Document:

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                         FALLBROOK NATIONAL BANK
                             EMPLOYEE STOCK
                             OWNERSHIP PLAN

                        Effective January 1, 1997

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                             FALLBROOK NATIONAL BANK
                          EMPLOYEE STOCK OWNERSHIP PLAN

                               Table of Contents

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Article I - PURPOSE...........................................................1

        1.1    Exclusive Benefit..............................................1

        1.2    No Rights of Employment Granted................................1

Article II - DEFINITIONS......................................................1

        2.1    Accrued Benefit................................................1

        2.2    Administrative Committee.......................................2

        2.3    Affiliated Employer............................................2

        2.4    Beneficiary....................................................2

        2.5    Cash-Out.......................................................2

        2.6    Code...........................................................2

        2.7    Compensation...................................................3

        2.8    Employee ......................................................3

        2.9    Employer.......................................................3

        2.10   Employer Account...............................................3

        2.11   ERISA..........................................................3

        2.12   Exempt Loan....................................................3

        2.13   Fair Market Value..............................................3

        2.14   Family Member..................................................4

        2.15   Forfeiture.....................................................4

        2.16   Highly Compensated Employee....................................4

        2.17   Hours of Service...............................................5

        2.18   Leave of Absence...............................................6

        2.19   Net Profits....................................................6

        2.20   Normal Retirement Age..........................................7

        2.21   One Year Break in Service......................................7

        2.22   Participant....................................................7

        2.23   Plan...........................................................7

        2.24   Plan Administrator.............................................7

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        2.25    Plan Year.....................................................7

        2.26    Qualified Election Period.....................................8

        2.27    Qualified Participant.........................................8

        2.28    Qualifying Employer Security..................................8

        2.29    Retirement....................................................8

        2.30    Service.......................................................8

        2.31    Termination Date..............................................9

        2.32    Total and Permanent Disability................................9

        2.33    Total Service for Vesting.....................................9

        2.34    Trust.........................................................9

        2.35    Trust Fund....................................................9

        2.36    Unallocated Stock Account.....................................10

        2.37    Year of Service for Accrual of Benefits.......................10

        2.38    Year of Service for Participation.............................10

        2.39    Year of Service for Vesting...................................10

Article III - ELIGIBILITY TO PARTICIPATE......................................10

        3.1    Initial Entry..................................................10

        3.2    Resumption of Participation....................................11

Article  IV - CONTRIBUTIONS TO THE TRUST......................................11

        4.1    Amount of Contributions to Participants........................11

        4.2    Manner of Allocation...........................................11

        4.3    Permissible Types of Employer Contributions....................12

        4.4    Interim Allocation to Unallocated Stock Account................12

        4.5    General Accounting.............................................12

        4.6    Additional Provisions..........................................12

Article  V - ADMINISTRATION OF ACCOUNTS.......................................13

        5.1    Investments....................................................13

        5.2    Invest in Single Fund and Reasonable Rules.....................13

        5.3    Valuation of Assets and Allocation of Changes..................13

        5.4    Limitations on Allocations to Each Participant.................14

               (a)  Defined Contribution Plan Limitations.....................14

               (b)  Defined Benefit Plan Limitations..........................15

               (c)  Social Security Retirement Age Limitations................15

               (d)  Combination Defined Benefit and Defined Contribution

                                -ii-
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                    Plan Limitations..........................................16

        5.5    Designation of Beneficiary.....................................17

        5.6    Participant Voting and Exercise of Stock Rights................17

Article VI - VESTING..........................................................18

        6.1    Employer Account Vesting on Death, Retirement, or
               Total Permanent Disability.....................................18

        6.2    Employer Account Vesting on Termination........................18

        6.3    Restoration of Forfeitures.....................................19

Article VII - DISTRIBUTION OF BENEFITS........................................20

        7.1    Method of Distribution of Participant and Employer Accounts....20

        7.2    Time of Distribution...........................................20

        7.3    Segregation if Installment Distribution........................21

        7.4    Non-segregation if Installment Distribution....................22

        7.5    Distribution After Death of Participant........................22

        7.6    Distribution After Death of Beneficiary........................22

        7.7    Rollover Contributions and Distributions.......................22

        7.8    Suspense Account for Terminated Participants...................23

        7.9    Unable to Locate Participant or Beneficiary....................24

        7.10   Repayment of Cash-Out..........................................25

        7.11   Distribution of Dividends......................................25

        7.12   Diversification of Investments.................................25

        7.13   Qualified Domestic Relations Orders............................26

Article VIII - DUTIES AND AUTHORITY OF TRUSTEE................................26

        8.1    Receive Payments...............................................26

        8.2    Evaluate Assets................................................27

        8.3    Segregation of Accounts........................................27

        8.4    Tax Returns and Reports........................................27

        8.5    Powers.........................................................27

        8.6    Expenses.......................................................29

        8.7    Litigation.....................................................29

        8.8    Written Instructions...........................................29

        8.9    Appointment of Investment Manager..............................30

        8.10   Removal and Resignation of the Trustee.........................30

        8.11   Loans from Disqualified Persons................................30

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Article IX - DUTIES AND AUTHORITY OF ADMINISTRATIVE COMMITTEE.................31

        9.1    Appointment....................................................31

        9.2    No Discrimination..............................................32

        9.3    Majority Action................................................32

        9.4    Powers.........................................................32

        9.5    Filing Reports.................................................33

        9.6    Records and Information........................................33

        9.7    Information to Participants....................................33

        9.8    Compensation of Members........................................33

        9.9    Review of Participant's Claims.................................33

        9.10   Exercise of Stock Rights.......................................33

Article X - MODIFICATIONS FOR TOP HEAVY PLANS.................................34

        10.1   Application of Article.........................................34

        10.2   Definitions....................................................34

               (a)  Top Heavy Plans...........................................34

               (b)  Toy Heavy Group...........................................34

               (c)  Key Employee..............................................35

               (d)  Amounts Included for Computation Purposes.................35

               (e)  Non-Key Employee..........................................36

               (f)  Top Heavy Accrual.........................................36

        10.3   Accelerated Vesting............................................36

        10.4   Minimum Contributions..........................................37

        10.5   Limitation on Compensation Taken into Account Under Plan.......38

        10.6   Modification of Defined Benefit and Defined Contribution

               Plan Fraction..................................................38

Article XI - AMENDMENT AND TERMINATION........................................38

        11.1   Rights to Suspend or Terminate Plan............................38

        11.2   Successor Corporation..........................................38

        11.3   Amendment......................................................39

        11.4   One Hundred Percent (100%) Vesting on Termination of Plan......39

        11.5   Plan Merger or Consolidation...................................39

Article XII - MISCELLANEOUS...................................................39

        12.1   Laws of California to Apply....................................39

        12.2   Participant Cannot Transfer or Assign Benefits.................40

                                 -iv-

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        12.3   Right to Perform Alternative Acts..............................40

        12.4   Reversion of Contributions Under Certain Circumstances.........40

        12.5   Plan Administrator Agent for Service of Process................41

        12.6   Filing Tax Returns and Reports.................................41

        12.7   Indemnification................................................41

        12.8   Number and Gender..............................................41

Article XIII - EXEMPT LOANS...................................................42

        13.1   Use of Proceeds................................................42

        13.2   Interest Rate..................................................42

        13.3   Non-recourse...................................................42

        13.4   Limitations on Payments........................................42

        13.5   Forfeiture of Qualifying Employer Securities...................43

        13.6   Limitation on Future Obligation................................43
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                                    -v-
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                             FALLBROOK NATIONAL BANK
                          EMPLOYEE STOCK OWNERSHIP PLAN

This Stock Bonus Employee Stock Ownership Plan and Trust Agreement (Plan) is
made by and between Fallbrook National Bank, a corporation of the State of
California, having its principal place of business at 130 West Fallbrook,
Fallbrook, California, herein called "Employer" and Thomas E. Swanson and
Granger Haugh, herein called "Trustees".

Whereas, Employer desires to establish and maintain an employee stock ownership
plan for the benefit of its Employees who shall qualify as participants
(Participants) hereunder;

Therefore, effective January 1, 1997, Employer hereby establishes an employee
stock ownership plan and creates this Trust for the purpose of carrying out such
Plan and Trust on the following terms:

                                    Article I
                                     PURPOSE

1.1    EXCLUSIVE BENEFIT.

       This Plan has been executed for the exclusive benefit of the Participants
       hereunder and their Beneficiaries. This Plan shall be interpreted in a
       manner consistent with this intent and with the intention of the Employer
       that this Plan satisfy Internal Revenue Code (Code) Section 401 and Code
       Section 501. This Plan is created for the sole purpose of enabling
       employees of the Employer to share in its growth. Under no circumstances
       shall the Trust Fund ever revert to or be used or enjoyed by the
       Employer, except as provided in Reversion of Contributions Under Certain
       Circumstances section below.

1.2    NO RIGHTS OF EMPLOYMENT GRANTED.

       The establishment of this Plan shall not be considered as giving any
       employee the right to be retained in the service of the Employer.

                                   Article II
                                   DEFINITIONS

The following capitalized words and phrases as used in this Plan and Trust
Document shall have the meanings set forth below.

2.1    ACCRUED BENEFIT.

       The "Accrued Benefit" is the amount credited to the Employer Account of a
       Participant.

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2.2    ADMINISTRATIVE COMMITTEE.

       The "Administrative Committee" or "Committee" shall refer to the
       Administrative Committee, as defined in the Duties and Authority of
       Administrative Committee Article, below.

2.3    AFFILIATED EMPLOYER.

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

2.4    BENEFICIARY.

       A "Beneficiary" is any person, estate or trust who by operation of law,
       or under the terms of the Plan, or otherwise, is entitled to receive any
       Accrued Benefit of a Participant under the Plan. A "Designated
       Beneficiary" is any individual designated or determined in accordance
       with the Designation of Beneficiary section below, except that it shall
       not include any person who becomes a Beneficiary by virtue of the laws of
       inheritance or intestate succession.

2.5    CASH-OUT.

       A "Cash-Out" may be involuntary or voluntary.

       An involuntary Cash-Out is a distribution of Accrued Benefit to a former
       Participant which meets the following requirements: (i) the former
       Participant's entire non-forfeitable Accrued Benefit is distributed to
       him; (ii) the present value of the non-forfeitable Accrued Benefit of the
       Participant has never exceeded three thousand five hundred dollars
       ($3,500), and (iii) the distribution is made on account of the Employee's
       termination of participation in the Plan.

       A voluntary Cash-Out is a distribution of Accrued Benefits to a former
       Participant which meets the following requirements: (i) the former
       Participant has voluntarily elected to receive the distribution; and (ii)
       the distribution is made on account of the Employee's termination of
       participation in the Plan.

2.6    CODE.

       "Code" refers to the Internal Revenue Code of 1986, as amended.

                                      -2-
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2.7    COMPENSATION.

       "Compensation" refers to all Compensation paid during the Plan Year under
       consideration as W-2 income by the Employer to an Employee, excluding
       director's fees and including amounts deferred pursuant to Code Section
       401(k)(2), or Code Section 403(b), or contributed to any welfare benefit
       plans maintained by the Employer through a reduction in the Employee's
       compensation which, pursuant to Code Section 125, are not included in
       the gross income of the Employee for the taxable year in which such
       amounts are contributed. It excludes all contributions by the Employer to
       the Plan and to any other retirement or deferred compensation plan
       maintained by the Employer (except amounts deferred pursuant to Code
       Section 401(k)(2) or Section 403(b) or contributed pursuant to Code
       Section 125) and excludes amounts in excess of one hundred fifty thousand
       dollars ($150,000) for the Plan Year or such other amount as may be
       prescribed by law.

2.8    EMPLOYEE.

       An "Employee" is an individual who is employed by the Employer or who is
       on a Leave of Absence, and shall include leased Employees within the
       meaning of Code Section 414(n)(2). Directors acting solely in that
       capacity and independent contractors shall not be Employees.

2.9    EMPLOYER.

       The "Employer" shall mean Fallbrook National Bank and any Affiliated
       Employer.

2.10   EMPLOYER ACCOUNT.

       The "Employer Account" is the separate account maintained for each
       Participant to which all Employer contributions shall be allocated and to
       which forfeitures shall be reallocated.

2.11   ERISA.

       "ERISA" refers to the Employee Retirement Income Security Act of 1974, as
       amended.

2.12   EXEMPT LOAN.

       "Exempt Loan" shall mean a loan to the Plan by a disqualified person (as
       defined in Code Section 4975(e)(2)) or a loan to the Plan which is
       guaranteed by a disqualified person. Such loan includes a direct loan of
       cash, a purchase-money transaction, and an assumption of the obligation
       by the Plan. The Exempt Loan must satisfy the provisions of Treasury
       Regulation Section 54.4975-7(b).

2.13   FAIR MARKET VALUE.

       "Fair Market Value" shall mean the closing price (or, if there is no
       closing price, then the closing bid price) of Qualifying Employer
       Securities as reported on the Composite Tape, or if not reported thereon,
       then such price as reported in the trading reports of the

                                      -3-
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       principal securities exchange in the United States on which such
       Qualifying Employer Securities are listed, or if the Qualifying Employer
       Securities are not listed on a securities exchange in the United States,
       the mean between the dealer closing "bid" and "ask" prices on the
       over-the-counter market as reported by the National Association of
       Securities Dealers Automated Quotation System (NASDAQ), or NASDAQ's
       successor, or if not reported on NASDAQ, the Fair Market Value of the
       Qualifying Employer Securities as determined by a qualified independent
       appraiser meeting requirements similar to those contained in Treasury
       regulations under Code Section 170(a)(1) and Department of Labor
       Regulations under ERISA Section 3(18).

2.14   FAMILY MEMBER.

       A "FAMILY MEMBER" includes the spouse, lineal ascendants and descendants
       of the Employee or former Employee and the spouses of such lineal
       ascendants and descendants.

2.15   FORFEITURE.

       "Forfeiture" refers to the amount of non-vested Accrued Benefits in a
       Participant's Employer Account which are reallocated to the Employer
       Accounts of other Participants.

2.16   HIGHLY COMPENSATED EMPLOYEE.

       A "Highly Compensated Employee" means a highly compensated active
       Employee and a highly compensated former Employee.

       A highly compensated active Employee for a determination 1 year includes
       any Employee who performs service for the Employer during the
       determination year and who: (i) was a five percent (5%) owner (as defined
       in Code Section 416(i)(1)) of the Employer at any time during the
       determination year or the look-back year, or (ii) for the look-back year
       had compensation from the Employer in excess of eighty thousand dollars
       ($80,000.00) (as adjusted pursuant to Code Section 415(d)) and, if the
       Employer elects for such look-back year, was in the top-paid group of
       Employees for the look-back year.

       An Employee is in the top-paid group of Employees for any year if such
       Employee is in the group consisting of the top twenty percent (20%) of
       the Employees when ranked on the basis of compensation (as defined in
       Code Section 414(q)(4)) paid during such year. For purposes of
       determining the number of Employees in the top-paid group the following
       Employees shall be excluded: (i) Employees who have not completed six (6)
       months of service; (ii) Employees who normally work less than seventeen
       and one-half (17.5) hours per week; (iii) Employees who normally work
       during not more than six (6) months during any year; (iv) Employees who
       have not attained age twenty-one (21); and (v) except to the extent
       provided in Treasury Regulations, Employees who are included in a unit of
       Employees covered by an agreement which the Secretary of Labor finds to
       be a collective bargaining agreement between employee representatives
       and the Employer.

       For this purpose, the determination year shall be the Plan Year unless
       the Employer elects a calendar year. The look-back year shall be the
       twelve (12) month period immediately preceding the determination year,
       or, if elected by the Employer, the calendar year ending with or within
       the applicable determination year (or, in the case of

                                      -4-
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       a determination year that is shorter than twelve (12) months, the
       calendar year ending with or within the twelve (12) month period ending
       with the end of the applicable determination year), or, if elected, the
       calendar year immediately preceding the calendar year determination year.

       A highly compensated former Employee for a Plan Year includes any
       Employee who separated from service (or was deemed to have separated)
       prior to such Plan Year, performs no services for the Employer during
       such Plan Year, and was a highly compensated active Employee for either
       the Plan Year during which the separation occurred (or was deemed to have
       occurred) or any Plan Year ending on or after the Employee's fifty-fifth
       (55th) birthday.

