Document:

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                                                                     Exhibit 4.1

                           SAFEGUARD SCIENTIFICS, INC.
                    2001 ASSOCIATES EQUITY COMPENSATION PLAN

            The purpose of the Safeguard Scientifics, Inc. 2001 Associates
Equity Compensation Plan (the "Plan") is to provide (i) designated employees of
Safeguard Scientifics, Inc. (the "Company") and its subsidiaries, (ii)
individuals to whom an offer of employment has been extended, and (iii) certain
advisors who perform services for the Company or its subsidiaries, with the
opportunity to receive grants of nonqualified stock options, stock appreciation
rights, restricted stock, performance units and other stock-based awards. No
person who is an officer (within the meaning of the rules of the New York Stock
Exchange) or a director of the Company shall be entitled to receive any awards
hereunder. The Company believes that the Plan will encourage the participants to
contribute materially to the growth of the Company, thereby benefiting the
Company's shareholders, and will align the economic interests of the
participants with those of the shareholders.

            1.    Administration

                  (a) Committee. The Plan shall be administered and interpreted
by a committee (the "Committee") appointed by the Board of Directors of the
Company. The Committee shall consist of two or more persons appointed by the
Board, all of whom may be "outside directors" as defined under section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code") and related Treasury
regulations and may be "non-employee directors" as defined under Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Except to the extent prohibited by applicable law or the applicable rules of a
stock exchange, the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members or may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked by the
Committee at any time. If the Committee does not exist, or for any other reason
determined by the Board, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee.

                  (b) Committee Authority. The Committee shall have the sole
authority to (i) determine the individuals to whom grants shall be made under
the Plan, (ii) determine the type, size and terms of the grants to be made to
each such individual, (iii) determine the time when the grants will be made and
the duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, and (iv)
deal with any other matters arising under the Plan.

                  (c) Committee Determinations. The Committee shall have full
power and authority to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations, agreements and
instruments for implementing the Plan and for the conduct of its business as it
deems necessary or advisable, in its sole discretion. The Committee's
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the
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Plan or in any awards granted hereunder. All powers of the Committee shall be
executed in its sole discretion, in the best interest of the Company, not as a
fiduciary, and in keeping with the objectives of the Plan and need not be
uniform as to similarly situated individuals.

            2.    Grants

                  (a) Generally. Awards under the Plan may consist of grants of
nonqualified stock options as described in Section 5 ("Options"), restricted
stock as described in Section 6 ("Restricted Stock"), stock appreciation rights
as described in Section 7 ("SARs"), performance units as described in Section 8
("Performance Units"), and other stock-based awards as described in Section 9
("Other Stock-Based Grants") (hereinafter collectively referred to as "Grants").
All Grants shall be subject to the terms and conditions set forth herein and to
such other terms and conditions consistent with this Plan as the Committee deems
appropriate and as are specified in writing by the Committee to the individual
in a grant instrument (the "Grant Instrument") or an amendment to the Grant
Instrument. The Committee shall approve the basic form and provisions of each
Grant Instrument. Grants under a particular Section of the Plan need not be
uniform as among the grantees.

                  (b) Stand-Alone, Additional, Tandem, and Substitute Grants.
Grants made under the Plan may, in the discretion of the Committee, be made
either alone or in addition to, in tandem with, or in substitution or exchange
for, any other Grants or any grant made under another plan of the Company, any
subsidiary or affiliate, or any business entity to be acquired by the Company or
a subsidiary or affiliate, or any other right of a Grantee to receive payment
from the Company or any subsidiary or affiliate ("Non-Plan Grants"). Grants made
in addition to or in tandem with other Grants or Non-Plan Grants may be granted
either as of the same time as or a different time from the grant of such other
Grants or Non-Plan Grants. Except as otherwise required by law, the Committee
may determine that, in making a new Grant, the value of any surrendered Grant or
Non-Plan Grant (as determined by the Committee in its sole discretion) may be
applied to reduce the exercise price of any Option, grant price of any SAR, or
purchase price of any other Grant.

                  (c) Form and Timing of Payment under Grants; Deferrals.
Subject to the terms of the Plan and any applicable Grant document, payments to
be made by the Company or a subsidiary or affiliate upon the exercise of an
Option or other Grant or settlement of a Grant may be made in such forms as the
Committee shall determine, including, without limitation, cash, Company Stock
(hereinafter defined), other Grants or other property, and may be made in a
single payment or transfer, in installments, or on a deferred basis. The
settlement of any Grant may be accelerated, and cash paid in lieu of Company
Stock in connection with such settlement, in the discretion of the Committee or
upon occurrence of one or more specified events. Installment or deferred
payments may be required by the Committee or permitted at the election of the
Grantee on terms and conditions established by the Committee. Payments may
include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of dividend equivalents, other rights or other amounts in respect of
installment or deferred payments denominated in Company Stock.
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            3.    Shares Subject to the Plan

                  (a) Shares Authorized. Subject to the adjustment specified
below, the aggregate number of shares of common stock of the Company ("Company
Stock") that may be issued or transferred under the Plan is 1,200,000 shares.
The maximum aggregate number of shares of Company Stock that shall be subject to
Grants made under the Plan to any individual during any calendar year shall be
1,000,000 shares. The shares may be authorized but unissued shares of Company
Stock or reacquired shares of Company Stock, including shares purchased by the
Company on the open market for purposes of the Plan. If and to the extent
Options or SARs granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised, or if any
shares of Restricted Stock, Performance Units or Other Stock-Based Grants are
forfeited, the shares subject to such Grants shall again be available for
purposes of the Plan.

                  (b) Adjustments. If there is any change in the number or kind
of shares of Company Stock outstanding (i) by reason of a stock dividend,
spinoff, recapitalization, stock split or combination or exchange of shares,
(ii) by reason of a merger, reorganization or consolidation in which the Company
is the surviving corporation, (iii) by reason of a reclassification or change in
par value, or (iv) by reason of any other extraordinary or unusual event
affecting the outstanding Company Stock as a class without the Company's receipt
of consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution (as may be determined from time to time
by the Committee), the maximum number of shares of Company Stock available for
Grants, the maximum number of shares of Company Stock that any individual
participating in the Plan may be granted in any year, the number of shares
covered by outstanding Grants, the kind of shares issued under the Plan, and the
price per share or the applicable market value of such Grants shall be
appropriately adjusted by the Committee to reflect any increase or decrease in
the number of, or change in the kind or value of, issued shares of Company Stock
to preclude, to the extent practicable, the enlargement or dilution of rights
and benefits under such Grants; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated by rounding any portion of a
share equal to .5 or greater up, and any portion of a share equal to less than
 .5 down, in each case to the nearest whole number. Any adjustments determined by
the Committee shall be conclusive and binding on all persons having any interest
in the Plan or in any awards granted hereunder.

            4.    Eligibility for Participation

                  (a) Eligible Persons. All employees of the Company and its
subsidiaries ("Employees") and individuals to whom an offer of employment has
been extended ("New Hire") shall be eligible to participate in the Plan;
provided however that (i) Employees shall not be deemed to include any person
who, at the time of the award under this Plan, is an officer of the Company
within the meaning of the rules of the New York Stock Exchange, and (ii) no
awards shall be made under this plan to any person who, at the time of the award
under this Plan, is a director of the Company. Advisors who perform services at
the Company's request ("Key Advisors") shall be eligible to participate in the
Plan if the Key Advisors render bona fide
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services to the Company and its subsidiaries or business ventures in which the
Company has a significant interest, such services are not in connection with the
offer or sale of securities in a capital-raising transaction, and the Key
Advisors do not directly or indirectly promote or maintain a market for the
Company's securities.

                  (b) Selection of Grantees. The Committee shall select the
Employees, New Hires, and Key Advisors to receive Grants and shall determine the
number of shares of Company Stock subject to a particular Grant in such manner
as the Committee determines. Employees, New Hires, and Key Advisors who receive
Grants under this Plan shall hereinafter be referred to as "Grantees."

            5.    Granting of Options

                  (a) Number of Shares. The Committee shall determine the number
of shares of Company Stock that will be subject to each Grant of Options to
Employees, New Hires, and Key Advisors.

                  (b)   Type of Option and Price.

                        (i) The Committee may grant Nonqualified Stock Options
that are not intended to qualify as "incentive stock options" within the meaning
of section 422 of the Code, all in accordance with the terms and conditions set
forth herein. Nonqualified Stock Options may be granted to Employees, New Hires,
and Key Advisors.

                        (ii) The purchase price (the "Exercise Price") of
Company Stock subject to an Option shall be determined by the Committee and may
be equal to, greater than, or less than the Fair Market Value (as defined below)
of a share of Company Stock on the date the Option is granted.

                        (iii) If the Company Stock is publicly traded, then,
except as otherwise determined by the Committee, the following rules regarding
the determination of Fair Market Value per share apply:

      (x) if the principal trading market for the Company Stock is a national
securities exchange or the Nasdaq National Market, the mean between the highest
and lowest quoted selling prices on the relevant date or (if there were no
trades on that date) the latest preceding date upon which a sale was reported,
or

      (y) if the Company Stock is not principally traded on such exchange or
market, the mean between the last reported "bid" and "asked" prices of Company
Stock on the relevant date, as reported on Nasdaq or, if not so reported, as
reported by the National Daily Quotation Bureau, Inc. or as reported in a
customary financial reporting service, as applicable and as the Committee
determines. If the Company Stock is not publicly traded or, if publicly traded,
is not subject to reported transactions or "bid" or "asked" quotations as set
forth above, the Fair Market Value per share shall be as determined by the
Committee.
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                  (c) Option Term. The Committee shall determine the term of
each Option. The term of any Option shall not exceed ten years from the date of
grant.

                  (d) Exercisability of Options.

                        (i) Options shall become exercisable in accordance with
such terms and conditions, consistent with the Plan, as may be determined by the
Committee and specified in the Grant Instrument or an amendment to the Grant
Instrument. The Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason.

                        (ii) Notwithstanding the foregoing, the Option may, but
need not, include a provision whereby the Grantee may elect at any time while an
Employee or Key Advisor to exercise the Option as to any part or all of the
shares subject to the Option prior to the full vesting of the Option. Any
unvested shares so purchased shall be subject to a repurchase right in favor of
the Company (which the Company shall have the right, but not the obligation, to
exercise), with the repurchase price to be equal to the original purchase price,
and any other restrictions the Committee determines to be appropriate.

                  (e)   Termination of Employment, Disability or Death.

                        (i)   Except as provided below, an Option may only be
exercised while the Grantee is employed by, or providing service to, the Company
as an Employee or Key Advisor. In the event that a Grantee ceases to be employed
by, or providing service to the Company for any reason other than Disability,
death or termination for Cause, any Option which is otherwise exercisable by the
Grantee shall terminate unless exercised within 90 days after the date on which
the Grantee ceases to be employed by, or providing service to, the Company (or
within such other period of time as may be specified by the Committee), but in
any event no later than the date of expiration of the Option term. Except as
otherwise provided by the Committee, any of the Grantee's Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or providing service to, the Company shall terminate as of such date.

                        (ii) In the event the Grantee ceases to be employed by,
or providing service to, the Company on account of a termination for Cause by
the Company, any Option held by the Grantee shall terminate as of the date the
Grantee ceases to be employed by, or providing service to, the Company. In
addition, notwithstanding any other provisions of this Section 5, if the
Committee determines that the Grantee has engaged in conduct that constitutes
Cause at any time while the Grantee is employed by, or providing service to, the
Company or after the Grantee's termination of employment or service, any Option
held by the Grantee shall immediately terminate, and the Grantee shall
automatically forfeit all shares underlying any exercised portion of an Option
for which the Company has not yet delivered the share certificates, upon refund
by the Company of the Exercise Price paid by the Grantee for such shares. Upon
any exercise of an Option, the Company may withhold delivery of share
certificates pending resolution of an inquiry that could lead to a finding
resulting in a forfeiture.
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                        (iii) In the event the Grantee ceases to be employed by,
or providing service to, the Company because the Grantee incurs a Disability,
any Option which is otherwise exercisable by the Grantee shall terminate unless
exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Company (or within such other period of
time as may be specified by the Committee), but in any event no later than the
date of expiration of the Option term. Except as otherwise provided by the
Committee, any of the Grantee's Options which are not otherwise exercisable as
of the date on which the Grantee ceases to be employed by, or providing service
to, the Company shall terminate as of such date.

                        (iv) If the Grantee dies while employed by, or providing
service to, the Company or within 90 days after the date on which the Grantee
ceases to be employed or providing service on account of a termination specified
in Section 5(e)(i) above (or within such other period of time as may be
specified by the Committee), any Option that is otherwise exercisable by the
Grantee shall terminate unless exercised within one year after the date on which
the Grantee ceases to be employed by, or providing service to, the Company (or
within such other period of time as may be specified by the Committee), but in
any event no later than the date of expiration of the Option term. Except as
otherwise provided by the Committee, any of the Grantee's Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or providing service to, the Company shall terminate as of such date.

                        (v)   For purposes of Sections 5(e), 6, 7, 8 and 9:

      (A) "Company," when used in the phrase "employed by the Company," shall
mean the Company and its parent, subsidiary corporations, and any business
venture in which the Company has a significant interest or other entities, as
determined by the Committee.

      (B) "Employed by, or providing service to, the Company" shall mean
employment or service as an Employee of Safeguard or any subsidiary or business
venture in which the Company has a significant interest, or Key Advisor (so
that, for purposes of exercising Options and SARs and satisfying conditions with
respect to Restricted Stock, Performance Units and Other Stock-Based Grants, a
Grantee shall not be considered to have terminated employment or service until
the Grantee ceases to be an Employee of Safeguard or any subsidiary or business
venture in which the Company has a significant interest, or Key Advisor), unless
the Committee determines otherwise. The Committee's determination as to a
participant's employment or other provision of services, termination of
employment or cessation of the provision of services, leave of absence, or
reemployment shall be conclusive on all persons unless determined to be
incorrect.

      (C) "Disability" shall mean a Grantee's becoming disabled within the
meaning of section 22(e)(3) of the Code.

      (D) "Cause" shall mean the determination of the Committee that any one or
more of the following events has occurred:
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      (1) the Grantee's conviction of any act which constitutes a felony under
applicable federal or state law, either in connection with the performance of
the Grantee's obligations on behalf of the Company or which affects the
Grantee's ability to perform his or her obligations as an employee, board member
or advisor of the Company or under any employment agreement, non-competition
agreement, confidentiality agreement or like agreement or covenant between the
Grantee and the Company (any such agreement or covenant being herein referred to
as an "Employment Agreement");

      (2) the Grantee's willful misconduct in connection with the performance of
his or her duties and responsibilities as an employee, board member or advisor
of the Company or under any Employment Agreement, which willful misconduct is
not cured by the Grantee within 10 days of his or her receipt of written notice
thereof from the Committee;

      (3) the Grantee's commission of an act of embezzlement, fraud or
dishonesty which results in a loss, damage or injury to the Company;

      (4) the Grantee's substantial and continuing neglect, gross negligence or
inattention in the performance of his or her duties as an employee, board member
or advisor of the Company or under any Employment Agreement which is not cured
by the Grantee within 10 days of his or her receipt of written notice thereof
from the Committee;

      (5) the Grantee's unauthorized use or disclosure or any trade secret or
confidential information of the Company which adversely affects the business of
the Company, provided that any disclosure of any trade secret or confidential
information of the Company to a third party in the ordinary course of business
who signs a confidentiality agreement shall not be deemed a breach of this
subparagraph;

      (6) the Grantee's material breach of any of the provisions of any
Employment Agreement, which material breach is not cured by the Grantee within
10 days of his or her receipt of a written notice from the Company specifying
such material breach; or

      (7) the Grantee has voluntarily terminated his or her employment or
service with the Company and breaches his or her noncompetition agreement with
the Company.

                  (f) Exercise of Options. A Grantee may exercise an Option that
has become exercisable, in whole or in part, by delivering a notice of exercise
to the Company with payment of the Exercise Price. The Grantee shall pay the
Exercise Price for an Option as specified by the Committee:

                        (i)   in cash,

                        (ii)  by delivering shares of Company Stock owned by the
Grantee for the period necessary to avoid a charge to the Company's earnings for
financial reporting purposes (including Company Stock acquired in connection
with the exercise of an
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Option, subject to such restrictions as the Committee deems appropriate) and
having a Fair Market Value on the date of exercise equal to the Exercise Price,

                        (iii) by payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board, or

                        (iv) by such other method of payment as the Committee
may approve.

                        Shares of Company Stock used to exercise an Option shall
have been held by the Grantee for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the Option. The Grantee
shall pay the Exercise Price and the amount of any withholding tax due (pursuant
to Section 11) at the time of exercise.

                  (g) Reload Options. In the event that shares of Company Stock
are used to exercise an Option, the terms of such Option may provide for a Grant
of additional Options, or the Committee may grant additional Options, to
purchase a number of shares of Company Stock equal to the number of whole shares
used to exercise the Option and the number of whole shares, if any, withheld in
payment of any taxes. Such Options shall be granted with an Exercise Price equal
to the Fair Market Value of the Company Stock at the date of grant of such
additional Options, or at such other Exercise Price as the Committee may
establish, for a term not longer than the unexpired term of the exercised option
and on such other terms as the Committee shall determine.

            6.    Restricted Stock Grants

            The Committee may issue or transfer shares of Company Stock to a
Grantee under a Grant of Restricted Stock upon such terms as the Committee deems
appropriate. The following provisions are applicable to Restricted Stock:

                  (a) General Requirements. Shares of Company Stock issued or
transferred pursuant to Restricted Stock Grants may be issued or transferred for
consideration or for no consideration, as determined by the Committee. The
Committee may establish conditions under which restrictions on shares of
Restricted Stock shall lapse over a period of time or according to such other
criteria as the Committee deems appropriate. The period of time during which the
Restricted Stock will remain subject to restrictions will be designated in the
Grant Instrument as the "Restriction Period."

                  (b) Number of Shares. The Committee shall determine the number
of shares of Company Stock to be issued or transferred pursuant to a Restricted
Stock Grant and the restrictions applicable to such shares.

                  (c) Requirement of Employment or Service. If the Grantee
ceases to be employed by, or providing services to, the Company (as defined in
Section 5(e)) during a period designated in the Grant Instrument as the
Restriction Period, or if other specified
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conditions are not met, the Restricted Stock Grant shall terminate as to all
shares covered by the Grant as to which the restrictions have not lapsed, and
those shares of Company Stock must be immediately returned to the Company. The
Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.

                  (d) Restrictions on Transfer and Legend on Stock Certificate.
During the Restriction Period, a Grantee may not sell, assign, transfer, pledge
or otherwise dispose of the shares of Restricted Stock except to a Successor
Grantee under Section 13(a). Each certificate for a share of Restricted Stock
shall contain a legend giving appropriate notice of the restrictions in the
Grant. The Grantee shall be entitled to have the legend removed from the stock
certificate covering the shares subject to restrictions when all restrictions on
such shares have lapsed. The Committee may determine that the Company will not
issue certificates for shares of Restricted Stock until all restrictions on such
shares have lapsed, or that the Company will retain possession of certificates
for shares of Restricted Stock until all restrictions on such shares have
lapsed.

                  (e) Right to Vote and to Receive Dividends. Unless the
Committee determines otherwise, during the Restriction Period, the Grantee shall
have the right to vote shares of Restricted Stock and to receive any dividends
or other distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee, including, without limitation, the achievement of
specfic performance goals.

                  (f) Lapse of Restrictions. All restrictions imposed on
Restricted Stock shall lapse upon the expiration of the applicable Restriction
Period and the satisfaction of all conditions imposed by the Committee. The
Committee may determine, as to any or all Restricted Stock Grants, that the
restrictions shall lapse without regard to any Restriction Period.

            7.    Stock Appreciation Rights

                  (a) General Requirements. The Committee may grant stock
appreciation rights ("SARs") to a Grantee separately or in tandem with any
Option (for all or a portion of the applicable Option). Tandem SARs may be
granted either at the time the Option is granted or at any time thereafter while
the Option remains outstanding. The Committee shall establish the base amount of
the SAR at the time the SAR is granted. Unless the Committee determines
otherwise, the base amount of each SAR shall be equal to the per share Exercise
Price of the related Option or, if there is no related Option, the Fair Market
Value of a share of Company Stock as of the date of Grant of the SAR.

                  (b) Tandem SARs. In the case of tandem SARs, the number of
SARs granted to a Grantee that shall be exercisable during a specified period
shall not exceed the number of shares of Company Stock that the Grantee may
purchase upon the exercise of the related Option during such period. Upon the
exercise of an Option, the SARs relating to the Company Stock purchased pursuant
to such Option shall terminate. Upon the exercise of SARs, the related Option
shall terminate to the extent of an equal number of shares of Company Stock.
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                  (c) Exercisability. A SAR shall be exercisable during the
period specified by the Committee in the Grant Instrument and shall be subject
to such vesting and other restrictions as may be specified in the Grant
Instrument. The Committee may accelerate the exercisability of any or all
outstanding SARs at any time for any reason. SARs may only be exercised while
the Grantee is employed by, or providing service to, the Company or during the
applicable period after termination of employment as described in Section 5(e).
A tandem SAR shall be exercisable only during the period when the Option to
which it is related is also exercisable. No SAR may be exercised for cash by an
officer or director of the Company or any of its subsidiaries who is subject to
Section 16 of the Exchange Act, except in accordance with Rule 16b-3 under the
Exchange Act.

