Document:

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                                                                    EXHIBIT 10-C

                               TRUSERV CORPORATION

                          DEFINED LUMP SUM PENSION PLAN

                             As Amended and Restated

                              as of January 1, 1998

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                               TRUSERV CORPORATION
                          DEFINED LUMP SUM PENSION PLAN

                                TABLE OF CONTENTS

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INTRODUCTION -- SECTION 1.................................................................................       1

      1.1       History of Plan...........................................................................       1

      1.2       Preservation of Rights....................................................................       1

      1.3       Intent to Comply..........................................................................       1

      1.4       Application of Plan.......................................................................       1

DEFINITIONS -- SECTION 2..................................................................................       2

      2.1       Definitions...............................................................................       2

PARTICIPATION -- SECTION 3................................................................................      10

      3.1       Date of Participation.....................................................................      10

      3.2       Events Affecting Participation............................................................      11

      3.3       Participation upon Reemployment...........................................................      11

NORMAL PENSION -- SECTION 4...............................................................................      12

      4.1       Formula...................................................................................      12

      4.2       Eligibility and Commencement -- Normal Pension............................................      12

      4.3       Amount of Normal Pension..................................................................      12

      4.4       Terminations and Retirements Before January 2, 1998.......................................      14

      4.5       Uniformed Services Employment and Reemployment Rights.....................................      14

      4.6       SERVISTAR Plan............................................................................      14

IMMEDIATE, EARLY AND LATE PENSION -- SECTION 5............................................................      15

      5.1       Immediate Pension.........................................................................      15

      5.2       Early Retirement Pension..................................................................      15

      5.3       SERVISTAR Plan............................................................................      15

      5.4       Late Retirement Pension...................................................................      15

NORMAL FORM OF PAYMENT -- SECTION 6.......................................................................      16

      6.1       Normal Form of Payment -- Joint and Survivor..............................................      16

      6.2       Normal Form of Payment -- Single Life Annuity.............................................      16

      6.3       Optional Forms of Payment.................................................................      16

      6.4       Election of Option........................................................................      17

      6.5       Notice to Participants....................................................................      17

      6.6       SERVISTAR Protected Payment Forms.........................................................      17

      6.7       Payment of Pension to the Participant.....................................................      18
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                                TABLE OF CONTENTS
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      6.8       Payment Options...........................................................................      18

      6.9       Minimum Amounts to be Paid................................................................      19

     6.10       TEFRA Transition Rule Elections...........................................................      20

     6.11       Restoration of Retired Participant or Other Former Associate to Service...................      21

     6.12       Direct Rollover of Certain Distributions..................................................      21

SURVIVING SPOUSE BENEFIT -- SECTION 7.....................................................................      22

      7.1       Eligibility...............................................................................      22

      7.2       Amount....................................................................................      23

      7.3       Payments..................................................................................      23

      7.4       Minimum Benefit and Payment Form..........................................................      24

TRUST FUND AND TRUSTEE -- SECTION 8.......................................................................      24

      8.1       Trust Fund................................................................................      24

      8.2       Trust Fund Applicable Only to Payment of Benefits and Expenses............................      24

      8.3       Trustee Capacity..........................................................................      24

      8.4       Resignation and Removal of Trustee........................................................      25

      8.5       Taxes, Expenses and Compensation of Trustee...............................................      25

      8.6       Funding Policy and Investment Managers....................................................      25

FUNDING OF BENEFITS -- SECTION 9..........................................................................      26

      9.1       Contributions to the Fund.................................................................      26

      9.2       Fund for Exclusive Benefit of Participants................................................      26

      9.3       Disposition of Credits and Forfeitures....................................................      26

PLAN ADMINISTRATOR -- SECTION 10..........................................................................      26

     10.1       Plan Administrator/Appointment of Committee...............................................      26

     10.2       Duties and Authority......................................................................      27

     10.3       Removal of Plan Administrator.............................................................      27

     10.4       Appointment of Successor Plan Administrator...............................................      28

     10.5       Plan Administration -- Miscellaneous......................................................      28

AMENDMENT AND TERMINATION OF PLAN -- SECTION 11...........................................................      32

     11.1       Amendment -- General......................................................................      33

     11.2       Amendment -- Merger or Consolidation of Plan..............................................      33

     11.3       Termination of Plan.......................................................................      33

SECTION 12................................................................................................      33

     12.1       Limitation Concerning Highly Compensated Employees or Highly Compensated
         Former Employees.................................................................................      33
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                                TABLE OF CONTENTS
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SPECIAL PENSION BENEFITS PROVISIONS -- SECTION 13.........................................................      34

     13.1       Statutory Maximum Pension Benefits........................................................      34

     13.2       Top-Heavy Provisions......................................................................      41

SUPPLEMENT A..............................................................................................      46

SUPPLEMENT B..............................................................................................      47

SUPPLEMENT C..............................................................................................      48

SUPPLEMENT D..............................................................................................      59

SUPPLEMENT E..............................................................................................      60
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                            INTRODUCTION -- SECTION 1

1.1      HISTORY OF PLAN

         As of January 1, 1958, Cotter & Company established a program for
         providing retirement income and other benefits for certain of its
         Associates and their beneficiaries. This program was set forth in a
         document entitled the Cotter & Company Pension Plan. Since the Cotter &
         Company Pension Plan was initially established, it has been amended and
         restated and its name changed to the Cotter & Company Defined Lump Sum
         Pension Plan.

         On July 1, 1997, Cotter & Company and SERVISTAR COAST TO COAST
         Corporation merged to form TruServ Corporation. In conjunction with the
         merger, the Cotter & Company Defined Lump Sum Pension Plan changed its
         name to be known as the TruServ Corporation Defined Lump Sum Pension
         Plan effective as of January 1, 1998. On January 2, 1998, the TruServ
         Corporation Defined Lump Sum Pension Plan and the SERVISTAR COAST TO
         COAST Corporation Retirement Income Plan were combined. Between July 1,
         1997 and January 1, 1998, all Associates of the TruServ Corporation who
         were participants in the SERVISTAR Plan on June 30, 1997 remained
         participants in the SERVISTAR Plan. All benefit accruals under the
         SERVISTAR COAST TO COAST Corporation Retirement Income Plan ceased as
         of December 31, 1997. On January 2, 1998, all participants under the
         SERVISTAR Plan became Participants under the TruServ Corporation
         Defined Lump Sum Pension Plan and will be entitled to the retirement
         benefits described in this Plan, including current accruals beginning
         on January 1, 1998.

1.2      PRESERVATION OF RIGHTS

         No provisions, other than those required to maintain this Plan as one
         qualified under Section 401(a) of the Code, of any previous amendment,
         this amendment and restatement of the Plan, or any future amendment
         shall operate to diminish or otherwise adversely affect the amount or
         terms of retirement income accrued in respect to a Participant's
         coverage under the Plan prior to the effective date of any such
         amendment or restatement.

1.3      INTENT TO COMPLY

         It is the intent of the Employer that the Plan shall be established and
         maintained (1) as a retirement program which is in full compliance with
         ERISA, and (2) as a qualified plan under the terms of Section 401(a) of
         the Internal Revenue Code of 1986 as amended from time to time.

1.4      APPLICATION OF PLAN

         This Plan supersedes the Cotter & Company Defined Lump Sum Pension Plan
         and the SERVISTAR COAST TO COAST Corporation Retirement Income Plan,
         both in effect on December 31, 1997. With respect to all persons who
         have retired on or prior to December 31, 1997, retirement benefits will
         be made in accordance with such plan in effect on the date of
         retirement or separation from service. With respect to all persons who
         retire or otherwise separate from service on or after January 1, 1998,
         the retirement benefits will be made in accordance with the terms of
         the Plan. Notwithstanding the

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         preceding effective dates, the provisions of this amended and restated
         Plan described in Supplement E shall have effective dates which are
         prior to January 1, 1998 and are applicable to the Prior Plan, and the
         SERVISTAR Plan as each plan existed at that time.

                            DEFINITIONS -- SECTION 2

2.1      DEFINITIONS

         The terms, as capitalized and defined in this Section, shall for all
         purposes of this Plan have the meaning described in this Section unless
         the context clearly requires otherwise or as otherwise expressly
         provided.

         (A)      ACCRUED BENEFIT -- The yearly Pension commencing on the
                  Participant's Normal Retirement Date determined in accordance
                  with Section 4, as if the Participant's termination of
                  employment occurred on the date of determination and he had a
                  Vesting Percentage of 100%.