       The determination of who is a Highly Compensated Employee, including the
       determinations of the number and identity of Employees in the top-paid
       group and the compensation that is considered, will be made in accordance
       with Code Section 414(q) and the regulations promulgated thereunder.

2.17   HOUR OF SERVICE.

       "Hour of Service" means:

       (a)    Each hour for which an Employee is directly or indirectly
              compensated or entitled to Compensation from the Employer for the
              performance of duties during the applicable computation period;

       (b)    Each hour for which an Employee is directly or indirectly
              compensated or entitled to Compensation from the Employer
              (irrespective of whether the employment relationship has
              terminated) for reasons other than performance of duties (such as
              vacation, holidays, sickness, disability, lay-off, military duty
              or leave of absence) during the applicable computation period; and

       (c)    Each hour for which back pay is awarded or agreed to by the
              Employer, without regard to mitigation of damages.

       Hours of Service will be credited for employment with other members of an
       affiliated service group (under Code Section 414(m)), a controlled group
       of corporations (under Code Section 414(b)), or a group of trades or
       businesses under common control (under Code Section 414(c)) of which the
       Employer is a member or any other entity required to be aggregated with
       the Employer pursuant to regulations under Code Section 414(o).

       Hours of Service will also be credited for any individual considered an
       Employee for purposes of this Plan under Code Section 414(n).

       Notwithstanding subparagraph (b) above, no more than five hundred one
       (501) Hours of Service are required to be credited to an Employee on
       account of any single continuous period during which the Employee
       performs no duties (whether or not such period occurs in a single
       computation period), and an hour for which an Employee is directly or
       indirectly paid, or entitled to payment, on account of a period during
       which no duties are performed is not required to be credited to the
       Employee if such payment is made or due

                                      -5-
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       under a Plan maintained by the Employer solely for the purpose of
       complying with applicable worker's compensation, unemployment
       compensation or disability insurance laws. In addition, Hours of Service
       are not required to be credited hereunder for a payment which solely
       reimburses an Employee for medical or medically related expenses incurred
       by the Employee. The provisions of Sections 2530.200b-2(b) and (c) of the
       Department of Labor Regulations are incorporated herein by reference.

       For purposes of this Hour of Service section, a payment shall be deemed
       to be made by or due from the Employer regardless of whether such payment
       is made by or due from the Employer directly or indirectly through a
       trust, fund or insurer to which the Employer contributes or pays
       premiums.

2.18   LEAVE OF ABSENCE.

       A "Leave of Absence" shall refer to that period during which the
       Participant is absent without Compensation and for which the
       Administrative Committee, in its sole discretion, has determined him to
       be on a "Leave of Absence" instead of having terminated his employment.
       (However, such discretion of the Administrative Committee shall be
       exercised in a nondiscriminatory manner.) In all events, a Leave of
       Absence by reason of service in the armed forces of the United States
       shall end no later than the time at which a participant's re-employment
       rights as a member of the armed forces cease to be protected by law and a
       Leave of Absence for any other reason shall end after six (6) months,
       except that if the Participant resumes employment with the Employer
       prior thereto, the Leave of Absence shall end on such date of resumption
       of employment. The date that the Leave of Absence ends shall be deemed
       the Termination Date if the Participant does not resume employment with
       the Employer. In determining a Year of Service for Accrual of Benefits,
       all such Leaves of Absence shall be considered to be periods when the
       Employee is a Participant.

2.19   NET PROFITS.

       The "Net Profits" mean the Employer's Net Profits for the taxable year of
       the Employer (coinciding with or within which the plan year ends) as
       calculated at the end of the taxable year, in accordance with the
       Employer's regular accounting practices, before state and federal income
       taxes and without reduction by reason of the Employer's contributions
       under the Plan and any other Plan maintained by the Employer and
       described in Code Section 401(a) and Section 403(a).

       The "Net Profits" shall also mean the Employer's accumulated Net Profits
       for all years prior to the taxable year of the Employer, described in the
       preceding paragraph of this section. Such accumulated Net Profits shall
       be calculated in accordance with the Employer's regular accounting
       practices, before state and federal income taxes which would be refunded
       (as a result of contributions to the Plan), without reduction by reason
       of the Employer's contributions, made for the current Plan Year, under
       the Plan and any other Plan maintained by the Employer and described in
       Code Section 401(a) or Section 403(a).

                                      -6-
<PAGE>

2.20   NORMAL RETIREMENT AGE

       The 'Normal Retirement Age" shall be sixty-five (65) years of age or, if
       later, the fifth anniversary of the date of which an individual commenced
       participation in the Plan.

2-21   ONE YEAR BREAK IN SERVICE

       A "One Year Break in Service" means a Plan Year in which the Participant
       has not completed more than five hundred (500) Hours of Service.

       However, in determining a One Year Break in Service for a Plan Year in
       which, or following which, a maternity or paternity absence (as defined
       below) occurs, the following shall apply: the Hours of Service which
       normally would have been credited but for the maternity or paternity
       absence (or eight (8) Hours of Service per day if the Administrative
       Committee is unable to determine the Hours of Service which normally
       would have been credited) shall be credited to the Plan Year in which
       such absence begins, if the Employee would incur a One Year Break in
       Service if the hours were not so credited; in all other cases the Hours
       of Service shall be credited to the following Plan Year. The total Hours
       of Service credited under a maternity or paternity absence shall not
       exceed five hundred one (501) hours. A "maternity or paternity absence"
       is one in which the Employee is absent from work because of (i) the
       pregnancy of the Employee, (ii) the birth of a child of the Employee,
       (iii) the placement of a child with the employee in connection with the
       adoption of such child by the Employee, or (iv) the caring for such child
       immediately following such birth or placement. As a condition of an
       Employee being credited with Hours of Service pursuant to this paragraph,
       the Administrative Committee can require that the Employee timely furnish
       such information as is reasonably necessary to establish that the absence
       from work was for a cause stated in subparagraphs (i)-(iv) and the
       number of days attributable to such cause.

2.22   PARTICIPANT.

       A "Participant" shall refer to every Employee or former Employee who has
       met the applicable participation requirements of Article III.

2.23   PLAN.

       " Plan" refers to this Stock Bonus Employee Stock Ownership Plan and
       Trust Agreement.

2.24   PLAN ADMINISTRATOR.

       The "Plan Administrator" shall be the Administrative Committee designated
       in a resolution adopted by the board of directors of the Employer,
       pursuant to Article IX, who shall accept the designation in writing.

2.25   PLAN YEAR.

       A "Plan Year" is the period from the first day of January to the last day
       of December, annually.

                                      -7-
<PAGE>

2.26   QUALIFIED ELECTION PERIOD.

       "Qualified Election Period" shall mean the period of six (6) Plan Years
       beginning with the later of (i) the Plan Year after the Plan Year in
       which the Participant attains age fifty-five (55); or, (ii) the Plan Year
       after the Plan Year in which the Participant first becomes a Qualified
       Participant.

2.27   QUALIFIED PARTICIPANT.

       "Qualified Participant" shall mean a Participant who has attained age
       fifty-five (55) and who has completed at least ten (10) years of
       participation in the Plan.

2.28   QUALIFYING EMPLOYER SECURITY.

       "Qualifying Employer Security" shall mean Common Stock of the Employer
       which meets the requirements of Code Section 409(l).

2.29   RETIREMENT.

       "Retirement" refers to the termination of employment of an Employee who
       has attained at least the Normal Retirement Age. The Employee may work
       beyond Normal Retirement Age, in which case Employer contributions and
       Forfeitures shall continue to be allocated to the Employer Account of the
       Employee.

2.30   SERVICE.

       "Service" means:

       (a)    The period (measured in years and days) for which an Employee is
              directly or indirectly compensated or entitled to Compensation
              from the Employer for the performance of duties during the
              applicable computation period;

       (b)    The period for which an Employee is directly or indirectly
              compensated or entitled to Compensation from the Employer
              (irrespective of whether the employment relationship has
              terminated) for reasons other than performance of duties (such as
              vacation, holidays, sickness, disability, lay-off, military duty
              or leave of absence) during the applicable computation period; and

       (c)    Each period prior to or after the effective date of this Plan for
              which an Employee was directly or indirectly paid or entitled to
              be paid by the Predecessor Employer.

       Service will be credited for employment with other members of an
       affiliated service group (under Code Section 414(m)), a controlled
       group of corporations (under Code Section 414(b)), or a group of trades
       or businesses under common control (under Code Section 414(c)) of
       which the Employer is a member or any other entity required to be
       aggregated with the Employer pursuant to regulations under Code Section
       414(o) for the period of such affiliation or common control.

                                      -8-
<PAGE>

       Notwithstanding subparagraph (b), above, no more than five hundred one
       (501) Hours of Service is required to be credited to an Employee on
       account of any single continuous period during which the Employee
       performs no duties (whether or not such period occurs in a single
       computation period), and for which an Employee is directly or indirectly
       paid, or entitled to payment, if such payment is made or due under a plan
       maintained by the Employer solely for the purpose of complying with
       applicable worker's compensation, unemployment compensation or disability
       insurance laws. The provisions of Sections 2530.200b-2(b) and (c) of the
       Department of Labor Regulations are incorporated herein by reference.

2.31   TERMINATION DATE.

       The "Termination Date" shall be the date on which the earliest of the
       following events occurs: (a) a Participant's Retirement, (b) a
       Participant's termination of employment as a result of total and
       permanent disability; (c) a Participant's death, or (d) a Participant's
       termination of employment for any other reason.

2.32   TOTAL AND PERMANENT DISABILITY.

       "Total and Permanent Disability" shall refer to the Participant suffering
       from a physical or mental condition which in the sole discretion of the
       Administrative Committee, based upon appropriate medical reports and
       examinations, may be expected to result in death or be of long and
       indefinite duration and which renders the Participant incapable of
       performing any substantial gainful activity and which qualifies as Total
       and Permanent Disability under the federal Social Security Act.

2.33   TOTAL SERVICE FOR VESTING.

       "Total Service for Vesting" shall mean the sum of each separate Year of
       Service for Vesting credited to the Participant; however, if the
       Participant incurs at least five (5) consecutive One Year Breaks in
       Service, his Years of Service for Vesting rendered after such break in
       service shall only be counted for purposes of determining his vested
       benefits accruing after such break in service, not for determining his
       Vested benefits accruing before such break.

2.34   TRUST.

       "Trust" means the Trust created under this Employee Stock Ownership Plan
       and Trust Agreement.

2.35   TRUST FUND.

       The "Trust Fund" consists of the Employer and Participant contributions
       held by the Plan and any income or appreciation thereon.

                                      -9-
<PAGE>

2.36   UNALLOCATED STOCK ACCOUNT.

       The Account used to hold Qualifying Employer Securities acquired with
       loan proceeds pursuant to the "Loans from Disqualified Persons" section
       below.

2.37   YEAR OF SERVICE FOR ACCRUAL OF BENEFITS.

       A "Year of Service for Accrual of Benefits" means a Plan Year during
       which the Employee had not less than one thousand (1,000) Hours of
       Service as a Participant. If the Participant entered the Plan other than
       on the first (1st) day of the Plan Year, all Hours of Service rendered by
       the Participant during that Plan Year, whether or not rendered as a
       Participant, shall be treated as if they were Hours of Service as a
       Participant.

2.38   YEAR OF SERVICE FOR PARTICIPATION.

       A "Year of Service for Participation" means the twelve (12)-consecutive
       month period, the first (1st) day of which is the day the Employee was
       first required to be credited with an Hour of Service, provided the
       Employee was credited with not less than one thousand (1,000) Hours of
       Service during such period. If the Employee does not have one thousand
       (1,000) Hours of Service for such twelve (12)-consecutive month period, a
       Year of Service for Participation shall be the earliest twelve
       (12)-consecutive month period coinciding with the Plan Year (which begins
       during the Employee's initial twelve (12)-consecutive months of
       employment) in which the Employee is credited with one thousand (1,000)
       Hours of Service.

       In case the Employee completes at least one (1) Year of Service for
       Participation and then has at least a One Year Break in Service, a Year
       of Service for Participation following such break in service shall begin
       on the first day following the One Year Break in Service on which his
       employment resumes. If the Employee does not perform one thousand (1,000)
       Hours of Service during such period, a Year of Service for Participation
       shall be the earliest twelve (12)month period coinciding with the Plan
       Year (which begins during the twelve (12)-month period in which the
       Employee returns to work) in which the Employee has one thousand (1,000)
       Hours of Service.

2.39   YEAR OF SERVICE FOR VESTING

       A "Year of Service for Vesting" shall mean a Plan Year during which the
       Employee had not less than one thousand (1,000) Hours of Service after
       attaining age eighteen (18). An Employee will not be credited for Years
       of Service prior to the effective date of this Plan.

                                   Article III
                           ELIGIBILITY TO PARTICIPATE

3.1    INITIAL ENTRY.

       Every Employee who has attained the age of twenty one (21) and completed
       a Year of Service for Participation shall participate in the Plan on the
       first (1) day of the Plan Year in which such eligibility requirements are
       met. All Participants shall be required

                                      -10-

<PAGE>

       to furnish such information to the Administrative Committee as it may
       reasonably request for the proper administration of the Plan.

3.2    RESUMPTION OF PARTICIPATION.

       A Participant who is reemployed by the Employer without having incurred
       a One Year Break in Service shall be a Participant as of the first (1st)
       day of the month following the date of his reemployment. If an Employee
       incurs at least a One Year Break in Service, his active participation in
       the Plan shall be suspended until he completes a Year of Service for
       Participation following such One Year Break in Service. Upon completing a
       Year of Service for Participation after such One Year Break in Service,
       measured from his re-employment commencement date, the Participant will
       be readmitted to active participation in the Plan as of the first day of
       the Plan Year in which the Participant completes such Year of Service for
       Participation.

       The Committee may adjust the above service requirement, as necessary, to
       make the Plan available to a newly-acquired Employee group, provided that
       the adjustment (1) is not more restrictive than the above requirement,
       and (2) does not discriminate in favor of Highly Compensated Employees.

                                   Article IV
                           CONTRIBUTIONS TO THE TRUST

4.1    AMOUNT OF CONTRIBUTIONS TO PARTICIPANTS.

       Subject to the rights of the Employer under Article XI, the Employer may
       make a contribution to the Trust from its Net Profits beginning with the
       first Plan Year ending on or after the effective date of the Plan. The
       amount of the contribution shall be discretionary with the Employer and
       shall be paid to the Trustees on or before the time required by law for
       filing the Employer's federal income tax return (including extensions)
       for the year with respect to which the contribution is made. However, no
       Employer contributions may be made in any Plan Year to the extent that
       they would be directly allocated to the suspense account created pursuant
       to the Limitation on Allocations to Each Participant section below.

4.2    MANNER OF ALLOCATION.

       (a)    All contributions by the Employer for any Plan Year, plus all
              Forfeitures, if any, during such year, shall be allocated as of
              the last day of such year to the Employer Account of each
              individual Participant, who is an Employee on the last day of such
              Plan Year, and who has a Year of Service for Accrual Benefits for
              the Plan Year, in the same proportion that each such Participant's
              Compensation for the Plan Year bears to the total Compensation of
              all such Participants for the Plan Year. Employees who terminate
              employment before the last day of the Plan Year on account of
              death or Retirement shall receive an allocation regardless of
              whether they have a Year of Service for Accrual of Benefits for
              such Plan Year.

       (b)    If allocation of Employer contributions in accordance with Section
              (a) above will result in an allocation of more than one-third
              (1/3) of the total contributions for a

                                      -11-
<PAGE>

              Plan Year to the accounts of Highly Compensated Employees, then
              allocation of such amounts shall be adjusted so that it will be
              allocated to the Participants who are not Highly Compensated
              Employees. Notwithstanding anything to the contrary contained in
              this Manner of Allocation section, no Qualifying Employer
              Securities may be allocated to the Employer Account of any
              Participant who sold such Qualifying Employer Securities to the
              Plan, any person who is a member of the family of such person
              (within the meaning of Code Section 267(c)(4)), or any person
              who owns more than twenty-five percent (23%) in value of any class
              of outstanding Qualifying Employer Securities (after the
              application of Code Section 318(a)).