                  (d) Value of SARs. When a Grantee exercises SARs, the Grantee
shall receive in settlement of such SARs an amount equal to the value of the
stock appreciation for the number of SARs exercised, payable in cash, Company
Stock or a combination thereof, as determined by the Committee. The stock
appreciation for a SAR is the amount by which the Fair Market Value of the
underlying Company Stock on the date of exercise of the SAR exceeds the base
amount of the SAR as described in Subsection (a).

                  (e) Form of Payment. The Committee shall determine whether the
appreciation in a SAR shall be paid in the form of cash, shares of Company
Stock, or a combination of the two, in such proportion as the Committee deems
appropriate. For purposes of calculating the number of shares of Company Stock
to be received, shares of Company Stock shall be valued at their Fair Market
Value on the date of exercise of the SAR. If shares of Company Stock are to be
received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.

            8.    Performance Units

                  (a) General Requirements. The Committee may grant performance
units ("Performance Units") to a Grantee. Each Performance Unit shall represent
the right of the Grantee to receive an amount based on the value of the
Performance Unit, if performance goals established by the Committee are met. A
Performance Unit shall be based on the Fair Market Value of a share of Company
Stock or on such other measurement base as the Committee deems appropriate. The
Committee shall determine the number of Performance Units to be granted and the
requirements applicable to such Units.

                  (b) Performance Period and Performance Goals. When Performance
Units are granted, the Committee shall establish the performance period during
which performance shall be measured (the "Performance Period"), performance
goals applicable to the Units ("Performance Goals") and such other conditions of
the Grant as the Committee deems appropriate. Performance Goals may relate to
the financial performance of the Company or its operating units, the performance
of Company Stock, individual performance, or such other criteria as the
Committee deems appropriate.
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                  (c) Payment with respect to Performance Units. At the end of
each Performance Period, the Committee shall determine to what extent the
Performance Goals and other conditions of the Performance Units are met and the
amount, if any, to be paid with respect to the Performance Units. Payments with
respect to Performance Units shall be made in cash, in Company Stock, or in a
combination of the two, as determined by the Committee.

                  (d) Requirement of Employment or Service. If the Grantee
ceases to be employed by, or providing service to, the Company (as defined in
Section 5(e)) during a Performance Period, or if other conditions established by
the Committee are not met, the Grantee's Performance Units shall be forfeited.
The Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.

            9.    Other Stock-Based Grants

                  (a) General Requirements. The Committee may, subject to
limitations under applicable law, grant to a Grantee such other Grants that may
be denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Company Stock or factors that may influence
the value of Company Stock, including, without limitation, convertible or
exchangeable debt securities, other rights convertible or exchangeable into
Company Stock, purchase rights for Company Stock, Grants with value and payment
contingent upon performance of the Company or business units thereof or any
other factors designated by the Committee, and Grants valued by reference to the
book value of Company Stock or the value of securities of or the performance of
specified subsidiaries or affiliates or other business units. The Committee
shall determine the terms and conditions of such Grants. Company Stock delivered
pursuant to a Grant in the nature of a purchase right granted under this Section
9 shall be purchased for such consideration and paid for at such times, by such
methods and in such forms, including, without limitation, cash, Company Stock,
other Grants, notes, or other property, as the Committee shall determine. Cash
grants, as an element of or supplement to any other Grant under the Plan, may
also be made pursuant to this Section 9.

                  (b) Requirement of Employment. If with respect to any Other
Stock-Based Grant, the Grantee ceases to be employed by the Company (as defined
in Section 5(e)) before all conditions of vesting or exercise have been met, or
if other conditions established by the Committee are not met, the Grantee's
Other Stock-Based Grant shall be forfeited. The Committee may, however, provide
for complete or partial exceptions to this requirement as it deems appropriate.

            10.   Qualified Performance-Based Compensation.

                  (a) Designation as Qualified Performance-Based Compensation.
The Committee may determine that Performance Units, Restricted Stock or Other
Stock-Based Grants granted to an Employee shall be considered "qualified
performance-based compensation" under section 162(m) of the Code. The provisions
of this Section 10 shall apply to Grants of Performance Units, Restricted Stock
and Other Stock-Based Grants that are to be considered "qualified
performance-based compensation" under section 162(m) of the Code.
<PAGE>   12
                  (b) Performance Goals. When Performance Units, Restricted
Stock or Other Stock-Based Grants that are to be considered "qualified
performance-based compensation" are granted, the Committee shall establish in
writing (i) the objective performance goals that must be met in order for
restrictions on the Restricted Stock to lapse or amounts to be paid under the
Performance Units, (ii) the Performance Period during which the performance
goals must be met, (iii) the threshold, target and maximum amounts that may be
paid if the performance goals are met, and (iv) any other conditions, including
without limitation provisions relating to death, disability, other termination
of employment or Reorganization or Change of Control, that the Committee deems
appropriate and consistent with the Plan and section 162(m) of the Code. The
performance goals may relate to the Employee's business unit or the performance
of the Company and its subsidiaries as a whole, or any combination of the
foregoing. The Committee shall use objectively determinable performance goals
based on one or more of the following criteria: stock price, earnings per share,
net earnings, operating earnings, return on assets, shareholder return, return
on equity, growth in assets, unit volume, sales, market share, or strategic
business criteria consisting of one or more objectives based on meeting specific
revenue goals, market penetration goals, geographic business expansion goals,
cost targets or goals relating to acquisitions or divestitures or capital
raising activities (including without limitation rights offerings and share
subscription programs) for the Company (as defined in Section 5(e)(v)(A)
hereof).

                  (c) Establishment of Goals. The Committee shall establish the
performance goals in writing either before the beginning of the Performance
Period or during a period ending no later than the earlier of (i) 90 days after
the beginning of the Performance Period or (ii) the date on which 25% of the
Performance Period has been completed, or such other date as may be required or
permitted under applicable regulations under section 162(m) of the Code. The
performance goals shall satisfy the requirements for "qualified
performance-based compensation," including the requirement that the achievement
of the goals be substantially uncertain at the time they are established and
that the goals be established in such a way that a third party with knowledge of
the relevant facts could determine whether and to what extent the performance
goals have been met. The Committee shall not have discretion to increase the
amount of compensation that is payable upon achievement of the designated
performance goals; however, subject to any restrictions in section 162(m) of the
Code, the Committee may reduce the amount of compensation that is payable upon
achievement of the designated performance goals.

                  (d) Maximum Payment. If Restricted Stock, or Performance Units
or Other Stock-Based Grants measured with respect to the fair market value of
the Company Stock, are granted, not more than 1,000,000 shares may be granted to
any Grantee for any Performance Period. If Performance Units are measured with
respect to other criteria, the maximum amount that may be paid to a Grantee with
respect to a Performance Period is $1,000,000.

                  (e) Announcement of Grants. The Committee shall certify and
announce the results for each Performance Period to all Grantees immediately
following the announcement of the Company's financial results for the
Performance Period. If and to the extent
<PAGE>   13
that the Committee does not certify that the performance goals have been met,
the grants of Restricted Stock, Performance Units or Other Stock-Based Grants
for the Performance Period shall be forfeited.

            11.   Withholding of Taxes

                  (a) Required Withholding. All Grants under the Plan shall be
subject to applicable federal (including FICA), state and local tax withholding
requirements. The Company shall have the right to deduct from all Grants paid in
cash, or from other wages paid to the Grantee, any federal, state or local taxes
required by law to be withheld with respect to such Grants. In the case of
Options and other Grants paid in Company Stock, the Company may require the
Grantee or other person receiving such shares to pay to the Company the amount
of any such taxes that the Company is required to withhold with respect to such
Grants, or the Company may deduct from other wages paid by the Company the
amount of any withholding taxes due with respect to such Grants.

                  (b) Election to Withhold Shares. If the Committee so permits,
a Grantee may elect to satisfy the Company's income tax withholding obligation
with respect to an Option, SAR, Restricted Stock, Performance Units or Other
Stock-Based Grant paid in Company Stock by having shares withheld up to an
amount that does not exceed the Grantee's minimum applicable withholding tax
rate for federal (including FICA), state and local tax liabilities. The election
must be in a form and manner prescribed by the Committee and shall be subject to
the prior approval of the Committee.

            12.   Loan Provisions.

            With the consent of the Committee, and subject to any limitations
imposed by applicable law and other obligations binding upon the Company, the
Company may make, guarantee or arrange for a loan or loans to a Grantee with
respect to the exercise of any Option or other payment in connection with any
Grant, including the payment by a Grantee of any or all federal, state or local
taxes due in connection with any Grant. Subject to such limitations, the
Committee shall have full authority to decide whether to make a loan or loans
hereunder and to determine the amount, terms and provisions of any such loan or
loans.

            13.   Transferability of Grants

                  (a) Nontransferability of Grants. Except as provided below or
as provided by the terms of an Other Stock-Based Grant, only the Grantee may
exercise rights under a Grant during the Grantee's lifetime. A Grantee may not
transfer those rights except by will or by the laws of descent and distribution
or if permitted in any specific case by the Committee, pursuant to a domestic
relations order (as defined under the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the regulations thereunder). When a
Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee ("Successor Grantee") may exercise such rights. A
Successor Grantee must furnish proof
<PAGE>   14
satisfactory to the Company of his or her right to receive the Grant under the
Grantee's will or under the applicable laws of descent and distribution.

                  (b) Transfer of Nonqualified Stock Options. Notwithstanding
the foregoing, the Committee may provide, in a Grant Instrument or other written
agreement, that a Grantee may transfer Grants to family members or other persons
or entities, consistent with applicable securities laws, according to such terms
as the Committee may determine; provided that the Grantee receives no
consideration for the transfer of such Grants and the transferred Grant shall
continue to be subject to the same terms and conditions as were applicable to
the Grant immediately before the transfer.

            14.   Reorganization or Change of Control of the Company.

                  (a) Reorganization. As used herein, a "Reorganization" shall
be deemed to have occurred if the shareholders of the Company approve (or, if
shareholder approval is not required, the Board approves) an agreement providing
for (i) the merger or consolidation of the Company with another corporation
where the shareholders of the Company, immediately prior to the merger or
consolidation, will not beneficially own, immediately after the merger or
consolidation, shares entitling such shareholders to more than 50% of all votes
to which all shareholders of the surviving corporation would be entitled in the
election of directors (without consideration of the rights of any class of stock
to elect directors by a separate class vote), (ii) the sale or other disposition
of all or substantially all of the assets of the Company, or (iii) a liquidation
or dissolution of the Company.

                  (b) As used herein, a "Change of Control" shall be deemed to
have occurred if

                        (i) Any "person" (as such term is used in sections 13(d)
and 14(d) of the Exchange Act) becomes a "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing a majority of the voting power of the then outstanding
securities of the Company except where the acquisition is approved by the Board;
or

                        (ii) Any person has commenced a tender offer or exchange
offer for a majority of the voting power of the then outstanding shares of the
Company.

                  (c) Assumption of Grants. Upon a Reorganization or Change of
Control where the Company is not the surviving corporation (or survives only as
a subsidiary of another corporation), unless the Committee determines otherwise,
all outstanding Options and SARs that are not exercised shall be assumed by, or
replaced with comparable options or rights by, the surviving corporation (or a
parent of the surviving corporation), and other outstanding Grants shall be
converted to similar grants of the surviving corporation or a parent of the
surviving corporation).
<PAGE>   15
                  (d) Other Alternatives. Notwithstanding the foregoing, in the
event of a Reorganization or Change of Control, the Committee may take one or
both of the following actions: the Committee may (i) require that Grantees
surrender their outstanding Options and SARs in exchange for a payment by the
Company, in cash or Company Stock as determined by the Committee, in an amount
equal to the amount by which the then Fair Market Value of the shares of Company
Stock subject to the Grantee's unexercised Options and SARs exceeds the Exercise
Price of the Options or the base amount of the SARs, as applicable, or (ii)
after giving Grantees an opportunity to exercise their outstanding Options and
SARs or otherwise realize the value of all of their other Grants, terminate any
or all unexercised Options, SARs and Grants at such time as the Committee deems
appropriate. Such surrender or termination shall take place as of the date of
the Reorganization or Change of Control or such other date as the Committee may
specify. The Committee shall have no obligation to take any of the foregoing
actions and, in the absence of any such actions, outstanding Grants shall
continue in effect according to their terms (subject to any assumption pursuant
to Subsection (b)).

                  (e) Limitations. Notwithstanding anything in the Plan to the
contrary, in the event of a Reorganization or Change of Control, the Committee
shall not have the right to take any actions described in the Plan (including
without limitation actions described in Subsection (d) above) that would make
the Reorganization or Change of Control ineligible for pooling of interests
accounting treatment or that would make the Reorganization or Change of Control
ineligible for desired tax treatment if, in the absence of such right, the
Reorganization or Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Reorganization or
Change of Control. The Committee shall have the right, however, to provide in
any Grant Instrument or other written agreement with the Grantee that the terms
of the Grant, including without limitation, any vesting provision, may change
upon the occurrence of a Change of Control or Reorganization.

            15.   Requirements for Issuance or Transfer of Shares

                  (a) Shareholder's Agreement. The Committee may require that a
Grantee execute a shareholder's agreement, with such terms as the Committee
deems appropriate, with respect to any Company Stock distributed pursuant to
this Plan.

                  (b) Limitations on Issuance or Transfer of Shares. No Company
Stock shall be issued or transferred in connection with any Grant hereunder
unless and until all legal requirements applicable to the issuance or transfer
of such Company Stock have been complied with to the satisfaction of the
Committee. The Committee shall have the right to condition any Grant made to any
Grantee hereunder on such Grantee's undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be
<PAGE>   16
required by applicable laws, regulations and interpretations, including any
requirement that a legend be placed thereon.

            16.   Amendment and Termination of the Plan

                  (a) Amendment. The Board or the Committee may amend or
terminate the Plan at any time.

                  (b) Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the shareholders.

                  (c) Termination and Amendment of Outstanding Grants. A
termination or amendment of the Plan that occurs after a Grant is made shall not
materially impair the rights of a Grantee unless the Grantee consents. The
termination of the Plan shall not impair the power and authority of the
Committee with respect to an outstanding Grant. Whether or not the Plan has
terminated, an outstanding Grant may be terminated or amended in accordance with
the Plan or may be amended by agreement of the Company and the Grantee
consistent with the Plan.

                  (d) Governing Document. The Plan shall be the controlling
document. No other statements, representations, explanatory materials or
examples, oral or written, may amend the Plan in any manner. The Plan shall be
binding upon and enforceable against the Company and its successors and assigns.

            17.   Funding of the Plan

            This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants. Notwithstanding the foregoing, the Committee may authorize the creation
of trusts and deposit therein cash, Company Stock, other Grants or other
property, or make other arrangements to meet the Company's obligations under the
Plan. Such trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Committee otherwise determines with the consent of
each affected Grantee.

            18.   Rights of Grantees

            Nothing in this Plan shall entitle any Grantee or other person to
any claim or right to be granted a Grant under this Plan. Neither this Plan nor
any action taken hereunder shall be construed as giving any individual any
rights to be retained by or in the employ of the Company or any other employment
rights.

            19.   No Fractional Shares
<PAGE>   17
            No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Grant. The Committee shall determine whether cash,
other awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.

            20.   Headings

      Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.

            21.   Effective Date of the Plan

            The Plan shall be effective on February 21, 2001.

            22.   Miscellaneous

                  (a) Grants in Connection with Corporate Transactions and
Otherwise. Nothing contained in this Plan shall be construed to (i) limit the
right of the Committee to make Grants under this Plan in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association, including Grants to
employees thereof who become Employees of the Company, or for other proper
corporate purposes, or (ii) limit the right of the Company to grant stock
options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may make a Grant to an employee of another corporation
who becomes an Employee by reason of a corporate merger, consolidation,
acquisition of stock or property, reorganization or liquidation involving the
Company or any of its subsidiaries in substitution for a stock option or
restricted stock grant made by such corporation. The terms and conditions of the
substitute grants may vary from the terms and conditions required by the Plan
and from those of the substituted stock incentives. The Committee shall
prescribe the provisions of the substitute grants.

                  (b) Compliance with Law. The Plan, the exercise of Options and
SARs and the obligations of the Company to issue or transfer shares of Company
Stock under Grants shall be subject to all applicable laws and to approvals by
any governmental or regulatory agency as may be required. With respect to
persons subject to section 16 of the Exchange Act, it is the intent of the
Company that the Plan and all transactions under the Plan comply with all
applicable provisions of Rule 16b-3 or its successors under the Exchange Act.
The Committee may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation. The
Committee may also adopt rules regarding the withholding of taxes on payments to
Grantees. The Committee may, in its sole discretion, agree to limit its
authority under this Section.

                  (c) Governing Law. The validity, construction, interpretation
and effect of the Plan and Grant Instruments issued under the Plan shall
exclusively be governed by and determined in accordance with the law of the
Commonwealth of Pennsylvania.<PAGE>   1

                                   EXHIBIT 4.3

        THE BON-TON STORES, INC.  PROFIT SHARING/RETIREMENT SAVINGS PLAN

                  (Amended and Restated Effective July 1, 1994)
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                               Page
-------                                                                                               ----
<S>                                                                                                   <C>
1.         DEFINITIONS ............................................................................      2
           (a)      Accrued Benefit ...............................................................      2
           (b)      Administrative Committee or Committee .........................................      2
           (c)      Administrator or Plan Administrator ...........................................      2
           (d)      Annual Additions ..............................................................      2
           (e)      Applicable Family Aggregation Rules ...........................................      2
           (f)      Board of Directors ............................................................      4
           (g)      Break in Service ..............................................................      4
           (h)      Code ..........................................................................      4
           (i)      Company .......................................................................      4
           (j)      Company Contribution Account ..................................................      4
           (k)      Company Stock .................................................................      4
           (l)      Compensation ..................................................................      4
           (m)      Direct Rollover ...............................................................      8
           (n)      Disability ....................................................................      8
           (o)      Distributee ...................................................................      9
           (p)      Eligible Retirement Plan ......................................................      9
           (q)      Eligible Rollover Distribution ................................................      9
           (r)      Early Retirement Date .........................................................     10
           (s)      Employee ......................................................................     10
           (t)      Entry Date ....................................................................     10
           (u)      ERISA .........................................................................     10
           (v)      Fiduciary .....................................................................     10
           (w)      Fund ..........................................................................     11
           (x)      Hour of Service ...............................................................     11
           (y)      Investment Category ...........................................................     14
           (z)      Investment Manager ............................................................     14
           (aa)     Limitation Year ...............................................................     15
           (bb)     Member ........................................................................     15
           (cc)     Normal Retirement Date ........................................................     15
           (dd)     Participating Company..........................................................     15
           (ee)     Plan ..........................................................................     15
           (ff)     Plan Year .....................................................................     16
           (gg)     Profit Sharing Contributions ..................................................     16
           (hh)     Profit Sharing Plan ...........................................................     16
           (ii)     Related Entity ................................................................     16
           (jj)     Restatement Effective Date ....................................................     17
           (kk)     Retirement Savings Plan .......................................................     17
           (ll)     Rollover Contribution Account .................................................     17
           (mm)     Salary Reduction Account ......................................................     17
           (nn)     Trust Agreement ...............................................................     18
           (oo)     Trustee .......................................................................     18
           (pp)     Valuation Date ................................................................     18
           (qq)     Voluntary Contribution Account ................................................     18
           (rr)     Year of Service ...............................................................     18
</TABLE>

                                       -i-
<PAGE>   3
<TABLE>
<CAPTION>
Section                                                                                               Page
-------                                                                                               ----
<S>                                                                                                   <C>
2          ADMINISTRATION OF THE PLAN .............................................................     18
           (a)      ERISA Reporting and Disclosure by
                    Administrator .................................................................     18
           (b)      Administrative Committee ......................................................     19
           (c)      Multiple Capacities ...........................................................     19
           (d)      Committee Duties and Powers ...................................................     19
           (e)      Allocation of Fiduciary Responsibility ........................................     20
           (f)      Claims ........................................................................     22
           (g)      Fiduciary Compensation ........................................................     23
           (h)      Plan Expenses .................................................................     23
           (i)      Fiduciary Insurance ...........................................................     24
           (j)      Indemnification ...............................................................     24

3          PARTICIPATION IN THE PLAN ..............................................................     24
           (a)      Initial Eligibility ...........................................................     24
           (b)      Measuring Service .............................................................     25
           (c)      Commencement of Participation .................................................     26
           (d)      Termination and Requalification ...............................................     26
           (e)      Termination of Membership .....................................................     26