         (B)      ACTUARIAL EQUIVALENT OR ACTUARIALLY EQUIVALENT -- The amount
                  of equal value when computed on the basis of the actuarial
                  assumptions set forth in Supplement A of the Plan. Application
                  of such assumptions to the computation of benefits under the
                  Plan shall be made uniformly and consistently with respect to
                  all Participants in similar circumstances.

         (C)      ADJUSTMENT FACTOR -- The appropriate adjustment factor(s)
                  which may be applicable to a Participant's Pension in
                  accordance with the further terms of the Plan.

         (D)      AFFILIATED EMPLOYER -- Any company not participating in the
                  Plan which is a member of a controlled group of corporations
                  (as defined in Section 414(b) of the Code) which also includes
                  as a member the Employer; any trade or business under common
                  control (as defined in Section 414(c) of the Code) with the
                  Employer; any organization (whether or not incorporated) which
                  is a member of an affiliated service group (as defined in
                  Section 414(m) of the Code) which includes the Employer; and
                  any other entity required to be aggregated with the Employer
                  pursuant to regulations under Section 414(o) of the Code.
                  Notwithstanding the foregoing sentence, for purposes of
                  Section 13.1, the definitions in Sections 414(b) and (c) of
                  the Code shall be modified as provided in Section 415(h) of
                  the Code.

         (E)      ANNUITY STARTING DATE -- The first day of the first period for
                  which an amount is payable as an annuity or in the case of a
                  lump sum payment the first date on which all events have
                  occurred which entitle a Participant to such benefit.

         (F)      ASSOCIATE -- Any person in the employ of the Employer, but
                  excluding any person who is:

                  (1)      a Leased Employee;

                  (2)      in a unit of Associates covered by a collective
                           bargaining agreement which does not provide for
                           participation in the Plan;

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                  (3)      a participant, or eligible to become a participant,
                           in any other retirement or pension plan (except the
                           TruServ Corporation Savings and Compensation Deferral
                           Plan) intended to qualify under Section 401(a) of the
                           Code and which is established by the Employer or to
                           which the Employer makes any contribution; or

                  (4)      any person who is treated as being other than a
                           common law employee on the payroll records of the
                           Employer, including any person classified as an
                           independent contractor or consultant by the Employer
                           during the period such person is so classified by the
                           Employer regardless of such person's reclassification
                           for such period by the Internal Revenue Service or
                           other controlling authority for tax withholding
                           purposes.

                  The term "Associate" as used in this Plan means any person who
                  is employed by the Employer or an Affiliated Employer as a
                  common law employee of the Employer or an Affiliated Employer,
                  regardless of whether the person is an "Associate," and any
                  Leased Employee.

                  The term "Leased Employee" as used in the Plan means any
                  person (other than a person in the employ of the Employer) who
                  pursuant to an agreement between the recipient and any other
                  person ("leasing organization") has performed services for the
                  recipient (or for the recipient and related persons determined
                  in accordance with Section 414(n)(b) of the Code), on a
                  substantially full time basis for a period of at least one
                  year, and such services are performed under primary direction
                  or control by the recipient. Contributions or benefits
                  provided a leased employee by the leasing organization which
                  are attributable to services performed for the recipient
                  employer shall be treated as provided by the recipient
                  employer.

                  A Leased Employee shall not be considered an employee of the
                  recipient if: (i) such employee is covered by a money purchase
                  pension plan providing: (1) a nonintegrated employer
                  contribution rate of at least 10 percent of compensation, as
                  defined in Section 415(c) of the Code, but including amounts
                  contributed pursuant to a salary reduction agreement which are
                  excludable from the employee's gross income under Section 125,
                  Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of
                  the Code; (2) immediate participation; and (3) full and
                  immediate vesting; and (ii) leased employees do not constitute
                  more than 20 percent of the recipient's nonhighly compensated
                  work force.

         (G)      AVERAGE COMPENSATION -- Effective January 1, 2002, the annual
                  average of the Compensation of an Associate during three
                  calendar years within the ten calendar years up to and
                  including the calendar year of such Associate's termination of
                  employment which yield the highest average. Prior to January
                  1, 2002, the annual average of the Compensation of an
                  Associate during the three consecutive calendar years within
                  the ten calendar years up to and including the calendar year
                  of such Associate's termination of employment which yield the
                  highest average.

         (H)      BENEFICIARY -- The person or persons named by a Participant by
                  written designation filed with the Employer to receive
                  payments after the Participant's death as provided in Section
                  7.4.

         (I)      CODE -- The Internal Revenue Code of 1986, as amended from
                  time to time.

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         (J)      COMMITTEE -- The individuals appointed by the Employer to
                  administer the Plan as described in Section 10.1.

         (K)      COMPENSATION -- For any calendar year is the total cash
                  compensation (including commissions, bonuses [other than
                  sign-on bonuses], overtime pay, sick pay, vacation pay and
                  holiday pay) paid to him by the Employer during that calendar
                  year for personal services rendered to an Employer as an
                  Associate, plus elective deferrals under Sections 125 and
                  401(k) of the Code (and for Plan Years beginning after
                  December 31, 1997, Section 132(f) of the Code) for that
                  calendar year, but excluding severance pay, moving or
                  relocation allowances or bonuses, tuition reimbursements, auto
                  or travel expense allowances or bonuses, or any other
                  extraordinary remuneration. During the period of any Leave of
                  Absence, an Associate shall be deemed to receive Compensation
                  at the annual rate of Compensation actually received by him
                  during such period, or, if no compensation is paid, the annual
                  rate of Compensation immediately prior to the commencement of
                  such Leave of Absence.

                  However, effective on and after the first day of the Plan Year
                  beginning in 1989 and before the first day of the Plan Year
                  beginning in 1994, Compensation taken into account for any
                  purpose under the Plan, including the determination of Average
                  Compensation, shall not exceed $200,000 per year. Except as
                  provided below, as of January 1 of each calendar year on and
                  after January 1, 1990 and before January 1, 1994, the
                  applicable limitation as determined by the Commissioner of
                  Internal Revenue for that calendar year shall become effective
                  as the maximum Compensation to be taken into account for Plan
                  purposes for 12-month compensation computation periods
                  beginning within that calendar year only in lieu of the
                  $200,000 limitation set forth above. Commencing with the Plan
                  Year beginning in 1994, Compensation taken into account for
                  any purpose under the Plan, including the determination of
                  Average Compensation, shall not exceed $150,000 (as adjusted
                  from time to time by the Secretary of the Treasury in
                  accordance with Section 401(a)(17)(B) of the Code). Effective
                  January 1, 1997, the compensation limit shall be applied
                  without regard to the family aggregation provisions of the now
                  repealed Section 414(q)(6) of the Code in determining benefit
                  accruals for Plan Years beginning on and after January 1,
                  1997, and, to the extent permissible under the Internal
                  Revenue Service rules or regulations, for any earlier Plan
                  Year.

                  Solely for purposes of this subsection 2.1(K), for those
                  individuals who were employed by SERVISTAR Corporation or
                  SERVISTAR COAST TO COAST Corporation and who were participants
                  in the SERVISTAR Corporation Retirement Income Plan or the
                  SERVISTAR COAST TO COAST Corporation Retirement Income Plan,
                  Compensation for periods beginning before January 1, 1998
                  shall include "Earnings" as defined in the SERVISTAR Plan as
                  restated in Supplement C hereto subject to the above statutory
                  limits and for the purposes of this Plan recasted on a
                  calendar year basis assuming level "Earnings." Compensation
                  shall not include any "Earnings" received by an individual
                  while an Associate of Coast to Coast Stores, Inc.

         (L)      DEFINED LUMP SUM -- The amount determined under Section
                  4.3(B).

         (M)      DISABILITY INSURANCE PLAN -- Any plan from time to time in
                  force which provides for the payment of income benefits to
                  Associates of an Employer by reason of disability resulting
                  from accident or sickness.

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         (N)      EFFECTIVE DATE -- January 1, 1998, unless otherwise noted.

         (O)      EMPLOYER -- On and after July 1, 1997, Employer shall mean
                  TruServ Corporation or any successor by merger, purchase or
                  otherwise, with respect to its Associates. Before July 1,
                  1997, Employer shall mean Cotter & Company, a Delaware
                  corporation, and any Affiliated Employer which adopted the
                  Plan by resolution of its board of directors and with the
                  consent of Cotter & Company.