4.3    PERMISSABLE TYPES OF EMPLOYER CONTRIBUTIONS

       Payments on account of the contributions due from the Employer for any
       year may be made in cash or in kind, specifically including Qualifying
       Employer Securities; except that assets may not be contributed if such
       contribution violates the prohibited transaction rules of Code Section
       4973, or the corresponding rules under ERISA Section 406, if applicable.

4.4    INTERIM ALLOCATION TO UNALLOCATED STOCK ACCOUNT.

       Qualifying Employer Securities purchased with an Exempt Loan when
       initially acquired by the Trustees shall be credited to the Unallocated
       Stock Account. The balance in the Unallocated Stock Account shall be
       released in accordance with Section 8.11 and the Qualifying Employer
       Securities so released shall be allocated as of the last day of each Plan
       Year in accordance with Manner of Allocation section above.

4.5    GENERAL ACCOUNTING.

       The Committee shall establish accounting procedures for the purpose of
       making the allocations to Participant's Accounts provided for in this
       Article IV. The Committee shall maintain adequate records of the
       aggregate cost basis of Qualifying Employer Securities allocated to each
       Participant's Employer Account. The Committee shall also keep separate
       records of financed shares and discretionary contributions (and any
       earning thereon) made for the purpose of enabling the Trust to repay any
       Exempt Loan. From time to time, the Committee may modify the accounting
       procedures for the purposes of achieving equitable and nondiscriminatory
       allocations among the accounts of Participants in accordance with the
       general concepts of the Plan, the provisions of this Article IV and the
       requirements of the Code and ERISA.

4.6    ADDITIONAL PROVISIONS.

       Employer contributions shall not be made for any Plan Year in amounts
       which cannot be allocated to Participant's accounts by reason of the
       allocation limitations described in Article V or in amounts which are not
       deductible under Code Section 404(a). Any Employer Contributions which
       are not deductible under Code Section 404(a) may be returned to the
       Employer be the Trustees (upon the direction of the Employer) within one
       (1) year after the disallowance of the deduction or after it is
       determined that the deduction is not available. In the event that
       Employer Contributions are paid to the Trust by reason of a mistake of
       fact, such Employer Contributions may be returned to the

                                      -12-
<PAGE>

       Employer by the Trustees (upon the direction of the Employer) within one
       (1) year after the payment to the Trust.

                                    Article V
                           ADMINISTRATION OF ACCOUNTS

5.1    INVESTMENTS.

       The amounts allocated to the Employer Accounts shall be invested by the
       Trustees as directed in accordance with Article VIII, primarily in
       Qualifying Employer Securities.

5.2    INVEST IN SINGLE FUND AND REASONABLE RULES

       The Trustees may cause all contributions paid to it by the Employer and
       the income therefrom, without distinction between principal and income,
       to be held and administered as a single fund, and the Trustees shall not
       be required to invest separately any share of any Participant except as
       provided in the Non-segregation if Installment Distribution section
       below. The Trustees may adopt reasonable rules for the administration of
       such common fund and for the determination of the proportionate interest
       of each Participant in the fund.

5.3    VALUATION OF ASSETS AND ALLOCATION OF CHANGES

       The assets of the Trust Fund will be valued as of the close of the last
       day of each Plan Year at their Fair Market Value in accordance with
       Section 2.13 and the Employer Account of each Participant (or Employer
       Accounts if the Participant has Accrued Benefits for service incurred
       both prior and subsequent to a One Year Break in Service), including any
       Employer Account held in suspense, shall be adjusted for any net
       appreciation or net depreciation in the assets of the Plan and any net
       income or net loss of the Trust for such year with each account being
       credited or charged in the ratio that the amount of the account (as of
       the close of the last day of the Plan Year) bears to the total (as of
       the close of the last day of the Plan Year) of all remaining
       non-segregated accounts. For the purpose of such adjustment of accounts,
       any contribution made by the Employer with respect to that Plan Year
       shall be considered as having been made immediately after such evaluation
       and adjustment. In making the adjustments required by this section the
       value of any amounts segregated in accordance with the Non-segregation if
       Installment Distribution section below, shall not be considered in
       determining the amount of net appreciation, depreciation, gain or loss to
       be allocated to such account. The amount of any net appreciation,
       depreciation, gain or loss with respect to such cash value or segregated
       account shall be allocated to the individual account with respect to
       which arose. In addition to the evaluations required by the first
       sentence of this section, the Trust Fund may be evaluated at such other
       times during the Plan Year as the Administrative Committee deems
       appropriate using the method set forth in Section 2.13.

       For purposes of all computations required by this section, the accrual
       method of accounting shall be used to value the Trust Fund and the assets
       thereof at their fair market value as of each valuation date. Qualifying
       Employer Securities shall be accounted for as provided in Treasury
       Regulation Section 1.402(a)-1(b)(2)(ii), as amended, or any regulation or
       statute of similar import.

                                      -13-
<PAGE>

3.4    LIMITATIONS ON ALLOCATIONS TO EACH PARTICIPANT.

       (a)    DEFINED CONTRIBUTION PLAN LIMITATIONS.

              Notwithstanding any other provision of this Plan the maximum
              annual addition for any Plan Year which can be made to any
              individual Participant's Employer and Participant accounts, taken
              together, is the lesser of thirty thousand dollars (530,000) (or,
              if greater, one-fourth (1/4) of the defined benefit dollar
              limitation set forth in Code Section 415(b)(1) as in effect for
              the Plan Year) or twenty-five percent (25%) of the Participant's
              Compensation. In addition the increased limitations provided in
              Code Section 415(c)(6) shall apply if appropriate. For purposes of
              Subsections 5.4(a), (b), and (c) the annual addition is the sum of
              the following amounts allocated to the accounts of the individual
              Participant for the Plan Year of the Trust (which shall be the
              limitation year for purposes of Code Section 415) under this and
              all other defined contribution type plans maintained by the
              Employer.

              (i)    Employer contributions;

              (ii)   Forfeitures (if applicable);

              (iii)  Participant contributions;

              (iv)   Amounts allocated to an individual medical account (as
                     defined in Code Section 413(l)(2)) that is part of a
                     defined benefit plan maintained by the Employer; and

              (v)    Amounts derived from contributions paid or accrued after
                     December 31, 1985, in taxable years ending after such date,
                     that are attributable to post-retirement medical benefits
                     allocated to the separate account of a Key Employee (as
                     defined in Code Section 419A(d)(3)) under a welfare benefit
                     fund (as defined in Code Section 419(e)) maintained by the
                     Employer.

              If Subsections 5.4(a), (b), and (c) limit the amount which can be
              allocated to the Employer Account of any Participant for a Plan
              Year, the excess amount which cannot be allocated for the Plan
              Year shall be held in the suspense account to be allocated on the
              last day of each succeeding Plan Year until the funds in the
              suspense account have been completely reallocated. No further
              Employer contributions may be made to the Plan until the suspense
              account has been completely reallocated. Any Participant
              contributions which exceed the limitations of Subsections 5.4(a),
              (b), and (c) shall be returned to the Participant. No investment
              gains and losses or other income shall be allocated to the
              suspense account.

                                      -14-
<PAGE>

       (b)    DEFINED BENEFIT PLAN LIMITATIONS.

              As to any defined benefit plan maintained by the Employer for any
              Plan Year the annual benefit cannot exceed the lesser of:

              (i)    Ninety thousand dollars ($90,000) (or such other figure as
                     determined in accordance with the cost of living adjustment
                     procedure of Code Section 415(d), but only for the year in
                     which such adjustment is effective), or

              (ii)   One hundred percent (100 %) of the Participant's average
                     annual compensation for the Participant's three highest
                     paid consecutive Plan Years; however, benefits of up to ten
                     thousand dollars ($10,000) during a Plan Year can be paid
                     without regard to the one hundred percent (100%) limitation
                     if the total retirement benefits payable to an Employee
                     under all defined benefit plans (as defined in Code Section
                     414(j)) maintained by the Employer for the present and any
                     prior Plan Year do not exceed ten thousand dollars
                     ($10,000) and the Employer has not at any time maintained a
                     defined contribution plan (as defined in Code Section
                     414(i)) in which the Employee was a Participant.

              If the Participant has less than ten (10) years of participation
              in the Plan (as defined in Code Section 415(b)(5)), the applicable
              limitation in Paragraph (b)(i) of this Section shall be reduced by
              multiplying such limitation by a fraction. The numerator of such
              fraction shall be the number of years, or part thereof, of
              participation in the defined benefit plan maintained by the
              Employer; the denominator shall be ten (10) years.

              For purposes of this Subsection 5.4(b), the "annual benefit" means
              a benefit payable annually in the form of a straight life annuity
              with no ancillary or incidental benefits and with no Employee or
              Rollover Contributions. To the extent that ancillary benefits are
              provided, the limits set forth in Subparagraphs (a) and (b) of the
              first paragraph of this Section will be reduced actuarially, using
              an interest rate assumption equal to the greater of five percent
              (5%) or the interest rate specified in the Plan to reflect such
              ancillary benefits.

       (c)    SOCIAL SECURITY RETIREMENT AGE LIMITATIONS.

              "Social Security Retirement Age" means the age used as the
              Retirement age under Section 216(l) of the Social Security Act,
              which is presently age Sixty-five (65) for a person born before
              1939, age sixty-six (66) for a person born between 1939 and 1954
              and age sixty-seven (67) for a person born after 1954

              If distribution of retirement benefits begins before the Social
              Security Retirement Age, the ninety thousand dollar (590,000)
              limitation as described in Subsection 5.4(b) shall be reduced
              acturially on the following basis:

              (i)    If the Social Security Retirement Age is sixty-five (63)
                     and distribution of benefits begins after the Participant
                     has attainedage sixty-two (62) 206

                                      -15-

<PAGE>

                     but before the Social Security Retirement Age, the
                     reduction shall be five-ninths (5/9) of one percent (1%)
                     per month for each month by which the first distribution
                     precedes the Social Security Retirement Age;

              (ii)   If the Social Security Retirement Age exceeds sixty-five
                     (65) and the distribution of benefits begins after the
                     Participant has attained age sixty-two (62), the reduction
                     shall be the sum of (A) and (B), where

                     (A)    Is five-ninths (5/9) of one percent (1%) per
                            month for each of the first thirty-six (36) months;
                            and

                     (B)    Is five-twelfths (5/12) of one percent (1%) per
                            month for each additional month (up to twenty-four
                            (24) months) by which benefits commence before the
                            month of the Participant's Social Security
                            Retirement Age;

              (iii)  If the distribution of benefits begins before the
                     Participant has attained age sixty-two (62), the limitation
                     will be the actuarial equivalent of what it would have been
                     if the first distribution had been made when the
                     Participant had attained age sixty-two (62); the assumed
                     interest rate for such calculation shall be five percent
                     (5%).

              For purposes of this Subsection 5.4(b) the "average annual
              Compensation for a Participant's three (3) highest paid
              consecutive years" shall mean the Participant's greatest aggregate
              Compensation during the period of three (3) consecutive Plan Years
              in which the individual was an active Participant in the Plan.

       (d)    COMBINATION DEFINED BENEFIT AND DEFINED CONTRIBUTION PLAN
              LIMITATIONS.

              If the Employer maintains one (1) or more defined benefit plans in
              addition to this Plan (and any other defined contribution plans)
              the limitation of this Subsection 5.4(c) shall apply in addition
              to those of Subsections 5.4(a) and 5.4(b). The limitation of this
              Subsection 5.4(c) is that the sum of the defined benefit plan
              fraction and the defined contribution plan fraction for any Plan
              Year may not exceed 1.0.

              The "defined benefit plan fraction" is a fraction:

              (i)    The numerator of which is the projected annual benefit of
                     the Participant under the Plan, (determined as of the
                     close of the Plan Year); and

              (ii)   The denominator of which (determined as of the close of the
                     Plan Year) is the lesser of (A) the maximum dollar
                     limitation, for such year as stated in Paragraph
                     5.4(b)(i), multiplied by 1.25, or (B) the percentage of
                     compensation limitation which may be taken into account
                     pursuant to Paragraph 5.4(b)(ii) multiplied by 1.4.

              The "defined contribution plan fraction" for any year is a
              fraction:

                                      -16-

<PAGE>

              (i)    The numerator of which is the sum of the annual additions
                     (as defined in Code Section 415(c)(2)) to the Participant's
                     account as of the close of the Plan Year; and

              (ii)   The denominator of which is the sum, for all years of an
                     Employee's service with the Employer, of the lesser for
                     each year of (A) the maximum dollar limitation as stated in
                     the first paragraph of Subsection 5.4(a) for such year
                     multiplied by 1.25 or (B) the percentage of Compensation
                     amount in effect as stated in the first paragraph of
                     Subsection 5.4(a) for such year multiplied by 1.40.

              With respect to each Participant, for Years of Service ending
              prior to January 1, 1983, the amount taken into account in the
              denominator of the defined contribution plan fraction, as set
              forth above, may, at the election of the Plan Administrator, be an
              amount equal to the denominator of the defined contribution plan
              fraction for the Plan Year ending in 1982, as determined under the
              law immediately prior to the enactment of the Tax Equity and
              Fiscal Responsibility Act of 1982, multiplied by the transition
              fraction described in Code Section 415(e)(6).

5.5    DESIGNATION OF BENEFICIARY.

       Each Participant may designate from time to time in writing one or more
       Beneficiaries, who will receive the Participant's vested Accrued Benefit
       in the event of the Participant's death. If the Participant dies without
       having made a Beneficiary designation, the Trustees shall distribute such
       benefits in the following order of priority to the deceased
       Participant's: (a) spouse, (b) lineal descendants, (c) parents, or (d)
       estate.

       However, in the event of the death of a married Participant, the
       surviving spouse must be the sole Beneficiary unless the surviving spouse
       has consented in writing to a different election, has acknowledged the
       effect of such election, and the consent and acknowledgment are witnessed
       by a member of the Administrative Committee or a notary public. The
       consent of spouse shall not be necessary if it is established to the
       satisfaction of the Adminstrative Committee that there is no spouse, the
       spouse cannot reasonably be located, or for such other reasons as the
       regulations may prescribe. The consent of a spouse as reason for not
       requiring such consent shall be applicable only to that spouse. If the
       spouse of a Participant becomes locatable or if a Participant remarries,
       it shall be the duty of the Participant to bring that fact to the
       attention of the Administrative Committee. If the Participant so notifies
       the Administrative Committee, the Administrative Committee shall then, if
       applicable, proceed to make available to such spouse the consent of
       spouse procedures described in this Section.

5.6    PARTICIPANT VOTING AND EXERCISE OF STOCK RIGHTS.

       (a)    Each Participant shall be entitled to direct the Trustees as to
              the manner in which any Qualifying Employer Securities which are a
              registration-type class of securities (as defined in Code Section
              409(e)(4)) which are allocated to the Employer Account of the
              Participant are to be voted and as to the manner in which other
              rights with respect to such Qualifying Employer Securities are to
              be

                                      -17-
<PAGE>

              exercised. With respect to any class of Qualifying Employer
              Securities which is not a registration-type class of securities
              (as defined in Code Section 409(e)(4)), a Participant shall be
              entitled to direct the Trustees as to the manner in which voting
              rights will be exercised with respect to any corporate matter
              which involves the voting of such shares allocated to the
              Participant's account with respect to the approval or disapproval
              of any corporate merger or consolidation, recapitalization,
              reclassification, liquidation, dissolution, sale of substantially
              all assets of a trade or business, or such similar transactions as
              may be prescribed in Treasury regulations.

       (b)    The Trustees shall notify Participants at least thirty (30) days
              (or a lesser period if thirty (30) days if impossible or
              impractical) prior to the voting or other exercise of rights
              referred to in Section 5.6(a). The notice shall include all proxy
              solicitations and other materials distributed to other
              shareholders holding any of the shares of stock described in this
              Plan as Qualifying Employer Securities.