4          MEMBER AND PARTICIPATING COMPANY MATCHING
           CONTRIBUTIONS ..........................................................................     26
           (a)      Company Contributions .........................................................     26
           (b)      Deduction Limitation ..........................................................     27
           (c)      Allocation of Company Contributions and
                    Forfeitures ...................................................................     27
           (d)      Eligibility for Allocation ....................................................     28
           (e)      Forfeitures ...................................................................     29
           (f)      Salary Reduction Contributions ................................................     29
           (g)      Salary Reduction Contribution Limitations .....................................     30
           (h)      Salary Reduction Account ......................................................     35
           (i)      Compliance with Salary Reduction
                    Discrimination Tests ..........................................................     35
           (j)      Participating Company Matching
                    Contributions .................................................................     35
           (k)      Forfeitures ...................................................................     37
           (l)      Company Contribution Account ..................................................     37
           (m)      Non-Deductible Member Contributions ...........................................     37
           (n)      Compliance with Participating Company
                    Matching and Non-Deductible Member
                    Contributions Discrimination Tests ............................................     39
           (o)      Rollovers .....................................................................     39
           (p)      Payroll Taxes .................................................................     40

5          MAXIMUM CONTRIBUTIONS AND BENEFITS .....................................................     40
           (a)      Defined Contribution Limitation ...............................................     40
           (b)      Combined Limitation ...........................................................     41
</TABLE>

                                      -ii-
<PAGE>   4
<TABLE>
<CAPTION>
Section                                                                                               Page
-------                                                                                               ----
<S>                                                                                                   <C>
           (c)      Combined Limitation Computation ...............................................     42

6          ADMINISTRATION OF FUNDS ................................................................     44
           (a)      Asset Control .................................................................     44
           (b)      Member Elections ..............................................................     44
           (c)      No Member Election ............................................................     45
           (d)      Facilitation ..................................................................     45
           (e)      Valuations ....................................................................     46
           (f)      Allocation of Gain or Loss ....................................................     46
           (g)      Provisions Optional ...........................................................     47
           (h)      Bookkeeping ...................................................................     47
           (i)      Company Stock .................................................................     47
           (j)      Special Member Election .......................................................     49
           (k)      Adoption of Rules .............................................................     50

7          BENEFICIARIES AND DEATH BENEFITS .......................................................     50
           (a)      Designation of Beneficiary ....................................................     50
           (b)      Beneficiary Priority List .....................................................     51
           (c)      Explanation of Benefit ........................................................     52

8          BENEFITS FOR MEMBERS ...................................................................     52
           (a)      Retirement Benefit ............................................................     52
           (b)      Death Benefit .................................................................     53
           (c)      Disability Benefit ............................................................     54
           (d)      Termination of Employment Benefit .............................................     54
           (e)      Time of Forfeiture ............................................................     55
           (f)      Restoration of Forfeiture .....................................................     56
           (g)      Calculation of Accrued Benefit Attributable
                    to a Member's Shares of Company Stock .........................................     56
           (h)      Benefits Attributable to Profit Sharing
                    Contributions .................................................................     57

9          DISTRIBUTION OF BENEFITS ...............................................................     62
           (a)      Commencement ..................................................................     62
           (b)      Benefit Forms .................................................................     64
           (c)      Installments ..................................................................     67
           (d)      Annuity Purchases .............................................................     67
           (e)      Required Annuity ..............................................................     67
           (f)      Lump Sum Distributions ........................................................     69
           (g)      Withholding ...................................................................     69
           (h)      Compliance with Code Requirements .............................................     69
           (i)      Special Provisions Regarding Distributions ....................................     70
           (j)      Distribution of Company Stock in Kind .........................................     71
           (k)      Eligible Rollover Distributions ...............................................     71

10         IN-SERVICE DISTRIBUTIONS ...............................................................     71
           (a)      Age 59-1/2 ....................................................................     71
</TABLE>

                                      -iii-
<PAGE>   5
<TABLE>
<CAPTION>
Section                                                                                               Page
-------                                                                                               ----
<S>                                                                                                   <C>
           (b)      Hardship ......................................................................     72
           (c)      Spousal Consent ...............................................................     74
           (e)      Accounting ....................................................................     74
           (f)      Emergency Distribution of Benefit
                    Attributable to Profit Sharing
                    Contributions .................................................................     74
           (g)      In-Service Distributions of Accrued
                    Benefit Attributable to Profit Sharing
                    Contributions for Part-Time Members ...........................................     75
           (h)      Other Provisions Pertaining to In-Service
                    Distributions Attributable to Profit Sharing
                    Contributions .................................................................     76

11         TITLE TO ASSETS ........................................................................     77

12         AMENDMENT AND TERMINATION ..............................................................     78
           (a)      Amendment .....................................................................     78
           (b)      Termination ...................................................................     78
           (c)      Conduct on Termination ........................................................     78

13         LIMITATION OF RIGHTS ...................................................................     79
           (a)      Alienation ....................................................................     79
           (b)      Qualified Domestic Relations Order
                    Exception .....................................................................     80
           (c)      Disclaimer of Rights ..........................................................     80

14         MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN
           ASSETS .................................................................................     81

15         PARTICIPATION BY RELATED ENTITIES ......................................................     81
           (a)      Commencement ..................................................................     81
           (b)      Termination ...................................................................     82
           (c)      Single Plan ...................................................................     82
           (d)      Delegation of Authority .......................................................     82

16         TOP-HEAVY REQUIREMENTS .................................................................     82
           (a)      General Rule ..................................................................     82
           (b)      Calculation of Top-Heavy Status ...............................................     82
           (c)      Definitions ...................................................................     83
           (d)      Combined Benefit Limitation ...................................................     87
           (e)      Vesting .......................................................................     87
           (f)      Minimum Contribution ..........................................................     88

17         MISCELLANEOUS ..........................................................................     89
           (a)      Incapacity ....................................................................     89
           (b)      Reversions ....................................................................     89
           (c)      Pronouns ......................................................................     90
</TABLE>

                                      -iv-
<PAGE>   6
<TABLE>
<CAPTION>
Section                                                                                               Page
-------                                                                                               ----
<S>                                                                                                   <C>
           (d)      Interpretation ................................................................     90
           (e)      Employee Data .................................................................     91
           (f)      Law Governing .................................................................     91

18         SPECIAL PROVISIONS REGARDING COMPANY STOCK .............................................     91
           (a)      Applicability .................................................................     91
           (b)      Instructions to Trustee .......................................................     91
           (c)      Trustee Action on Member Instructions .........................................     92
           (d)      Action With Respect to Participants Not
                    Instructing the Trustee or Not Issuing Valid
                    Instructions ..................................................................     92

                             APPENDIX A

4.  MEMBER AND PARTICIPATING COMPANY MATCHING
    CONTRIBUTIONS .................................................................................     94

           (i)      Compliance with Salary Reduction
                    Discrimination Tests ..........................................................     94
           (n)      Compliance with Participating Company
                    Matching and Non-Deductible Member
                    Contributions Discrimination Tests ............................................     99
</TABLE>

                                       -v-
<PAGE>   7
         THE BON-TON STORES, INC. PROFIT SHARING/RETIREMENT SAVINGS PLAN

                  (Amended and Restated Effective July 1, 1994)

         S. GRUMBACHER & SON, a Pennsylvania corporation (the "Company"),
established the S. Grumbacher & Son Retirement Savings Plan effective August 1,
1986 to provide benefits to its eligible Employees (as defined in the plan) and
the eligible Employees of its subsidiaries which adopted the plan. The plan was
amended from time to time, and was completely restated and redesignated as The
Bon-Ton Stores, Inc. Retirement Savings Plan, effective January 1, 1989. The
plan was further amended by Amendments No. 1 and No. 2 thereto, and amended and
restated generally effective January 1, 1993.

         The Company has determined that it is desirable to combine The Bon-Ton
Stores, Inc. Retirement Savings Plan (the "Retirement Savings Plan") and The
Bon-Ton Stores, Inc. Profit Sharing Retirement Plan (the "Profit Sharing Plan")
into a single plan, and does hereby redesignate such merged plan as the The
Bon-Ton Stores, Inc. Profit Sharing/Retirement Savings Plan (the "Plan") and
does further hereby amend and restate the Plan generally effective July 1, 1994.
<PAGE>   8
          1.      DEFINITIONS

                  (a) "Accrued Benefit" shall mean on any date of determination
the value of a Member's share of the Fund.

                  (b) "Administrative Committee" or "Committee" shall mean the
individual or group of individuals designated pursuant to subsection 2(b) to
control and manage the operation and administration of the Plan to the extent
set forth herein.

                  (c) "Administrator" or "Plan Administrator" shall mean a plan
administrator within the meaning of ERISA. The Company shall be the
"Administrator".

                  (d) "Annual Additions" shall mean the sum for any Limitation
Year of (i) employer contributions, (ii) employee contributions, (iii)
forfeitures and (iv) amounts described in sections 415(l)(1) and 419A(d)(2) of
the Code, which are allocated to the account of a Member under the terms of a
plan subject to section 415 of the Code. "Annual Additions" shall include excess
contributions as defined in section 401(k)(8)(B) of the Code, excess aggregate
contributions as defined in section 401(m)(6)(B) of the Code and excess
deferrals as described in section 402(g) of the Code, regardless of whether such
amounts are distributed or forfeited. "Annual Additions" shall not include
contributions made under subsection 4(o).

                  (e) "Applicable Family Aggregation Rules" shall mean the
following rules: For purposes of determining the "actual deferral percentage" or
"actual contribution percentage" of a

                                      - 2 -
<PAGE>   9
Member who is a "highly compensated employee", any amounts contributed to the
Fund on behalf of such Member pursuant to subsection 4(f), subsections 4(j) and
4(m) and "compensation" of such Member shall include any amounts contributed to
the Fund on behalf of "family members" pursuant to such subsection and
"compensation" of "family members". Further, in the case of a "highly
compensated employee" who is either a 5% owner or one of the ten most highly
compensated employees, the "actual deferral percentage" or "actual contribution
percentage" for the family group (which is treated as one highly compensated
employee) is the greater of (A) the "actual deferral percentage" or "actual
contribution percentage" (as the case may be) determined by combining the
contributions and "compensation" of all eligible family members who are "highly
compensated employees" without regard to family aggregation, and (B) the "actual
deferral percentage" or "actual contribution percentage" (as the case may be)
determined by combining the contributions and "compensation" of all eligible
"family members". Except as provided in the preceding sentence, "family members"
with respect to "highly compensated employees" shall be disregarded as separate
employees in determining the "actual average deferral percentage" or "actual
contribution percentage" both for Members who are not "highly compensated
employees" and for Members who are "highly compensated employees". For the
purpose of this subsection, a "family member" shall mean the spouse and the
lineal ascendants

                                      - 3 -
<PAGE>   10
and descendants (and spouses of such ascendants and descendants) of any Employee
or former Employee.

                  (f) "Board of Directors" shall mean the Board of Directors of
the Company.

                  (g) "Break in Service" shall mean a consecutive twelve-month
computation period specified in the Plan in which an Employee is credited with
not more than 500 Hours of Service.

                  (h) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the same as may be amended from time to time.

                  (i) "Company" shall mean the Bon-Ton Stores, Inc., a
Pennsylvania corporation, formerly known as S.Grumbacher & Son.

                  (j) "Company Contribution Account" shall mean the portion of
the Member's Accrued Benefit derived from Participating Company matching
contributions allocated under subsection 4(j) and forfeitures allocated under
subsection 4(k) hereof, adjusted as provided in subsection 4(l).

                  (k) "Company Stock" shall mean The Bon-Ton Stores, Inc. Common
Stock.

                  (l) "Compensation" in general shall mean the cash remuneration
for personal services payable to an Employee by a Participating Company from and
after the date he becomes eligible to participate in this Plan. "Compensation"
shall include amounts which an Employee elects to have withheld from his cash
remuneration for services to provide benefits under this Plan and

                                      - 4 -
<PAGE>   11
any plan which meets the requirements of section 125 of the Code. "Compensation"
shall not include expense reimbursements, the value of fringe benefits or
perquisites, or similar items.

                           For purposes of the salary reduction contribution
limitations contained in section 4(g), "compensation" shall mean compensation
within the meaning of section 415(c)(3) of the Code, including elective or
salary reduction contributions to a cafeteria plan, cash or deferred arrangement
or tax-sheltered annuity.

                           For purposes of compliance with the salary
reduction discrimination test set forth in section 4(i), and compliance with
participating company matching and non-deductible member contributions
discrimination tests set forth in section 4(n), "compensation" means
compensation for service performed for a Participating Company which is
currently includable in gross income or which is excludable from gross income
pursuant to an election under a qualified cash or deferred arrangement under
section 401(k) of the Code or a cafeteria plan under section 125 of the Code.

                           For purposes of the Code limitations set forth in
section 5, "compensation" for a Limitation Year shall mean the sum of (i)
amounts paid by a Participating Company or a Related Entity to the Member with
respect to personal services rendered by the Member, (ii) earned income of a
self-employed person with respect to a Participating Company or a Related
Entity, (iii)

                                      - 5 -
<PAGE>   12
amounts received by the Member (A) through accident or health insurance or under
an accident or health plan maintained or contributed to by a Participating
Company or a Related Entity and which are includable in the gross income of the
Member, (B) through a plan contributed to by a Participating Company or a
Related Entity providing payments in lieu of wages on account of a Member's
permanent and total disability, or (C) as a moving expense allowance paid by a
Participating Company or a Related Entity and which are not deductible by the
Member for federal income tax purposes, (iv) the value of a non-statutory stock
option granted by a Participating Company or a Related Entity to the Member to
the extent included in the Member's gross income for the taxable year in which
it was granted, and (v) the value of property transferred by a Participating
Company or a Related Entity to the Member which is includable in the Member's
gross income due to an election by the Member under section 83(b) of the Code.
Compensation shall not include (i) contributions made by a Participating Company
or Related Entity to a deferred compensation plan to the extent that, before
application of the limitations of section 415 of the Code to the plan, such
contributions are not includable in the Member's gross income for the taxable
year in which contributed, (ii) Participating Company or Related Entity
contributions made on behalf of a Member to a simplified employee pension plan
to the extent they are deductible by the Member under section 219(b) of the
Code, (iii)

                                      - 6 -
<PAGE>   13
distributions from a deferred compensation plan (except from an unfunded
nonqualified plan when includible in gross income), (iv) amounts realized from
the exercise of a nonqualified stock option, or when restricted stock (or
property) held by a Member either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture, (v) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified or incentive
stock option, and (vi) other amounts which receive special tax benefits, such as
premiums for group term life insurance (to the extent excludable from gross
income) or Participating Company or Related Entity contributions towards the
purchase of an annuity contract described in section 403(b) of the Code.

                           In addition to other applicable limitations set
forth in the Plan, and notwithstanding any other provision of the Plan to the
contrary, the annual compensation of each Employee taken into account under the
Plan shall not exceed $150,000, as adjusted by the Commissioner for increases in
the cost of living in accordance with section 401(a)(17)(B) of the Code. The
cost- of-living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which Compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the $150,000 annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in

                                      - 7 -
<PAGE>   14
the determination period, and the denominator of which is 12. For purposes of
the foregoing $150,000 limitation, if any Employee is a member of a "family
unit" (as defined below) with an Employee who is a "highly compensated employee"
(as defined in section 414(q) of the Code) and either (i) a 5% owner of the
Company, or (ii) one of the ten highest paid employees of the Company, then the
members of such family unit will be treated as a single Employee with one
"Compensation" and the $150,000 limitation set forth above shall be allocated
among the members of such family unit in the proportion that each member's
compensation bears to the compensation of all members in the family unit. For
purposes of this subsection, "family unit" means, with respect to any Employee,
such Employee's spouse and lineal descendants who have not attained age 19
before the close of the Plan Year.

                           Any reference in this Plan to the limitation under
section 401(a)(17) of the Code shall mean the $150,000 annual compensation limit
set forth in the preceding paragraph.

                  (m) "Direct Rollover" shall mean a payment by the plan to the
Eligible Retirement Plan specified by the Distributee.

                  (n) "Disability" shall mean a medically determinable physical
or mental impairment of a permanent nature which prevents a Member from
performing his customary employment duties without endangering his health.
"Disability" shall be determined by the Committee, in its absolute discretion,
on the basis of

                                      - 8 -
<PAGE>   15
such medical evidence as the Committee deems necessary or desirable.

                  (o) "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.

                  (p) "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, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.

                  (q) "Eligible Rollover Distribution" shall mean any
distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the

                                      - 9 -
<PAGE>   16
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 includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).

                  (r) "Early Retirement Date" shall mean any date after a Member
attains age 55.

                  (s) "Employee" shall mean each and every person employed by a
Participating Company or a Related Entity. The term "Employee" shall also
include a person who is a "leased employee" (within the meaning of section
414(n)(2) of the Code) with respect to a Participating Company or a Related
Entity except that no person who is a "leased employee" shall be eligible to
participate in this Plan or be deemed an "Employee" for purposes of eligibility
to participate.

                  (t) "Entry Date" shall mean the first day of each January and
each July.

                  (u) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and the same as may be further amended from time to
time.

                  (v) "Fiduciary" shall mean a person who, with respect to the
Plan, (i) exercises any discretionary authority or

                                     - 10 -
<PAGE>   17
discretionary control respecting management of the Plan or exercises any
authority or control with respect to management or disposition of the Plan's
assets, (ii) renders investment advice for a fee or other compensation, direct
or indirect, with respect to any monies or other property of the Plan, or has
any authority or responsibility to do so, or (iii) has any discretionary
authority or discretionary responsibility in the administration of the Plan.

                  (w) "Fund" shall mean the assets of the Plan. All Investment
Categories shall be part of the Fund.

                  (x) "Hour of Service"

                           (i) General Rule.  "Hour of Service" shall mean each
hour (A) for which an Employee is directly or indirectly paid, or entitled to
payment, by a Participating Company or a Related Entity for the performance of
duties or (B) for which back pay, irrespective of mitigation of damages, has
been either awarded or agreed to by a Participating Company or a Related Entity.
These hours shall be credited to the Employee for the period or periods in which
the duties were performed or to which the award or agreement pertains
irrespective of when payment is made. The same hours shall not be credited under
both (A) and (B) above.

                           (ii) Paid Absences.  An Employee shall also be
credited with one Hour of Service for each hour for which the Employee is
directly or indirectly paid, or entitled to payment,

                                     - 11 -
<PAGE>   18
by a Participating Company or a Related Entity on account of a period during
which no duties are performed due to vacation, holiday, illness, incapacity,
disability, layoff, jury duty or authorized leave of absence for a period not
exceeding one year for any reason in accordance with a uniform policy
established by the Committee; provided, however, not more than 501 Hours of
Service shall be credited to an Employee under this sentence on account of any
single, continuous period during which the Employee performs no duties and
provided, further, that no credit shall be given if payment (A) is made or due
under a plan maintained solely for the purpose of complying with applicable
workers' compensation, unemployment compensation or disability insurance laws or
(B) is made solely to reimburse an Employee for medical or medically related
expenses incurred by the Employee.

                           (iii) Maternity/Paternity.  For purposes of
subsection 1(g), an Employee shall also be credited with one Hour of Service for
each hour that otherwise would normally have been credited to the Employee but
during which such Employee is absent from work for any period (A) by reason of
the Employee's pregnancy, (B) by reason of the birth of the Employee's child,
(C) by reason of the placement of a child with such Employee in connection with
an adoption of such child by the Employee or (D) for purposes of caring for a
child for a period beginning immediately following birth or placement, provided
that an Employee shall be credited with no more than 501 Hours of Service

                                     - 12 -
<PAGE>   19
on account of any single continuous period of absence by reason of any such
pregnancy, birth or placement and provided further that Hours of Service
credited to an individual on account of such a period of absence shall be
credited only for the Break in Service computation period in which such absence
begins if an Employee would otherwise fail to be credited with 501 or more Hours
of Service in such period or, in any other case, in the immediately following
computation period.

                           (iv) Military. An Employee shall also be credited
with one Hour of Service for each hour during which the Employee is absent on
active duty in the military service of the United States under leave of absence
granted by a Participating Company or a Related Entity or when required by law,
provided he returns to employment with a Participating Company or a Related
Entity within 90 days after his release from active duty or within such longer
period during which his right to reemployment is protected by law.

                           (v) Miscellaneous.  For purposes of this
subsection 1(x), the regulations issued by the Secretary of Labor at 29 CFR
Section 2530.200b - 2(b) and (c) are incorporated by reference. Nothing herein
shall be construed as denying an Employee credit for an "Hour of Service" if
credit is required by separate federal law.

                           (vi) Equivalencies.  If, for Plan purposes, an
Employee's records are kept on other than an hourly basis as

                                     - 13 -
<PAGE>   20
described above, the Committee, according to uniform rules applicable to a class
of Employees, may apply the following equivalencies for purposes of crediting
Hours of Service:

<TABLE>
<CAPTION>
                                                Credit Granted to Individual if
Basis Upon Which                                Individual Earns One or More
Records are Maintained                          Hours of Service During Period
----------------------                          --------------------------------
<S>                                             <C>
Shift                                           Actual hours for full shift
Day                                             10 Hours of Service
Week                                            45 Hours of Service
Semi-monthly Payroll Period                     95 Hours of Service
Months of Employment                            190 Hours of Service
</TABLE>

                           (y) "Investment Category" shall mean any separate
investment fund which is made available under the terms of the
Plan.