         (P)      EMPLOYMENT CONTINUITY -- The period commencing with the date
                  on which an Associate first performs an Hour of Service for an
                  Employer or an Affiliated Employer and ending on the first day
                  of the 12-month period in which the Associate incurs a
                  One-Year Break in Service; provided, however, that if an
                  Associate leaves the employ of the Employer or an Affiliated
                  Employer other than pursuant to an authorized Leave of Absence
                  and does not return until after a One-Year Break in Service,
                  his Employment Continuity upon return to employment by the
                  Employer or an Affiliated Employer shall be determined on the
                  basis of the date on which the Associate first performs an
                  Hour of Service subsequent to his return to the employ of the
                  Employer or an Affiliated Employer. A former Associate who
                  terminates employment and is reemployed by the Employer or an
                  Affiliated Employer before incurring a One-Year Break in
                  Service will not be deemed to have terminated employment with
                  the Employer or an Affiliated Employer. Solely for purposes of
                  determining Employment Continuity with respect to all persons
                  who were active participants in the SERVISTAR Plan on December
                  31, 1997, for periods on or before June 30, 1997, Employer
                  means SERVISTAR COAST TO COAST Corporation and its
                  predecessors.

         (Q)      ERISA -- The Employee Retirement Income Security Act of 1974,
                  as it may be amended from time to time, and any regulations
                  issued pursuant thereto.

         (R)      FUND -- The fund or funds established by separate written
                  agreement between the Employer and an insurance company and/or
                  trustee or trustees for the purpose of accumulating
                  contributions made in accordance with the Funding of Benefits
                  Section and paying the benefits and expenses described in
                  certain other Sections of this Plan.

         (S)      HIGHLY COMPENSATED EMPLOYEE -- With respect to a Plan Year
                  commencing on or after January 1, 1997, any Associate of the
                  Employer or an Affiliated Employer (whether or not eligible
                  for the Plan) who

                  (i)      was a 5% owner of the Employer for such Plan Year or
                           the prior Plan Year, or

                  (ii)     for the preceding Plan Year received "statutory
                           compensation" in excess of $80,000. The $80,000
                           amount is adjusted at the same time and in the same
                           manner as under Section 415(d), except that the base
                           period is the calendar quarter ending September 30,
                           1996. For purposes of the foregoing, the applicable
                           year of the Plan for which a determination is being
                           made is called a determination year and the preceding
                           12-month period is called a look-back year. A highly
                           compensated former employee is based on the rules
                           applicable to determining highly compensated employee
                           status as in effect for that determination year, in
                           accordance with Section

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                           1.414(q)-1T, A-4 of the Temporary Treasury
                           Regulations and Internal Revenue Service Notice
                           97-45.

                  Notwithstanding the foregoing, Associates who are nonresident
                  aliens and who receive no earned income from the Employer or
                  an Affiliated Employer which constitutes income from sources
                  within the United States shall be disregarded for all purposes
                  of this Section.

                  The provisions of this definition shall be further subject to
                  such additional requirements as shall be described in Section
                  414(q) of the Code and its applicable regulations, which shall
                  override any aspects of this Section inconsistent therewith.

         (T)      HOUR OF SERVICE -- With respect to the applicable computation
                  period:

                  (1)      each hour for which the Associate is either directly
                           or indirectly paid by the Employer or Affiliated
                           Employer or entitled to payment for the performance
                           of duties for the Employer or an Affiliated Employer;
                           and

                  (2)      up to a maximum of 501 hours for reasons other than
                           the performance of duties (such as but not limited to
                           paid sick leave, paid vacation time), irrespective of
                           whether the employment relationship has terminated,
                           which hours shall be credited to the Associate during
                           the computation period in which payment is made or
                           amounts payable to the Associate become due, and

                  (3)      each hour for which back pay is either awarded or
                           agreed to by the Employer or an Affiliated Employer,
                           irrespective of mitigation of damages, which hour
                           shall be credited to the Associate for the
                           computation period to which the award, agreement or
                           payment pertains, rather than the period in which the
                           award, agreement or payment was made.

                           The same hours of service shall not be credited under
                           more than one paragraph of this definition. In no
                           event will Hours of Service be allowed and computed
                           in a manner less liberal than the manner described in
                           the Department of labor Regulation 2530.200b-2.

                  Solely for purposes of this subsection 2.1(T), the term
                  Associate shall be deemed to include any person who is in the
                  common law employ of the Employer or an Affiliated Employer so
                  that Associates may be credited under the Plan with Hours of
                  Service for participation purposes for period of employment
                  during which they are not Associates as such term is defined
                  in subsection 2.1(F).

         (U)      LEAVE OF ABSENCE -- A temporary absence from active service
                  with the Employer or an Affiliated Employer that, in the
                  discretion of the Employer or an Affiliated Employer, may be
                  granted to an Associate because of temporary incapacity or
                  other good cause. If an Associate on a Leave of Absence does
                  not return to employment with the Employer or an Affiliated
                  Employer within the period authorized by the Employer or an
                  Affiliated Employer, the Associate's employment shall be
                  deemed to have terminated as of the first day following the
                  period of the Leave of Absence. A Participant shall
                  automatically be entitled to a Leave of

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                  Absence during any period of time for which he is eligible to
                  receive a benefit under a Disability Insurance Plan.

         (V)      NAMED FIDUCIARY -- For purposes of ERISA, is the Committee
                  appointed in Section 10.

         (W)      NORMAL RETIREMENT DATE - For benefit eligibility and vesting
                  purposes, the day on which the Participant attains his 65th
                  birthday. For all other purposes, the first day of the month
                  coinciding with or next following the Participant's 65th
                  birthday.

         (X)      ONE-YEAR BREAK IN SERVICE -- For an Associate, a 12-month
                  period commencing on the date of an Associate's termination of
                  employment and on each anniversary thereof during which such
                  Associate is not employed (i.e., does not complete an Hour of
                  Service) with an Employer or an Affiliated Employer. In the
                  case of a maternity or paternity Leave of Absence, the
                  12-month period beginning on the first day of such absence
                  shall not constitute a One-Year Break in Service. For purposes
                  of this subsection 2.1(X), maternity or paternity Leave of
                  Absence means an absence from work by reason of the
                  Associate's pregnancy, birth of the Associate's child, or
                  placement of a child with the Associate in connection with the
                  adoption of such child, or an absence for the purpose of
                  caring for such child for a period immediately following such
                  birth or placement.

         (Y)      PARTICIPANT -- Any Associate who becomes covered under this
                  Plan. A former Associate who is entitled to a vested Pension
                  under the Plan shall continue to be a Participant until he has
                  received his vested Pension.

         (Z)      PENSION -- Yearly payments (and lump sum payment, if elected)
                  under the Plan in the amount provided in Section 4.1 and the
                  forms provided in Section 7 payable to the Participant or his
                  Beneficiary under the Plan as a consequence of the termination
                  of employment of the Participant.

         (AA)     PLAN -- The TruServ Corporation Defined Lump Sum Pension Plan
                  as set forth in this document, as amended from time to time
                  thereafter.

         (BB)     PLAN ADMINISTRATOR -- The individual or group of individuals
                  designated by the Employer to administer and supervise the
                  Plan as provided in Section 10.

         (CC)     PLAN YEAR -- The 12-month period commencing on a January 1 and
                  ending on the following December 31.

         (DD)     PRIOR PLAN -- The Cotter & Company Pension Plan in effect on
                  December 31, 1995.

         (EE)     PROTECTED BENEFITS -- As of any date of determination, the
                  Accrued Benefit of a Participant and

                  (1)      any right of the Participant under the terms of the
                           Plan as of such date to have such Accrued Benefit,
                           and the Prior Plan benefit, commence on a date other
                           than the Normal Retirement Date;

                  (2)      any right of the Participant under the terms of the
                           Plan as of such date to have such Accrued Benefit,
                           and the Prior Plan benefit, payable in an optional
                           form of payment; and

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                  (3)      the methodology under the terms of the Plan as of
                           such date for determining the amount of benefit
                           payable as a result of the exercise of any right of
                           the Participant expressed in paragraph (1) or (2)
                           above.

                  For the sole purposes of paragraph (3) above, any provision of
                  the Plan that requires payment of a Participant's Pension in a
                  form other than that described in Section 6.2 shall be
                  considered to be the exercise of a right by the Participant
                  therefor.

                  See Sections 2.1(OO), 4.1(B), 5.3, 6.6 and 7.4 for any
                  Protected Benefits rights with respect to the SERVISTAR Plan.

         (FF)     QUALIFIED JOINT AND SURVIVOR ANNUITY --

                  (1)      in the case of a 50% Qualified Joint and Survivor
                           Annuity, an annuity for the life of the Participant
                           with a survivor annuity for the life of his Spouse
                           which is one-half of the amount of the annuity
                           payable during the joint lives of the Participant and
                           his Spouse, and which is the Actuarial Equivalent of
                           a single annuity for the life of the Participant in
                           the amount specified by the relevant provision of
                           Section 4; and

                  (2)      in the case of a 100% Qualified Joint and Survivor
                           Annuity, an annuity for the life of the Participant
                           with an survivor annuity for the life of his Spouse
                           which is equal to the amount of the annuity payable
                           during the joint lives of the Participant and his
                           Spouse, and which is the Actuarial Equivalent of a
                           single annuity for the life of the Participant in the
                           amount specified by the relevant provision of Section
                           4.