       (c)    The Trustees shall vote any shares and exercise any other rights
              with respect to applicable Qualifying Employer Securities in the
              manner instructed by the Participant. The Trustees shall vote any
              shares and exercise any other rights with respect to Qualifying
              Employer Securities as to which it receives no such instructions
              (either because the Participant does not timely give such
              instructions, or because the shares have not yet been allocated to
              the Employer Accounts, or if because the Trustees are not required
              to be directed) as the Trustees in their sole discretion, but
              acting in a fiduciary capacity, deems in the best interests of the
              Participants and their Beneficiaries.

                                   Article VI
                                    VESTING

6.1    EMPLOYER ACCOUNT VESTING ON DEATH, RETIREMENT, OR TOTAL PERMANENT
       DISABILITY.

       If a Participant's employment is terminated for death, on or after Normal
       Retirement Age, or for Total and Permanent Disability, one hundred
       percent (100%) of the Accrued Benefit in his Employer Account, shall vest
       in the Participant (or in his Beneficiary, as the case may be) and shall
       be distributed or set aside in accordance with the provisions of Article
       VII.

6.2    EMPLOYER ACCOUNT VESTING ON TERMINATION.

       If a Participant's employment is terminated except for death, Total and
       Permanent Disability, or on or after Normal Retirement Age the following
       percentages of the Accrued Benefit in the Employer Account of the
       Participant shall vest in the Participant and shall be distributed to or
       set aside for him in accordance with the provisions of Article VII:

                                      -18-
<PAGE>

<TABLE>
<CAPTION>
                    =======================================
                         YEARS OF             VESTED
                         SERVICE            PERCENTAGE
                    =======================================
                    <S>                     <C>
                      Less than 3               0%
                    =======================================
                           3                   20%
                    =======================================
                           4                   40%
                    =======================================
                           5                   60%
                    =======================================
                           6                   80%
                    =======================================
                      7 or more               100%
                    =======================================
</TABLE>

       The Accrued Benefit of a Participant which is not vested as above
       provided shall be retained by the Trustees for allocation as a
       Forfeiture, in accordance with the provisions of Manner of Allocation
       section above, Suspense Account for Terminated Participants and Unable to
       Locate Participant or Beneficiary sections below.

6.3    RESTORATION OF FORFEITURES.

       If a Participant is less than one hundred percent (100%) vested and he
       receives a distribution from the Plan and forfeits part of his Accrued
       Benefit, and then, if the Participant resumes employment with the
       Employer before the occurrence of five (5) consecutive One Year Breaks in
       Service, until such time as there is a fifth (5th) consecutive One Year
       Break in Service, the Participant's vested portion of the balance in his
       account at any time shall be equal to an amount ("X") determined by the
       formula X = P(AB + D) - D, where "P" is the vested percentage of the
       Participant at such time, "AB" is the balance in the Participant's
       account at such time and "D" is the amount distributed as a severance of
       employment benefit and not previously repaid by the Participant.

       Notwithstanding the preceding paragraph, if the Participant returns to
       employment prior to the time he incurs five (5) consecutive One Year
       Breaks in Service, he shall have the right to repay to the Plan the full
       amount of the benefits previously distributed to him, provided that such
       repayment is made prior to the earlier of (i) five (5) years after the
       first date on which the Participant is reemployed, or (ii) the date the
       Participant incurs five (5) consecutive One Year Breaks in Service
       following the date of the previous distribution. If an Employee is deemed
       to receive a distribution pursuant to the Time of Distribution section
       below), and the Participant resumes employment covered under the Plan
       before the date the Employee incurs five (5) consecutive One Year Breaks
       in Service, upon the reemployment of such Employee, the balance of the
       Employer Account of the Employee will be restored to the amount on the
       date of such deemed distribution.

       If the Participant's forfeited accrued benefit is restored pursuant to
       this Section 6.3, the restoration shall be made first out of Forfeitures,
       if any, and then by additional Employer contributions.

                                      -19-
<PAGE>

                                   Article VII
                            DISTRIBUTION OF BENEFITS

7.1    METHOD OF DISTRIBUTION OF PARTICIPANT AND EMPLOYER ACCOUNTS.

       The Participant shall elect to receive his distribution in one of the
       following forms: (a) a voluntary Cash-Out or (b) an installment
       distribution consisting of approximately equal annual installments
       (subject to the limitations of Time of Distribution section) over a term
       certain. If a Participant's vested Accrued Benefit at the Termination
       Date has never exceeded three thousand five hundred dollars ($53,500),
       the entire amount of such vested Accrued Benefit shall be distributed
       in the form of an involuntary Cash-out.

       The Administrative Committee shall distribute benefits in the form of
       Qualifying Employer Securities except to the extent that the
       Participant's Employer Account consists of cash or fractional shares of
       Qualifying Employer Securities or other assets, the Fair Market Value of
       which shall be distributed in cash.

7.2    TIME OF DISTRIBUTION.

       (a)    After the Participant has attained the Normal Retirement Age, has
              died, or has terminated his employment due to Total and Permanent
              Disability, then the first installment or Cash-Out, as the case
              may be, will be made as soon as administratively feasible after
              the end of the Plan Year in which the Participant completes a One
              Year Break in Service. If the Participant is zero percent (0%)
              vested in his Accrued Benefit, his account balance will be deemed
              to have been distributed to him in the form of a Cash-Out.
              However, in all events such distributions shall begin no later
              than sixty (60) days after the end of the Plan Year in which
              occurs the latest of the following:

              (i)    The date on which the Participant attains the earlier of
                     age sixty-five (65) or the Normal Retirement Age;

              (ii)   The tenth (10th) anniversary of the year in which the
                     Participant commenced participation in the Plan;

              (iii)  The Termination Date.

       (b)    Distribution to a Participant who terminates other than due to
              death, Retirement or Disability, shall commence as soon as
              administratively feasible after the end of the Plan Year in which
              the Participant completes a One Year Break in Service.

       (c)    Distributions shall commence no later than April 1 of the calendar
              year following the calendar year in which the Participant attains
              age seventy and one-half (70-1/2).

       (d)    If distributions are made in installments rather than a Cash-Out,
              then (i) the installments must be over a period of ten (10) years
              or less or (ii) the amount of the installment to be distributed
              each year must be at least an amount equal to the

                                      -20-

<PAGE>

              quotient obtained by dividing the Participant's entire interest by
              the life expectancy of the Participant or the joint and last
              survivor expectancy of the Participant and his designated
              Beneficiary. Life expectancy and joint and last survivor
              expectancy are computed by the use of the return multiples
              contained in Treasury Regulations section 1.72-9, or, in the case
              of payments under a contract issued by an insurance company, by
              use of the life expectancy tables of the insurance company. For
              purposes of this computation, a Participant's life expectancy may
              be recalculated no more frequently than annually, but the life
              expectancy of a nonspouse Beneficiary may not be recalculated. If
              the Participant's spouse is not the designated Beneficiary, the
              method of distribution selected must assure that at least fifty
              percent (50%) of the present value of the amount available for
              distribution is paid within the life expectancy of the
              Participant.

       (e)    If the Participant dies after distributions to him have begun but
              before his entire Accrued Benefit has been distributed to him, the
              remaining portion of his Accrued Benefit shall be distributed from
              the Plan at least as rapidly as under the method of distribution
              previously established for him, if such method is irrevocable at
              the time of his death.

       (f)    If the Participant dies before distribution of his interest
              commences, then distributions of the Participant's remaining
              Accrued Benefit must be completed by the end of the fifth (5th)
              calendar year following the year of his death. However,
              installment distributions to a designated Beneficiary which begin
              not later than the end of the calendar year following the death
              of the Participant shall be treated as complying with this five
              (5) year distribution requirement (even though the installment
              payments are not completed within five (5) years of the
              Participant's death) if the distributions are made at a rate which
              is not longer than that calculated (in the manner described in
              paragraph (c) of this Section) to provide payment of all the
              Participant's Accrued Benefit during the anticipated life
              expectancy of the designated Beneficiary. Provided that if the
              designated Beneficiary is the surviving spouse of the deceased
              Participant, the distributions can begin as long after the
              Participant's death as the date on which the deceased Participant
              would have attained the age of seventy and one-half (70-1/2); if
              the surviving spouse dies before distributions to the surviving
              spouse have begun, the Plan may make distributions at such times
              as described in this Section as it would have if the surviving
              spouse had been a deceased Participant

       (g)    For purposes of this section, any amount paid to a child of a
              Participant will be treated as if it had been paid to the
              surviving spouse of the Participant if such remaining amount
              becomes payable to the surviving spouse when the child reaches the
              age of majority.

7.3    SEGREGATION IF INSTALLMENT DISTRIBUTION.

       The Administrative Committee may determine that the Employer Account of a
       Participant who is no longer an Employee shall be segregated and set
       aside, in which event the Administrative Committee shall direct the
       Trustees to segregate the vested portion (as defined in Article VI) of
       the entire balance of the Participant's Employer

                                      -21-
<PAGE>

       Account and to deposit such portion in a separate interest bearing
       account at a bank or savings and loan association, and said account shall
       cease to participate in the income or net loss or appreciation or
       depreciation of the Trust Fund, as of the beginning of the Plan Year in
       which such segregation occurs, and instead will be credited with the full
       amount of interest earned thereon.

7.4    NON-SEGREGATION IF INSTALLMENT DISTRIBUTION.

       In the event the Administrative Committee does not segregate (as provided
       in Section Segregation if Installment Distribution above) the Employer
       Account of a Participant, said account shall continue to be treated,
       without interruption, in the same manner as when the Participant was an
       Employee, in which case the installment distributions shall be adjusted
       upward or downward to reflect appreciation or depreciation, or income or
       loss in the account balance.

7.5    DISTRIBUTION AFTER DEATH OF PARTICIPANT.

       In the event of the death of a Participant after installment payments
       have begun, but prior to completion of such payments, the full amount of
       such unpaid benefits shall continue to be paid in the form of the
       previously established installments except that the Beneficiary may
       request that the remaining Accrued Benefit be paid in a lump sum.

       In the event of the death of the Participant prior to the start of any
       payments of his Accrued Benefit, distributions shall be made in the form
       and at the time or times selected by the Beneficiary pursuant to Sections
       7.1 and 7.2.

7.6    DISTRIBUTION AFTER DEATH OF BENEFICIARY.

       In the event of the death of a Beneficiary (or a contingent Beneficiary,
       if applicable) prior to the completion of payment of benefits due the
       Beneficiary from the Plan, the full amount of such unpaid benefits shall
       at once vest in and become the property of the estate of said
       Beneficiary. In determining the amount of such unpaid benefits, no
       adjustment shall be made by reason of any net income, or net loss, of the
       Trust, or any net appreciation or net depreciation by the Trust's assets
       subsequent to the beginning of the Plan Year in which such final
       distribution occurs.

7.7    ROLLOVER CONTRIBUTIONS AND DISTRIBUTIONS.

       Rollovers from other qualified plans into the Plan will not be permitted.

       The Administrative Committee may, in its sole discretion, but only with
       the prior written consent of the Participant, transfer part or all of the
       funds credited to his Employer and Participant Deferral Accounts to a
       retirement plan, as described in Code Section 401(a) or Section 403(a) as
       to which the individual is a Participant at the time of such
       distribution.

       The Committee shall provide to each Participant, Beneficiary or Alternate
       Payee who receives an eligible rollover distribution (as defined in Code
       Section 402(f), at the time such distribution is made, a written
       explanation of the: (a) provisions under which the

                                      -22-
<PAGE>

       distribution will not be subject to tax if timely transferred to an
       eligible retirement plan; and, if applicable, (b) provisions regarding
       the availability of capital gains and ten-year averaging or five-year
       averaging tax treatment of the distribution.

       For distributions made on or after January 1, 1993, notwithstanding any
       provisions of the Plan to the contrary that would otherwise limit a
       distributee's election under this Subsection, a distributee may elect, at
       the time and in the manner prescribed by the Committee, to have any
       portion of an eligible rollover distribution paid directly to an eligible
       retirement plan specified by the distributee in a direct rollover.

       (a)    An eligible rollover distribution is any distribution of all or
              any portion of the balance to the credit of the distributee,
              except that an eligible rollover distribution does not include any
              distribution that is one of a series of substantially equal
              periodic payments (not less frequently than annually) made for the
              life (or life expectancy) of the distributee and the distributee's
              designated Beneficiary, or for a specified period of ten (10)
              years or more; any distribution to the extent such distribution is
              required under Code Section 401(a)(9); 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 Qualifying Employer Securities).

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

       (c)    A distributee includes a Participant or former Participant. In
              addition, the Participant's surviving spouse, and the
              Participant's or former Participant's spouse or former spouse who
              is an Alternate Payee under a Qualified Domestic Relations Order,
              as defined in Code Section 414(p), are distributees with regard to
              the interest of the spouse or former spouse.

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

7.8    SUSPENSE ACCOUNT FOR TERMINATED PARTICIPANTS.

       If a Participant has terminated his employment but his Employer Account
       is not one hundred percent (100%) vested and he has not had five (5)
       consecutive One Year Breaks in Service subsequent to his termination, all
       funds in his Employer Account shall be held in suspense until the
       happening of the soonest of the following: (i) the Participant returning
       to employment with the Employer, or (ii) the occurrence of five (5)
       consecutive One Year Breaks in Service with respect to the Participant,
       or (iii) the Participant attaining Normal Retirement Age. At such time
       the Participant's Employer Account shall cease to be held in suspense. If
       a Participant has returned to employment prior to incurring five (5)
       consecutive One Year Breaks in Service, his Employer Account which

                                      -23-
<PAGE>

       has been held in suspense shall be restored to his credit, less any
       Cash-Out which is not repaid in accordance with Section 7.10. If five (5)
       consecutive One Year Breaks in Service occur, the non-vested portion of
       the Employer Account held in suspense will be forfeited and reallocated
       in accordance with the Manner of Allocation section above for the Plan
       Year in which such Forfeiture occurs; the vested portion shall be
       distributed in accordance with the provisions of Article VII. In the case
       of a Participant attaining Normal Retirement Age while his Employer
       Account is being held in suspense, the entire vested amount will be
       distributed and the non-vested portion shall be forfeited in accordance
       with the provisions of this Article VII.

       Such account shall share in any appreciation, depreciation, or net income
       or loss as if it were not in suspense, except that an account which is in
       suspense shall have no Forfeitures allocated to it for a Plan Year in
       which the Employee does not have a Year of Service for Accrual of
       Benefits.

       Notwithstanding anything contained in this Suspense Account for
       Terminated Participants section to the contrary, upon the payment of a
       Participant's vested Accrued Benefit through a Cash-Out, the non-vested
       portion of such Participant's Accrued Benefit shall be forfeited and
       shall be reallocated for the Plan Year in which a One Year Break in
       Service occurs in accordance with the Manner of Allocation section above.

7.9    UNABLE TO LOCATE PARTICIPANT OR BENEFICIARY.

       If the Participant or Beneficiary to whom benefits are to be distributed
       cannot be located, and reasonable efforts have been made to locate the
       Participant or Beneficiary, including the sending of notification by
       certified or registered mail to his last known address, the
       Administrative Committee may direct the Trustees to take any of the
       following actions:

       (i)    Distribute the benefits in question to an interest bearing savings
              account established in the name of the Participant or
              Beneficiary; or, if the benefits are payable to a Participant (as
              reasonably determined by the Administrative Committee) the
              Administrative Committee may instruct the Trustees to distribute
              the funds to the Participant by placing them in a savings account
              in the Participant's name or by purchasing U.S. Savings Bonds in
              the Participant's name and holding them for the Participant;

       (ii)   If the Administrative Committee has taken the reasonable efforts,
              as described in the preceding sentence, to locate the Participant,
              the Administrative Committee may allocate the Participant's
              Accrued Benefits to a segregated account in the manner described
              in Section 7.3, as if an installment distribution were being made;
              however, such funds shall be held in the segregated account for
              distribution to the Participant when located;

       (iii)  The Participant's Accrued Benefits may be forfeited and
              reallocated pursuant to the Manner of Allocation section above; if
              the Participant subsequently returns, such Forfeiture shall be
              restored pursuant to Section 6.5 and the restoration shall be made
              first out of Forfeitures, if any, and then by additional Employer
              contributions.