                           (z) "Investment Manager" shall mean any Fiduciary
(other than a Trustee) who;

                                    (i) has the power to manage, acquire, or
dispose of any asset of the Plan:

                                    (ii) is:

                                             (A) registered as an investment
adviser under the Investment Advisers Act of 1940;

                                             (B) a bank, as defined in that Act;
or

                                             (C) an insurance company qualified
to perform services described in subsection 1(z)(i) above under the laws of more
than one state; and

                                    (iii) has acknowledged in writing that he is
a Fiduciary with respect to the Plan.

                                     - 14 -
<PAGE>   21
                           (aa) "Limitation Year" shall mean the consecutive
twelve-month period commencing on February 1st and ending on January 31st.
Effective February 1, 1988, the "Limitation Year" shall mean the consecutive
twelve-month period commencing on January 1st and ending on the following
December 31st.

                           (bb) "Member" shall mean (i) each and every Employee
of a Participating Company who satisfies the requirements for participation
under section 3 hereof and who elects that amounts be withheld from his
Compensation under subsection 4(f) and (ii) each other person who has an Accrued
Benefit held under the Plan. For purposes of subsection 4(o), "Member" shall
also mean each and every Employee of a Participating Company who would be
eligible to participate in the Plan if he satisfied the age and service
requirements of subsection 3(a).

                           (cc) "Normal Retirement Date" shall mean the date on
which a Member attains age 65.

                           (dd) "Participating Company" shall mean each Related
Entity with respect to the Company which adopts this Plan pursuant to section
15. The term shall also include the Company, unless the context otherwise
requires.

                           (ee) "Plan" shall mean the Bon-Ton Stores, Inc.
Profit Sharing/Retirement Savings Plan as amended and restated generally
effective January 1, 1994, as set forth herein, and the same as may be amended
from time to time.

                                     - 15 -
<PAGE>   22
                           (ff) "Plan Year" shall mean the consecutive
twelve-month period commencing on January 1st and ending on December 31st.

                           (gg) "Profit Sharing Contributions" shall mean
contributions to the Plan under section 4(a) and any contribution under the
Profit Sharing Plan taken into account in determinating a Member's Accrued
Benefit.

                           (hh) "Profit Sharing Plan" shall mean The Bon-Ton
Stores, Inc. Profit Sharing Retirement Plan.

                           (ii) "Related Entity" shall mean (i) all corporations
which are members with a Participating Company in a controlled group of
corporations within the meaning of section 1563(a) of the Code, determined
without regard to sections 1563(a)(4) and (e)(3)(C) of the Code, (ii) all trades
or businesses (whether or not incorporated) which are under common control with
a Participating Company as determined by regulations promulgated under section
414(c) of the Code, (iii) all trades or businesses which are members of an
affiliated service group with a Participating Company within the meaning of
section 414(m) of the Code and (iv) any entity required to be aggregated with
the Company under regulations prescribed under section 414(o) of the Code (to
the extent provided in such regulations); provided, however, for purposes of
section 5, the definition shall be modified to substitute the phrase "more than
50%" for the phrase "at least 80%" each place it appears in section 1563(a)(1)
of the

                                     - 16 -
<PAGE>   23
Code. Furthermore, for purposes of crediting Hours of Service for eligibility to
participate and vesting, service performed as a "leased employee", within the
meaning of section 414(n) of the Code, of a Participating Company or a Related
Entity shall be treated as Hours of Service performed for such Participating
Company or Related Entity. For Employees on October 1, 1987, Allied Stores
Corporation, a Delaware corporation, and entities which are "related entities"
(as defined above) with respect to it, shall be deemed a Related Entity for all
periods prior to October 1, 1987. An entity is a Related Entity only during
those periods in which it is included in a category described in this
subsection.

                           (jj) "Restatement Effective Date" shall mean July 1,
1994.

                           (kk) "Retirement Savings Plan" shall mean The Bon-Ton
Stores, Inc. Retirement Savings Plan

                           (ll) "Rollover Contribution Account" shall mean the
portion of the Member's Accrued Benefit derived from contributions made under
subsection 4(o) hereof, adjusted as provided under such subsection.

                           (mm) "Salary Reduction Account" shall mean the
portion of the Member's Accrued Benefit derived from contributions made under
subsection 4(f) hereof, adjusted as provided under subsection 4(h).

                                     - 17 -
<PAGE>   24
                           (nn) "Trust Agreement" shall mean the agreement
between the Company and the Trustee under which the Fund is held.

                           (oo) "Trustee" shall mean such person, persons or
corporate fiduciary designated pursuant to subsection 6(a) to manage and control
the Fund pursuant to the terms of the Plan and the Trust Agreement.

                           (pp) "Valuation Date" shall mean the last business
day of the Plan Year and the last business day of each calendar quarter in a
Plan Year. If the Fund or any Investment Category is invested in a manner which
permits daily valuation of a Member's Accrued Benefit therein without
incremental cost or the Committee otherwise directs, then for purposes of
section 6 and section 8, "Valuation Date" shall mean the date on which the
Member's investment election is executed or Accrued Benefit is distributed, as
the case may be.

                           (qq) "Voluntary Contribution Account" shall mean the
portion of the Member's Accrued Benefit derived from contributions made under
subsection 4(m) hereof, adjusted as provided under such subsection.

                           (rr) "Year of Service" shall mean a consecutive
twelve-month computation period specified in the Plan in which an Employee is
credited with at least 1,000 Hours of Service.

                  2. ADMINISTRATION OF THE PLAN

                           (a) ERISA Reporting and Disclosure by Administrator.
The Administrator shall file all reports and

                                     - 18 -
<PAGE>   25
distribute to Members and beneficiaries reports and other information required
under ERISA or the Code.

                           (b) Administrative Committee. The Company, through
its Board of Directors, shall designate an Administrative Committee which shall
have the authority to control and manage the operation and administration of the
Plan. If the Committee consists of more than two members, it shall act by
majority vote. The Committee may (i) delegate all or a portion of the
responsibilities of controlling and managing the operation and administration of
the Plan to one or more persons and (ii) appoint agents, investment advisers,
counsel, or other representatives to render advice with regard to any of its
responsibilities under the Plan. The Board of Directors may remove, with or
without cause, the Committee or any Committee member. The Committee may remove,
with or without cause, any delegate or adviser designated by it.

                           (c) Multiple Capacities. Any person may serve in more
than one fiduciary capacity (including service both as Trustee and Committee
member).

                           (d) Committee Duties and Powers. The responsibility
to control and manage the operation and administration of the Plan shall
include, but shall not be limited to, the performance of the following acts:

                                     - 19 -
<PAGE>   26
                                    (i) the filing of all reports required of
the Plan, other than those which are the responsibility of the Administrator;

                                    (ii) the distribution to Members and
beneficiaries of all reports and other information required of the Plan, other
than reports and information required to be distributed by the Administrator;

                                    (iii) the keeping of complete records of the
administration of the Plan;

                                    (iv) the promulgation of rules and
regulations for the administration of the Plan consistent with the terms and
provisions of the Plan and the Trust Agreement; and

                                    (v) the interpretation of the Plan,
including the determination of any questions of fact arising under the Plan and
the making of all decisions required by the Plan.

The Committee's interpretation of the Plan and any actions and decisions taken
in good faith by the Committee based on its interpretation shall be final and
conclusive. The Committee may correct any defect, or supply any omission, or
reconcile any inconsistency in the Plan in such manner and to such extent as
shall be expedient to carry the Plan into effect and shall be the sole judge of
such expediency.

                           (e) Allocation of Fiduciary Responsibility. The Board
of Directors, the Administrator, the Committee, the Trustee

                                     - 20 -
<PAGE>   27
and the Investment Manager (if any) possess certain specified powers, duties,
responsibilities and obligations under the Plan and the Trust Agreement. It is
intended under this Plan and the Trust Agreement that each be responsible solely
for the proper exercise of its own functions and that each not be responsible
for any act or failure to act of another, unless otherwise responsible as a
breach of its fiduciary duty or for breach of duty by another Fiduciary under
ERISA's rules of co-fiduciary responsibility. In general:

                                    (i) the Board of Directors is responsible
for appointing and removing the Committee and the Trustee and for amending or
terminating the Plan and the Trust Agreement;

                                    (ii) the Committee is responsible for
administering the Plan, for adopting such rules and regulations as in the
opinion of the Committee are necessary or advisable to implement and administer
the Plan and to transact its business, and for providing a procedure for
carrying out a funding policy and method consistent with the objectives of the
Plan and the requirements of Title I of ERISA;

                                    (iii) the Company, as Administrator, is
responsible for discharging the statutory duties of a plan administrator under
ERISA and the Code;

                                    (iv) the Trustee and the Investment Manager
(if any) are responsible for the management and control of the

                                     - 21 -
<PAGE>   28
respective portions of the Fund over which they have control to the extent
provided in the Trust Agreement; and

                                    (v) the Fiduciary appointing an Investment
Manager is responsible for the appointment and retention of the Investment
Manager.

                           (f) Claims. If, pursuant to the rules, regulations or
other interpretations of the Plan, the Committee denies the claim of a Member or
beneficiary for benefits under the Plan, the Committee shall provide written
notice, within 90 days after receipt of the claim, setting forth in a manner
calculated to be understood by the claimant:

                                    (i) the specific reasons for such denial;

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

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

                                    (iv) an explanation of the Plan's claim
review procedure and the time limitations of this subsection applicable thereto.

A Member or beneficiary whose claim for benefits has been denied may request
review by the Committee of the denied claim by notifying the Committee in
writing within 60 days after receipt of the notification of claim denial. As
part of said review procedure, the claimant or his authorized representative may

                                     - 22 -
<PAGE>   29
review pertinent documents and submit issues and comments to the Committee in
writing. The Committee shall render its decision to the claimant in writing in a
manner calculated to be understood by the claimant not later than 60 days after
receipt of the request for review, unless special circumstances require an
extension of time, in which case decision shall be rendered as soon after the
sixty-day period as possible, but not later than 120 days after receipt of the
request for review. The decision on review shall state the specific reasons
therefor and the specific Plan references on which it is based.

                           (g) Fiduciary Compensation. A Committee member,
delegate, or adviser who already receives full-time pay from a Participating
Company or a Related Entity shall serve without compensation for his services as
such, but he shall be reimbursed pursuant to subsection 2(h) for any reasonable
expenses incurred by him in the administration of the Plan. A Committee member,
delegate, or adviser who is not already receiving full-time pay from a
Participating Company or a Related Entity may be paid such reasonable
compensation as shall be agreed upon.

                           (h) Plan Expenses. All expenses of administration of
the Plan shall be paid out of the Fund unless paid by a Participating Company.
Brokerage or other commissions and transfer taxes shall be added to the cost or
deducted from the sales price of the investments to which they relate unless
they are paid by a Participating Company.

                                     - 23 -
<PAGE>   30
                  (i)      Fiduciary Insurance. If the Committee so directs, the
Plan shall purchase insurance to cover the Plan from liability or loss occurring
by reason of the act or omission of a Fiduciary provided such insurance permits
recourse by the insurer against the Fiduciary in the case of a breach of duty by
such Fiduciary.

                  (j)      Indemnification. The Company shall indemnify and hold
harmless to the maximum extent permitted by its by-laws each Fiduciary who is an
Employee or who is an officer or director of any Participating Company or any
Related Entity from any claim, damage, loss or expense, including litigation
expenses and attorneys' fees, resulting from such person's service as a
Fiduciary of the Plan unless the act or failure to act giving rise to the claim
for indemnification is determined by a court to have constituted wilful
misconduct or recklessness.

         3.       PARTICIPATION IN THE PLAN

                  (a)      Initial Eligibility. Each Employee of a Participating
Company who was participating in the Retirement Savings Plan or the Profit
Sharing Plan on the day before the Restatement Effective Date shall remain
eligible to participate in the Plan. Each other Employee of a Participating
Company shall be eligible to participate in the Plan on the Entry Date following
attainment by such Employee of age 21 and completion by such Employee of one
Year of Service provided he is then employed

                                     - 24 -
<PAGE>   31
by a Participating Company. Notwithstanding the foregoing provisions of this
subsection,

                           (i)      no Employee whose terms and conditions of
employment are determined by a collective bargaining agreement between employee
representatives and a Participating Company shall be eligible to participate in
the Plan unless such collective bargaining agreement provides to the contrary,
in which case such Employee shall be eligible to participate upon compliance
with such provisions for eligibility and participation as such agreement shall
provide; and

                           (ii)     no Employee who has selected, or in the
future selects, a union shall become ineligible during the period between his
selection of the union and the execution of the first collective bargaining
agreement which covers him.

                  (b)      Measuring Service. For purposes of measuring service
to satisfy the eligibility provisions of subsection 3(a), the Year of Service
computation period for an Employee shall begin with the date on which such
Employee first is credited with an Hour of Service; provided, however, if an
Employee is credited with less than 1,000 Hours of Service in such computation
period, then subsequent computation periods shall begin with the first day of
the Plan Year next following the date on which the Employee was first credited
with an Hour of Service and continue on a Plan Year basis thereafter.

                                     - 25 -
<PAGE>   32
                  (c)      Commencement of Participation. An Employee shall
become a Member on the Entry Date next following his satisfaction of all
applicable requirements and conditions of subsection 3(a) and his timely
election authorizing amounts be withheld from his Compensation and be credited
to his Salary Reduction Account under this Plan.

                  (d)      Termination and Requalification. An Employee who has
satisfied the service requirement of subsection 3(a) and who subsequently
becomes ineligible for any reason shall requalify for participation on the date
on which he is next credited with an Hour of Service in an eligible job
classification under subsection 3(a) or, if later, on the Entry Date after he
satisfies the age requirement.

                  (e)      Termination of Membership. An Employee who becomes a
Member shall remain a Member as long as he has an Accrued Benefit held under the
Plan.

         4.       MEMBER AND PARTICIPATING COMPANY MATCHING CONTRIBUTIONS

                  (a)      Company Contributions. For each Plan Year the Company
shall make contributions to the Fund in such amounts as the Company, in its
absolute discretion, shall determine; provided, however, the contributions shall
not exceed any applicable limitation of section 4 or 5. The Company shall either
(i) designate the payment in writing to the Trustee as a payment on account of
the Plan Year which ends coincident with

                                     - 26 -
<PAGE>   33
its taxable year or (ii) claim such payment as a deduction on its federal income
tax return for its taxable year ending coincident with the end of the Plan Year
for which the contribution was made. The contribution shall be paid on or before
the date (including any extensions thereof) on which the Company is required to
file its federal income tax return for such taxable year. Any contributions made
under this subsection 4(a) and any portion of a Member's Accrued Benefit
attributable to contributions for the benefit of such Member under the Profit
Sharing Plan are referred to herein as "Profit Sharing Contributions."

                  (b)      Deduction Limitation. The Profit Sharing Contribution
of the Company to the Fund for any Plan Year shall not exceed the maximum amount
deductible by it for the taxable year ended coincident with such Plan Year under
applicable provisions of the Code determined after deduction of all other
contributions to qualified retirement plans (within the meaning of the Code).

                  (c)      Allocation of Company Contributions and Forfeitures.
As of the end of each Plan Year, the Trustee shall allocate to the Accrued
Benefits of the Members listed in subsection 4(d), (i) any amounts contributed
as Profit Sharing Contributions by the Company to the Fund with respect to such
Plan Year plus (ii) any amounts which have been forfeited pursuant to the
provisions of subsections 8(d) and 8(e) hereof on

                                     - 27 -
<PAGE>   34
or before the last day of such Plan Year. The amount allocated to each such
Member shall be determined by the ratio which the sum of each such Member's (i)
Compensation for the Plan Year plus (ii) Compensation in excess of the amount
equal to 40% of the Social Security Taxable Wage Base ("Wage Base") in effect
under section 230 of the Social Security Act for such Plan Year is to the sum of
all Members' (i) Compensation plus (ii) Compensation in excess of the amount
equal to 40% of the Wage Base. However, the maximum amount which may be
allocated to any Member under the preceding sentence shall be the product which
results from multiplying 4.3% by the sum of the Member's (i) Compensation for
the Plan Year plus (ii) Compensation in excess of the amount equal to 40% of the
Wage Base for the Plan Year rounded up to the nearest $100. The balance of the
contribution, if any, after the application of the preceding limitation, shall
be allocated according to the ratio which the Compensation for the Plan Year of
each such eligible Member bears to the Compensation of all such eligible
Members.

                  (d)      Eligibility for Allocation. The following Members
shall be entitled to share in the allocation of Profit Sharing Allocations for a
Plan Year:

                           (i)      Members who retired during the Plan Year
pursuant to subsection 8(a);

                           (ii)     Members who died during the Plan Year;

                                     - 28 -
<PAGE>   35
                           (iii)    Members who terminated employment due to
Disability during the Plan Year; and

                           (iv)     Members who both completed a Year of Service
during the Plan Year and were employed by the Company or a Related Entity on the
last business day of the Plan Year; provided, however, that a Member who has
attained age 55, completed a Year of Service during the Plan Year and completed
twenty (20) Years of Service with the Company shall be entitled to share in the
allocation for the Plan Year even if not employed by the Company or a Related
Entity on the last business day of such Plan Year.

                  (e)      Forfeitures. Any portion of the Accrued Benefits of
Members which have been forfeited pursuant to the provisions of subsections 8(d)
and 8(e) hereof shall be applied to increase Company contributions. If the Plan
should terminate with any forfeitures not allocable under this section 4 in the
Plan Year in which the Plan terminates, such forfeitures shall be distributed to
the Members or former Members from whose Accrued Benefits the forfeitures arose.

                  (f)      Salary Reduction Contributions. Each Employee who
becomes eligible to participate under subsection 3(a) may contribute any whole
percentage, from and including 1% up to and including 15%, of his Compensation
as he shall elect in writing on a form prescribed by the Committee. The election
to contribute may be effective as soon as administratively feasible

                                     - 29 -
<PAGE>   36
following the January 1, April 1, July 1 or October 1 occurring after such
election, for Compensation after such date. Such contribution shall be
accomplished through direct reduction of pay after the election is in effect. A
Member may elect (i) to increase or decrease his contribution no more than four
times a year, in connection with the foregoing quarterly dates, with any such
change to be effective as soon as practicable after the quarterly date following
receipt of notice of change by the Committee or (ii) to discontinue his
contributions effective as soon as practicable following receipt of notice of
discontinuance by the Committee. All elections shall be made in writing on a
form prescribed therefor and shall be subject to timely delivery to the
Committee. The Participating Companies shall pay over to the Fund all
contributions made under this subsection at such time or times as the Company
shall determine. Contributions made by the Participating Companies under this
subsection shall be allocated to the Salary Reduction Accounts of the Members
from whose Compensation the contributions were withheld in an amount equal to
the amount withheld. Such contributions shall be deemed to be employer
contributions made on behalf of Members to a qualified cash or deferred
arrangement (within the meaning of section 401(k)(2) of the Code).

                  (g)      Salary Reduction Contribution Limitations.
Contributions under subsection 4(f) shall be limited as provided below.

                                     - 30 -
<PAGE>   37
                           (i)      Exclusion Limit. The maximum amount of
contribution which any Member may make in any calendar year under subsection
4(f) is $7,000 (or such increased annual amount resulting from a cost of living
adjustment pursuant to sections 402(g)(5) and 415(d)(1) of the Code), reduced by
the amount of elective, pre-tax deferrals by such Member under all other plans,
contracts or arrangements of any Participating Company or Related Entity. If the
contribution under subsection 4(f) for a Member for any calendar year exceeds
$7,000 (or such increased annual amount resulting from an adjustment described
above), the Committee shall direct the Trustee to distribute the excess amount
(plus any income and minus any loss allocable to such amount) to the Member not
later than the March 15th following the close of such calendar year. If (A) a
Member participates in another plan which includes a qualified cash or deferred
arrangement, (B) such Member contributes in the aggregate more than the
exclusion limit under subsection 4(f) of this Plan and the corresponding
provisions of the other plan and (C) the Member notifies the Committee not later
than the March 1st following the close of such calendar year of the portion of
the excess the Member has allocated to this Plan, then the Committee shall
direct the Trustee to distribute to the Member not later than March 15th
following the close of such calendar year the excess amount (plus any income and
minus any loss allocable to such amount) which the Member allocated to this
Plan.