         (GG)     RETIREMENT DATE -- The date on which the payment of a
                  Participant's Pension is to commence as a result of his
                  termination of employment, as determined in accordance with
                  the further terms of the Plan.

         (HH)     SERVISTAR -- Is SERVISTAR COAST TO COAST Corporation, which
                  merged with Cotter & Company to form the TruServ Corporation
                  on July 1, 1997.

         (II)     SERVISTAR PLAN -- Is the SERVISTAR COAST TO COAST Corporation
                  Retirement Income Plan in effect on December 31, 1997. Certain
                  provisions of the SERVISTAR Plan are contained in Supplement C
                  to this Plan to assist the Committee's administration of this
                  Plan's provisions where they relate to the SERVISTAR Plan
                  provisions.

         (JJ)     SPOUSAL CONSENT - The Spouse's consent to the Participant's
                  election of a form of payment other than Qualified Joint and
                  Survivor Annuity must be in writing, must acknowledge the
                  effect of the election, and the Spouse's signature must be
                  witnessed by a Plan representative or notary public.
                  Additionally, the Spouse's consent must specifically
                  acknowledge any nonspouse Beneficiary designated by the
                  Participant in conjunction with his election of an optional
                  form of payment. The Participant may not subsequently
                  designate another nonspouse Beneficiary without the further
                  written consent of the Spouse. Notwithstanding this consent
                  requirement, if the Participant establishes to the
                  satisfaction of a Plan representative that such written
                  consent cannot be obtained because there is no Spouse; the
                  Spouse cannot be located; of other circumstances as the
                  Secretary of the

                                       8

<PAGE>

                  Treasury may by regulations prescribe, the Participant's
                  election to waive coverage will be considered valid. Any
                  consent necessary under this provision will be valid only with
                  respect to the Spouse who signs the consent. A Participant is
                  allowed to revoke his election without the consent of his
                  Spouse. The number of his revocations is not limited.

         (KK)     SPOUSE -- The lawful wife of a male Participant, or the lawful
                  husband of a female Participant, on the Participant's
                  Retirement Date, date of death, or other event date as the
                  context requires, if earlier.

         (LL)     TRUST -- The trust established with the Trustee to hold the
                  assets which fund the benefits payable by the Plan.

         (MM)     TRUSTEE - The Trustee of the Fund appointed by the Employer,
                  which may be a bank, trust company or other corporation
                  possessing trust powers under applicable state and Federal
                  law, or one or more individuals or any combination thereof.

         (NN)     VESTING PERCENTAGE -- The percentage which may be applied to a
                  Participant's Accrued Benefit in accordance with the further
                  terms of the Plan as determined below:

<TABLE>
<CAPTION>
                                                                  Vesting
                                                                 Percentage
                                                                 ----------
<S>                                                              <C>
If he has 5 Years of Service                                        100%
On his Normal Retirement Date                                       100%
In all other cases                                                    0%
</TABLE>

                  Notwithstanding the above, a Participant shall have a 100%
                  Vesting Percentage in his Accrued Benefit if he:

                  (i)      attained age 50, regardless of his Years of Service,
                           and

                  (ii)     became a participant in the SERVISTAR Plan before
                           July 1, 1996.

         (OO)     YEAR OF SERVICE -- Shall be credited to each Participant based
                  on the number of days during a Participant's period of
                  Employment Continuity divided by 365.25 rounded to the nearest
                  1/10 of a year, subject to the following:

                  (1)      a Prior Plan participant shall be credited with his
                           Years of Service earned through December 31, 1995 in
                           accordance with provisions of the Prior Plan;

                  (2)      a Participant in the SERVISTAR Plan as of December
                           31, 1997 shall be credited with a minimum number of
                           Years of Service which shall be equal to his Years of
                           Service as of June 30, 1997 under the SERVISTAR Plan;

                  (3)      in addition, if an individual was a participant in
                           the SERVISTAR Plan on July 1, 1997 and earned at
                           least 500 hours of service (as defined in the
                           SERVISTAR Plan and included in Supplement C hereto in
                           which the Employer and Affiliated Employer referred
                           to therein has the same meaning as defined in this
                           Plan) during the period July 1, 1997 through December
                           31, 1997, he shall be credited with an additional
                           one-half Year of

                                       9

<PAGE>

                           Service under this Plan and thereafter shall be
                           credited with a Year of Service (and fractions
                           thereof) as generally provided in this subsection
                           (OO);

                  (4)      if a former Participant with no Vesting Percentage in
                           the Plan again becomes a Participant in this Plan,
                           his Years of Service prior to any One-Year Break in
                           Service shall be taken into account only if the
                           number of consecutive One-Year Breaks in Service is
                           less than five;

                  (5)      no more than one Year of Service shall be granted to
                           any individual for any period; and

                  (6)      notwithstanding any Plan provision to the contrary,
                           for purposes of Section 4.3, no Year of Service shall
                           be credited to any Participant for any of the
                           following periods: (a) periods of employment with
                           Coast to Coast Stores, Inc. occurring prior to July
                           1, 1996, (b) periods of employment with Advocate
                           Services, Inc. occurring prior to January 1, 1998,
                           (c) periods of employment while such person is in an
                           employment classification, including but not limited
                           to a unit of Associates covered by a collective
                           bargaining agreement which does not provide for
                           participation in this Plan, (d) periods of employment
                           during which an employee was a participant (or
                           eligible to be a participant) in any retirement plan
                           which is intended to be qualified under the Code
                           (except the TruServ Corporation Savings and
                           Compensation Deferral Plan and the SERVISTAR Plan)
                           sponsored by the Employer or an Affiliated Employer,
                           (e) periods of employment as a Leased Employee as
                           defined in Section 414(n) of the Code, (f) periods of
                           employment for which an employee has received or is
                           receiving benefits under this Plan.

                           PARTICIPATION -- SECTION 3

3.1      DATE OF PARTICIPATION

         (A)      Each Associate who:

                  (1)      was a Participant in the Cotter & Company Defined
                           Lump Sum Pension Plan on January 1, 1998; or

                  (2)      was a Participant in the SERVISTAR Plan on January 1,
                           1998

                  shall automatically become a Participant in the Plan on
                  January 2, 1998 provided that his Employment Continuity did
                  not end on January 1, 1998.

         (B)      Each other Associate will become a Participant under the Plan
                  on the January 1 or July 1 which coincides with or next
                  following the date the Associate has completed "one year of
                  employment" and has attained age 21.

         (C)      Notwithstanding any Plan provision to the contrary, each
                  individual, who on January 1, 1998 was employed by Advocate
                  Services, Inc. and who became an Associate of the Employer on
                  January 2, 1998, shall commence participation in the Plan on
                  January 2, 1998.

                                       10

<PAGE>

         (D)      For the purposes of this Section, an Associate shall be
                  credited with "one year of employment" when he completes a
                  12-month period of employment during his period of Employment
                  Continuity.

         (E)      Notwithstanding any Plan provision to the contrary, for
                  purposes of this Section, each individual who is hired as a
                  temporary employee shall be credited with "one year of
                  employment" for the 12-month computation period beginning on
                  the date he first completes an Hour of Service if he completes
                  at least 1,000 Hours of Service by the end of that period, and
                  he shall become a Participant as provided in (B) above. If a
                  temporary employee terminates employment prior to becoming a
                  Participant, but after having worked 1,000 Hours of Service in
                  the 12-month period during which he was employed, and is
                  subsequently rehired, he shall become a Participant as of the
                  first January 1 or July 1 which coincides with or immediately
                  follows his reemployment. If he terminates employment, is
                  subsequently rehired as a temporary employee, and had not
                  worked 1,000 Hours of Service in the 12-month period
                  commencing with his initial date of hire, his prior service
                  shall be disregarded and he shall begin a new computation
                  period and his Hours of Service shall be counted from his date
                  of rehire.

3.2      EVENTS AFFECTING PARTICIPATION

         A person's participation in the Plan shall end when he is no longer
         employed by the Employer, if he is not entitled to either an immediate
         or a deferred Pension under the Plan. Participation shall continue
         while on a Leave of Absence or during a period while he is not an
         Associate but is in the employ of the Employer or an Affiliated
         Employer, but no Years of Service for the purpose of determining the
         Accrued Benefit shall be counted for that period, except as
         specifically provided otherwise in this Plan, and such person's Pension
         shall be determined in accordance with the provisions of the Plan in
         effect on the date he ceased to be an Associate.