                                  -24-
<PAGE>

7.10   REPAYMENT OF CASH-OUT.

       If a Participant receives a Cash-Out distribution from the Plan as a
       result of ceasing to be an Employee, and is less than one hundred percent
       (100%) vested in his Accrued Benefit at such time, Participant shall have
       the right to repay to the Plan the Cash-Out distribution received from
       the Plan, prior to the sooner of (i) five (5) years from the individual
       again becoming an Employee, or the completion of five (5) consecutive
       One Year Breaks in Service following the date of distribution of the
       Cash-Out to the Participant. If the Participant makes such payment within
       the time specified in the preceding sentence, any non-vested portion of
       his Cash-Out distribution which was forfeited pursuant to Section 7.8
       will be restored to his credit. The permissable sources of restoration of
       the forfeited portion of a Cash-Out distribution are: income or gains
       from Plan investments, Forfeitures and Employer contribution. However,
       except with respect to the forfeited portion of a Cash-Out distribution,
       only amounts held in suspense pursuant to Section 7.8 shall be used to
       satisfy such restoration.

7.11   DISTRIBUTION OF DIVIDENDS.

       On or before the thirtieth (30th) day after the close of each Plan Year
       the Administrative Committee shall direct the Trustees as to whether any
       or all of the cash dividends received on any Qualifying Employer
       Securities, if any, owned by the Plan shall be: (i) retained by the Plan
       and allocated pursuant to Section 5.3; (ii) distributed to each
       Participant; or (iii) used to make payments on an Exempt Loan. In the
       event the Administrative Committee elects to cause the cash dividends to
       be distributed to Participants, each Participant shall receive, no later
       than ninety (90) days after the close of the Plan Year in which the
       dividend is paid, the pro rata share, computed in accordance with the
       provisions of Section 5.3, of such cash dividend (excluding earnings
       thereon).

7.12   DIVERSIFICATION OF INVESTMENTS.

       (a)    Notwithstanding Sections 5.01 and Article VIII, each Qualified
              Participant shall be permitted to direct the Plan as to the
              investment of twenty-five percent (25%) of the value of the
              Participant's account balance attributable to Qualifying
              Employer Securities which were acquired by the Plan after December
              31, 1986, within ninety (90) days after the last day of each Plan
              Year during the Participant's Qualified Election Period. Within
              ninety (90) days after the close of the last Plan Year in the
              Participant's Qualified Election Period, a Qualified Participant
              may direct the Plan as to the investment of fifty percent (50%) of
              the value of such account balance.

       (b)    The Participant's direction shall be provided to the
              Administrative Committee in writing; shall be effective no later
              than one hundred eighty (180) days after the close of the Plan
              Year to which the direction applies; and shall specify which, if
              any, of the options set forth in Section 7.12(c) the Participant
              selects.

       (c)    At the election of the Qualified Participant, the Plan shall
              distribute in cash or stock the portion of the Participant's
              account that is covered by the election within ninety (90) days
              after the last day of the period during which the

                                      -25-

<PAGE>

              election can be made. This Section shall apply notwithstanding any
              other provision of the Plan other than such provisions as
              require the consent of the Participant and the Participant's
              spouse.

       (d)    In lieu of distribution under this Section, the Qualified
              Participant who has the right to receive a distribution may direct
              the Plan to transfer the portion of the Participant's account that
              is covered by the election to another qualified plan of the
              Employer which accepts such transfers, provided that such Plan
              permits Employee-directed investment and does not invest in
              Qualifying Employer Securities to a substantial degree. Such
              transfer shall be made no later than ninety (90) days after the
              last day of the period during which the election can be made.

7.13   QUALIFIED DOMESTIC RELATIONS ORDERS.

       Notwithstanding any other provisions of Article VII, any Accrued Benefit
       of a Participant may be apportioned between the Participant and the
       alternate payee (as defined in Code Section 414(p)(8)) either through
       separate accounts or by providing the alternate payee a percentage of the
       Participant's account. The Committee may direct distributions to an
       alternate payee pursuant to a Qualified Domestic Relations Order as
       defined in Code Section 414(p)(1)(A) prior to the date on which the
       Participant attains the earliest Retirement Age, provided that the
       Committee has properly notified the affected Participant and each
       alternate payee of the order and has determined that the order is a
       Qualified Domestic Relations Order as defined in Code Section
       414(p)(1)(A). The alternate payee shall be paid a separate account or a
       percentage of the Participant's account, computed as of the valuation
       date described in Section 5.3, in a lump sum payment notwithstanding the
       value of such lump sum payment unless the domestic relations order
       specifies a different manner of payment permitted by the Plan. The
       alternate payee shall not be required to consent to such lump sum
       payment. The Committee shall adopt reasonable procedures to determine the
       qualified status of Qualified Domestic Relations Orders and to administer
       the distributions thereunder. In no event will a Qualified Domestic
       Relations Order which provides that a former spouse is to be treated as
       the current spouse of a Participant be considered a Qualified Domestic
       Relations Order under this Plan, notwithstanding that such Qualified
       Domestic Relations Order is a Qualified Domestic Relations Order as
       defined in Code Section 414(p)(1)(A).

                                  Article VIII
                         DUTIES AND AUTHORITY OF TRUSTEE

8.1    RECEIVE PAYMENTS.

       The Trustees shall receive from the Employer the payments made by it on
       account of its contributions under the Plan but the Trustees shall have
       no duty to compute any amount due from the Employer or to collect the
       same.

                                      -26-
<PAGE>

8.2    EVALUATE ASSETS.

       The Trustees shall evaluate the assets of the Trust Fund as of the close
       of the last day of each Plan Year at their Fair Market Value and the
       Administrative Committee or its agent will allocate the sums contributed
       by the Employer plus the net income or minus the net loss of the Trust
       Fund and plus the net appreciation or minus the net depreciation in the
       Trust assets to separate bookkeeping accounts in the names of the
       respective Participants under the Plan in accordance with the provisions
       of Sections 2.13 and 5.3.

8.3    SEGREGATION OF ACCOUNTS.

       When directed in writing by the Administrative Committee, the Trustees
       shall segregate the accounts of terminated Participants in accordance
       with the provisions of Section 7.3, and make payments out of the Trust
       Fund from time to time to the Participants or their Beneficiaries, such
       payments to be made in the manner and in the amounts as may be specified
       in the written instructions of the Administrative Committee.

8.4    TAX RETURNS AND REPORTS.

       If the Trustees are a corporate fiduciary, then such Trustees shall
       prepare or cause to have prepared and filed, all tax returns, reports,
       and related documents, except as otherwise specifically provided in this
       Plan or unless the Administrative Committee, in writing, relieves the
       Trustees of such obligation, in part or entirely, in which case the
       Administrative Committee, or the person or persons it designates, shall
       be responsible for filing the tax returns, reports, and related filings,
       as provided by the Administrative Committee. The Trustees shall be
       entitled to rely on the accuracy of any written statement from the
       Administrative Committee or from an officer of the Employer as to those
       matters provided in Article IX.

8.5    POWERS.

       The Trustees are authorized and empowered to:

       (a)    Invest and reinvest the Trust Fund, without distinction between
              principal and income, in Qualifying Employer Securities, bank
              accounts, certificates of deposit, Common Stocks, preferred
              stocks, bonds, notes, debentures, mortgages, U.S. retirement plan
              bonds, and in other property, real or personal, so long as the
              incidents of ownership of such property are within the
              jurisdiction of the United States, and so long as such investments
              do not violate applicable law;

       (b)    Purchase and hold Qualifying Employer Securities in a value up to
              one hundred percent (100%) of the total value of the Trust Fund,
              and borrow funds and pledge as collateral therefor the Qualifying
              Employer Securities so acquired; the Trustees shall have the duty
              to invest primarily in Qualifying Employer Securities;

       (c)    Purchase, sell, exchange, convey, transfer, or otherwise realize
              the value of any property held by it, specifically including the
              purchase and sale of Qualifying

                                      -27-
<PAGE>

              Employer Securities from or to the Employer or a disqualified
              person (as defined in Code Section 4975(e)(2)) or a party in
              interest (as defined in ERISA Section 3(14)) if such purchase or
              sale is for adequate consideration and no commission is charged
              with respect thereto;

       (d)    Convert any stocks, bonds, or other securities; to give general or
              special proxies or powers of attorney with or without power of
              substitution; to exercise any warrants, conversion privileges,
              subscription rights, or other options and to make any payment
              incidental thereto; to consent to or otherwise participate in
              corporate reorganizations or other changes affecting corporate
              securities and to delegate discretionary powers to pay any
              assessments or charges in connection therewith; and generally to
              exercise any of the powers of an owner with respect to stocks,
              bonds, securities or other properties held in the Trust Fund;

       (e)    Make, execute, acknowledge, and deliver any and all documents of
              transfer and conveyance and any other instruments that may be
              necessary or appropriate to carry out the powers herein granted;

       (f)    Register any investments held in the Trust Fund in its own name or
              in the name of a nominee or nominees and to hold any investment in
              bearer form, but the books and records of the Trustees shall at
              all times show that all such investments are part of the Trust
              Fund;

       (g)    Invest all or a part of the Trust Fund in deposits which bear a
              reasonable rate of interest in a bank or similar financial
              institution, even though such institution is a Trustee or other
              fiduciary, as defined in Code Section 4975(e)(3);

       (h)    Invest in a common or collective trust fund or pooled investment
              fund maintained by a bank or trust company or a pooled investment
              fund of an insurance company qualified to do business in a State
              even though such bank, trust company or insurance company is a
              disqualified person, as defined in Code Section 4975(e)(2);

       (i)    Take whatever actions are necessary to ensure that Qualifying
              Employer Securities consisting of stock are distributed in the
              manner prescribed in Section 7.1; such actions may include, but
              are not limited to, purchasing or exchanging such stock from the
              Trust, even though it has already been allocated to the Employer
              Accounts of Participants and purchasing or exchanging such stock
              as described in subparagraph (c) of this Section;

       (j)    Purchase Qualifying Employer Securities from persons, including
              "disqualified persons" as that term is defined in Code Section
              4975(e)(2), so long as the purchase price does not exceed the Fair
              Market Value of such securities and so long as the terms of the
              purchase are fair and reasonable;

       (k)    Perform all such acts, although not specifically mentioned herein,
              as the Trustees may deem necessary to administer the Trust Fund
              and to carry out the purpose of the Trust; and

                                      -28-
<PAGE>

       (l)    Borrow, or loan, except as prohibited by Code Section 4975(c)
              without reference to Code Section 4975(d), sums as the Trustees
              deems desirable, and for that purpose, to mortgage or pledge all
              or part of the Trust Fund; and borrow from "disqualified persons"
              (as that term is defined in Code Section 4975(e)(2)) in such
              amounts as permitted by Section 8.11, for the purpose of
              purchasing Qualifying Employer Securities.

8.6    EXPENSES.

       All brokerage costs, transfer taxes and similar expenses incurred in
       connection with the investment and reinvestment of the Trust Fund and all
       taxes of any kind whatsoever which may be levied or assessed under
       existing or future laws upon or in respect of the Trust Fund, and any
       interest which may be payable on money borrowed by the Trustees for the
       purpose of the Trust (however, such funds may not be borrowed for the
       purpose of purchasing Qualifying Employer Securities), shall be paid from
       the Trust Fund, and, until paid, shall constitute a charge upon the Trust
       Fund. All other administrative expenses incurred by the Trustees in the
       performance of its duties, including such compensation to the Trustees as
       may be agreed upon from time to time between the Employer and the
       Trustees (in accordance with the Trustees' standard schedule of fees in
       effect from time to time during the time it administers this Trust, if
       applicable) and all proper charges and disbursements of the Trustees,
       shall be paid by the Employer, but until paid shall constitute a charge
       upon the Trust Fund. If the Employer advises the Trustees in writing of
       its determination to make no further contribution to this Trust, the
       expenses of the Trustees shall thereafter be charged against and paid out
       of the Trust Fund and a lien for the payment thereof shall be impressed
       upon the assets of the Trust to be charged proportionately against the
       amount standing to the credit of each Participant. However, no person who
       is a disqualified person (as defined in Code Section 4975(e)(2) ) and who
       received full-time pay from the Employer, may receive compensation from
       the Trust, except for reimbursement of expenses properly and actually
       incurred.

       The Trustees may inspect the records of the Employer whenever such
       inspection may be reasonably necessary in order to determine any fact
       pertinent to the performance of its duties as the Trustees. The Trustees,
       however, shall not be required to make such inspection, but may, in good
       faith, rely on any statement of the Employer or any of its officers.

8.7    LITIGATION.

       The Trustees shall not be required to participate in any litigation
       either for the collection of monies or other property due the Trust Fund,
       or in defense of any claim against the Trust Fund unless the Trustees
       shall have been indemnified to its satisfaction against all expenses and
       liability to which the Trustees might become subject.

8.8    WRITTEN INSTRUCTIONS.

       When any act of the Trustees is based upon instructions of the Employer
       or the Administrative Committee, the Trustees may rely upon instructions
       in writing, signed by an officer of the Employer, or upon written
       instructions from the Administrative Committee, as appropriate.

                                      -29-
<PAGE>

8.9    APPOINTMENT OF INVESTMENT MANAGER.

       The Trustees, with the written concurrence of the Administrative
       Committee, may appoint an Investment Manager (as defined in ERISA Section
       3(38)), who shall have responsibility for investment of the Trust Fund.
       The Investment Manager shall have the investment powers granted
       the Trustees in Section 8.5 except to the extent the Investment Manager's
       powers are specifically limited by an agreement between the Trustee and
       Investment Manager.

8.10   REMOVAL AND RESIGNATION OF THE TRUSTEE.

       The Employer may at any time remove any Trustee acting hereunder or
       appoint a corporation and/or an individual or individuals to be successor
       Trustee hereunder in the place of any removed or resigning Trustee. Any
       Trustee may at any time resign by giving written notice to the Employer,
       which resignation shall take effect on the date therein specified and
       which shall not be less than thirty (30) days from the date of notice
       unless the Employer shall agree to an earlier date.

8.11   LOANS FROM DISQUALIFIED PERSONS

       The Trustees shall have the power to borrow funds either in the form of
       cash, a purchase money transaction, or the assumption of an obligation,
       from "disqualified persons" (as that term is defined in Code Section
       4975(e)(2) ), or guaranteed by disqualified persons, for the purpose of
       purchasing Qualifying Employer Securities or to repay amounts which were
       borrowed for the purpose of purchasing such securities, only if the
       following conditions are met:

       (a)    Such loan must provide for periodic payments over a definitely
              ascertainable term;

       (b)    The only assets given as collateral for such loan may be, in the
              case of a loan to purchase Qualifying Employer Securities, those
              Qualifying Employer Securities purchased with the proceeds of the
              loan, and in the case of a loan to refinance a prior loan used to
              acquire Qualifying Employer Securities, the Qualifying Employer
              Securities acquired with such prior loan;

       (c)    The only Plan assets available upon default to persons who loaned
              funds or who are entitled to payments under a loan from a
              disqualified person are: (i) Qualifying Employer Securities given
              pursuant to paragraph (b) above; (ii) contributions made to the
              Plan, other than contributions of Qualifying Employer Securities,
              that are made for the purpose of meeting the Plan's obligations
              under the loan; and (iii) earnings attributable to amounts
              described in (i) and (ii) of this sentence;

       (d)    Amounts paid during a Plan Year in repayment of such loan may not
              exceed amounts contributed (during the current and prior Plan
              Years) to the Plan for the purpose of meeting the Plan's
              obligations under the loan, less total prior payments on the loan;

                                      -30-

<PAGE>

       (e)    Amounts contributed to the Plan for the purpose of meeting loan
              obligations shall, prior to making payments under such loan, be
              segregated from the other amounts held by the Plan and all
              earnings thereon shall be allocated to such segregated account;

       (f)    Upon default, Plan assets shall be transferred to the lender, in
              an amount which is necessary to make payments which are currently
              due under the payment schedule of the loan, without acceleration
              of future amounts due thereon;

       (g)    Interest charged under the loan must be reasonable after
              considering all relevant factors such as the loan's amount and
              duration, the amount of security provided the lender (including
              any guarantee), the credit standing of the Plan and prevailing
              interest rates;

       (h)    Qualifying Employer Securities which are pledged as collateral for
              such loan must be released from encumbrance at the end of each
              Plan Year in an amount equal to the number of currently encumbered
              securities multiplied by a fraction, the numerator of which is the
              total payment of principal and interest made during the Plan Year,
              and the denominator of which is the total payment of principal and
              interest made during the Plan Year plus the total payment of
              principal and interest due under the loan for all future Plan
              Years. (If the interest rate under the loan is variable the above
              calculation must be made using the interest rate which is
              applicable as of the end of the Plan Year in which such
              calculation is made.) Securities of different classes must be
              released from encumbrance in equal percentages;

       (i)    All Qualifying Employer Securities acquired with the proceeds of a
              loan from a "disqualified person", whether they are pledged as
              collateral for such loan or not, shall be held in suspense in the
              Unallocated Stock Account and shall be removed from such account
              and be allocated to the Employer Accounts of Participants at the
              end of each Plan Year to the extent paragraph (h) of this Section
              8.11 provides for the release of encumbered securities. Income
              earned from securities held in suspense shall be deemed to be the
              income of the Plan and shall not be held in suspense unless such
              income has been pledged as collateral for the loan. Should a
              portion of a Participant's Employer Account be forfeited,
              Qualifying Employer Securities held in suspense for such
              Participant pursuant to this paragraph may only be forfeited after
              all other assets in the Participant's Employer Account are
              forfeited.