                                     - 31 -
<PAGE>   38
                           (ii)     Discrimination Test Limits. The Committee
may limit the maximum amount of contribution for Members who are "highly
compensated employees" (as defined below) to the extent it determines that such
limitation is necessary to keep the Plan in compliance with section 401(a)(4) or
section 401(k)(3) of the Code. Any limitation shall be effective for all payroll
periods following the announcement of the limitation. For purposes of section 4
of the Plan, the term "highly compensated employee" shall mean an Employee who
performs service during the "determination year" (as defined below) and is
described in one or more of the following groups:

                                    (A)      an Employee who is a 5% owner, as
defined in section 416(i)(1)(A)(iii) of the Code, at any time during the
"determination year" or the "look-back year" (as defined below);

                                    (B)      an Employee who receives
"compensation" (as defined below) in excess of $75,000 (or an increased amount
resulting from a cost of living adjustment) during the "look-back year";

                                    (C)      an Employee who receives
"compensation" in excess of $50,000 (or an increased amount resulting from a
cost of living adjustment) during the "look-back year" and is a member of the
"top-paid group" (as defined below) for the "look-back year";

                                     - 32 -
<PAGE>   39
                                    (D)      an Employee who is an officer,
within the meaning of section 416(i) of the Code, during the "look-back year"
and who receives "compensation" in the "look-back year" greater than 50% of the
dollar limitation in effect under section 415(b)(1)(A) of the Code for the
calendar year in which the "look-back year" begins;

                                    (E)      an Employee who is both described
in subsection (B), (C) or (D) above when they are modified to substitute the
"determination year" for the "look-back year" and one of the 100 Employees who
receive the most "compensation" from the employer during the "determination
year"; or

                                    (F)      a former Employee who had a
"separation year" prior to the "determination year" and who was an active
"highly compensated employee" for either such Employee's "separation year" (as
defined below) or any "determination year" ending on or after the Employee's
fifty-fifth birthday; provided, however, a former Employee who separated from
service before January 1, 1987 will be included as a "highly compensated
employee" only if he was a 5% owner (as defined in section 416(i)(1)(A)(iii) of
the Code) or received "compensation" in excess of $50,000 (or an increased
amount resulting from a cost of living adjustment) during (1) his "separation
year" (or the immediately preceding year thereto) or (2) during any year ending
on or after his fifty-fifth birthday (or the last year ending before such
birthday).

                                     - 33 -
<PAGE>   40
                                    For purposes hereof, the following rules and
definitions shall apply:

                                    (A)      The "determination year" is the
Plan Year for which the determination of who is highly compensated is being
made.

                                    (B)      The "look-back year" is the
12-month period immediately preceding the determination year, or, if the Company
elects, the calendar year ending with or within the determination year.

                                    (C)      The "top-paid" group consists of
the top 20% of Employees ranked on the basis of "compensation" received during
the year. For purposes of determining the number of Employees in the "top-paid"
group, Employees described in section 414(q)(8) of the Code and Q & A 9(b) of
section 1.414(q)-1T of the regulations thereunder are excluded.

                                    (D)      The number of officers is limited
to 50 (or, if lesser, the greater of three Employees or 10% of Employees).

                                    (E)      When no officer has "compensation"
in excess of 150% of the dollar limitation of section 415(c) of the Code, the
highest paid officer is treated as highly compensated.

                                    (F)      Employers aggregated under section
414(b), (c), (m), or (o) of the Code are treated as a single employer.

                                     - 34 -
<PAGE>   41
                                    (G)      "Separation Year" is the
"determination year" in which an Employee separates from service.

                  (h)      Salary Reduction Account. Each Member's salary
reduction contributions, as adjusted for investment gain or loss and income or
expense, constitute such Member's Salary Reduction Account. A Member shall at
all times have a nonforfeitable interest in the portion of his Accrued Benefit
derived from his Salary Reduction Account.

                           (i)      Compliance with Salary Reduction
Discrimination Tests.

                                    The text of subsection 4(i) appears in
Appendix A of the Plan.

                           (j)      Participating Company Matching Contributions

                                    (i)      Amount. The Company shall determine
whether, and to what extent, the Participating Companies shall make a matching
contribution for any Plan Year. If the Company determines that a matching
contribution shall be made, the Participating Companies shall make the matching
contribution on account of each Member employed by a Participating Company or
Related Entity on the last business day of the Plan Year who elected to
contribute under subsection 4(f) for any payroll period in such Plan Year. The
matching contribution shall be such percentage of the Member's contribution
under subsection 4(f) as the Company in its absolute discretion shall determine;
provided, however, the matching contribution shall not be applied

                                     - 35 -
<PAGE>   42
to the Member's contribution under subsection 4(f) to the extent such
contribution exceeds 5% of the Member's Compensation, or such greater percentage
of the Member's Compensation as the Company may determine. Contributions made
with respect to a Member under this subsection shall be allocated to his Company
Contribution Account and shall be invested on behalf of such Member on the basis
of the Member's investment elections, if any, that are in effect on the date
such matching contribution is made. In no event shall the matching contribution
for a Plan Year exceed any applicable limitation of section 4 or 5. The
Participating Companies shall either (i) designate the payment in writing to the
Trustee as a payment on account of the Plan Year which ends coincident with or
during their taxable year or (ii) claim such payment as a deduction on their
federal income tax return for such taxable year.

                                    (ii)     Payment Date. The Participating
Companies shall pay over to the Fund the contribution, if any, made under this
subsection no later than the due date, including extensions, for filing the
Participating Companies' federal income tax returns for the taxable year in
which ended the Plan Year with respect to which such contributions are to be
made.

                                    (iii)    Company Stock. The Participating
Companies may make any matching contribution provided for in this subsection
4(j) by the delivery to the Trustee of (A) Company Stock with a value equal to
the amount of the matching

                                     - 36 -
<PAGE>   43
contribution, (B) cash, or (C) a combination of Company Stock and cash, as the
Company may determine in its sole discretion.

                  (k)      Forfeitures. Amounts which have been forfeited from a
Member's Company Contribution Account in any Plan Year pursuant to the
provisions of subsection 4(n), 8(d) or 8(e) hereof shall be allocated among the
Members who made salary reduction contributions under subsection 4(f) for the
Plan Year in proportion to their respective contributions under subsection 4(f)
for such Plan Year. Such amounts shall be treated as additions to the Member's
Company Contribution Account.

                  (l)      Company Contribution Account. The Participating
Company matching contributions allocated to a Member under subsection 4(j) and
forfeitures allocated to a Member under subsection 4(k) as adjusted for
investment gain or loss and income or expense, shall constitute the Member's
Company Contribution Account. A Member shall have a nonforfeitable interest in
the portion of his Accrued Benefit derived from Participating Company matching
contributions and reallocated forfeitures to the extent provided under
subsection 8(d)(ii).

                  (m)      Non-Deductible Member Contributions

                           (i)      Amount. Each Member shall be eligible to
make non-deductible Member contributions to the Fund for such Plan Year in an
amount not in excess of 15% of such Member's Compensation for the Plan Year (but
not in excess of 5% of Compensation in the case of a Member who is a "highly
compensated

                                     - 37 -
<PAGE>   44
employee"). However, the permitted contribution under this subsection shall be
reduced to the extent necessary to preclude the sum of the contributions made
under subsections 4(f), 4(j) and this subsection from exceeding the limitations
of subsection 5. To the extent feasible, any such excess shall be refunded by
the Participating Companies to the Member before contribution to the Fund to the
extent necessary to avoid reduction of the allocation provided for in subsection
5(a).

                           (ii)     Payment. Each Member's contribution pursuant
to this subsection for any Plan Year shall be made by payroll withholding or
shall be paid to the Company in not more than two payments on or before the last
day of the sixth month of the Plan Year and on or before the last day of the
twelfth month of the Plan Year. All contributions shall be paid over by the
Company to the Trustee within 30 days after receipt.

                           (iii)    Account. Each Member's non-deductible
contributions, as adjusted for investment gain or loss and income or expense,
shall constitute such Member's Voluntary Contribution Account. A Member shall at
all times have a nonforfeitable interest in the portion of his Accrued Benefit
derived from his Voluntary Contribution Account.

                           (iv)     In-Service Distributions of Non-Deductible
Member Contributions. A Member may withdraw all or a portion of his
contributions made pursuant to subsection 4(m) but not in excess of the value of
the Member's Accrued

                                     - 38 -
<PAGE>   45
Benefit attributable thereto. Notwithstanding the foregoing, a married Member
whose nonforfeitable Accrued Benefit exceeds $3,500 shall not be permitted to
make a withdrawal without the written consent of his spouse witnessed by a
notary public or member of the Committee. In the event a Member withdraws all or
a portion of his contributions made under subsection 4(m), he shall be
prohibited from making any further contribution to the Fund pursuant to
subsection 4(m) for twelve full calendar months after receipt of the withdrawal.
To the extent permitted under the Code, the withdrawal shall first be charged to
the Member's contributions made prior to January 1, 1987, and then to investment
gains on such contributions. Thereafter, the withdrawal shall be charged on a
proportional basis according to the amount of the Member's contributions under
this subsection which are made after December 31, 1986, and investment gains on
such contributions.

                  (n)      Compliance with Participating Company Matching and
Non-Deductible Member Contributions Discrimination Tests.

                           The text of subsection 4(n) appears in Appendix A of
the Plan.

                  (o)      Rollovers. A Member may contribute either (i) a
"qualified total distribution" from a "qualified trust" (both within the meaning
of section 402(a)(5)(E) of the Code) from another retirement plan or (ii) an
individual retirement

                                     - 39 -
<PAGE>   46
account consisting solely of a "qualified total distribution" from a "qualified
trust" to the Fund. Any such rollover contributions, as adjusted for investment
gain or loss and income or expense, constitute such Member's Rollover
Contribution Account. A Member shall at all times have a nonforfeitable interest
in the portion of his Accrued Benefit derived from his Rollover Contribution
Account.

                  (p)      Payroll Taxes. The Participating Companies shall
withhold from the Compensation of the Members and remit to the appropriate
government agencies such payroll taxes and income withholding as the Company
determines is or may be necessary under applicable statutes or ordinances and
the regulations and rulings thereunder.

         5.       MAXIMUM CONTRIBUTIONS AND BENEFITS

                  (a)      Defined Contribution Limitation. In the event that
the amount allocable to a Member from amounts contributed by the Participating
Companies to the Fund in respect of any Plan Year would cause the Annual
Additions allocated to any Member under this Plan plus the Annual Additions
allocated to such Member under any other defined contribution plan maintained by
a Participating Company or a Related Entity to exceed for any Limitation Year
the lesser of (i) $30,000 (or, if greater, one-fourth of the dollar limitation
in effect under subsection 415(b)(1)(A) of the Code for such Limitation Year) or
(ii) 25% of such Member's compensation (as defined in subsection 5(d)) for

                                     - 40 -
<PAGE>   47
such Limitation Year, then such amount allocable to such Member shall be reduced
after the application of the corresponding provisions of the Company's Profit
Sharing Retirement Plan by the amount of such excess to determine the actual
amount of the contribution allocable to such Member in respect of such Plan
Year. The excess amount allocable to a Member's Accrued Benefit shall be held in
a suspense account and shall be used to reduce contributions allocable to the
Member for the next Limitation Year (and succeeding Limitation Years as
necessary) provided the Member is covered by the Plan as of the end of the
Limitation Year. However, if the Member is not covered by the Plan as of the end
of the Limitation Year, then the excess amount shall be held unallocated in a
suspense account and shall be allocated, after adjustment for investment gains
or losses, among all Employees eligible to make contributions under subsection
4(f) for such Limitation Year as an equal percentage of their Compensation for
such Limitation Year. No excess amount may be distributed to a Member or former
Member.

                  (b)      Combined Limitation. In addition to the limitation of
subsection 5(a), if a Participating Company or a Related Entity maintains or
maintained a defined benefit plan and the amount allocable to a Member in
respect of any Plan Year would cause the amount allocated to any Member under
all defined contribution plans maintained by any Participating Company or
Related Entity to exceed the maximum allocation as determined in

                                     - 41 -
<PAGE>   48
subsection 5(c), then such amount allocable to such Member shall be reduced by
the amount of such excess. To the extent administratively feasible, the
limitation of this subsection shall be applied to a Member's benefit payable
from the defined benefit plan prior to reduction of the Member's Annual
Additions under this Plan. The excess amount with respect to any Member shall be
applied in accordance with subsection 5(a).

                  (c)      Combined Limitation Computation. The maximum
allocation is the amount of Annual Additions which may be allocated to a
Member's benefit without permitting the sum of the defined benefit plan fraction
(as hereinafter defined) and the defined contribution plan fraction (as
hereinafter defined) to exceed 1.0 for any Limitation Year. The defined benefit
plan fraction applicable to a Member for any Limitation Year is a fraction, the
numerator of which is the projected annual benefit of the Member under the plan
determined as of the close of the Limitation Year and the denominator of which
is the lesser of (i) the product of 1.25 multiplied by the maximum then
permitted dollar amount of straight life annuity payable under the defined
benefit plan maximum benefit provisions of the Code as a benefit commencing at
the Member's normal retirement age and (ii) the product of 1.4 multiplied by the
maximum permitted amount of straight life annuity, based on the Member's
compensation, payable under the defined benefit plan maximum benefit provisions
of the Code as a benefit commencing at the Member's normal

                                     - 42 -
<PAGE>   49
retirement age. For purposes of this subsection 5(c), a Member's projected
annual benefit is equal to the annual benefit, expressed in the form of a
straight life annuity, to which the Member would be entitled under the terms of
the defined benefit plan based on the assumptions that (i) the Member will
continue employment until reaching his normal retirement age (or current age, if
later) at a rate of compensation equal to that for the Limitation Year under
consideration and (ii) all other relevant factors used to determine benefits
under the plan for the Limitation Year under consideration will remain constant
for future Limitation Years. The defined contribution plan fraction applicable
to a Member for any Limitation Year is a fraction, the numerator of which is the
sum of the Annual Additions for all Limitation Years allocated to the Member as
of the close of the Limitation Year and the denominator of which is the sum of
the lesser, separately determined for each Limitation Year of the Member's
employment with a Participating Company or Related Entity, of (i) the product of
1.25 multiplied by the maximum dollar amount of Annual Additions which could
have been allocated to the Member under the Code for such Limitation Year and
(ii) the product of 1.4 multiplied by the maximum amount, based on the Member's
compensation, of Annual Additions which could have been allocated to the Member
for such Limitation Year.

                                     - 43 -
<PAGE>   50
         6.       ADMINISTRATION OF FUNDS

                  (a)      Asset Control. The management and control of the
assets of the Plan shall be vested in the Trustee, which Trustee shall be such
person, persons or corporate fiduciary designated from time to time by the
Company through its Board of Directors; provided, however, the Company, through
its Board of Directors, or the Trustee may appoint one or more Investment
Managers to manage, acquire or dispose of any assets of the Plan. The Committee
shall instruct the Trustee or an Investment Manager to establish Investment
Categories for selection by the Members or the Committee in accordance with the
Plan, in which case the Committee may at any time add to or delete from the
Investment Categories.

                  (b)      Member Elections. In accordance with rules
established by the Committee, each Member shall have the right to designate the
Investment Category or Categories in which new contributions under section 4
allocated to such Member and prior balances in his accounts are invested. Any
designation or change in designation of Investment Category shall be made in
writing on forms provided by and submitted to the Committee. A Member may make
changes of Investment Categories for new contributions under subsection 4(f) or
subsection 4(m) and prior account balances effective as soon as administratively
feasible after the first Valuation Date following timely delivery to the
Committee of written notice of the change on the form prescribed for such

                                     - 44 -
<PAGE>   51
notice. New contributions under subsection 4(j) and reallocated forfeitures
under subsection 4(k) shall be invested in the same manner as under the election
in effect for new contributions made under subsection 4(f) on the date the
contribution is made or the forfeiture is physically reallocated. Any election
of Investment Categories by any Member shall, on its effective date, cancel any
prior election. The right to elect Investment Categories as set forth herein
shall be the sole and exclusive investment power granted to a Member. In
accordance with subsection 2(d), the Committee may promulgate separate
accounting and administrative rules to facilitate the establishment or
maintenance of an Investment Category.

                  (c)      No Member Election. If a Member does not make a
written election of Investment Category, the Committee shall direct that all
amounts allocated to such Member be invested in the Investment Category which,
in the opinion of the Committee, best protects principal.

                  (d)      Facilitation. Notwithstanding any instruction from
any Member for investment of funds in an Investment Category as provided for
herein, the Trustee shall have the right to hold uninvested or invested in a
short-term investment fund any amounts intended for investment or reinvestment
until such time as investment may be made in accordance with section 6(b) or
6(c) and the Trust Agreement.

                                     - 45 -
<PAGE>   52
                  (e)      Valuations. The Fund and each Investment Category
shall be valued at fair market value as of each Valuation Date.

                  (f)      Allocation of Gain or Loss. Any increase or decrease
in the market value of each Investment Category of the Fund since the preceding
Valuation Date, as computed pursuant to subsection 6(e), and all income
collected, and expenses paid and realized profits and losses, shall be added to
or deducted from the account of each Member in such Investment Category in the
proportion that such Member's account balance as of the immediately preceding
Valuation Date bears to the total of all Members' account balances in such
Investment Category as of the immediately preceding Valuation Date; provided,
however, such allocation for the first period following the establishment of an
Investment Category shall be made based on the ratio that the amount allocated
to each Member in such Investment Category in the period bears to the total
amount allocated to such Investment Category in the period. Notwithstanding the
foregoing, allocation shall not be required to the extent the Fund, or any
Investment Category thereof, is administered in a manner which permits separate
valuation of each Member's interest therein without separate incremental cost to
the Plan or the Committee otherwise provides for separate valuation, and the
portion of the Accrued Benefit of any Member which is attributable to an
investment by that Member in Company Stock shall be separately

                                     - 46 -
<PAGE>   53
valued and accounted for. The Committee and the Trustee shall adopt such rules
and procedures as are required to account for investments in Company Stock on a
Member-by-Member basis, rather than on a pooled fund basis.

                  (g)      Provisions Optional. Nothing herein shall require the
Committee to establish Investment Categories. If no Investment Categories are
established, the Fund shall be administered as a unit.

                  (h)      Bookkeeping. The Committee shall direct that separate
bookkeeping accounts be maintained to reflect each Member's Salary Reduction
Account, Company Contribution Account, Voluntary Contribution Account and
Rollover Contribution Account.

                  (i)      Company Stock.

                           (1)      General. The Committee shall direct the
Trustee to establish an Investment Category consisting solely of Company Stock.
All dividends or other distributions with respect to Company Stock shall be
applied to purchase additional shares of Company Stock provided, however, that
no fractional shares of Company Stock shall be so purchased. The Trustee may
acquire Company Stock from any source, including the public market, in private
transactions, from the Company's treasury shares or from authorized but unissued
shares, as the Company shall direct. Company Stock purchased from the Company
shall be based on the closing price of the common stock on the date preceding
the date on which the purchase is made. Notwithstanding anything herein

                                     - 47 -
<PAGE>   54
to the contrary, up to 100% of the assets of the Plan may be invested in
qualifying employee securities (as defined in section 407(d)(5) of ERISA) in
accordance with the provisions of section 408(e) of ERISA. In accordance with
subsection 6(b), a Member may elect that (A) all or a portion of his Accrued
Benefit be applied to purchase shares of Company Stock, or (B) all or a portion
of his shares of Company Stock be liquidated for reinvestment. The Committee
shall direct the Trustee to arrange for the elections, procedures and deadlines
for Members to authorize Plan transactions in Company Stock and shall direct the
Trustee to consummate all such purchase and sale transactions as soon as
administratively practicable. Notwithstanding the foregoing, in the case of
Members subject to the provisions of section 16 of the Securities Exchange Act
of 1934 (the "1934 Act"), the Committee shall establish such rules and
procedures as may be required in order for the Plan to satisfy the requirements
of Rule 16b-3 of the 1934 Act.

                           (2)      Voting of Shares. Each Member may direct the
Trustee as to the manner in which the shares of the Company Stock attributable
to the Member's shares of Company Stock are to be voted, valued as of the record
date used to determine the eligibility of shareholders to vote Company Stock.
Before each annual or special meeting of shareholders of the Company, there
shall be sent to each Member a copy of the proxy solicitation material for each
meeting, together with a form

                                     - 48 -
<PAGE>   55
requesting instructions to the Trustee on how to vote the Company Stock
attributable to the Member. Upon receipt of such instructions, the Trustee shall
vote such shares as instructed. In lieu of voting Members' fractional shares as
instructed by Members, the Trustee may vote the combined fractional shares of
Company Stock to the extent possible to reflect the direction of Members with
allocated fractional shares. The Trustee shall vote shares of Company Stock
attributable to those Members from whom the Trustee received no valid
instructions in the same manner and in the same proportion as the Company Stock
attributable to those Members from whom the Trustee received valid voting
instructions.

                  (j)      Special Member Election. A Member who has attained
age 55 on or before the last day of the Plan Year may elect in writing, in
accordance with rules prescribed by the Committee, to have all or any portion of
his Accrued Benefit segregated into an investment account the primary purpose of
which is to protect and preserve principal. A Member may make such an election
once in any Plan Year effective as of the last business day of June, or as soon
as administratively possible. Any Member who has made an election under this
section 6(c) shall be permitted to revoke such election by means of a written
revocation in such form as may be prescribed by the Committee, effective as soon
as administratively practicable following the receipt of such written
revocation.