3.3      PARTICIPATION UPON REEMPLOYMENT

         (A)      If an Associate's participation in the Plan ends and he again
                  becomes an Associate, he shall again become a Participant as
                  of his date of restoration to service as an Associate if his
                  Vesting Percentage was 100% or he had not incurred five
                  One-Year Breaks in Service. In any other case, he will
                  participate in the Plan when he again meets the requirements
                  of Section 3.1

         (B)      However, if an Associate's employment is terminated before he
                  participates in the Plan and:

                  (i)      he is later reemployed before he incurred a One-Year
                           Break in Service, his employment after reemployment
                           shall be aggregated with his previous period of
                           employment and the period between his date of
                           termination and his date of reemployment shall be
                           included in his requirement of one year of
                           employment; or

                  (ii)     he incurred at least a One-Year Break in Service and
                           the length of his break in service exceeded his
                           Service prior to his Break, his employment

                                       11

<PAGE>

                           before reemployment shall not be aggregated with his
                           period of employment after his absence,

                  in which case he will participate in the Plan when he meets
                  the requirements of Section 3.1.

                           NORMAL PENSION -- SECTION 4

4.1      FORMULA

         With respect to a Participant who retires or terminates on or after
         January 2, 1998, the Pension payable under the Plan is the greatest of
         (A), (B) or (C):

         (A)      The Vesting Percentage of the Participant's Accrued Benefit
                  determined in Section 4.3; or

         (B)      The Vesting Percentage of the Participant's accrued benefit
                  payable under the SERVISTAR Plan as of January 1, 1998, as
                  modified by Sections 2.1(OO) and 4.6; or

         (C)      The Vesting Percentage of the Participant's accrued benefit
                  under the Prior Plan as of December 31, 1995.

4.2      ELIGIBILITY AND COMMENCEMENT -- NORMAL PENSION

         Each Participant who retires from the employ of the Employer on his
         Normal Retirement Date will receive a normal Pension commencing as of
         such date.

4.3      AMOUNT OF NORMAL PENSION

         The yearly Pension payable to such Participant will be equal to the
         amount described in subsections (A), (B), (C), (D) and (E) below
         (subject, however, to Section 13.1 of this Plan, if applicable, and the
         election of the Participant to take the Accrued Benefit in a lump sum
         form under Section 6.8):

         (A)      The Participant's Accrued Benefit shall equal his Defined Lump
                  Sum converted into an Actuarially Equivalent single life
                  annuity payable at the Participant's Normal Retirement Date
                  or, if the Participant retires after his Normal Retirement
                  Date, the age he retires after his Normal Retirement Date.

         (B)      The Participant's Defined Lump Sum equals the sum of (1) and
                  (2) below:

                  (1)      the Participant's Average Compensation multiplied by
                           the sum of a+b below:

                           (a)  the sum of the annual pension credit percentages
                           in the table below that are earned by the Participant
                           for each Year of Service (and fraction thereof)
                           beginning January 1, 2002

                           Plus

                                       12

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
YEARS OF SERVICE        ANNUAL PENSION       YEARS OF SERVICE       ANNUAL PENSION
    WHILE AGE          CREDIT PERCENTAGE         WHILE AGE         CREDIT PERCENTAGE
------------------------------------------------------------------------------------
<S>                    <C>                   <C>                   <C>
  Less than 26               1.0%                   50                   6.0%
    26 - 28                  1.5%                   51                   6.5%
    29 - 31                  2.0%                   52                   7.0%
    32 - 34                  2.5%                   53                   7.5%
    35 - 37                  3.0%                   54                   8.0%
    38 - 40                  3.5%                   55                   8.5%
    41 - 43                  4.0%               56 or More               9.0%
    44 - 45                  4.5%
    46 - 47                  5.0%
    48 - 49                  5.5%
------------------------------------------------------------------------------------
</TABLE>

                  (b)      The Participants' accumulated pension credit
                           percentages earned under the Plan as of December 31,
                           2001, based on the provision of the plan in effect on
                           that date.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
YEARS OF SERVICE        ANNUAL PENSION       YEARS OF SERVICE       ANNUAL PENSION
    WHILE AGE          CREDIT PERCENTAGE         WHILE AGE         CREDIT PERCENTAGE
------------------------------------------------------------------------------------
<S>                    <C>                   <C>                   <C>
  Less than 26               2.0%                   46                    7.0%
    26 - 28                  2.5%                   47                    7.5%
    29 - 31                  3.0%                   48                    8.0%
    32 - 33                  3.5%                   49                    8.5%
    34 - 35                  4.0%                   50                    9.0%
    36 - 37                  4.5%                   51                    9.5%
    38 - 39                  5.0%                   52                   10.0%
    40 - 41                  5.5%                   53                   10.5%
    42 - 43                  6.0%                   54                   11.0%
    44 - 45                  6.5%                 55- 60                 11.5%
                                                61 or More               12.0%
------------------------------------------------------------------------------------
</TABLE>

                           In no event will the sum of a Participant's annual
                           pension credit percentages be less than 10%;

         (C)      With respect to any Participant who is an officer of TruServ
                  Corporation, pursuant to a supplement to the Plan, such
                  Participant's Defined Lump Sum shall not be less than an
                  amount which is equal to the sum of (a) the benefits
                  determined under (B) above, considering only Years of Service
                  prior to becoming an officer, plus(b) 33% of the Participant's
                  Average Compensation for each Year of Service, considering
                  only the Years of Service beginning with the date the
                  Participant became an Officer, in no event will a
                  Participant's total accumulated pension credit percentages
                  under this paragraph exceed 660%. In no event will the
                  benefit described in this subsection be greater than the
                  maximum benefit payable under Code section 415(b).

         (D)      Minimum Benefit Protection

                  (1)      With respect to a Participant in the Prior Plan, the
                           lump sum benefit payable under this Plan shall be no
                           less than the Actuarial Equivalent of the
                           Participant's Accrued Benefit under the Prior Plan.
                           Further, for a

                                       13

<PAGE>

                           Participant eligible for an immediate benefit under
                           the Prior Plan, the lump sum shall be no less than
                           the Actuarial Equivalent of the immediate Prior Plan
                           benefit payable to the Participant.

                  (2)      With respect to a Participant in the Prior Plan who
                           attains age 62 or completes 30 Years of Service while
                           an active Associate, the lump sum shall be no less
                           than the lump sum calculated in (1) above, assuming
                           the Participant commenced receipt of the lump sum at
                           the later of (a) January 1, 1996, and (b) the first
                           day of the month coincident with or next following
                           the earlier of (i) the date the Associate attains age
                           62, and (ii) the date the Associate completes 30
                           Years of Service.

                  (3)      With respect to a Participant in the SERVISTAR Plan,
                           the lump sum benefit payable under this Plan will not
                           be less than the Actuarial Equivalent of the
                           Participant's Accrued Benefit under the SERVISTAR
                           Plan.

                  (4)      With respect to a Participant in the SERVISTAR Plan
                           who attains age 60 while an active Associate, the
                           lump sum shall be no less than the lump sum
                           calculated in (3) above, assuming the Participant
                           commenced receipt of the lump sum at the later of (a)
                           January 1, 1998, and (b) the first day of the month
                           coincident with or next following the date the
                           Associate attains age 60.

4.4      TERMINATIONS AND RETIREMENTS BEFORE JANUARY 2, 1998

         Any pension benefit that a Participant, who terminated his employment
         or retired prior to January 2, 1998, may be entitled to receive shall
         be governed by the provisions of the Plan, Prior Plan and/or SERVISTAR
         Plan as in effect on the date of his termination of employment or
         retirement. Any Participant who terminated employment or retired prior
         to January 2, 1998 and who is reemployed on or after January 2, 1998
         shall have his benefits calculated in accordance with the Plan as in
         effect on the date of his subsequent retirement or termination of
         employment as provided in Section 6.11.

         With respect to participants in the SERVISTAR Plan who terminated
         employment or retired on or after July 1, 1997 and before January 2,
         1998, a lump sum pension option, calculated as the Actuarial Equivalent
         of the Participant's Accrued Benefit under the SERVISTAR Plan, was made
         available, effective June 1, 1998.

4.5      UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS

         Notwithstanding any Plan provision to the contrary, for re-employments
         initiated on or after December 12, 1994, benefits and service credit
         with respect to qualified military service will be provided in
         accordance with Section 414(u) of the Code.

4.6      SERVISTAR PLAN

         On and after January 1, 1998, a participant under the SERVISTAR Plan
         will cease to be credited with service, credited service, earnings,
         and/or cash balance credit for purposes of benefit accrual under the
         SERVISTAR Plan.