                                   Article IX
                DUTIES AND AUTHORITY OF ADMINISTRATIVE COMMITTEE

9.1    APPOINTMENT.

       This Plan shall be administered by the Administrative Committee as Plan
       Administrator. The Board of Directors of the Employer shall appoint the
       Administrative Committee, which shall consist of at least two (2) persons
       who shall signify in writing their acceptance of such appointment. Any
       member of the

                                      -31-
<PAGE>

       Administrative Committee may resign upon giving written notice to the
       board of directors of the Employer. Each appointee shall hold office at
       the pleasure of the Board of Directors. Vacancies arising in the
       Administrative Committee from death, resignation, removal or otherwise,
       shall be filled by the Board Of Directors, but the Administrative
       Committee may act notwithstanding the existence of vacancies so long as
       there is at least one member of the Administrative Committee who is a
       director.

       At any time the Board Of Directors of the Employer may adopt a resolution
       abolishing the Administrative Committee and reserving all of the duties
       of the Administrative Committee to the Board of Directors. Such
       resolution shall be effective as soon as it is communicated in writing to
       both the Administrative Committee and Trustees, or at any such subsequent
       effective date as is provided in the resolution. Whenever such a
       resolution is effective as to the Plan or in the event an Administrative
       Committee is not appointed, the term Plan Administrator or Board of
       Directors shall be deemed to replace the term "Administrative Committee."
       Such a resolution may be rescinded by the board of directors and shall be
       effective as soon as it is communicated in writing to the Trustees, or
       shall be effective at such later date as is provided in the resolution.

9.2    NO DISCRIMINATION.

       The Administrative Committee shall not take any action nor direct the
       Trustees to take any action that would result in benefiting one
       Participant or group of Participants at the expense of another, or
       discriminating between Participants similarly situated, or applying
       different rules to substantially similar sets of facts.

9.3    MAJORITY ACTION.

       The Administrative Committee shall act by a majority (or by all members
       if there be only one or two members) of the number of members
       constituting the Administrative Committee at the time of such action, and
       such action may be taken either by vote at a meeting or in writing
       without a meeting.

9.4    POWERS.

       Except as otherwise provided in the Plan, the Administrative Committee
       shall have control of the administration of the Plan, with all powers
       necessary to enable it to carry out its duties in that respect. Not in
       limitation, but in amplification of the foregoing, the Administrative
       Committee shall have power to interpret or construe the Plan and to
       determine all questions that may arise hereunder as to the status and
       rights of Participants and others hereunder. The Administrative Committee
       may inspect the records of the Employer or Trustees whenever such
       inspection may be reasonably necessary in order to determine any fact
       pertinent to the performance of the duties of the Administrative
       Committee. The Administrative Committee, however, shall not be required
       to make such inspection, but may, in good faith, rely on any statement of
       the Trustees or Employer or any of its officers or Employees.

                                      -32-
<PAGE>

9.5    FILING REPORTS.

       The Administrative Committee shall furnish, or shall see that the
       Employer furnishes, a summary of this Plan to all Employees, as
       required by applicable Federal law. The Administrative Committee shall
       furnish to the Trustees the names of all Employees who become eligible as
       Participants, and the Administrative Committee shall notify each Employee
       of his eligibility.

9.6    RECORDS AND INFORMATION.

       The Administrative Committee shall keep a complete record of all its
       proceedings and all data necessary for the administration of the Plan.

9.7    INFORMATION TO PARTICIPANTS.

       The Administrative Committee shall direct the maintenance of separate
       accounts of the Participants. It shall give each Participant, at least
       once every year, information as to the balance of his Employer Account.

9.8    COMPENSATION OF MEMBERS.

       The members of the Administrative Committee shall serve without
       compensation for their services as such, but shall be reimbursed by the
       Employer for all necessary expenses incurred in the discharge of their
       duties. If the Employer advises the Administrative Committee in writing
       of its determination to make no further contributions to the Plan, the
       expenses of the Administrative Committee shall thereafter be charged
       against and paid out of the Trust Fund and a lien for the payment thereof
       shall be impressed upon the assets of the Trust to be charged
       proportionately against the amount standing to the credit of each
       Participant.

9.9    REVIEW OF PARTICIPANT'S CLAIMS.

       In case the claim of any Participant or Beneficiary for benefits under
       the Plan is denied, the Administrative Committee shall provide adequate
       notice in writing to such claimant, setting forth the specific reasons
       for such denial. The notice shall be written in a manner calculated to be
       understood by the claimant. The Administrative Committee shall afford a
       Participant or Beneficiary, whose claim for benefits has been denied,
       sixty (60) days from the date notice of such denial is delivered or
       mailed in which to appeal the decision in writing to the Administrative
       Committee. If the Participant or Beneficiary appeals the decision in
       writing within sixty (60) days, the Administrative Committee shall review
       the written comments and any submissions of the Participant or
       Beneficiary and render its decision regarding the appeal, all within
       sixty (60) days of such appeal.

9.10   EXERCISE OF STOCK RIGHTS.

       In the event that Qualifying Employer Securities contributed by the
       Employer to the Plan include voting stock, or stock or other securities
       with any rights other than voting rights,

                                      -33-

<PAGE>

       the Administrative Committee shall name, as a Designated Fiduciary, one
       of its members, or such other person as may consent thereto, to exercise
       on behalf of Participants, voting or other stock or equity rights with
       respect to the stock contributed to the Plan. The Designated Fiduciary
       shall notify each Participant to whose account any Qualifying Employer
       Security has been allocated at least thirty (30) days prior to any
       occasion on which such voting or other rights may be exercised. Such
       notification shall include all information distributed to shareholders or
       holders of such other equities by the Employer regarding the exercise of
       such voting or other rights. Such notification shall contain a procedure
       under which each of such Participants shall be able to direct the
       Designated Fiduciary in the exercise of the voting, or other rights. The
       Designated Fiduciary shall be bound by the instructions of each
       Participant; if a Participant gives no instructions to the Designated
       Fiduciary, the Designated Fiduciary shall not vote such Participant's
       stock or exercise such rights but shall so notify the trustees to vote
       such stock or exercise such rights.

                                    Article X
                        MODIFICATIONS FOR TOP HEAVY PLANS

10.1   APPLICATION OF ARTICLE.

       The provisions in this Article X shall take precedence over any other
       provisions in the Plan with which they conflict.

10.2   DEFINITIONS.

       (a)    TOP HEAVY PLANS.

              This Plan shall constitute a Top Heavy Plan for a Plan Year if, as
              of the last day of the preceding Plan Year (or in the case of the
              Plan Year in which occurs the effective date of this Plan, the
              last day of such Plan Year): (i) the aggregate of the Employer
              Accounts of Key Employees exceeds sixty percent (60%) of the
              aggregate of the Employer Accounts of all Employees under the Plan
              all valued as of the last day of the preceding Plan Year (or in
              the case of the Plan Year in which occurs the effective date of
              this Plan, the last day of such Plan Year); or (ii) if the Plan is
              part of a Top Heavy Group.

       (b)    TOP HEAVY GROUP.

              This Plan shall be deemed to be a part of a Top Heavy Group if the
              Plans which make up the group of which this Plan is considered a
              part are such that, when aggregated, the sum of: (i) the present
              value of the cumulative accrued benefits of Key Employees under
              all defined benefit plans in the group; and (ii) the cumulative
              accrued benefits in the Plan accounts of Key Employees under all
              defined contribution plans in the group, exceeds sixty percent
              (60%) of the sum of such amounts for all Employees who participate
              in the Plans of such group. The group of Plans of which this Plan
              shall be considered a part includes: (i) all Plans of the Employer
              in which a Key Employee participates; (ii) all Plans which enable
              a Plan in which a Key Employee participates to meet the
              qualification requirements of Code Section 401(a)(4) or Code
              Section 410; and (iii) all Plans

                                      -34-
<PAGE>

              which the Employer, in its discretion, decides to include,
              provided that the inclusion of such Plan or Plans would not
              prevent the group of Plans from meeting the qualification
              requirements of Code Section 401(a)(4) and Code Section 410.

       (c)    KEY EMPLOYEE.

              "Key Employee" means an Employee or former Employee (or his
              Beneficiaries) who, at any time during the Plan Year or any of the
              preceding four (4) Plan Years, is any of the following:

              (i)    An officer of the Employer if such individual's annual
                     Compensation exceeded fifty percent (50%) of the dollar
                     limitation under Code Section 415(b)(1)(A).

              (ii)   One of the ten (10) Employees owning (or considered as
                     owning within the meaning of Code Section 318) the largest
                     interests in the Employer if such individual's Compensation
                     exceeded one hundred percent (100%) of the dollar
                     limitation under Code Section 415(c)(1)(A).

              (iii)  A "five percent owner" (5%) of the Employer. "Five percent
                     owner" (5%) means any person who owns (or is considered as
                     owning within the meaning of Code Section 318) more than
                     five percent (5%) of the outstanding stock of the Employer
                     or stock possessing more than five percent (5%) of the
                     total combined voting power of all stock of the Employer.

              (iv)   A "one percent owner" (1%) of the Employer receiving annual
                     Compensation from the Employer of more than one hundred
                     fifty thousand dollars ($150,000). "One percent (1%) owner"
                     means any person who owns (or is considered as owning
                     within the meaning of Code Section 318) more than one
                     percent (1%) of the outstanding stock of the Employer or
                     stock possessing more than one percent (1%) of the total
                     combined voting power of all stock of the Employer.

              In determining percentage ownership hereunder, Employers that
              would otherwise be aggregated under Code Section 414(b), (c), (m)
              and (o) shall be treated as separate Employers. However, in
              determining whether an individual receives compensation of more
              than one hundred fifty thousand dollars ($150,000) compensation
              from each Employer required to be aggregated under Code Section
              414(b), (c), (m) and (o) shall be taken into account.

       (d)    AMOUNTS INCLUDED FOR COMPUTATION PURPOSES.

              In determining, for the purposes of this Section 10.2, the amount
              of an Employee's accrued benefits and account balances, there
              shall be included therein the present value of all distributions
              made within a five (5) year period ending on the date such
              determination is made, including distributions from terminated
              Plans required to be considered pursuant to Section 10.2(b).
              Furthermore, the accrued benefits and account balances of any
              Employee who is not a Key Employee for the

                                      -35-
<PAGE>

              Plan Year in question, but was a Key Employee in any previous Plan
              Year, shall not be taken into consideration in making any of the
              computations required in this Section 10.2. The accrued benefit of
              any individual who has not performed any service for the Employer
              within the five year period ending on the date such determination
              is made shall not be taken into account for purposes of Section
              10.2. Except to the extent provided in regulations of the
              Secretary of the Treasury, any rollover contributions (or similar
              transfers) made to the Plan after December 31, 1983 shall not be
              taken into consideration in making any of the computations
              required by this Section 10.2.

       (e)    NON-KEY EMPLOYEE.

              A "Non-Key Employee" shall mean any Employee who is not a Key
              Employee.

       (f)    TOP HEAVY ACCRUAL.

              Solely for the purpose of determining if the Plan, or any other
              Plan included in a Top Heavy Group of which this Plan is a part,
              is top-heavy, the accrued benefit of a Participant other than a
              Key Employee shall be determined under (i) the method, if any,
              that uniformly applies for accrual purposes under all Plans
              maintained by the Employer or by other members of an affiliated
              service group (under Code Section 414(m)), a controlled group of
              corporations (under Code Section 414(b)), a group of trades or
              businesses under common control (under Code Section 414(c)) of
              which the Employer is a member and any other entity required to
              be aggregated with the Employer pursuant to regulations under
              Code Section 414(o), or (ii) if there is no such method, as if
              such benefit accrued not more rapidly than the slowest accrual
              rate permitted under the fractional accrual rate of Code Section
              411(b)(1)(C).

10.3   ACCELERATED VESTING.

       Unless the Plan provides for full and immediate vesting of Employer
       Accounts upon participation, then for any Plan Year in which this Plan is
       deemed to be a Top Heavy Plan, the vesting schedule contained in Section
       6.3 shall be modified as follows:

<TABLE>
<CAPTION>
                 ================================================
                     TOTAL YEARS FOR VESTING           VESTED
                   (EXCLUDING YEARS OF SERVICE       PERCENTAGE
                   PRIOR TO EFFECTIVE DATE OF
                           THIS PLAN)
                 ================================================
                 <S>                                 <C>
                      Less than 2                        0%
                 ================================================
                           2                            20%
                 ================================================
                           3                            40%
                 ================================================
                           4                            60%
                 ================================================
                           5                            80%
                 ================================================
                       6 or more                       100%
                 ================================================
</TABLE>

                                      -36-
<PAGE>

       Should this Plan not be deemed to be a Top Heavy Plan after previously
       being so categorized, the vesting schedule contained in Section 6.2 shall
       again be effective except that the vested percentage attained by
       Participants shall not be reduced thereby and Participants with three (3)
       or more Years of Service for Vesting shall have the right to select the
       vesting schedule under which their vested Accrued Benefit will be
       determined.

10.4   MINIMUM CONTRIBUTIONS.

       For any Plan Year in which this Plan is determined to be a Top Heavy
       Plan, either: (i) a minimum Employer contribution shall be made, pursuant
       to this Plan or another defined contribution plan maintained by the
       Employer, to the account of each non-Key Employee (except those who are
       separated from service with the Employer at the end of the Plan Year); or
       (ii) a minimum non-integrated benefit must be provided to each non-Key
       Employee (except those who are separated from service with the Employer
       at the end of the Plan Year), pursuant to a defined benefit plan
       maintained by the Employer.

       For the purposes of the first sentence of this Section 10.4, the minimum
       Employer contribution provided to each non-Key Employee (except those who
       are separated from service with the Employer at the end of the Plan Year)
       shall be equal to three percent (3%) of such non-Key Employee's
       Compensation. If, however, the Employer contribution, under this and any
       other defined contribution plan required to be included in the Top-Heavy
       Group and maintained by the Employer, for any Key Employee for such Plan
       Year is less than three percent (3%) of such Key Employee's total
       Compensation not in excess of Two Hundred Thousand Dollars ($200,000)
       (for Plan Years beginning before 1989), then, the Employer contribution
       to each Participant (except those who are separated from service with the
       Employer at the end of the Plan Year) shall equal the amount which
       results from multiplying such Participant's Compensation times the
       highest contribution rate of any Key Employee covered by the Plan and
       shall include amounts elected to be deferred by the Key Employee pursuant
       to an Code Section 401(k) provision.