                                     - 49 -
<PAGE>   56
                  (k)      Adoption of Rules. Notwithstanding anything to the
contrary contained herein, the Committee may make such other rules for the
administration of the Plan and may cause the Plan to be administered in such
fashion as the Committee deems appropriate or necessary, including provisions
for more frequent investment elections or reallocations, and special provisions
relating investments in Company Stock, in order to comply with section 404(c) of
ERISA.

         7.       BENEFICIARIES AND DEATH BENEFITS

                  (a)      Designation of Beneficiary. Each Member shall have
the right to designate one or more beneficiaries and contingent beneficiaries to
receive any benefit to which such Member may be entitled hereunder in the event
of the death of the Member prior to the complete distribution of such benefit by
filing a written designation with the Committee on the form prescribed by the
Committee. Such Member may thereafter designate a different beneficiary at any
time by filing a new written designation with the Committee. Notwithstanding the
foregoing, if a married Member (i) has not yet attained age 35 or (ii)
designates a beneficiary other than his spouse, and his spouse does not consent
to such designation in writing witnessed by a notary public or member of the
Committee in a manner prescribed by the Committee, then the Member's spouse and
the Member's designated beneficiary shall each receive a benefit based on 50% of
the Member's Accrued Benefit. A spouse's consent

                                     - 50 -
<PAGE>   57
given in accordance with the Committee's rules shall be irrevocable by the
spouse with respect to the beneficiary then designated by the Member unless the
Member makes a new beneficiary designation. Any written designation shall become
effective only upon its receipt by the Committee. If the beneficiary designated
pursuant to this subsection dies before the Member and the Member fails to make
a new designation, then his beneficiary shall be determined pursuant to
subsection 7(b). Notwithstanding the foregoing, to the extent provided in a
qualified domestic relations order (within the meaning of section 414(p) of the
Code) the former spouse of the Member shall be treated as the spouse of the
Member for purposes of this subsection and the current spouse of the Member
shall not be treated as the Member's spouse for such purposes.

                  (b)      Beneficiary Priority List. If (i) a Member omits or
fails to designate a beneficiary, (ii) the designated beneficiary does not
survive the Member or (iii) the Committee determines that the Member's
beneficiary designation is invalid for any reason, then the death benefits shall
be paid to the Member's surviving spouse, or if the Member is not survived by
his spouse, then to the Member's estate. If the Member's designated beneficiary
dies after the Member but before distribution of benefits, then the death
benefits shall be paid to the beneficiary's estate.

                                     - 51 -
<PAGE>   58
                  (c)      Explanation of Benefit. The Committee shall provide
to the Member within the "applicable period" a written explanation of the terms
and conditions of the death benefit described in subsection 7(a), and of the
rights of the Member's spouse with respect to the designation of an alternate
beneficiary under such subsection. For purposes of this subsection 7(c)
"applicable period" shall mean whichever of the following periods ends last:

                           (i)      the period beginning with the first day of
the Plan Year in which the Member attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Member attains age 35;

                           (ii)     a reasonable period after the Member
commences participation in the Plan; or

                           (iii)    in the case of a Member who separates from
service before attaining age 35, a reasonable period after such separation from
service.

         8.       BENEFITS FOR MEMBERS

                  The following are the only post employment benefits provided
by the Plan:

                  (a)      Retirement Benefit

                           (i)      Normal Retirement. Each Member who retires
on or after his Normal Retirement Date shall be entitled to a retirement benefit
equal to 100% of the Member's Accrued

                                     - 52 -
<PAGE>   59
Benefit following his retirement as of the Valuation Date coincident with or
next following his retirement.

                           (ii)     Late Retirement. A Member who continues
employment beyond his Normal Retirement Date shall continue to participate in
the Plan. A Member shall have a nonforfeitable right to 100% of his Accrued
Benefit upon attainment of his Normal Retirement Date.

                  (b)      Death Benefit

                           (i)      Valuation. In the event of the death of a
Member before termination of employment with all Participating Companies and
Related Entities, 100% of the Member's Accrued Benefit on the Valuation Date
which follows his death and is coincident with or precedes its distribution
shall constitute his death benefit and shall be distributed pursuant to sections
7 and 9, (A) to his designated beneficiary or (B) if no designation of
beneficiary is then in effect, to the beneficiary determined pursuant to
subsection 7(b).

                           (ii)     Survivor Benefits. In the event of the death
of a retired Member before complete distribution of his Accrued Benefit has been
made to him, 100% of the undistributed balance shall constitute his death
benefit and shall be distributed pursuant to sections 7 and 9, (A) to his
designated beneficiary or (B) if no designation of beneficiary is then in
effect, to the beneficiary determined pursuant to subsection 7(b).

                                     - 53 -
<PAGE>   60
                  (c)      Disability Benefit. In the event a Member suffers a
Disability before actual retirement, 100% of the Member's Accrued Benefit on the
Valuation Date which follows his Disability and is coincident with or precedes
its distribution shall constitute his Disability benefit.

                  (d)      Termination of Employment Benefit

                           (i)      Valuation. In the event a Member separates
from service with all Participating Companies and all Related Entities other
than by reason of retirement on or after his Normal Retirement Date, Disability
or death, the Member shall be entitled to receive a benefit equal to 100% of his
Salary Reduction Account, Voluntary Contribution Account and Rollover
Contribution Account and the nonforfeitable portion (as determined under the
vesting schedule at subsection 8(d)(ii)) of his Company Contribution Account on
the Valuation Date coincident with or next following his separation from
service. A Member who separates from service on or after attaining his Early
Retirement Date but before attaining his Normal Retirement Date for reasons
other than Disability or death shall be treated as terminating service under
this subsection 8(d).

                           (ii)     Vesting Schedule. The nonforfeitable portion
of a Member's Company Contribution Account is as follows:

<TABLE>
<CAPTION>
                                                    NONFORFEITABLE
                YEARS OF SERVICE                      PERCENTAGE
                ----------------                    --------------
<S>                                                 <C>
                Less than 3 years                          0%
                3 years or more                          100%
</TABLE>

                                     - 54 -
<PAGE>   61
                           (iii)    Computation Period. The measuring period for
determining a Year of Service or a Break in Service is the Plan Year.

                           (iv)     Crediting Service. For purposes of
subsection 8(d), except as provided in this subsection 8(d)(iv), a Member shall
receive credit for all Years of Service. Notwithstanding the foregoing:

                                    (A)      Years of Service completed by a
Member prior to attaining age 18 shall be disregarded.

                                    (B)      If a Member has five consecutive
Breaks in Service and no nonforfeitable interest, then Years of Service prior to
such Breaks in Service shall not be credited for any purpose. Except as provided
in this subsection, a Member's Years of Service before and after any Breaks in
Service shall be aggregated.

                           (v)      Notwithstanding anything to the contrary
contained herein, the calculation of a Member's Years of Service for purposes of
this subsection 8(d) shall, to the extent it result in the Member being credited
with a greater number of Years of Service, be determined for periods prior to
the Restatement Effective Date by reference to the Plan as it was in effect
during such periods.

                  (e)      Time of Forfeiture. The nonvested portion of the
Company Contribution Account of a Member who separates from

                                     - 55 -
<PAGE>   62
service shall be forfeited on his date of separation subject to the right of
restoration under subsection 8(f). Forfeitures shall increase Participating
Company matching contributions for the Plan Year in which the forfeitures
occurs.

                  (f)      Restoration of Forfeiture. If a Member who has
forfeited a portion of his Accrued Benefit under subsections 8(d) and 8(e)
returns to employment with a Participating Company or a Related Entity before
suffering five consecutive Breaks in Service, the forfeited portion of the
Member's Accrued Benefit, without adjustment for investment gains or losses,
shall be restored. The restoration shall be made from forfeitures for the Plan
Year of the Member's return to employment and, if forfeitures are insufficient,
from Participating Company contributions.

                  (g)      Calculation of Accrued Benefit Attributable to a
Member's Shares of Company Stock. Anything in the Plan to the contrary
notwithstanding, if, in the distribution of Accrued Benefits to a Member
hereunder, the shares of Company Stock forming part of such Accrued Benefit are
to be liquidated in accordance with the provisions of subsection 9(j), the value
of that portion of the Member's Accrued Benefit which is attributable to the
Company Stock and which is to be distributed to the Member shall be the actual
amount of the net proceeds obtained by the Trustee from the liquidation of the
Company Stock.

                                     - 56 -
<PAGE>   63
                  (h)      Benefits Attributable to Profit Sharing
Contributions. The following benefits attributable to a Member's Accrued Benefit
derived from Profit Sharing Contributions are provided by the Plan in connection
with a Member's attainment of retirement age or termination of employment:

                           (i)      Retirement Benefit

                                    (A)      Valuation. Each Member shall be
entitled to a retirement benefit equal to 100% of the Member's Accrued Benefit
attributable to Profit Sharing Contributions as of the Valuation Date coincident
with or next following his retirement on or after his Normal Retirement Date
plus his share of the Profit Sharing Contribution for the Plan Year in which his
retirement occurred.

                                    (B)      Late Retirement. A Member who
continues employment beyond his Normal Retirement Date shall have a
nonforfeitable interest in his Accrued Benefit attributable to Profit Sharing
Contributions upon his attaining his Normal Retirement Date.

                                    (C)      Post-Normal Retirement Date
Part-Time Employment. Notwithstanding anything to the contrary contained in the
Plan, a Member (i) who has attained Normal Retirement Date and completed 20
Years of Service as determined under this subsection 8(h) and (ii) who is
scheduled to be paid for less than 1,000 Hours of Service in a Plan Year, may
request in writing to the Committee that he commence receipt of benefits

                                     - 57 -
<PAGE>   64
attributable to Profit Sharing Contributions in the form of a single life
annuity, and qualified joint and survivor annuity or periodic installments over
the Member's life expectancy (or the joint life expectancy of the Member and the
Member's designated beneficiary) effective as of the Valuation Date following
approval of the request, provided such request complies with applicable
requirements for such forms of distribution as set forth in section 9 of the
Plan. The Committee shall develop uniform rules of general application for
reviewing requests under this subsection 8(a)(iii), which rules may provide for
termination of payments until the Member actually separates from service in
appropriate circumstances.

                           (ii)     Death Benefit

                                    (A)      Valuation. In the event of the
death of a Member before termination of employment with the Company and all
Related Entities, 100% of the Member's Accrued Benefit attributable to Profit
Sharing Contributions on the Valuation Date coincident with or next following
his death plus his share of the Profit Sharing Contribution for the Plan Year in
which his death occurred shall constitute his death benefit attributable to
Profit Sharing Contributions and shall be distributed pursuant to sections 7 and
9 of the Plan (A) to his designated beneficiary or (B) if no designation of
beneficiary is then in effect, to the beneficiary determined pursuant to
subsection 7(b).

                                     - 58 -
<PAGE>   65
                                    (B)      Survivor Benefits. In the event of
the death of a terminated Member before complete distribution of his
nonforfeitable Accrued Benefit attributable to Profit Sharing Contributions has
been made to him, 100% of the undistributed balance of his nonforfeitable
Accrued Benefit attributable to Profit Sharing Contributions shall constitute
his death benefit attributable to Profit Sharing Contributions and shall be
distributed pursuant to sections 7 and 9 of the Plan (A) to his designated
beneficiary or (B) if no designation of beneficiary is then in effect, to the
beneficiary determined pursuant to subsection 7(b).

                           (iii)    Disability Benefit. In the event a Member
suffers a Disability before actual retirement, 100% of the Member's Accrued
Benefit attributable to Profit Sharing Contributions on the Valuation Date
coincident with or next following his Disability plus his share of the Profit
Sharing Contribution for the Plan Year in which he suffers a Disability shall
constitute his Disability benefit.

                           (iv)     Termination of Employment Benefit

                                    (A)      Valuation. In the event a Member
separates from service with the Company and all Related Entities other than by
reason of retirement on or after his Normal Retirement Date, Disability or
death, the Member shall be entitled to receive a benefit equal to the
nonforfeitable portion (as determined under the vesting schedule set forth
below) of the

                                     - 59 -
<PAGE>   66
Member's Accrued Benefit attributable to Profit Sharing Contributions on the
Valuation Date coincident with or next following his termination of employment
plus his share, if any, of the Profit Sharing Contribution for the Plan Year in
which he separates from service.

                                    (B)      Vesting Schedule. The
nonforfeitable portion of a Member's Accrued Benefit attributable to Profit
Sharing Contributions is determined as follows:

<TABLE>
<CAPTION>
                                                    NONFORFEITABLE
                  YEARS OF SERVICE                    PERCENTAGE
                  ----------------                  --------------
<S>                                                 <C>
                  Less than 5 years                        0%
                  5 years or more                        100%
</TABLE>

                                    (C)      Computation Period. For purposes of
this subsection 8(h), the computation period for crediting a Year of Service or
incurring a Break in Service is the Plan Year.

                                    (D)      Crediting Service. A Member shall
receive credit for all Years of Service. For purposes of this subsection, a
Member shall in all events be credited with the full number of Years of Service
as determined under the Profit Sharing Plan for periods prior to the Restatement
Effective Date, plus the Years of Service determined under the Plan for periods
after the Restatement Effective Date if such determination would result in such
Member being credited with a greater number of Years of Service than would be
the case if the determination were

                                     - 60 -
<PAGE>   67
made solely on the basis of the provisions set forth in the Plan.
Notwithstanding the foregoing:

                                             (I)      Years of Service completed
by a Member prior to attaining age 18 shall be disregarded.

                                             (II)     If a Member has five
consecutive Breaks in Service and no nonforfeitable interest, then Years of
Service prior to such Breaks in Service shall not be credited. Except as
provided in this subsection, a Member's Years of Service before and after any
Breaks in Service shall be aggregated.

                           (iv)     Time of Forfeiture. The nonvested portion of
the Accrued Benefit of a Member who separates from service shall be forfeited on
his date of separation, subject to the right of restoration under subsection
8(h)(v). Forfeitures shall increase Company contributions for the Plan Year in
which the forfeiture occurs.

                           (v)      Restoration of Forfeiture. If a Member who
has forfeited his Accrued Benefit under this subsection 8(h) returns to
employment with the Company or a Related Entity before suffering five
consecutive Breaks in Service, the Member's forfeited Accrued Benefit, without
adjustment for investment gains or losses, shall be restored. The restoration
shall be made from forfeitures for the Plan Year of the Member's return to
employment and, if such forfeitures are insufficient, from Company
contributions.

                                     - 61 -
<PAGE>   68
         9.       DISTRIBUTION OF BENEFITS

                  (a)      Commencement. The payment of benefits shall commence
as soon after the Valuation Date following the Member's termination of
employment as is administratively feasible, except as provided below.

                           (i)      Termination of Employment Benefits.

                                    (A)      If the Member's nonforfeitable
Accrued Benefit exceeds $3,500, (A) distribution of benefits prior to the
Member's Normal Retirement Date shall not commence unless the Member consents to
such distribution in writing and (B) if a Member has been married to his or her
then spouse for at least one year on the date on which benefit payments are to
commence, then distribution shall be subject to subsection 9(e). If the Member
does not consent to distribution, his Accrued Benefit shall be retained in the
Fund. Distribution shall commence as of the Valuation Date next following the
first to occur of the Member's Normal Retirement Date or death (provided the
Committee has notice of the Member's death).

                                    (B)      In the case of a Member who
terminates employment after having attained at least age 55 and completed at
least ten (10) Years of Service, or who terminates employment on account of
Disability, the payment of benefits shall, at the election of such Member,
commence as soon after the Member's termination of employment as is
administratively feasible in the following manner: An initial payment shall be

                                     - 62 -
<PAGE>   69
made to such Member in an amount equal the lesser of $3,500 or fifty percent
(50%) of such Member's Accrued Benefit determined as of the Valuation Date
preceding the Member's termination of employment. Any payments made subsequently
shall be made in accordance with the other provisions of the Plan, provided
however, that such Member's Accrued Benefit shall be adjusted to reflect the
amount of any payment to such Member under this subsection 9(a)(i)(B).

                           (ii)     Deferral Limitation. Notwithstanding the
foregoing, in no event other than with the written consent of the Member shall
the payment of benefits commence later than the sixtieth day after the close of
the Plan Year in which the latest of the following occurs:

                                    (A)      the Member's Normal Retirement
Date;

                                    (B)      the Member's termination of
employment; or

                                    (C)      the tenth anniversary of the year
in which the Member first commenced participation in the Profit Sharing Plan,
the Retirement Savings Plan or the Plan. Further, any other provision of the
Plan notwithstanding, distribution of benefits must commence on or before the
April 1st of the calendar year following the calendar year in which the Member
attains age 70-1/2; provided, however, if a Member (A) attained age 70-1/2
before January 1, 1988 and (B) such Member was not a 5% owner (as

                                     - 63 -
<PAGE>   70
defined in section 416 of the Code) at any time during the five Plan Years
ending in the calendar year in which he attained age 70-1/2, then distribution
of benefits must commence on or before April 1st of the calendar year following
the later of (A) the calendar year in which the Member attained age 70-1/2 or
(B) the calendar year in which the Member retires. Notwithstanding the
foregoing, a Member who is permitted to defer the commencement of distribution
of benefits beyond attainment of age 70-1/2 pursuant to the preceding sentence
may nevertheless elect (by written request to the Committee) to receive a
distribution for each calendar year prior to the year of the Member's actual
retirement in an amount equal to the greater of $300.00 or the minimum amount
which would be required to be distributed to such Member for such year pursuant
to section 401(a)(9) of the Code if the Member had actually retired.

                           (iii)    Death Benefits. The payment of death
benefits under the Plan shall commence as soon after the Member's death as is
administratively feasible or as the Member's beneficiary shall direct, subject
to the limitations of subsection 9(b).

                  (b)      Benefit Forms.

                           (i)      Vested and Retirement Benefits. Vested and
retirement benefits shall be distributed as the Member shall elect, subject to
subsection 9(e), in accordance with uniform rules established by the Committee
from the alternatives below:

                                     - 64 -
<PAGE>   71
                                    (A)      a straight life annuity for the
Member's life;

                                    (B)      a joint and survivor annuity with
the Member's spouse as contingent annuitant under which the amount payable to
the Member's spouse is 50% of the amount payable during the joint lives of the
Member and his spouse;

                                    (C)      approximately equal monthly,
quarterly, semi-annual or annual installments over any period of time not
exceeding the Member's then life expectancy, or, if the Member has designated a
beneficiary, the joint life expectancy of the Member and the Member's designated
beneficiary, and in the event of the Member's death during such period, the
remainder shall be payable as a death benefit in accordance with sections 7 and
9 to the Member's beneficiary;

                                    (D)      a lump sum payment; or

                                    (E)      any combination of the foregoing.
For purposes of this subsection, life expectancy shall be determined by the
Committee in accordance with applicable regulations under the Code. The method
so adopted by the Committee shall be uniformly applied to all Members. If the
Member's beneficiary is not the Member's spouse, the Member must elect a method
of distribution under which the present value of the payments to be paid to the
Member over his projected life span is more than 50% of the present value of the
payments to be paid to both the Member and his beneficiary.

                                     - 65 -
<PAGE>   72

                               (ii) Death Benefits.  Death benefits shall be
distributed in one lump sum or in installments over a period not extending
beyond five years of the Member's date of death unless payment of benefits
commenced under a form of annuity or installment payment before the Member's
death in which case benefits shall be paid at least as rapidly as under the
method of distribution in effect on the Member's date of death; provided,
however,

                                            (A) if any portion of the Member's
Accrued Benefit is payable to or for the benefit of a designated beneficiary,
such portion may be distributed over a period of time not exceeding the life
expectancy of such designated beneficiary, provided distribution begins not
later than one year after the date of the Member's death or such later date as
applicable regulations under the Code may permit; or

                                            (B) if the designated beneficiary
referred to in subsection 9(b)(ii)(A) is the Member's surviving spouse, (1) the
date on which the distribution is required to begin shall not be earlier than
the date on which the Member would have attained age 70-1/2, (2) the benefit
amount will be used to purchase a straight life annuity for the spouse's life
unless the spouse elects another form of settlement permitted under the Plan,
and (3) if the surviving spouse should die before distribution to such spouse
begins, this subsection 9(b)(ii) shall apply as if the surviving spouse were the
Member.

                                     - 66 -
<PAGE>   73

                           (c) Installments. If benefits are to be paid directly
by the Trustee in installments or if the payment of benefits is to be deferred,
the net value of the benefit determined in accordance with the provisions of
section 8 shall be retained in the Fund subject to the administrative provisions
of the Plan and the Trust Agreement. The Committee, according to a uniform rule,
may direct the Trustee to segregate all or a portion of the benefit amount into
a separate investment account designed to protect principal and yield a
reasonable investment return consistent with the preservation of principal and
the obligation to make installment payments.