                                       14

<PAGE>

                 IMMEDIATE, EARLY AND LATE PENSION -- SECTION 5

5.1      IMMEDIATE PENSION

         A Participant, whose employment with the Employer or an Affiliated
         Employer terminates with a 100% Vesting Percentage, may upon such
         termination of employment prior to his Normal Retirement Date be
         entitled to receive an immediate Pension. An immediate Pension is the
         Participant's Accrued Benefit converted into an Actuarially Equivalent
         single life annuity. With the consent of the Participant and Spousal
         Consent, if applicable, such immediate Pension shall commence on the
         first day of the month coinciding with or immediately following the
         Participant's termination of employment and shall be payable in any
         form of benefit as described in Section 6. Such Immediate Pension
         election must be made within 60 days from the date the Pension
         information and forms are provided to the Participant which will be as
         soon as administratively practical after the earlier of the submission
         of the Participant's written notice of termination or the Participant's
         actual termination from employment

5.2      EARLY RETIREMENT PENSION

         A Participant who does not timely elect an immediate Pension under
         Section 5.1 upon his termination of employment may next elect to
         receive his Pension as an early retirement Pension under the Plan at a
         date not earlier than his attainment of age 55 (or age 50 for a former
         SERVISTAR Plan participant) and not later than his Normal Retirement
         Date. The early retirement Pension shall equal his Accrued Benefit
         reduced by 2/3 of 1% for each of the first 60 months and by 1/3 of 1%
         for each of the next 60 months by which payment of his early retirement
         Pension precedes his Normal Retirement Date (see SERVISTAR Plan
         application in Section 5.3 below). In no event, however, shall a
         Participant's early retirement Pension be less than his immediate
         Pension. With the consent of the Participant and Spousal Consent, if
         applicable, the early retirement Pension shall be payable in any form
         of benefit described in Section 6.

5.3      SERVISTAR PLAN

         For any Participant whose Pension is determined under Section 4.1(B),
         the calculation of any immediate or early retirement reduction factors
         will be based upon an age 60 Normal Retirement Date in accordance with
         the terms of the SERVISTAR Plan in effect at the earlier of his
         termination, retirement or January 1, 1998, as restated in Supplement C
         hereto.

5.4      LATE RETIREMENT PENSION

         If a Participant's employment with the Employer continues after his
         Normal Retirement Date, such Participant will receive a late retirement
         Pension commencing on the first day of the month immediately following
         the calendar month in which his employment ceases by reason other than
         death. The Participant's late retirement Pension is the Participant's
         Accrued Benefit.

                                       15

<PAGE>

         In the event a Participant's Pension is required to begin under Section
         6.7 while the Participant is in active service, such required beginning
         date shall be the Participant's Annuity Starting Date for purposes of
         Section 6 and the Participant shall receive a late retirement Pension
         commencing on or before such required beginning date in an amount
         determined as if he had retired on the last day of the preceding Plan
         Year. Subsequently, as of the end of each prior Plan Year before the
         Participant's actual late retirement date (and as of his actual late
         retirement date), the Participant's Pension shall be recomputed to
         reflect additional accruals. The Participant's recomputed Pension shall
         then be paid as of the following January 1.

         (A)      If the Participant's Pension is being paid on an annuity form,
                  the Participant's recomputed Pension shall then be reduced by
                  the Actuarial Equivalent of the total payments of his late
                  retirement Pension which were paid prior to each such
                  recomputation to arrive at the Participant's late retirement
                  Pension; provided that no such reduction shall reduce the
                  Participant's late retirement Pension below the amount of late
                  retirement Pension payable to the Participant prior to the
                  recomputation of such Pension.

         (B)      If the Participant's Pension is being paid in a lump sum
                  payment, additional accrual will be based on that Year of
                  Service only and not be reduced by any prior payments.

                       NORMAL FORM OF PAYMENT -- SECTION 6

6.1      NORMAL FORM OF PAYMENT -- JOINT AND SURVIVOR

         If the Participant has a Spouse, to whom he was married at least one
         year prior to his Annuity Starting Date, the normal form of payment is
         the 50% Qualified Joint and Survivor Annuity form.

         As an alternative to the 50% Qualified Joint and Survivor Annuity
         described above, a Participant may elect that his benefit be payable to
         him in the 100% Qualified Joint and Survivor Annuity form. Such
         election will not require spousal consent as provided in Section 6.4.

6.2      NORMAL FORM OF PAYMENT -- SINGLE LIFE ANNUITY

         If the Participant does not have a Spouse on his Annuity Starting Date,
         the normal form of payment is the single life annuity form. This form
         provides that payments will be made to the Participant during his
         lifetime with no payments made after death.

6.3      OPTIONAL FORMS OF PAYMENT

         In lieu of receiving his Pension in the normal form applicable to his
         coverage, a Participant may elect to receive a benefit of equal value
         based on one of the optional forms of payment provided in accordance
         with the further terms of the Plan, including Sections 6.6 and 6.8.

                                       16

<PAGE>

6.4      ELECTION OF OPTION

         The Participant may elect or revoke an option during the 90-day period
         before his Annuity Starting Date by filing a written election,
         including the Spousal Consent, with the Employer. However, a
         Participant may not elect more than one option to be effective at the
         same time. No such election or revocation can be made after the
         Participant's Retirement Date.

         In addition a Participant may elect or revoke an optional form of
         payment, to become effective upon his death, at any time on or after
         his Normal Retirement Date and before his late Retirement Date. To
         elect an option the Participant must waive surviving Spouse benefit
         coverage and elect an optional form of payment. His election must
         include the Spousal Consent to both the waiver and election.

         If a Participant elects an optional form of payment, the Pension
         payable to him must be more than 50% of the Actuarial Equivalent of a
         Pension payable to the Participant had the option not been elected,
         unless the alternate recipient is the Participant's Spouse; otherwise,
         such election will be inoperative.

6.5      NOTICE TO PARTICIPANTS

         The Employer shall furnish to each Participant, no less than 30 days
         and no more than 90 days, before his Annuity Starting Date a written
         explanation in nontechnical language of the terms and conditions of the
         Pension payable to the Participant in the normal and optional forms
         described in Sections 6.1, 6.2, 6.3, 6.6 and 6.8. Such explanation
         shall include a general description of the eligibility conditions for,
         and the material features and relative values of, the optional forms of
         payment under the Plan, any rights the Participant may have to defer
         commencement of his Pension, the requirement for Spousal Consent, and
         the right of the Participant to make, and to revoke, elections under
         Section 6.4. A Participant's Annuity Starting Date may not occur less
         than 30 days after receipt of the notice. An election under Section 6.4
         shall be made on a form provided by the Plan Administrator and may be
         made during the 90-day period ending on the Participant's Annuity
         Starting Date, but not prior to the date the Participant receives the
         written explanation described in this Section. Notwithstanding any
         provision to the contrary, the Participant may, after having received
         the notice, affirmatively elect (with any applicable Spousal Consent)
         to waive any requirement that the written explanation be provided at
         least 30 days before his Annuity Starting Date if:

         (A)      the Committee clearly informs the Participant that he has a
                  period of at least 30 days after receiving the notice to
                  decide when to have his benefits begin and, if applicable, to
                  choose a particular optional form of payment;

         (B)      the Participant affirmatively elects a date for his benefit to
                  begin and, if applicable, an optional form of payment, after
                  receiving the notice;

         (C)      the Participant is permitted to revoke his election until the
                  later of his Annuity Starting Date or seven days following the
                  day he received the notice;

         (D)      the distribution of his Pension commences more than 7 days
                  after such explanation is provided to the Participant.

6.6      SERVISTAR PROTECTED PAYMENT FORMS

                                       17

<PAGE>

         Each Participant who was a participant in the SERVISTAR Plan on January
         1, 1998 shall have, in addition to the optional forms of payment
         available under this Plan, all of the normal and optional forms of
         payment available under the SERVISTAR Plan, except for the 66-2/3 Joint
         and Survivor Annuity form, with respect to the payment of his Pension
         under this Plan. The Participant's Pension payable under said SERVISTAR
         Plan optional payment forms shall be the Actuarial Equivalent of the
         single life annuity form of payment for the life of the Participant and
         all calculations of these forms are based on the provisions contained
         in the SERVISTAR Plan on December 31, 1997 and restated in Supplement C
         hereto.

6.7      PAYMENT OF PENSION TO THE PARTICIPANT

         A Participant's Pension will be payable monthly with each payment
         equivalent to 1/12 of the yearly amount. The first of such monthly
         payments will be made at the Participant's Normal Retirement Date or
         early retirement date, if appropriate, with subsequent monthly payments
         being made at the first of each month thereafter until the
         Participant's death occurs, or in the case of a survivor annuity, until
         the surviving Beneficiary's death occurs.