       For the purposes of the first sentence of this Section 10.4, the minimum
       non-integrated benefit provided by the Employer to each non-Key Employee
       (except those who are separated from service with the Employer at the end
       of the Plan Year) is an amount, which when expressed as an annual
       retirement benefit, shall be no less than two percent (2%) of such
       non-Key Employee's average annual Compensation for his five (5) highest
       consecutive years of service, multiplied by the Employee's years of
       service with the Employer, not to exceed ten (10) years. For the purposes
       of the preceding sentence, years of service with the Employer shall not
       include years of service completed during any Plan Year which begins
       before January 1, 1984, or years of service completed during a Plan Year
       for which the Plan is not a Top-Heavy Plan. For the purposes of this
       Section 10.4, the minimum benefit provided above shall be computed in the
       form of a single life annuity, with no ancillary benefits, beginning at
       Normal Retirement Age.

       For the purposes of this Article X, "Compensation" shall have the same
       meaning as it does throughout the Plan; provided that it shall include
       such additional compensation as is required to meet the requirements of
       Code Section 415(c)(3).

                                      -37-
<PAGE>

       The minimum allocation required pursuant to this section shall be made
       even though, under other Plan provisions, a participant would not
       otherwise be entitled to receive an allocation, or would have received a
       lesser allocation for the year because of such participant's failure to
       complete a Year of Service.

10.5   LIMITATION ON COMPENSATION TAKEN INTO ACCOUNT UNDER PLAN.

       For any Plan Year prior to Plan Years beginning before January 1, 1989,
       in which this Plan is deemed to be a Top Heavy Plan the definition of
       Compensation contained in Section 2.5 shall exclude amounts in excess of
       one hundred fifty thousand dollars ($150,000).

10.6   MODIFICATION OF DEFINED BENEFIT AND DEFINED CONTRIBUTION PLAN FRACTION.

       For any Plan Year in which the Plan is deemed to be a Top Heavy Plan, the
       denominators of the defined benefit plan fraction and the defined
       contribution plan fraction contained in Section 5.4(c) (if such Section
       is included in this Plan) shall be deemed to be modified by substituting
       1.0 for 1.25. Notwithstanding the above, if this Plan would not be deemed
       to be a Top Heavy Plan if ninety percent (90%) were substituted for sixty
       percent (60%) in Section 10.2 and if the Employer provides benefits
       and/or makes contributions to the Employer Accounts of non-Key Employees
       who participate in defined benefit and/or defined contribution plans
       maintained by the Employer, in amounts at least equal to that which would
       be required by Section 10.4 after substituting four percent (4%) for
       three percent (3%) in the second paragraph thereof, and by substituting
       three percent (3%) for two percent (2%) in the third paragraph thereof,
       then the reduction in the defined benefit plan fraction and the defined
       contribution plan fraction as set forth in the preceding sentence, shall
       not be made.

                                   Article XI
                            AMENDMENT AND TERMINATION

11.1   RIGHTS TO SUSPEND OR TERMINATE PLAN.

       It is the present intention of the Employer to maintain this Plan
       throughout its corporate existence. Nevertheless, the Employer
       reserves the right, at any time, to discontinue or terminate the Plan,
       to terminate the Employer's liability to make further contributions to
       this Plan, to suspend contributions for a fixed or indeterminate period
       of time. In any event, the liability of the Employer to make
       contributions to this Plan shall automatically terminate upon its legal
       dissolution or termination, upon its adjudication as a bankrupt, upon the
       making of a general assignment for the benefit of creditors, or upon its
       merger or consolidation with any other corporation or corporations.

11.2   SUCCESSOR CORPORATION.

       In the event of the termination of the liability of the Employer to make
       further contributions to this Plan, the Employer's liability may be
       assumed by any other corporation or organization which employs a
       substantial number of the Participants of this Plan. Such assumption of
       liability shall be expressed in an agreement between such other
       corporation or organization and the Trustees under which such other
       corporation or

                                      -38-
<PAGE>

       organization assumes the liabilities of this Trust with respect to the
       Participants employed by it.

11.3   AMENDMENT.

       To provide for contingencies which may require the clarification,
       modification, or amendment of this Plan, the Employer reserves the right
       to amend this Plan at any time. The Employer, however, shall not have the
       right to amend this Plan in any way which would deprive any Participant
       of the right to receive his Accrued Benefits under the Plan, or which
       would alter the basic purpose of the Plan, or which would give the
       Employer any rights in the Trust Fund.

       Each Participant having at least three Years of Service for Vesting at
       the time of the adoption of any amendment changing any vesting schedule
       under the Plan shall have the right to elect at any time, but no later
       than 60 days after the later of: (a) the date the amendment is adopted;
       (b) the date on which the amendment is effective; or (c) the date on
       which the Participant is given written notice the amendment, to have his
       vested percentage computed under the Plan without regard to such
       amendment.

11.4   ONE HUNDRED PERCENT (100%) VESTING ON TERMINATION OF PLAN.

       Upon termination or partial termination of the Plan and Trust by formal
       action of the Employer or for any other reason, or if Employer
       contributions to the Plan and Trust are permanently discontinued for any
       reason, each Participant directly affected by such action shall be one
       hundred percent (100%) vested in the amount allocated to the accounts of
       each such Participant, and payment to such Participant shall be made in
       cash as soon as practicable after liquidation of the assets of the Trust.

11.5   PLAN MERGER OR CONSOLIDATION.

       In the case of any merger or consolidation with, or transfer of any
       assets or liabilities to, any other Plan, each Participant in this plan
       must be entitled to receive (if the surviving Plan is then terminated) a
       benefit immediately after the merger, consolidation, or transfer which is
       equal to or greater than the benefit he would have been entitled to
       receive immediately before the merger, consolidation, or transfer (if
       this Plan had terminated).

                                   Article XII
                                  MISCELLANEOUS

12.1   LAWS OF CALIFORNIA TO APPLY.

       The Plan provisions of this document shall be construed according to the
       laws of the State of California, to the extent Federal laws do not
       control. The situs of the Trust will be in the State of California. Its
       validity, construction, and all rights under the Plan and Trust shall be
       governed by ERISA and, to the extent not preempted, by the laws of
       California. If any provisions of the Agreement are invalid or
       unenforceable, the remaining provisions thereof shall continue to be
       fully effective.

                                      -39-
<PAGE>

12.2   PARTICIPANT CANNOT TRANSFER OR ASSIGN BENEFITS.

       None of the benefits, payments, proceeds, claims, or rights of any
       Participant hereunder shall be subject to any claim of any creditor of
       the Participant, nor shall any Participant have any right to transfer,
       assign, encumber, or otherwise alienate, any of the benefits or proceeds
       which a Participant may expect to receive, contingently or otherwise
       under this Plan.

       Notwithstanding any other provisions of this Section 12.2, the Trustees
       may make distributions pursuant to a qualified domestic relations order
       (as defined in Code Section 414(p)), provided that the plan administrator
       has properly notified the Participant and any alternate payee of the
       order and has determined that the order is a qualified domestic relations
       order. The Plan Administrator shall adopt reasonable procedures to
       determine the qualified status of such orders and to administer
       distributions thereunder. Notwithstanding any restrictions on the time
       of distribution which would otherwise apply under this Plan,
       distributions with respect to a qualified domestic relations order may
       be made at any time required by the order.

12.3   RIGHT TO PERFORM ALTERNATIVE ACTS.

       In the event it becomes impossible for the Employer, the Administrative
       Committee or the Trustees to perform any act required by this Plan, then
       the Employer, the Administrative Committee or the Trustees may perform
       such alternative act which most clearly carries out the intent and
       purpose of this Plan.

12.4   REVERSION OF CONTRIBUTIONS UNDER CERTAIN CIRCUMSTANCES.

       If this Plan is not initially approved and qualified by the Internal
       Revenue Service as meeting the requirements of Code Section 401 and Code
       Section 501, the Employer may, at its election, either: (a) cause the
       Trustees to return to the Employer any amounts previously contributed by
       the Employer to the Trust and the Participants, if any amounts have been
       contributed by them, and immediately terminate the Plan; or (b) effect
       such amendments to the Plan as are necessary to obtain the approval and
       qualification of the Plan by the Internal Revenue Service.

       All contributions made pursuant to Article IV are conditioned on
       deductibility of such contributions under Code Section 404. To the extent
       that the deduction under Code Section 404 for any year is disallowed, the
       contribution shall be returned to the Employer within one (1) year after
       disallowance of the deduction.

       If a contribution is made by an Employer by a mistake of fact, the
       contribution may be returned to the Employer within one (1) year after
       the payment of the contribution.

       Notwithstanding the above, earnings attributable to amounts described in
       paragraphs two and three of this Section 12.4 shall not be returned to
       the Employer; losses attributable to such amounts shall reduce the amount
       returned.

                                      -40-

<PAGE>

12.5   PLAN ADMINISTRATOR AGENT FOR SERVICE OF PROCESS.

       The Plan Administrator is designated agent to receive service of legal
       process on behalf of the Plan.

12.6   FILING TAX RETURNS AND REPORTS.

       If the Trustees are not a corporate fiduciary, the Plan Administrator
       shall prepare, or cause to have prepared, all tax returns, reports, and
       related documents, except as otherwise specifically provided in this Plan
       or unless the Administrative Committee provides to the contrary in the
       manner prescribed in Section 8.4.

12.7   INDEMNIFICATION.

       The Employer agrees to indemnify all Employees who serve as members of
       the Administrative Committee or who serve as Trustee against all
       liability arising in connection with their duties under the Plan, except
       that this indemnification shall not include acts of embezzlement, or
       diversion of Trust Funds by the Employee, nor shall it include acts of
       gross negligence.

       The Employer shall indemnify and hold harmless the Trustees, its
       officers, Employees, agents, successors and assigns against all
       liabilities, demands, claims, actions, losses, taxes, expenses (including
       reasonable attorney's fees), both direct and indirect, arising out of
       (1) acts or omissions to act with respect to the Plan by persons
       unrelated to the Trustees ("unrelated persons"), (2) the Trustee's action
       or inaction with respect to the Plan resulting from reliance on the
       actions or inaction of unrelated persons, including directions to invest
       or otherwise deal with Plan assets, or (3) any violation by an unrelated
       persons of the provisions of ERISA or the regulations thereunder. The
       foregoing indemnity shall not apply if the actions or omissions of the
       Trustees result from the Trustees' willful misconduct or gross
       negligence.

12.8   NUMBER AND GENDER.

       When appropriate the singular as used in this Plan shall include the
       plural and vice versa; and the masculine shall include the feminine.

12.9   MILITARY SERVICE.

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

                                      -41-
<PAGE>

                                  Article XIII
                                  EXEMPT LOANS

13.1   USE OF PROCEEDS.

       The proceeds of an Exempt Loan must be used within a reasonable time
       after their receipt by the Plan only for any or all of the following
       purposes:

       (a)    To acquire Qualifying Employer Securities;

       (b)    To repay such Exempt Loan;

       (c)    To repay a prior Exempt Loan.

       If the proceeds of a loan are used to repay an Exempt Loan, the new loan
       must constitute an Exempt Loan.

13.2   INTEREST RATE.

       The interest rate of any loan to the Plan, including an Exempt Loan, must
       not be in excess of a reasonable rate of interest. All other factors will
       be considered in determining a reasonable rate of interest, including the
       amount and duration of the loan, the security and guaranty (if any)
       involved, the credit standing of the Plan and the guarantor (if any),
       and the interest rate prevailing for comparable loans, including a
       variable interest rate if reasonable.

13.3   NON-RECOURSE.

       An Exempt Loan must be without recourse against the Plan. The only assets
       of the Plan that may be given as collateral on an Exempt Loan are
       Qualifying Employer Securities which were either: (i) acquired with the
       proceeds of the Exempt Loan; or (ii) were used as Collateral on a prior
       Exempt Loan repaid with the proceeds of the current Exempt Loan. No
       person entitled to payment under the Exempt Loan shall have any right to
       assets of the Plan other than:

       (a)    Collateral given for the Exempt Loan;

       (b)    Contributions (other than contributions of Qualifying Employer
              Securities) that are made under the Plan to meet the obligations
              of the Exempt Loan; and

       (c)    Earnings attributable to such collateral and the investment of
              such contributions.

13.4   LIMITATIONS ON PAYMENTS.

       Payments made with respect to an Exempt Loan by the Plan during a Plan
       Year must not exceed an amount equal to the sum of such contributions and
       earnings received during or prior to the Plan Year less such payments in
       prior Plan Years. Such contributions and earnings shall be accounted for
       separately by the Employer in the books of account of the Plan until the
       Exempt Loan is repaid.

                                      -42-
<PAGE>

13.5   FORFEITURE QUALIFYING EMPLOYER SECURITIES.

       All Qualifying Employer Securities acquired with the proceeds of a loan
       from a "disqualified person", whether they are pledged as collateral for
       such loan or not, shall be held in a suspense account and shall be
       removed from such account and be allocated to the Employer Accounts of
       Participants at the end of each Plan Year to the extent paragraph (h) of
       Section 8.11 provides for the release of encumbered securities. Income
       earned from securities held in suspense shall be deemed to be the income
       of the Plan and shall not be held in suspense unless such income has been
       pledged as collateral for the loan. Should a portion of a Participant's
       Employer Account be forfeited, Qualifying Employer Securities held in
       suspense for such Participant pursuant to this paragraph may only be
       forfeited after all other assets in the Participant's Employer Account
       are forfeited. If interests in more than one class of Qualifying Employer
       Securities have been allocated to the Participant's Employer Account, the
       Participant must be treated as forfeiting the same proportion of each
       such class of Qualifying Employer Securities.

13.6   LIMITATION ON FUTURE OBLIGATION.

       The Plan shall not obligate itself to acquire Qualifying Employer
       Securities from a particular security holder at an indefinite time
       determined upon the happening of an event such as the death of the
       security holder. However, this shall not prevent the Plan from providing
       for the issuance of options in accordance with Treasury Regulation
       Sections 54.4975-7(b)(10), (11), and (12).

       In the event of default upon an Exempt Loan, the value of Plan assets
       transferred in satisfaction of the Exempt Loan may not exceed the amount
       of default. If the lender is a disqualified person (as defined in Code
       Section 4975(e)(2)), the Exempt Loan must provide for a transfer of Plan
       assets upon default only upon and to the extent of the failure of the
       Plan to meet the payment schedule of the Exempt Loan. For purposes of
       this Section 13.6, the making of a guaranty does not make a person a
       lender.

IN WITNESS WHEREOF, the parties have executed this agreement this 29th day of
July, 1997.

WITNESS                                      EMPLOYER

                                             FALLBROOK NATIONAL BANK

/s/ [ILLEGIBLE]                             By /s/ Thomas E. Swanson
-------------------------------                ---------------------------------
                                                        Thomas E. Swanson
                                                             President

                                      -43-
<PAGE>

WITNESS                                                TRUSTEE

/s/ [ILLEGIBLE]                                 /s/ Thomas E. Swanson
-------------------------------                ---------------------------------
                                                       Thomas E. Swanson

/s/ Lynda Hepier                                /s/ Granger Haugh
-------------------------------                ---------------------------------
                                                         Granger Haugh

                                      -44-<PAGE>

                                                                    Exhibit 10.4

                              EMPLOYMENT AGREEMENT

                  AGREEMENT dated as of October 1, 1999, between Questron
Technology, Inc., a Delaware corporation (referred to herein as "Employer" or
"Questron"), and Robert V. Gubitosi ("Executive").

                               W I T N E S S E T H

                  WHEREAS, the Employer desires to retain the services of
Executive and Executive desires to be employed by Employer upon the terms and
conditions hereinafter set forth.

                  NOW, THEREFORE, in consideration of the premises and the
mutual undertakings and agreements contained herein, Employer and Executive
agree as follows:

                  1. EMPLOYMENT. Employer hereby employs Executive, and
Executive hereby agrees to serve as President and Chief Financial Officer of
Employer, or in such other senior executive positions as shall be assigned to
Executive by Employer's board of directors with Executive's consent during the
Term of Employment (as hereinafter defined). Executive further agrees to use his
best efforts to promote the interests of Employer and to devote all his business
time and energies to the business and affairs of Employer during the Term of
Employment.

                  2. TERM OF EMPLOYMENT. Unless earlier terminated pursuant to
Paragraph 7 hereof, the employment hereunder shall commence as of October 1,
1999 and shall end on June 30, 2003 (the "Term of Employment").