                           (d) Annuity Purchases. If benefits are to be paid in
a form of annuity under subsection 9(b)(i)(A), (B) or (E), the Committee shall
direct the Trustee to apply the Member's Accrued Benefit to purchase an
appropriate nontransferable annuity contract and to deliver said annuity
contract to the Member.

                           (e) Required Annuity

                                    (i) Married Member. If a Member is married
to his then spouse for at least one year on the date on which benefit payments
are to commence and his nonforfeitable Accrued Benefit exceeds $3,500, benefits
will be distributed in the form described under subsection 9(b)(i)(B) unless the
Member, with the written consent of his spouse witnessed by a notary public or a
member of the Committee in a manner prescribed by the Committee,

                                     - 67 -
<PAGE>   74

elects an alternate form of settlement. Further, no total or partial
distribution may be made after the annuity starting date where the present value
of the benefit exceeds $3,500 unless the Member and his spouse (or where the
Member has died, the surviving spouse) consent in writing witnessed by a notary
public or a member of the Committee in a manner prescribed by the Committee
prior to such distribution. The consent of the Member and his spouse must be
obtained not more than 90 days before the date distribution commences. The
Committee shall furnish to such Member a written notification of the
availability of the election hereunder at least 90 days before the Member's
anticipated benefit commencement date or, if a Member notifies the Committee of
his intent to terminate employment less than 90 days before the proposed benefit
commencement date, as soon after the Member notifies the Committee as is
administratively feasible. The notification shall explain the terms and
conditions of the joint and survivor annuity described in subsection 9(b)(i)(B)
and the effect of electing not to take such annuity. The Member may, within a
period of 90 days after receipt of the written notification or such longer
period as the Committee may uniformly make available, complete the election. The
Member may revoke an election not to take the joint and survivor annuity
described in subsection 9(b)(i)(B) or choose again to take such annuity at any
time and any number of times within the applicable election period. If a Member
requests additional information within 60

                                     - 68 -
<PAGE>   75

days after receipt of the notification of election, the minimum election period
shall be extended an additional 60 days following his receipt of such additional
information.

                               (ii) Single Member.  If a Member is not
married on the date on which benefits are to commence and his nonforfeitable
Accrued Benefit exceeds $3,500, benefits will be distributed in the form
described under subsection 9(b)(i)(A) unless the Member elects an alternate form
of settlement.

                           (f) Lump Sum Distributions. The amount of any
distribution of a benefit in the form of a lump sum shall be adjusted consistent
with the rules of subsection 6(e) to take into account gains or losses properly
allocable to the benefit being distributed for the period ending on the
Valuation Date coincident with or last preceding such lump sum distribution
whenever the distribution occurs more than three months after the initial
determination of the amount of such distribution.

                           (g) Withholding. All distributions under the Plan are
subject to federal, state and local tax withholding as required by applicable
law as in effect from time to time.

                           (h) Compliance with Code Requirements. All forms of
benefit distributions and required benefit commencement dates shall be subject
to and in compliance with section 401(a)(9) of the Code and the regulations
thereunder, including the minimum distribution incidental benefit requirement.
The provisions of section 401(a)(9) of the Code and the regulations thereunder

                                     - 69 -
<PAGE>   76

shall override any provision of the Plan inconsistent therewith.

                           (i) Special Provisions Regarding Distributions.
Anything in this section 9 to the contrary notwithstanding, the following
special provisions shall apply with respect to distributions:

                                    (i) If the Accrued Benefit of a Member at
the time of the Member's initial required benefit distribution (as determined
pursuant to subsection 9(a)) is $300.00 or less, the entire Accrued Benefit
shall be distributed to the Member in one lump sum.

                                    (ii) If the minimum required distribution to
a Member who has attained age 70-1/2 is less than $300.00 but the Member's
Accrued Benefit exceeds $300.00, the Member may elect annually (by written
request to the Committee) a distribution of up to $300.00, but in no event shall
the aggregate amount of such distributions exceed the Member's Accrued Benefit.

                                    (iii)With respect any Member whose
employment terminates on or after November 1, 1991, in the case of a Member
whose nonforfeitable Accrued Benefit at the time scheduled for distribution is
$3,500 or less, and who fails to return to the Committee completed election
forms with respect to the distribution of his benefits within one month from the
date the forms are mailed to the Member, the Committee shall cause the Accrued
Benefit, less all applicable taxes, to be distributed to

                                     - 70 -
<PAGE>   77

the Member in a lump sum as soon thereafter as practicable, anything in the Plan
to the contrary notwithstanding.

                           (j) Distribution of Company Stock in Kind. If at the
time set for distribution of benefits hereunder, all or a portion of the
Member's Accrued Benefit is invested in the Stock Fund, the portion of the
Member's Accrued Benefit so held shall be liquidated into cash for distribution
to the Member, unless the Member directs that the distribution be made in kind,
provided, however, that the value of a fractional share of Company Stock shall
in all events be distributed in cash.

                           (k) Eligible Rollover Distributions. Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a
Distributee's election under this section 9, 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.

                  10.      IN-SERVICE DISTRIBUTIONS

                           (a) Age 59-1/2. A Member who has attained the age of
59-1/2 shall have the right to withdraw all or a portion of his Accrued Benefit
(other than that portion attributable to Profit Sharing Contributions) as of the
first Valuation Date occurring after the Member's delivery of a written request
for withdrawal to the Committee.

                                     - 71 -
<PAGE>   78

                           (b) Hardship. A Member shall have the right, subject
to the requirements and limitations hereunder set forth in this section 10 to
request an in-service distribution from his Salary Reduction Account on account
of "hardship." A distribution is on account of hardship only if the distribution
both is made on account of an immediate and heavy financial need of the Member
and is necessary to satisfy such financial need.

                                    (i) Need. A distribution shall be deemed to
be made on account of an immediate and heavy financial need of the Member if the
distribution is on account of (A) medical expenses described in section 213(d)
of the Code incurred by the Member, the Member's spouse or any dependent of the
Member (as defined in section 152 of the Code); (B) purchase (excluding mortgage
payments) of a principal residence for the Member; (C) payment of tuition for
the next semester or quarter of post-secondary education for the Member, the
Member's spouse, child or any dependent of the Member (as defined in section 152
of the Code); (D) the need to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the Member's principal
residence; or (E) such other reason as the Commissioner of Internal Revenue
specifies as a deemed immediate and heavy financial need through the publication
of regulations, revenue rulings, notices or other documents of general
applicability.

                                     - 72 -
<PAGE>   79

                               (ii) Satisfaction of Need.  A distribution
shall be deemed to be necessary to satisfy an immediate and heavy financial need
of a Member only if all of the requirements or conditions set forth below are
satisfied or agreed to by the Member, as appropriate.

                                            (A) The distribution is not in
excess of the amount of the immediate and heavy financial need of the Member.

                                            (B) The Member has obtained all
distributions, other than hardship distributions, and all non-taxable loans
currently available under all plans subject to section 415 of the Code
maintained by a Participating Company or any Related Entity.

                                            (C) The Member's elective deferrals
under this Plan and each other deferred compensation plan maintained a
Participating Company or Related Entity in which the Member participates are
suspended for twelve full calendar months after receipt of the distribution.

                                            (D) The Member does not make
elective deferrals under this Plan or any other plan maintained by the Company
or a Related Entity for the year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under section 402(g) of
the Code for such next taxable year reduced by the amount of the Member's
elective contributions for the taxable year of the hardship distribution.

                                     - 73 -
<PAGE>   80

                              (iii) Limitation. Distributions on account of
hardship shall be limited to the sum of (A) the Member's elective deferrals
under subsection 4(f) of the Plan and (B) income allocable to such elective
contributions credited to the Member's Salary Reduction Account as of December
31, 1988. Hardship distributions shall be subject to the withholding
requirements of subsection 9(g).

                              (iv) Additional Rule. A Member with a Voluntary
Contribution Account shall not be permitted to receive a hardship distribution
under this subsection until he has withdrawn such Voluntary Contribution Account
as provided for under subsection 4(m)(iv).

                           (c) Spousal Consent. If a Member who requests a
distribution under this section is married and the nonforfeitable portion of his
Accrued Benefit exceeds $3,500, then the written consent of such Member's spouse
to such distribution, witnessed by a notary public or a member of the Committee,
shall be a pre-condition to the distribution.

                           (e) Accounting. All distributions under this section
shall be charged in proportion to each Investment Category in which the Member's
Account is held.

                           (f) Emergency Distribution of Benefit Attributable to
Profit Sharing Contributions. The Committee, according to uniform rules
non-discriminatorily applied, may authorize the Trustee to make an in-service
distribution out of

                                     - 74 -
<PAGE>   81

assets attributable to Profit Sharing Contributions held for the benefit of a
Member to such Member on account of a financial emergency provided such Member's
Accrued Benefit attributable to Profit Sharing Contributions is 100%
nonforfeitable. A financial emergency shall mean an immediate and heavy
financial need of a Member resulting from personal accident or illness or an
accident, illness or death within the Member's immediate family. Such a
distribution shall not exceed the lesser of (i) the cost of meeting the
immediate financial need created by the emergency or (ii) the Member's Accrued
Benefit. In making the determination required under the preceding sentence, the
cost of meeting the financial need shall be calculated by taking into account
financial resources that are available from other sources, including any other
distributions, including other hardship based distributions from any plan in
which the Member participates, that may be available to the Member. A
distribution under this subsection shall not affect the Member's subsequent
participation in the Plan.

                           (g) In-Service Distributions of Accrued Benefit
Attributable to Profit Sharing Contributions for Part-Time Members.

                                    (i) A Member who has both attained age 65
and completed at least five (5) Years of Service but who is scheduled to perform
services for the Company at a rate of fewer than 1,000 Hours of Service in a
Plan Year shall have the right

                                     - 75 -
<PAGE>   82

to a distribution of his Accrued Benefit attributable to Profit Sharing
Contributions as of the first Valuation Date occurring after the Member's
delivery of a written request for withdrawal to the Committee. The distribution
to the Member shall be made in the form described in subsection 9(b)(i)(A), (B)
or (C), as the Member shall select.

                               (ii) A Member who has attained age 55, whose
right to his Accrued Benefit is nonforfeitable, and whose Hours of Service for
the Company are reduced shall have the right, exercisable not more frequently
than once in each Plan Year, to a distribution of a portion of his Accrued
Benefit attributable to Profit Sharing Contributions as of the first Valuation
Date occurring after the Member's delivery of a written request for withdrawal
to the Committee. The Member shall specify with said request the amount of the
distribution provided, however, that such amount shall be at least $300.00 but
shall not exceed the lesser of (A) the amount by which the Member's Compensation
has been reduced as a result of his performing fewer Hours of Service, or (B)
the Member's Accrued Benefit attributable to Profit Sharing Contributions.

                           (h) Other Provisions Pertaining to In-Service
Distributions Attributable to Profit Sharing Contributions. Anything herein to
the contrary notwithstanding, the in-service distributions of benefits
attributable to Profit Sharing

                                     - 76 -
<PAGE>   83

Contributions permitted by section 10 shall be subject to the following
requirements:

                                    (i) If a Member requesting an emergency
benefit under subsection 10(f) or a distribution on account of part-time
employment statuts under subsection 10(g)(ii) is married, the written consent of
such Member's spouse to such distribution, witnessed by a notary public or a
member of the Committee in a manner prescribed by the Committee, shall be a
pre-condition to the distribution. If a Member requesting a distribution on
account of part-time status under subsection 10(g)(i) is married, the provisions
of subsection 9(e) (insofar as they relate to the requirement for a joint and
survivor annuity with the Member's spouse and the conditions for the waiver of
such requirement) shall apply.

                                    (ii) The provisions of subsection 9(h)
(Compliance with Code Requirements) and the requirements of section 401(a)(9) of
the Code shall, to the extent applicable, continue to govern required
distributions of a Member's Accrued Benefit.

                  11. TITLE TO ASSETS

                           No person or entity shall have any legal or
equitable right or interest in the contributions made by any Participating
Company, or otherwise received into the Fund, or in

                                     - 77 -
<PAGE>   84

any assets of the Fund, except as expressly provided in the Plan.

                  12. AMENDMENT AND TERMINATION

                      (a) Amendment. The provisions of this Plan may be amended
by the Company from time to time and at any time in whole or in part, provided
that no amendment shall be effective unless the Plan as so amended shall be for
the exclusive benefit of the Members and their beneficiaries, and that no
amendment shall operate to deprive any Member of any rights or benefits accrued
to him under the Plan prior to such amendment.

                      (b) Termination. While it is the Company's intention to
continue the Plan in operation indefinitely, the right is, nevertheless,
expressly reserved to terminate the Plan in whole or in part or discontinue
contributions at any time. Any such termination, partial termination or
discontinuance of contributions shall be effected only upon condition that such
action is taken as shall render it impossible for any part of the corpus of the
Fund or the income therefrom to be used for, or diverted to, purposes other than
the exclusive benefit of the Members and their beneficiaries.

                      (c) Conduct on Termination. If the Plan is to be
terminated at any time, the Company shall give written notice to the Trustee
which shall thereupon revalue the assets of the Fund in accordance with the
Trust Agreement and the accounts of the Members as of the date of termination,
partial termination or discontinuance of contributions and, after discharging
and

                                     - 78 -
<PAGE>   85

satisfying any obligations of the Plan, shall allocate all unallocated assets to
the Accrued Benefits of the Members at the date of termination, partial
termination or discontinuance of contributions as provided for in section 6.
Upon termination, partial termination or discontinuance of contributions, the
Accrued Benefits of Members affected thereby shall become fully vested and shall
not thereafter be subject to forfeiture in whole or in part. The Committee shall
instruct the Trustee to continue to control and manage the Fund for the benefit
of Members to whom distributions will be made at the time and in the manner
provided in section 9. Notwithstanding the foregoing, incident to a termination
or a discontinuance of contributions, the Company may amend the Plan and the
Trust Agreement to provide for distribution of Accrued Benefits to each affected
Member provided such distribution does not violate any applicable provision of
section 401(a) or 401(k) of the Code.

                  13. LIMITATION OF RIGHTS

                      (a) Alienation. None of the payments, benefits or rights
of any Member shall be subject to any claim of any creditor of such Member and,
in particular, to the fullest extent permitted by law, shall be free from
attachment, garnishment, trustee's process, or any other legal or equitable
process available to any creditor of such Member. No Member shall have the right
to alienate, anticipate, commute, pledge, encumber or assign any of the benefits
or payments which he may expect to

                                     - 79 -
<PAGE>   86

receive, contingently or otherwise, under this Plan, except the right to
designate a beneficiary or beneficiaries as hereinabove provided.

                           (b) Qualified Domestic Relations Order Exception.
subsection 13(a) shall not apply to the creation, assignment or recognition of a
right to any benefit payable with respect to a Member under a qualified domestic
relations order within the meaning of section 414(p) of the Code.
Notwithstanding sections 8 and 9, distributions to an alternate payee pursuant
to a qualified domestic relations order shall be made (i) at the time specified
in such order or (ii), if the order permits, as soon after the Administrator
approves the order as is administratively feasible provided such distribution is
permitted under applicable provisions of the Code.

                           (c) Disclaimer of Rights. Neither the establishment
of the Plan, nor any modification thereof, nor the creation of any fund, trust
or account, nor the payment of any benefit shall be construed as giving any
Member or Employee, or any person whomsoever, any legal or equitable right
against any Participating Company, the Trustee or the Committee, unless such
right shall be specifically provided for in the Trust Agreement or the Plan or
conferred by affirmative action of the Committee or the Company in accordance
with the terms and provisions of the Plan or as giving any Member or Employee
the right to be retained in the employ of any Participating Company. All Members
and

                                     - 80 -
<PAGE>   87

other Employees shall remain subject to discharge to the same extent as if the
Plan had never been adopted.

                  14. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS

                      In the case of any Plan merger or Plan consolidation with,
or transfer of assets or liabilities of the Plan to, any other plan, each Member
in the Plan must be entitled to receive a benefit immediately after the merger,
consolidation, or transfer (if the Plan were then to terminate) 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 been
terminated). Any amounts held in this Plan by reason of a merger or transfer of
assets shall be regarded as a portion of the Accrued Benefit of the Member for
whose benefit the amount was received and shall be subject to all of the terms
of this Plan and such terms of the transferor plan which are made applicable to
amounts transferred by reason of section 411(d)(6) of the Code.

                  15. PARTICIPATION BY RELATED ENTITIES

                      (a) Commencement. Any subsidiary of the Company which is
eligible to file a consolidated federal income tax return with the Company shall
be deemed to have adopted this Plan unless the Company, through its Board of
Directors, provides to the contrary. Any other subsidiary company of the Company
or a Related Entity with respect to the Company may, with the

                                     - 81 -
<PAGE>   88

permission of the Board of Directors, elect to adopt this Plan and the
accompanying Trust Agreement.

                      (b) Termination. The Company may, by action of the Board
of Directors, determine at any time that any such Participating Company shall
withdraw and establish a separate plan and fund. The withdrawal shall be
effected by a duly executed instrument delivered to the Trustee instructing the
Trustee to segregate the assets of the Fund allocable to the Employees of such
Participating Company and pay them over to the separate fund.

                      (c) Single Plan. The Plan shall at all times be
administered and interpreted as a single plan for the benefit of the Employees
of all Participating Companies.

                      (d) Delegation of Authority. Each Participating Company,
by adopting the Plan, acknowledges that the Company has all the rights and
duties thereof under the Plan and the Trust Agreement, including the right to
amend the same.

                  16. TOP-HEAVY REQUIREMENTS

                      (a) General Rule. For any Plan Year in which the Plan is a
top-heavy plan or included in a top-heavy group, as determined under subsection
16(b), the special requirements of this section shall apply.

                      (b) Calculation of Top-Heavy Status. The Plan shall be a
top-heavy plan (if it is not included in an "aggregation group") or a plan
included in a top-heavy group (if

                                     - 82 -
<PAGE>   89

it is included in an "aggregation group") with respect to any Plan Year if the
sum as of the "determination date" of the "cumulative accounts" of "key
employees" for the Plan Year exceeds 60% of a similar sum determined for all
"employees", excluding "employees" who were "key employees" in prior Plan Years
only.

                      (c) Definitions. For purposes of this section 16, the
following definitions shall apply to be interpreted in accordance with the
provisions of section 416 of the Code and the regulations thereunder.

                                    (i) "Aggregation Group" shall mean the plans
of each Participating Company or Related Entity included below:

                                            (A) each such plan in which a "key
employee" is a participant including a terminated plan in which a "key employee"
was a participant within the five years ending on the "determination date";

                                            (B) each other such plan which
enables any plan in subsection (a) above to meet the requirements of section
401(a)(4) or 410 of the Code; and

                                            (C) each other plan not required to
be included in the "aggregation group" which the Company elects to include in
the "aggregation group" in accordance with the "permissive aggregation group"
rules of the Code if such group would continue to meet the requirements of
sections 401(a)(4) and 410 of the Code with such plan being taken into account.

                                     - 83 -
<PAGE>   90

                                    (ii) "Cumulative Account" for any "employee"
shall mean the sum of the amount of his accounts under this Plan plus all
defined contribution plans included in the "aggregation group" (if any) as of
the most recent valuation date for each such plan within a twelve-month period
ending on the "determination date", increased by any contributions due after
such valuation date and before the "determination date" plus the present value
of his accrued benefit under all defined benefit pension plans included in the
"aggregation group" (if any) as of the "determination date". For a defined
benefit plan, the present value of the accrued benefit as of any particular
determination date shall be the amount determined under (A) the method, if any,
that uniformly applies for accrual purposes under all plans maintained by the
Participating Companies and all Related Entities, or (B) if there is no such
method, as if such benefit accrued not more rapidly than under the slowest
accrual rate permitted under the fractional accrual rule of section 411(b)(1)(C)
of the Code, as of the most recent valuation date for the defined benefit plan,
under actuarial equivalent factors specified therein, which is within a
twelve-month period ending on the "determination date". For this purpose, the
valuation date shall be the date for computing plan costs for purposes of
determining the minimum funding requirement under section 412 of the Code.
"Cumulative accounts" of "employees" who have not performed services for any
Participating Company or any Related

                                     - 84 -
<PAGE>   91

Entity for the five-year period ending on the "determination date" shall be
disregarded. An "employee's" "cumulative account" shall be increased by the
aggregate distributions during the five-year period ending on the "determination
date" made with respect to him under any plan in the aggregation group.
Rollovers and direct plan-to-plan transfers to this Plan or to a plan in the
"aggregation group" shall be included in an "employee's" "cumulative account"
unless the transfer is initiated by the "employee" and made from a plan
maintained by an employer which is not a Participating Company or a Related
Entity.

                              (iii) "Determination Date" shall mean with respect
to any Plan Year the last day of the preceding Plan Year.

                              (iv) "Employee" shall mean any person (including a
beneficiary thereof) who has or had an accrued benefit held under this Plan or a
plan in the "aggregation group" including this Plan at any time during the
current or any one of the four preceding Plan Years. Any "employee" other than a
"key-employee" described in subsection 16(c)(v) shall be considered a "non-key
employee" for purposes of this section 16.