         Except as otherwise provided in Sections 4, 5 or 7, unless the
         Participant elects otherwise, the payment of a Pension shall commence
         not later than the 60th day after the latest of the close of the Plan
         Year in which:

         (A)      the Participant attains the earlier of age 65 or his Normal
                  Retirement Date, or

         (B)      the fifth anniversary of the year in which the Participant
                  commenced participation in the Plan occurs, or

         (C)      the Participant terminates his Service with the Employer.

         Notwithstanding the preceding paragraph, in the case of a Participant
         in active service of the Employer or an Affiliated Employer, the
         Participant's Pension shall begin not later than the April 1 following
         the calendar year in which he attains age 70 1/2. In this situation,
         the provisions of Section 5.4 shall apply to him. However, a
         Participant who attains age 70 1/2 prior to January 1, 1988 and who is
         not a 5% owner (as defined in Section 416(i) of the Code) of the
         Employer as described above shall not receive payment while in active
         service under the provisions of this Section 6.7.

6.8      PAYMENT OPTIONS

         If not made in a lump-sum under the small benefits provisions of
         Section 10.5(G), payment may be made in one of the following forms upon
         the Participant's election and with Spousal Consent, if applicable:

         (A)      A monthly pension payable in equal installments for the life
                  of the Participant; provided however, that in the event the
                  Participant dies within the 10-year period following his
                  Annuity Starting Date, monthly payments equal to those payable
                  during the life of the Participant shall be made to the
                  Beneficiary or Spouse of the deceased Participant designated
                  to receive such payments for the remainder of said 10-year
                  period.

                                       18

<PAGE>

         (B)      A lump sum payment equal to the Participant's Defined Lump
                  Sum, as determined under Section 4.3(B) but in no event less
                  than the lump sum amount determined under Section 4.3(E),
                  which payment shall be made as of the first day of the month
                  following the date an election to receive such lump sum
                  payment is made pursuant to this Section.

         (C)      A monthly pension payable in equal installments for the life
                  of a Participant.

         (D)      Any Participant, who was also a participant in the SERVISTAR
                  Plan and terminated employment with the Employer between July
                  1, 1997 and December 31, 1997, may elect to receive his
                  Accrued Benefit in a lump sum payment effective as of June 1,
                  1998. Such lump sum payment shall be calculated as provided in
                  Sections 4.3(E)(3) and (4) subject to the following
                  modifications, if applicable:

                  (1)      the calculation of the lump sum payment shall include
                           Participant contributions and interest thereon that
                           have not been previously distributed by valuing them
                           based on the Actuarial Equivalent but substituting
                           the May, 1998 rate of interest (5.93%) for the stated
                           lump sum distribution rate of interest.

                  (2)      the lump sum payment calculation shall not take into
                           account any previously distributed Participant
                           contributions and interest thereon;

                  (3)      for a Participant receiving monthly Pension payments
                           prior to June 1, 1998, the lump sum payment amount
                           calculated hereunder will be reduced by the sum of
                           all previous monthly Pension payments.

                  The Committee will provide notice to any affected Participant
                  of this election and provide a method by which the Participant
                  can elect the lump sum payment with Spousal Consent, if
                  applicable.

         The Participant must elect the optional forms of payment described in
         this Section 6.8, subject to the provisions of Section 5.1 and as
         provided in Section 6.4. Each of the optional forms of payment in this
         Section 6.8 (except as modified by Section 6.8(D)) shall be the
         Actuarial Equivalent of the single life annuity form of payment for the
         life of the Participant.

6.9      MINIMUM AMOUNTS TO BE PAID

         Notwithstanding any other provision in this Section 6, if the
         Participant's entire interest is to be paid in other than a lump-sum,
         then the amount to be paid each year (recognizing the possibility of
         paying the Cash Balance Benefit in a lump sum in the first year) must
         be at least an amount equal to the quotient obtained by dividing the
         Participant's entire interest by the life expectancy of the Participant
         or joint and last survivor expectancy of the Participant and designated
         beneficiary. Life expectancy and joint and last survivor expectancy are
         computed by the use of the return multiples contained in section 1.72-9
         of the Income Tax Regulations. For purposes of this computation, a
         Participant's life expectancy may be recalculated no more frequently
         than annually, however, the life expectancy of a nonspouse beneficiary
         may not be recalculated. If the Participant's spouse is not the
         designated beneficiary, the method of payment selected must assure that
         at least 50% of the present value of the amount available for payment
         would be

                                       19

<PAGE>

         payable within the life expectancy of the Participant. Notwithstanding
         the preceding in this paragraph, a Participant's interest shall be made
         and determined in accordance with Section 401(a)(9) of the Code
         including the minimum incidental distribution benefit requirement of
         Section 1.401(a)(9)-2 of the Proposed Treasury Regulations.

         If the Participant dies after payment of his interest has commenced,
         the remaining portion of such interest shall be paid at least as
         rapidly as under the method of payment being used prior to the
         Participant's death.

         If the Participant dies before payment of his interest commences, the
         Participant's entire interest must be paid no later than 5 years after
         the Participant's death except to the extent that an election is made
         to receive payment in accordance with (a) or (b) below:

         (A)      if any portion of the Participant's interest is payable to a
                  designated beneficiary, such payments shall be made in
                  substantially equal installments over the life or life
                  expectancy of the designated beneficiary and shall commence no
                  later than 1 year after the Participant's death;

         (B)      if, however, the designated beneficiary is the Participant's
                  surviving spouse, the date on which payments are required to
                  begin in accordance with (a) above is not required to be
                  earlier than the date on which the Participant would have
                  attained age 70 1/2; but, if the spouse dies before such
                  payments begin, subsequent payments shall be made as if the
                  spouse had been the Participant.

         With respect to distributions under the Plan made for calendar years
         beginning on or after January 1, 2001, the Plan will apply the minimum
         distribution requirements of Section 401(a)(9) of the Code in
         accordance with the regulations under Section 401(a)(9) that were
         proposed in January 2001, notwithstanding any provision of the Plan to
         the contrary. This provision shall continue in effect until the end of
         the last calendar year beginning before the effective date of final
         regulations under Sections 401(a)(9) of the Code or such other date as
         may be specified in guidance published by the Internal Revenue Service.

6.10     TEFRA TRANSITION RULE ELECTIONS

         Notwithstanding the other requirements of this Section and subject to
         the Qualified Joint and Survivor Annuity requirements, distribution on
         behalf of any Participant, including a 5% owner of the Employer, may be
         made in accordance with all of the following requirements (regardless
         of when such distribution commences):

         (A)      The distribution by the Plan is one which would not have
                  disqualified such Plan under Section 401(a)(9) of the Code as
                  in effect prior to amendment by the Deficit Reduction Act of
                  1984.

         (B)      The distribution is in accordance with a method of
                  distribution designated by the Participant whose interest in
                  the Plan is being distributed or, if the Participant is
                  deceased, by a beneficiary of such Participant.

         (C)      Such designation was in writing, was signed by the Participant
                  or the beneficiary, and was made before January 1, 1984.

         (D)      The Participant had accrued a benefit under the Plan as of
                  December 31, 1983.

                                       20

<PAGE>

         (E)      The method of distribution designated by the Participant or
                  the beneficiary specifies the time at which distribution will
                  commence, the period over which distributions will be made,
                  and in the case of any distribution upon the Participant's
                  death, the beneficiaries of the Participant listed in order of
                  priority. The method of distribution selected must assure that
                  at least 50% of the present value of the amount available for
                  distribution would be payable within the life expectancy of
                  the Participant.

         A distribution upon death will not be covered by this transition rule
         unless the information in the designation contains the required
         information described above with respect to the distributions to be
         made upon the death of the Participant.

         For any distribution which commences before January 1, 1984, but
         continues after December 31, 1983, the Participant or the beneficiary,
         to whom such distribution is being made, will be presumed to have
         designated the method of distribution under which the distribution is
         being made if the method of distribution was specified in writing and
         the distribution satisfies the requirements in subsections (A) and (E)
         above.

         If a designation is revoked any subsequent distribution must satisfy
         the requirements of Section 6.9. Any changes in the designation will be
         considered to be a revocation of the designation. However, the mere
         substitution or addition of another beneficiary (one not named in the
         designation) under the designation will not be considered to be a
         revocation of the designation, so long as such substitution or addition
         does not alter the period over which distributions are to be made under
         the designation, directly or-indirectly (for example, by altering the
         relevant measuring life).