                  3. COMPENSATION. As compensation for services hereunder and in
consideration of the covenants set forth in Paragraph 4 hereof, during the Term
of Employment Executive shall be compensated as follows:

                           (a) BASE SALARY. Effective October 1, 1999 and during
         the Term of Employment, Employer shall pay Executive a base salary at
         the rate of Two Hundred and Fifty Thousand Dollars ($250,000) per
         annum. Such salary shall be payable in appropriate installments to
         conform to the regular payroll dates for salaried personnel of
         Employer. The base salary of the Executive shall be reviewed annually
         by the Employer's board of directors or compensation committee of the
         board who may, in their sole discretion, approve an increase to the
         Executive's base salary.

                           (b) BONUSES. Employer shall pay Executive annual
         bonuses as follows (i) a discretionary bonus of up to Fifty Thousand
         Dollars ($50,000), to be determined by the board of directors or
         compensation committee of the board in their sole discretion; and (ii)
         an additional bonus of up to $50,000 based upon attaining

<PAGE>

         targeted increases in diluted earnings per share as mutually agreed
         upon at the beginning of each year by the Executive and the board of
         directors or compensation committee of the board.

                           (c) EXPENSES. Employer shall provide Executive with a
         car allowance of $1,300 per month. Employer shall also reimburse
         Executive for all reasonable out-of-pocket expenses incurred in
         connection with rendering services hereunder in accordance with
         Employer's customary policies, including without limitation,
         reimbursement of travel expenses for business purposes and
         reimbursement of Executive's cellular telephone expenses.

                           (d) FRINGE BENEFITS. Executive shall be eligible to
         participate in and to receive benefits under any pension plan,
         profit-sharing plan, savings plan, stock option/savings plan, ESOP,
         life insurance, health and accident plan or arrangement made available
         by Employer to its senior executives and key management employees
         generally, subject to and on a basis consistent with the terms,
         conditions and overall administration of each such plan or arrangement;
         provided, however, that with respect to any plan or arrangement under
         which participation is at the discretion of a committee or other body
         administering such plan or arrangement, nothing contained herein shall
         entitle Executive to participate in such plan or arrangement to be paid
         for by the Employer. Nothing paid to Executive under any plan or
         arrangement presently in effect or made available in the future shall
         be deemed to be in lieu of compensation to Executive hereunder, and
         nothing paid to Executive hereunder shall be deemed to be in lieu of
         any payment to which Executive may be entitled under any such plan or
         arrangement.

                           (e) VACATION. Executive shall be entitled to four (4)
         weeks of paid vacation days in each calendar year during the Term of
         Employment. In the event that Executive is employed hereunder during a
         calendar year for less than all of that year, he shall be entitled in
         that year to a number of paid vacation days which shall be prorated in
         accordance with the number of days on which he is so employed in that
         year. Executive shall also be entitled to all paid holidays given by
         Employer to its senior executive officers during the Term of
         Employment.

                  4. COVENANT NOT TO COMPETE; INTELLECTUAL PROPERTY;
                  CONFIDENTIALITY.

                           (a) COVENANT NOT TO COMPETE. Executive acknowledges
         that in consideration of the Employer entering into this Agreement,
         Executive is simultaneously executing and delivering to Employer the
         attached letter (the "Restrictive Letter") containing certain covenants
         relating to his conduct during and after the Term of Employment.
         Notwithstanding the provisions of the Restrictive Letter, during the
         Term of Employment Executive will not manage, operate, control,

                                       2
<PAGE>

         be employed by or participate in the ownership, management operation or
         control of, or be connected in any manner with, any business of the
         type and character engaged in and competitive with that to be conducted
         by Employer. The decision of Employer's board of directors as to what
         constitutes a competing business shall be final and binding upon
         Executive. For these purposes, Executive's service as a director of or
         his ownership of 1% or less of any class of securities of a public
         company shall not be considered to be competition with Employer.

                           (b) INTELLECTUAL PROPERTY. Executive agrees that all
         ideas, sketches, designs, prototypes, samples, patterns, and related
         work product developed by him during the Term of Employment which
         relate directly or indirectly to the business of Employer or any of its
         subsidiaries or affiliates are work-for-hire and will be the property
         of Employer and that he will, at Employer's request and cost, do
         whatever is reasonably necessary to secure the rights thereto to
         Employer.

                           (c) CONFIDENTIALITY. Except as required pursuant to a
         court order or applicable law, Executive agrees that he will not
         divulge to anyone (other than Employer or any persons employed or
         designated by Employer) any knowledge or information of any type
         whatsoever of a confidential nature relating to the business of
         Employer or any of its subsidiaries or affiliates, including, without
         limitation, all types of trade secrets. Executive further agrees not to
         disclose, publish or make use of any such knowledge or information of a
         confidential nature without the prior written consent of Employer.

                  5. BREACH BY EXECUTIVE. Both parties hereto recognize that the
         services to be rendered under this Agreement by Executive are special,
         unique and extraordinary in character, and that in the event of the
         breach by Executive of the terms and conditions of this Agreement or
         the Restrictive Letter to be performed by him, then Employer shall be
         entitled, if it so elects, to institute and prosecute proceedings in
         any court of competent jurisdiction, either in law or in equity, to
         obtain damages for any breach of this Agreement or of the Restrictive
         Letter, or to enforce the specific performance thereof by Executive, or
         to enjoin Executive from performing services for another person, firm
         or corporation in violation of this Agreement or the Restrictive
         Letter. If any of the restrictive covenants set forth in this Agreement
         or in the Restrictive Letter are held to be unenforceable because of
         the duration or scope of any such covenant, the parties hereto agree
         that the duration or scope of such provision shall be reduced to the
         maximum scope permitted by law, and, in its reduced form, shall be
         enforceable.

                  6. INDEMNIFICATION. The Employer agrees to indemnify the
         Executive to the fullest extent permitted by Delaware law for any and
         all liabilities to which he may be subject as a result of his
         employment hereunder (and as a result of his services as an officer or
         director of the Employer, or as an officer or director of any of

                                       3
<PAGE>

         its subsidiaries or affiliates), as well as the costs of any legal
         action brought or threatened against him as a result of such
         employment, to the fullest extent permitted by law.

                  7. TERMINATION.

                           (a) GENERAL. The employment of Executive hereunder
         shall terminate as provided in Paragraph 2 hereof and may be sooner
         terminated in accordance with the provisions of this Paragraph 7.

                           (b) DEATH OR DISABILITY OF EXECUTIVE. The employment
         of Executive hereunder shall terminate upon (i) the death of Executive;
         and (ii) at the option of Employer, upon not less than thirty (30)
         days' prior written notice to Executive or his legal representative, in
         the event that Executive becomes disabled. Executive shall be deemed to
         be disabled if by reason of physical or mental incapacity or
         disability, he is unable to render the services to be rendered by him
         pursuant to this Agreement for a continuous period of ninety (90)
         successive days or for shorter periods aggregating one hundred twenty
         (120) days or more during any twelve (12) successive months (the advice
         of a reputable physician mutually acceptable to Employer and Executive
         as to the existence of any such incapacity or disability to be final
         and binding upon the parties).

                           (c) TERMINATION FOR CAUSE. The employment of the
         Executive under this Agreement shall terminate for cause upon delivery
         to the Executive of notice in writing from Employer of termination of
         the Executive's employment for cause. Cause shall mean (i) any willful
         or grossly negligent act or failure to act by the Executive that causes
         material harm to Employer; any fraud by Executive upon the Employer;
         the conviction by the Executive or the plea of nolo contendere by the
         Executive, with respect to any felony; (ii) the Executive's habitual
         absenteeism, chronic alcoholism or other form of chemical addiction; or
         (iii) any material breach by the Executive of the Executive's
         obligations under this Agreement which remain uncured thirty (30) days
         after receipt of notice from Employer of such breach.

                           (d) EFFECT OF TERMINATION ON SALARY AND BENEFITS. If
         Executive's employment is terminated under Paragraph 7(a), (b) or (c)
         hereof, Employer shall have no further obligation to Executive
         hereunder other than as provided by this subparagraph (d) but the
         restrictions on the Executive's activities contained in Paragraph 4 and
         the obligations of Executive contained in the Restrictive Letter shall
         continue in effect as provided therein. In the event that the
         Executive's employment hereunder is terminated by Employer other than
         pursuant to Paragraph 7(a), (b) or (c) hereof, prior to the end of the
         Term of Employment, then Employer shall be obligated to pay Executive
         all salary and benefits (excluding any unpaid bonuses for this purpose)
         in installments through the remainder of the Term of Employment;
         PROVIDED, HOWEVER,

                                       4
<PAGE>

         if Executive is in breach of the Restrictive Letter at any time, the
         Employer shall have no further obligation to pay salary to Executive.
         For purposes of the immediately preceding sentence, Executive will also
         be treated as having been terminated by Employer other than pursuant to
         Paragraph 7(a), (b) or (c), after a Change in Control of Employer (as
         that term is defined in Paragraph 7(e)), occurs, and Executive is
         assigned duties materially inconsistent with Executive's positions as
         described in Paragraph 1 hereof or there is any significant diminution
         in Executive's duties or responsibilities, other than in connection
         with the termination of Executive's employment for Cause or disability.
         In the event of a termination of Executive's employment by the Company
         pursuant to Paragraph 7(a), (b) or (c) or by Executive, Executive's
         entitlement to salary and benefits shall cease as of the effective date
         of termination and Executive shall be entitled to all salary and
         benefits (excluding any unpaid bonuses) accrued but unpaid as of the
         date of termination.

                           (e) CHANGE IN CONTROL. For purposes of this
         Agreement, the term "Change of Control" shall mean the occurrence of
         any of the following events: (i) any "person" as such term is used in
         Sections 13(d) and 14(d) of the Securities Exchange of 1934, as amended
         (the "Exchange Act"), other than a trustee or other fiduciary holding
         securities under an employee benefit plan of Employer or any subsidiary
         or affiliate of Employer or any stockholder (and such stockholder's
         affiliates) as of the date hereof and direct transferees thereof,
         becomes, after the date hereof, the "beneficial owner" (as defined in
         Rule 13d-3 of the Exchange Act), directly or indirectly, of the
         securities of Employer representing 50.1% or more of the total voting
         power represented by Employer's then outstanding securities that vote
         generally in the election of directors ("Voting Securities"); or (ii)
         the merger or consolidation of Employer with any other corporation,
         other than a merger or consolidation in which the Voting Securities of
         Employer outstanding immediately prior thereto continue to represent
         (either by remaining outstanding or by being converted into Voting
         Securities of the surviving entity) at least a majority of the total
         voting power of the surviving entity, or the sale (in one transaction)
         of all or substantially all of the assets of Employer, other than to a
         subsidiary or affiliate of Employer.

                  8. ASSIGNMENT. This Agreement is a personal contract,
         and except as specifically set forth herein, the rights and interests
         of Employer and Executive herein may not be sold, transferred,
         assigned, pledged or hypothecated. The rights and obligations of
         Employer hereunder shall be binding upon and run in favor of the
         successors of Employer as a result of the sale, merger or
         reorganization of Employer or Employer's present corporation, subject
         to Executive's rights set forth in Paragraph 7(d).

                  9. GOVERNING LAW:  CAPTIONS: CONSENT TO JURISDICTION.

                                       5
<PAGE>

                           (a) This Agreement contains the entire agreement
         between the parties hereto, supersedes any prior agreements relating to
         the employment of the Executive and shall be governed by the laws of
         the State of Florida. It may not be changed orally, but only by
         agreement in writing signed by the party against whom enforcement of
         any waiver, change, modification or discharge is sought. Section
         headings are for convenience of reference only and shall not be
         considered a part of this Agreement.

                           (b) Each of the parties hereby irrevocably and
         unconditionally consent to the exclusive jurisdiction of the courts of
         the State of Florida and the United States District Court for the
         District of Florida for any action, suit or proceeding arising out of
         or relating to this Agreement, or the transactions contemplated hereby,
         and agrees not to commence any action, suit or proceeding related
         thereto except in such courts. Each of the parties further hereby
         irrevocably and unconditionally waive any objection to laying of venue
         of any lawsuit, claim or other proceeding arising out of or related to
         this Agreement in the courts of the State of Florida or the United
         States district Court for the District of Florida, hereby further
         irrevocably and unconditionally waive and agree not to plead or claim
         an inconvenient forum, and further covenant and agree not to institute
         any action or proceeding in any jurisdiction other than Florida. Each
         of the parties further agree that service of any process, summons,
         notice or document by U.S. registered mail to its address set forth
         below shall be effective service of process for any action, suit or
         proceeding brought against it in any such court. The prevailing party
         of any action, suit or proceeding arising out of or relating to this
         Agreement shall be entitled to receive its attorney's fees and court
         costs from the other party hereto.

                  10. NOTICES. Any notices or other communications required or
         permitted hereunder shall be in writing and shall be deemed to be duly
         given if personally delivered, or, if mailed (by certified or
         registered mail, return receipt requested) or if delivered by a
         nationally recognized-overnight mail or courier service, to the party
         at its address set forth below:

                  If to Executive:
                  Robert V. Gubitosi
                  18540 Long Lake Drive
                  Boca Raton, FL 33496

                  If to Employer:

                  Questron Technology, Inc.
                  6400 Congress Avenue

                                       6
<PAGE>

                  Suite 200A
                  Boca Raton, FL  33487

                  With a copy to:

                  Battle Fowler LLP
                  75 East 55th Street
                  New York, NY  10022
                  Attn: Luke P. Iovine, III, Esq.

                  11. RIGHT TO WITHHOLD/REPORT. Employer shall have the right to
         withhold from Executive's salary and other compensation hereunder and
         to report to appropriate federal, state and local taxing authorities
         all amounts required to be withheld or reported, including such amounts
         in respect of any compensation deemed paid to Executive under federal,
         state and local tax laws.

                     [SIGNATURE PAGE TO IMMEDIATELY FOLLOW]

                                       7
<PAGE>

                  IN WITNESS WHEREOF, Employer has by its duly authorized
officer signed this Agreement and Executive has signed this Agreement, as of the
day and year first above written.

         EXECUTIVE                          QUESTRON TECHNOLOGY, INC.

         ________________________           By:_____________________________
         ROBERT  V. GUBITOSI                Title:__________________________

                                       8
<PAGE>

                              RESTRICTIVE COVENANT

                                                  October 1, 1999

Questron Technology, Inc.
6400 Congress Avenue
Suite 200A
Boca Raton, FL 33487

Gentlemen:

         This will confirm my agreement with Questron Technology, Inc. (the
"Company", which term for purposes of this letter shall include all of the
Company's successor, subsidiary and affiliated companies).

         1. In consideration of my employment, I agree that while I am in the
         Company's employ, and for two years thereafter (provided that the
         Company elects to pay me a consulting and non-competition fee of
         $100,000 per year in equal quarterly installments in arrears, which
         Executive cannot waive), I will not, directly or indirectly:

                  (a)      Persuade or attempt to persuade any customer of the
                           Company to cease doing business with the Company, or
                           to reduce the amount of business it does with the
                           Company;

                  (b)      Persuade or attempt to persuade any potential
                           customer to which the Company has made a sales
                           presentation, not to purchase the Company's products;

                  (c)      Solicit for myself or any person other than the
                           Company the business of any person or entity which is
                           a customer of the Company, or was its customer within
                           two years prior to the termination of my employment;

                  (d)      Persuade or attempt to persuade any employees of the
                           Company, or any individual who was its employee
                           during the two years prior to my termination of
                           employment, to leave the Company's employ, or to
                           become employed by any person other than the Company;

                  (e)      Perform any service for any person other than the
                           Company in connection with the design or development
                           of any product, which competes, with a product of the
                           Company; and

                  (f)      Work for any other firm, corporation, partnership or
                           other entity, which compete with the Company.

<PAGE>

         2. I also agree that during my employment by the Company, or at any
         time thereafter, I will not disclose or use any confidential or secret
         information relating to the Company or any of its products, designs,
         processes or operations.

         3. If I violate any of the terms outlined above, I agree that the
         Company, in addition to any other rights it may have, shall be entitled
         to injunctive relief.

                                                   Very truly yours,

                                                   Robert V. Gubitosi

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