors under Section 3.1 hereof.

                  (b) In computing the Service of a person who is in the employ
of more than one of the adopting Employers at the same time, the period of
Service of such person with any of the adopting Employers shall be counted, and
a transfer of an Employee from the Employment of one adopting Employer to the
Employment of another shall not interrupt his Service, nor shall such a transfer
constitute a termination of Employment under the terms of this Plan.

                  (c) The contribution of each adopting Employer shall be
allocated among its Employees separately from the contributions of the others in
accordance with the provision of Section 4.3. Net increases and decreases in the
value of the Trust Fund resulting from increases or decreases in the value of
the assets of the Trust and earnings and losses shall be allocated among all
Participants under the Plan as a group in accordance with the provisions of
Section 4.2. Participants who are Employees of one or more adopting Employers
shall have separate accounts with respect to their participation as an Employee
of each such adopting Employer.

                  (d) In the event of a transfer of any Participant from the
Employment of one adopting Employer to the Employment of another, his Account
shall be considered and treated thereafter as the Account of a Participant who
is an Employee of the adopting Employer to which he is transferred.

                  In the event of such a transfer, the Participant transferred
shall share in the next annual contribution of each of such adopting Employers
on a pro rate basis, based upon the amount of wages or salary earned with each
such Employer during its fiscal year in which the transfer takes place.

                  11.4 Successor Employer - In the event of the dissolution,
merger, consolidation or reorganization of the Employer, provision may be made
by which the Plan and Trust will be continued by the successor; and, in that
event, such successor shall be substituted for the Employer under the Plan. The
substitution of the successor shall constitute an assumption of Plan liabilities
by the successor and the successor shall have all the powers, duties and
responsibilities of the Employer under the Plan.

                  11.5 Transfer of Plan Assets - In the event of any merger of
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to, another trust fund held under any other
plan of deferred compensation maintained or to be

                                       44
<PAGE>   45

established for the benefit of all or some of the Participants of this Plan, the
assets of the Trust Fund applicable to such Participants shall be transferred to
the other trust fund only if:

                  (a) Each Participant would, if either this Plan or the other
plan then terminated, receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he would
have been entitled to receive immediately before the merger, consolidation or
transfer if the Plan had then terminated;

                  (b) Resolutions of the Board of Directors of the Employer of
the affected Participants, shall authorize such transfer of assets, and, in the
case of the new or successor Employer of the affected Participants, its
resolutions shall include an assumption of liabilities with respect to such
Participant's inclusion in the new Employer's plan; and

                  (c) Such other plan and trust are qualified under sections
401(a) and 501(a) of the Code.

                  11.6 Delegation of Authority by Employer - Whenever the
Employer under the terms of this Plan is permitted or required to do or perform
any act or matter or thing it shall be done and performed by any officer
thereunto duly authorized by the Board.

                  11.7 Construction of Agreement - This Plan and the Trust
Agreement shall be construed according to the laws of the State of North
Carolina, and all provisions hereof shall be administered according to, and its
validity and enforceability shall be determined under the laws of such state,
except where pre-empted by ERISA.

                  11.8 Headings - The headings of Articles, Sections and
Subsections are for ease of reference only and shall in no wise be construed to
limit or modify the detailed provisions hereof.

                  11.9 Compliance With Distribution Method and Timing
Regulations - Notwithstanding any other provision of this Plan, if, and solely
to the extent that, any provision of the Plan becomes a material violation of
Code sections 401 or 411 as an impermissible restriction on an individual's
rights with respect to the timing or method of any alternative form of benefit,
then such Plan provision(s) shall thereafter be construed and administered in a
manner which grants to each Participant or his Beneficiary(ies), as applicable,
such additional rights, and only such additional rights, as will satisfy such
Code sections.

                  11.10 Qualification of Plan as Condition - This Plan is based
upon the condition subsequent that it shall be approved and qualified by the
Internal Revenue Service as meeting the requirements of the Federal Internal
Revenue Code and regulations issued thereunder with respect to employees' profit
sharing plans and trusts so as to permit, among other incidents to such
qualified plans, the Employer to deduct for income tax purposes the amount of
its contributions to the Plan as set forth herein, and so that such
contributions will not be taxable at the time of contribution to the
Participants as income. Therefore, if, when this Plan is submitted for
qualification and approval by the Internal Revenue Service, the Internal Revenue
Service rules that the Plan does not meet the requirements of the Internal
Revenue code for qualification for purposes specified in the preceding sentence
and the deficiencies precluding qualification may not be corrected by amendment
effective as of the Effective Date of this Plan, then

                                       45
<PAGE>   46

regardless of any other provision herein contained, this agreement shall be and
become null and void ab initio.

                                       46
<PAGE>   47

                                   ARTICLE XII
                            TOP-HEAVY PLAN PROVISIONS

                  2.1 Application - In the event that the Plan is determined to
be a Top-Heavy Plan as hereinafter defined, this Article XII shall become
effective as of the first day of the Plan Year in which the Plan is a Top-Heavy
Plan.

                  12.2 Definitions -

                  (a) Annual Compensation - Compensation as determined according
to section 414(q)(7) of the Code.