                              (v) "Key Employee" shall mean any "employee" or
former "employee" (including a beneficiary thereof) who is, at any time during
the Plan Year, or was, during any one of the four preceding Plan Years any one
or more of the following:

                                     - 85 -

<PAGE>   92
                              (A) an officer of a Participating Company or a
Related Entity whose compensation (as defined in subsection 5(d)) exceeds 50% of
the dollar limitation in effect under section 415(b)(1)(A) of the Code, unless
50 other such officers (or, if lesser, a number of such officers equal to the
greater of three or 10% of the "employees") have higher annual compensation;

                              (B) one of the ten persons employed by a
Participating Company or a Related Entity both having annual compensation (as
defined in subsection 5(d)) greater than the limitation in effect under 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 (but at least more than a 0.5%
interest) in any Participating Company or any Related Entity. For purposes of
this subsection (B), if two "employees" have the same interest, the one with the
greater compensation shall be treated as owning the larger interest;

                              (C) any person owning (or considered as owning
within the meaning of section 318 of the Code) more than 5% of the outstanding
stock of all Participating Companies or any Related Entity or stock possessing
more than 5% of the total combined voting power of such stock;

                              (D) a person who would be described in subsection
(C) above if 1% were substituted for 5% each place the

                                     - 86 -
<PAGE>   93
same appears in subsection (C) above, and who has annual compensation of more
than $150,000. For purposes of determining ownership under this subsection,
section 318(a)(2)(C) of the Code shall be applied by substituting 5% for 50%.

                  (d) Combined Benefit Limitation. For purposes of the
calculation of the combined limitation of subsection 5(c), "1.0" shall be
substituted for "1.25" each place the same appears in that subsection.

                  (e) Vesting. The portion of a Member's Accrued Benefit derived
from Company contributions made under any provisions of the Plan, the Profit
Sharing Plan or the Savings Plan shall continue to vest according to the
applicable schedule set forth in the Plan or in accordance with the schedule set
forth in this subsection 16(e) if that results in a larger nonforfeitable
portion.

<TABLE>
<CAPTION>
                                       NONFORFEITABLE
     YEARS OF SERVICE                   PERCENTAGE
<S>                                    <C>
Less than 2 years                           0%
2 years but less than 3 years              20%
3 years but less than 4 years              40%
4 years but less than 5 years              60%
5 years but less than 6 years              80%
6 years or more                           100%
</TABLE>

                                    - 87 -
<PAGE>   94
The schedule above shall apply to all benefits accrued as of the date the
schedule becomes effective and all benefits accrued for Plan Years thereafter to
which this section applies. If the Plan ceases to be top-heavy, no benefit which
became nonforfeitable under the schedule above shall become forfeitable. For
Members with three Years of Service or more, the schedule shall continue to
apply to future accruals to the extent it provides for more rapid vesting.

                  (f) Minimum Contribution. Minimum Participating Company
contributions for a Member who is not a "key employee" shall be required in an
amount equal to the lesser of 3% of compensation (as defined in subsection 5(d))
or the highest percentage of Compensation contributed for any "key employee".
For purposes of this subsection, employer social security contributions and
elective contributions on behalf of "employees" other than "key employees" shall
be disregarded. Each "non-key employee" of a Participating Company who has not
separated from service at the end of the Plan Year and who has satisfied the
eligibility requirements of subsection 3(a) shall receive any minimum
contribution provided under this section 16 without regard to (i) whether he is
credited with 1,000 Hours of Service in the Plan Year, (ii) earnings level for
the Plan Year or (iii) whether he elects to make contributions under subsection
4(f). If an "employee" participates in both this Plan and another defined
contribution plan maintained by a Participating Company

                                     - 88 -
<PAGE>   95
or a Related Entity, the minimum benefit shall be provided under the other plan.
Furthermore, if an "employee" participates in both this Plan and a defined
benefit plan maintained by a Participating Company or a Related Entity, the
minimum benefit shall be provided under the defined benefit plan.

            17.   MISCELLANEOUS

                  (a) Incapacity. If the Committee determines that a person
entitled to receive any benefit payment is under a legal disability or is
incapacitated in any way so as to be unable to manage his financial affairs, the
Committee may make payments to such person for his benefit, or apply the
payments for the benefit of such person in such manner as the Committee
considers advisable. Any payment of a benefit in accordance with the provisions
of this subsection shall be a complete discharge of any liability to make such
payment.

                  (b) Reversions. In no event, except as provided in this
subsection or in the applicable provisions of the Trust Agreement, shall the
Trustee return to a Participating Company any amount contributed by it to the
Plan.

                        (i) Mistake of Fact. In the case of a contribution made
by a good faith mistake of fact, the Trustee shall return the erroneous portion
of the contribution, without increase for investment earnings, but with decrease
for investment losses, if any, within one year after payment of the contribution
to the Fund.

                                     - 89 -
<PAGE>   96
                        (ii) Deductibility. To the extent deduction of any
contribution determined by a Participating Company to be deductible is
disallowed, the Trustee shall return that portion of the contribution, without
increase for investment earnings but with decrease for investment losses, if
any, for which deduction has been disallowed within one year after the
disallowance of the deduction.

                        (iii) Limitation. No return of contribution shall be
made under this subsection which adversely affects the Plan's qualified status
under regulations, rulings or other published positions of the Internal Revenue
Service or reduces a Member's Accrued Benefit below the amount it would have
been had such contribution not been made.

                        (iv) Limitations. This subsection shall not preclude
refunds made in accordance with subsections 4(g)(i), 4(i)(iii) and 4(n)(ii).

                  (c) Pronouns. The use of the masculine pronoun shall be
extended to include the feminine gender wherever appropriate.

                  (d) Interpretation. The Plan is a profit sharing plan
including a qualified, tax exempt trust under sections 401(a) and 501(a) of the
Code and a qualified cash or deferred arrangement under section 401(k)(2) of the
Code. The Plan shall be interpreted in a manner consistent with its satisfaction
of all requirements of the Code applicable to such a plan.

                                     - 90 -
<PAGE>   97
                  (e) Employee Data. The Committee or the Trustee may require
that each Employee provide such data as it deems necessary upon his becoming a
Member in the Plan. Each Employee, upon becoming a Member, shall be deemed to
have approved of and to have acquiesced in each and every provision of the Plan
for himself, his personal representatives, distributees, legatees, assigns, and
beneficiaries.

                  (f) Law Governing. This Plan shall be construed, enforced and
regulated under the law of the Commonwealth of Pennsylvania, except to the
extent such law is superseded by ERISA.

            18.   SPECIAL PROVISIONS REGARDING COMPANY STOCK

                  (a) Applicability. The provisions of this section shall 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
Company Stock (herein jointly and severally referred to as a "tender offer").

                  (b) Instructions to Trustee. The Trustee may not take any
action in response to a tender offer except as otherwise provided in this
section. Each Member may direct the Trustee to sell, offer to sell, exchange or
otherwise dispose of the Company Stock attributable to his interest in the Stock
Fund in accordance with the provisions, conditions and terms of such

                                     - 91 -
<PAGE>   98
tender offer and the provisions of this section; provided, however, that such
directions from Members shall be confidential and shall not be divulged by the
Trustee to anyone, including the Company or any director, officer, employee or
agent of the Company, it being the intent of this subsection 18(b) to ensure
that the Company (and its directors, officers, employees and agents) cannot
determine the direction given by any Member. Such instructions shall be in such
form and shall be filed in such manner and at such time as the Trustee may
prescribe. The confidentiality provision of this section shall likewise apply to
the decisions of the Trustee made pursuant to section 18(c).

                  (c) Trustee Action on Member Instructions. The Trustee shall
sell, offer to sell, exchange or otherwise dispose of the Company Stock
attributable to the Member's interest in the Stock Fund with respect to which it
has received directions to do so under this section 18 for Members. The proceeds
of a disposition directed by a Member with respect to Company Stock under this
section 18 shall be allocated to such Member's Accrued Benefit and be invested
in accordance with the Member's Investment Category or Categories designation(s)
for the investment of new contributions to the Plan under subsection 6(b).

                  (d) Action With Respect to Participants Not Instructing the
Trustee or Not Issuing Valid Instructions. To the extent to which Members do not
instruct the Trustee or do not

                                     - 92 -
<PAGE>   99
issue valid directions to the Trustee to sell, offer to sell, exchange or
otherwise dispose of the Company Stock attributable to their interest in the
Stock Fund, such Members shall be deemed to have directed the Trustee that such
shares remain invested in Company Stock subject to the provisions of the Plan.

            IN WITNESS WHEREOF, and as evidence of the adoption of this Plan by
the Company, it has caused the same to be signed by its officers thereunto duly
authorized, and its corporate seal to be affixed thereto, this 29th day of
December, 1994.

Attest:                                   THE BON-TON STORES, INC.

/s/ Carlos E. Alberini                        By: /s/ M. Thomas Grumbacher
-------------------------------               ----------------------------
        Secretary                             Chairman

[Corporate Seal]

                                     - 93 -
<PAGE>   100
                                   APPENDIX A

            4. (i) (i) Rule. In no event shall the "average actual deferral
percentage" (as defined below) for Members who are "highly compensated
employees" for any Plan Year bear a relationship to the "average actual deferral
percentage" for Members who are not "highly compensated employees" which does
not satisfy either subsection 4(i)(i)(A) or (B) below.

                              (A) The requirement shall be satisfied for a Plan
Year if the "average actual deferral percentage" for the group of Members who
are "highly compensated employees" is not more than the "average actual deferral
percentage" of all other Members multiplied by 1.25.

                              (B) The requirement shall be satisfied for a Plan
Year if (1) the excess of the "average actual deferral percentage" for the
Members who are "highly compensated employees" for the Plan Year over the
"average actual deferral percentage" of all other Members is not more than two
percentage points (or such lower amount as may be required by applicable
regulations under the Code) and (2) the "average actual deferral percentage" for
Members who are "highly compensated employees" is not more than the "average
actual deferral percentage" of all other Members multiplied by two (or such
lower multiple as may be required by applicable regulations under the Code).

                                     - 94 -
<PAGE>   101
                        (ii) Refund. If the relationship of the "average actual
deferral percentages" does not satisfy subsection 4(i)(i) for any Plan Year,
then the Committee shall direct the Trustee to distribute the "excess
contribution" (as defined below) for such Plan Year (plus any income and minus
any loss allocable thereto for the Plan Year in which the contributions were
made and, to the extent required by applicable regulations, for the period
between the end of the Plan Year to the date of distribution) within two and
one-half months after the close of the Plan Year to the "highly compensated
employees" on the basis of the respective portions of the "excess contribution"
attributable to each, as determined under this subsection. The portion of the
"excess contribution" attributable to a "highly compensated employee" is
determined by reducing such contributions paid over to the Fund on behalf of the
"highly compensated employees" in order of contribution percentages, until the
"excess contribution" is eliminated. The amount of excess contributions to be
distributed shall be reduced by excess deferrals previously distributed for the
taxable year ending in the same Plan Year and excess deferrals to be distributed
for a taxable year shall be reduced by excess contributions previously
distributed for the Plan Year beginning in such taxable year. In the case of a
"highly compensated employee" whose "actual deferral percentage" is determined
under the Applicable Family

                                     - 95 -
<PAGE>   102
Aggregation Rules, the determination of the amount of excess contributions shall
be made as follows:

                              (A) If the "highly compensated employee's" "actual
deferral percentage" is determined by combining the contributions and
"compensation" of only those family members who are highly compensated without
regard to family aggregation, then the "actual deferral percentage" is reduced
in accordance with the "leveling" method described in regulation section
1.401(k)-1(f)(2) and the excess contributions for the family unit are allocated
among the "family members" in proportion to the contributions of each family
member that have been combined.

                              (B) If the "highly compensated employee's" "actual
deferral percentage" is determined by combining the contributions and
"compensation" of all family members (as the term "family members" is defined in
subsection 1(e) of the Plan), then the "actual deferral percentage" is reduced
in accordance with the "leveling" method but not below the "actual deferral
percentage" of eligible nonhighly compensated family members. Excess
contributions are determined by taking into account the contributions of the
eligible family members who are highly compensated without regard to family
aggregation and are allocated among such family members in proportion to their
contributions. If further reduction of the "actual deferral percentage" is
required, excess contributions

                                     - 96 -
<PAGE>   103
resulting from this reduction are determined by taking into account the
contributions of all eligible "family members" and are allocated among such
"family members" in proportion to their contributions. Any refund made to a
Member in accordance with this subsection shall be drawn from his Salary
Reduction Account.

                        (iii) Additional Definitions. For purposes of this
subsection 4(i), the term "Member" shall mean each Employee eligible to make
contributions under subsection 4(f) at any time during a Plan Year. The "average
actual deferral percentage" for a specific group of Members for a Plan Year
shall be the average of the "actual deferral percentage" for each Member in the
group for such Plan Year. The "actual deferral percentage" for a particular
Member for a Plan Year shall be the ratio of the amount of contributions made
under subsection 4(f) no later than 12 months after the close of the Plan Year
for such Member out of amounts that would have been received by him in the Plan
Year but for his election under subsection 4(f) and which are allocated to the
Member on or before the last day of the Plan Year without regard to
participation or performance of services thereafter to the Member's
"compensation" for such Plan Year. The "excess contribution" for any Plan Year
is the excess of the amount of contributions paid over to the Fund pursuant to
subsection 4(f) on behalf of "highly compensated employees" for such Plan Year
over the maximum amount of such contributions

                                     - 97 -
<PAGE>   104
permitted for "highly compensated employees" under subsection
4(i)(i).

                        (iv) Aggregation of Contributions. The "actual deferral
percentage" for any Member who is a "highly compensated employee" for the Plan
Year and who is eligible to make elective contributions excludable from income
under section 401(k) of the Code to any plan maintained by a Participating
Company or a Related Entity shall be determined as if all such contributions
were made under this Plan.

                        (v) Aggregation of Plans. In the event that this Plan
satisfies the requirements of section 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans satisfy
the requirements of section 401(a)(4) or 410(b) of the Code only if aggregated
with this Plan, then subsection 4(i)(i) shall be applied by determining the
"actual deferral percentages" of Members as if all such plans were a single
plan.

                        (vi) Aggregation with 401(m) Contributions. In the event
that contributions made pursuant to subsections 4(j) and 4(m) satisfy the
relevant conditions described in proposed regulation section 1.401(k)-1(b)(3),
such contributions may, at the Company's discretion, be tested hereunder as if
they had been contributed under subsection 4(f). If such contributions are so
aggregated, any refund made pursuant to this subsection shall be drawn first
from the Member's Voluntary Contribution Account,

                                     - 98 -
<PAGE>   105
then from his Company Contribution Account and then from his Salary Reduction
Account.

                                   APPENDIX A

            4. (n) (i) Rule. In no event shall the "average actual contribution
percentage" (as defined below) for Members who are "highly compensated
employees" for any Plan Year bear a relationship to the "average actual
contribution percentage" for Members who are not "highly compensated employees"
which does not satisfy either subsection 4(n)(i)(A) or (B) below.

                              (A) The requirement shall be satisfied for a Plan
Year if the "average actual contribution percentage" for the group of Members
who are "highly compensated employees" is not more than the "average actual
contribution percentage" of all other Members multiplied by 1.25.

                              (B) The requirement shall be satisfied for a Plan
Year if (1) the excess of the "average actual contribution percentage" for the
Members who are "highly compensated employees" for the Plan Year over the
"average actual contribution percentage" of all other Members is not more than
two percentage points (or such lower amount as may be required by applicable
regulations under the Code) and (2) the "average actual contribution percentage"
for Members who are "highly compensated employees" is not more than the "average
actual contribution percentage" of all other Members multiplied by two

                                     - 99 -
<PAGE>   106
(or such lower multiple as may be required by applicable regulations under the
Code).

                        (ii) Refund. If the relationship of the "average actual
contribution percentages" does not satisfy subsection 4(n)(i) for any Plan Year,
then the Committee shall direct the Trustee to distribute the "excess
contribution" (as defined below) for such Plan Year (plus any income and minus
any loss allocable thereto for the Plan Year in which the contributions were
made and, to the extent required by applicable regulations, for the period
between the end of the Plan Year to the date of distribution) within two and
one-half months after the close of the Plan Year to the "highly compensated
employees" on the basis of the respective portions of the "excess contribution"
attributable to each, as determined under this subsection. The portion of the
"excess contribution" attributable to a "highly compensated employee" is
determined by reducing such contributions paid over to the Fund on behalf of the
"highly compensated employees" in order of contribution percentages, until the
"excess contribution" is eliminated. In the case of a "highly compensated
employee" whose "actual contribution percentage" is determined under the
Applicable Family Aggregation Rules, the determination of the amount of excess
contributions shall be made as follows:

                              (A) If the "highly compensated employee's" "actual
contribution percentage" is determined by

                                     - 100 -
<PAGE>   107
combining the contributions and "compensation" of only those family members who
are highly compensated without regard to family aggregation, then the "actual
contribution percentage" is reduced in accordance with the "leveling" method
described in regulation section 1.401(m)-1(e)(2) and the excess contributions
for the family unit are allocated among the "family members" in proportion to
the contributions for each family member that have been combined.

                              (B) If the "highly compensated employee's" "actual
contribution percentage" is determined by combining the contributions and
"compensation" of all family members, then the "actual contribution percentage"
is reduced in accordance with the "leveling" method but not below the "actual
contribution percentage" of eligible nonhighly compensated family members.
Excess contributions are determined by taking into account the contributions for
the eligible family members who are highly compensated without regard to family
aggregation and are allocated among such family members in proportion to their
contributions. If further reduction of the "actual contribution percentage" is
required, excess contributions resulting from this reduction are determined by
taking into account the contributions for all eligible "family members" and are
allocated among such "family members" in proportion to their share of the
contributions. Any refund made to a Member in accordance with this subsection
shall be drawn first from his Voluntary

                                     - 101 -
<PAGE>   108
Contribution Account and then from his Company Contribution Account.
Notwithstanding the foregoing, if a Member does not have a 100% nonforfeitable
right to his Company Contribution Account under subsection 8(d)(ii), the
forfeitable portion of any amount withdrawn from his Company Contribution
Account shall be forfeited and only the vested portion shall be distributed to
the Member.

                        (iii) Allocation of Forfeitures. Any amounts forfeited
by "highly compensated employees" under this subsection shall be applied to
increase Company matching contributions made pursuant to subsection 4(j).
Notwithstanding the foregoing, no forfeiture arising under this subsection shall
be allocated to the account of any other "highly compensated employee" who
suffers or would thereby suffer a forfeiture under this subsection.

                        (iv) Additional Definitions. For purposes of this
subsection 4(n), the term "Member" shall mean each Employee eligible to make
contributions under subsection 4(f) at any time during a Plan Year. The "average
actual contribution percentage" for a specific group of Members for a Plan Year
shall be the average of the "actual contribution percentage" for each Member in
the group for such Plan Year. The "actual contribution percentage" for a
particular Member for a Plan Year shall be the ratio of the sum of (A) the
amount of contributions made under subsection 4(j) or subsection 4(m) no later
than 12 months after

                                     - 102 -
<PAGE>   109
the close of the Plan Year for such Member and which are allocated to the Member
on or before the last day of the Plan Year without regard to participation or
performance of services thereafter plus (B) elective contributions of a
nonhighly compensated employee which are permitted to be treated as matching
contributions under section 1.401(m)-1(b)(2) of the regulations under section
401(m) of the Code to the Member's "compensation" for such Plan Year. The
"excess contribution" for any Plan Year is the excess of the amount of
contributions paid over to the Fund pursuant to subsections 4(j) and 4(m) on
behalf of "highly compensated employees" for such Plan Year over the maximum
amount of such contributions permitted for "highly compensated employees" under
subsection 4(n)(i).

                        (v) Aggregation of Contributions. The "actual
contribution percentage" for any Member who is a "highly compensated employee"
for the Plan Year and who is eligible to make after-tax contributions to any
plan subject to section 415 of the Code maintained by a Participating Company or
a Related Entity or to have Participating Company matching contributions within
the meaning of section 401(m)(4)(A) of the Code allocated to his account under
two or more plans described in section 401(a) of the Code that are maintained by
a Participating Company or a Related Entity shall be determined as if all such
contributions were made under this Plan and each other Plan.

                                     - 103 -
<PAGE>   110
                        (vi) Aggregation of Plans. In the event that this Plan
satisfies the requirements of section 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans satisfy
the requirements of section 401(a)(4) or 410(b) of the Code only if aggregated
with this Plan, then subsection 4(n)(i) shall be applied by determining the
"actual contribution percentages" of Members as if all such plans were a single
plan.

                        (vii) Aggregation with Salary Reduction Contributions.
In the event that contributions made pursuant to subsections 4(j) and 4(m)
satisfy the relevant conditions described in proposed regulation section
1.401(k)-1(b)(3), such contributions may, at the Company's discretion, be tested
under subsection 4(i) as if they had been contributed under subsection 4(f).

                                     - 104 -

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