                  (b) Key Employee - During any year that the Plan is a
Top-Heavy Plan, a Participant who is a Key Employee within the meaning of
section 416 of the Code, including any Employee, former Employee or Beneficiary
of an Employee or former Employee who at any time during the Plan Year or any of
the four (4) preceding Plan Years is:

                           (i) an Officer of the Employer who Annual
         Compensation is greater than 50% of the amount in effect under section
         415(b)(1)(A) of the Code for any Plan Year, provided that Employees
         described in section 414(q)(8) of the Code shall be excluded;

                           (ii) 1 of the 10 employees having Annual Compensation
         of more than the dollar limitation is section 415(c)(1)(A) of the Code
         and owning (or considered as owning within the meaning of section 318
         of the Code) the largest interest in the Employer;

                           (iii) a one percent (1%) owner of the Employer having
         Annual Compensation from the Employer of more than $150,000; or (iv) a
         five percent (5%) owner of the Employer.

                  Ownership shall be determined according to section
4156(i)(1)(B) of the Code. For purposes of (i) above, no more than fifty (50)
Employees (or if less, the greater of three (3) or ten percent (10%) of the
Employees) shall be treated as officers. For purposes of (ii) above, if two
Employees have the same ownership interest, the Employee with the higher Annual
Compensation shall be treated as having the larger interest. An Employee who is
not a Key Employee shall be a non-Key Employee.

                  (c) Minimum Contribution - For a Plan Year, the lesser of
three percent (3%) of a Participant's compensation (within the meaning of
section 415 of the Code) or a percentage of a Participant's compensation equal
to the percentage at which contributions are made (or required to be made) under
the Plan and all other plans required to be aggregated under section 416(g)(2)
of the Code, (i.e., each plan maintained by the Employer in which a Key Employee
is a Participant and all other plans maintained by the Employer which enable the
plans in which a Key Employee is a Participant to meet the requirements of
section 401(a)(4) and section 410) for the Key Employee for whom such percentage
is highest. The percentage of a Key Employee's

                                       47
<PAGE>   48

compensation at which contributions are made shall be determined by dividing the
contributions for each such employee by so much of his compensation for the Plan
Year as does not exceed the Annual Compensation Limit then in effect.

                  (d) Top-Heavy Plan - A plan that is required is such year to
satisfy the requirements of section 416 of the Code because the aggregate of the
accounts of all Key Employees in the Plan exceeds sixty percent (60%) of the
aggregate of the accounts of all Participants in the Plan, such determination to
be made in accordance with the procedures described in section 416(g) of the
Code and the regulations thereunder as of the Annual Valuation Date immediately
preceding such Plan Year (or in the case of the first Plan Year, as of the last
day of such Plan Year) (the "determination" and "valuation" date) and shall
include distributions made in the last five years. The account balance of any
Participant who has not performed any services for the Employer in the last five
years shall be taken into account. For purposes of determining whether the Plan
is a Top-Heavy Plan, the Plan shall be aggregated with all other plans
maintained by the Employer which are required to be aggregated with the Plan in
order for the Plan to meet the requirements of sections 401(a)(4) and 410 of the
Code, and all other plans maintained by the Employer in which Key Employee is a
Participant (the "Required Aggregation Group"). In addition, the Plan may also
be aggregated with any other plans maintained by the Employer (the "Permissive
Aggregation Group"), so long as such aggregation would not prevent the
aggregated group from satisfying the requirements of Code sections 401(a)(4) and
410.

                  12.3 Allocation of Minimum Contribution - For any year in
which the Plan is a Top-Heavy Plan, the Minimum Contribution as defined in
Section 12.2(c) hereof shall be made to the account of each Participant who is a
non-Key Employee, unless the Minimum Contribution for the Participant is made
under another defined contribution plan maintained by the Employer. Such Minimum
contribution shall be made to the Employer Contribution Account of each non-Key
Employee Participant who has not separated from service on the last day of such
Plan Year without regard to such Participant's Hours of Service such Plan Year
and without regard to such Participant's Annual Compensation for such Plan Year.
Such Minimum Contribution shall be made without consideration of the Employer's
contributions under section 3111 of the Code. The Employer and Committee shall
determine under which plan a Participant shall receive the Minimum Contribution
if the Employee is a Participant in more than one plan maintained by the
Employer.

                  12.4 Vesting - If for any Plan Year or Years the Plan is a
Top-Heavy Plan, the schedule in Section 5.5 shall be replaced with the following
vesting schedule in accordance with section 416(b) of the Code:

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

                  If the Plan ceases to be a Top-Heavy Plan, the vesting
schedule in this Section 12.4 shall revert to the schedule contained in Section
5.5; provided that any portion of the

                                       48
<PAGE>   49

accrued benefit that was nonforfeitable before the Plan ceases to be a Top-Heavy
Plan shall remain nonforfeitable, and further provided that if any Participant
who has three (3) or more Years of Service at the time the Plan ceases to be a
Top-Heavy Plan shall have the right to elect during the Election Period (as
hereinafter defined) to continue to have his vested interest determined in
accordance with the vesting schedule contained in this Section 12.4.

                  For the purposes of this Section 12.4, Year of Service shall
include service prior to the Effective Date, and shall include service during
the Election Period. The Election Period shall be the period during which such
Participants may make such vesting schedule election and shall begin on the date
of the adoption of the amendment which changes the vesting schedule and shall
end on the later of:

                           (i) The date which is 60 days after the adoption of
         the amendment which changes the vesting schedule;

                           (ii) The date which is 60 days after the effective
         date of the amendment which changes the vesting schedule; or

                           (iii) The date which is 60 days after the date, such
         Participant is notified in writing of the amendment which changes the
         vesting schedule.

                  IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized corporate officers and its corporate seal to
be hereunto affixed as of the day and year first above written.

                                       49

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