6.11     RESTORATION OF RETIRED PARTICIPANT OR OTHER FORMER ASSOCIATE TO SERVICE

         If a Participant having received his Pension or in receipt of a Pension
         is restored to service with the Employer or an Affiliated Employer, the
         following shall apply:

         (A)      Upon his restoration to service he shall not be required or
                  allowed to repay any benefit he has received and, if his
                  Pension is payable in an annuity form, his Pension shall not
                  be suspended and any optional form of payment shall remain in
                  effect; if the Participant had commenced payment prior to his
                  Normal Retirement Date, however, any additional Pension he
                  accrues after his restoration to service shall be paid to his
                  surviving Spouse in accordance with the provisions of Section
                  7 if he should die in active service.

         (B)      Any Years of Service to which he was entitled when he retired
                  or terminated service shall be restored to him, subject to the
                  provisions of section 2.1(OO) ("Years of Service").

6.12     DIRECT ROLLOVER OF CERTAIN DISTRIBUTIONS

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

                                       21

<PAGE>

         (B)      The following definitions apply to the terms used in this
                  Section:

                  (1)      An "eligible rollover distribution" is any
                           distribution of all or any portion of the balance to
                           the credit of the distributee, except that an
                           eligible rollover distribution does not include: any
                           distribution that is one of a series of substantially
                           equal periodic payments (not less frequently than
                           annually) made for the life (or life expectancy) of
                           the distributee or the joint lives (or joint life
                           expectancies) of the distributee and the
                           distributee's designated beneficiary, or for a
                           specified period of ten years or more; any
                           distribution to the extent such distribution is
                           required under Section 401(a)(9) of the Code; and the
                           portion of any distribution that is not includible in
                           gross income;

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

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

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

         (C)      In the event that the provisions of this Section 6.12 or any
                  part thereof cease to be required by law as a result of
                  subsequent legislation or otherwise, this Section or any
                  applicable part thereof shall be ineffective without the
                  necessity of further amendments to the Plan.

                      SURVIVING SPOUSE BENEFIT -- SECTION 7

7.1      ELIGIBILITY

         Upon the death of a Participant before his Retirement Date, his Spouse
         will receive a surviving Spouse benefit as described below in either
         7.2(A) or (B) as applicable, if all the following requirements were met
         when the Participant died:

         (A)      The Participant had a Spouse to whom the Participant had been
                  married at least one full year prior to his death;

         (B)      The Participant dies on or after January 2, 1998; and

         (C)      The Participant's Vesting Percentage is 100%.

                                       22

<PAGE>

7.2      AMOUNT

         (A)      If the Participant dies while actively employed by the
                  Employer, the surviving Spouse benefit shall be equal to 55%
                  of the Participant's Defined Lump Sum, but in no event less
                  than 55% of the lump sum amount determined under Section
                  4.3(E).

         (B)      If the Participant dies after his employment with the Employer
                  is terminated, but prior to commencement of payments under the
                  Plan, the Surviving Spouse benefit shall be equal to 55% of
                  the benefit the Participant would have received if the
                  Participant had survived to age 55 (or the age at his date of
                  death, if older) and elected a 50% Qualified Joint and
                  Survivor Annuity, and died.

7.3      PAYMENTS

         (A)      Subject to the surviving Spouse's right to have the benefit
                  paid at what would have been the Participant's Normal
                  Retirement Date, the surviving Spouse benefit under Section
                  7.2(A) shall be paid commencing as of the first day of the
                  month coinciding with or immediately following the
                  Participant's death. In lieu of immediate monthly payments for
                  life, the surviving Spouse may elect to receive the benefit
                  immediately as a lump sum. Alternatively, the surviving Spouse
                  may elect to defer commencement of the surviving Spouse
                  benefit until the first day of any month coinciding with or
                  immediately following the date the Participant would have
                  attained age 55 (or age at death, if older), but not later
                  than the first day of the month coinciding with or next
                  following the date that would have been the Participant's
                  Normal Retirement Date (or age at death, if older).

                  If a surviving Spouse elects to defer commencement of the
                  surviving Spouse benefit, the benefit shall be converted to an
                  Actuarially Equivalent monthly annuity for the life of the
                  surviving Spouse commencing on the date that would have been
                  the Participant's Normal Retirement Date. This benefit will be
                  reduced by 2/3 of 1% for each of the first 60 months and 1/3
                  of 1% for each of the next 60 months by which the benefit
                  commencement date precedes the date that would have been the
                  Participant's Normal Retirement Date. In no event, however,
                  shall this benefit be less than the benefit the surviving
                  Spouse could have received as a monthly annuity for life
                  commencing on the first of the month coinciding with or
                  immediately following the Participant's death.

         (B)      Subject to the surviving Spouse's right to have the benefit
                  paid at what would have been the Participant's Normal
                  Retirement Date, the surviving Spouse benefit under Section
                  7.2(B) shall be paid commencing as of the first day of the
                  month coinciding with or immediately following the
                  Participant's death. In lieu of such immediate payment, the
                  surviving Spouse may elect to defer receipt of the surviving
                  Spouse benefit to any date which is not later than the
                  Participant's Normal Retirement Date. If such an election is
                  made, the surviving Spouse benefit shall be equal to 55% of
                  the benefit the Participant would have received if the
                  Participant had survived to the date at which the surviving
                  Spouse elects to commence the surviving Spouse benefit and had
                  elected a 50% Qualified Joint and Survivor Annuity.

                                       23

<PAGE>

         (C)      An election by the Spouse to commence receiving payments prior
                  to what would have been the Participant's Normal Retirement
                  Date shall be made on a form provided by the Plan
                  Administrator and may be made during the 90-day period ending
                  on the date the payments to the Spouse commence.

7.4      MINIMUM BENEFIT AND PAYMENT FORM

         If a Participant, who was a former participant in the SERVISTAR Plan,
         dies and his Spouse is not eligible to receive the surviving Spouse
         benefit, his Beneficiary will receive a refund of his available
         Participant's contributions together with credited interest computed
         thereon to the date of the Participant's death. Credited interest on a
         Participant's contributions means interest for the number of full
         months from the January 1 following the date each such contribution was
         paid to the Plan to the date specified herein. Prior to January 1,
         1960, the rate of credited interest was 2 1/2% per annum, compounded
         annually. From January 1, 1960 to January 1, 1976, the rate of credited
         interest was 3% per annum, compounded annually. From January 1, 1976 to
         July 1, 1983, the rate of credited interest is 5% per annum. On and
         after July 1, 1983, the rate of credited interest is 7% per annum,
         compounded on each July 1. Any change in the rate of credited interest
         will apply to interest allowed for months occurring after the effective
         date of change.

                       TRUST FUND AND TRUSTEE -- SECTION 8

8.1      TRUST FUND

         The Employer has heretofore established the Fund which comprises all of
         the assets of the Plan and into which future contributions to finance
         this Plan shall be made. The Trust shall hold the Fund, which shall be
         used to pay benefits or expenses as provided in this Plan pursuant to
         authorization by the Committee; and such benefits shall be payable only
         from the Fund.

8.2      TRUST FUND APPLICABLE ONLY TO PAYMENT OF BENEFITS AND EXPENSES

         The fund will be used and applied only in accordance with the
         provisions of the Plan and the Trust Agreement entered into by the
         Employer and the Trustee to provide the benefits thereof, and no part
         of the corpus or income of the Trust fund will be used for, or diverted
         to, purposes other than for the exclusive benefit of Participants under
         the Plan and other persons thereunder entitled to benefits except to
         the extent provided in Sections 9.2 and 11.3 or to pay any reasonable
         expenses in the administration of the Plan.

8.3      TRUSTEE CAPACITY

         When there are two or more Trustees, they are authorized to allocate
         specific responsibilities, obligations or duties among themselves by
         their written agreement. An executed copy of such written agreement is
         to be delivered to and retained by the Committee. In the event of more
         than one Trustee, any action shall be taken at the direction of a
         majority of such Trustees.

                                       24

<PAGE>

8.4      RESIGNATION AND REMOVAL OF TRUSTEE

         Any Trustee may resign at any time by delivering to the Board of
         Directors of TruServ Corporation (the "Board of Directors") a written
         notice of resignation, which notice may be waived by the Board of
         Directors, to take effect at a date specified therein, which shall not
         be less than 30 days after the delivery thereof. The Trustee may be
         removed by the Board of Directors with or without cause, by tendering
         to the Trustee a written notice of removal to take effect at a date
         specified therein. Upon such removal or resignation of a Trustee, the
         Board of Directors shall either appoint a successor Trustee who shall
         have the same powers and duties as those conferred upon the resigning
         or discharged Trustee, or, if more than one Trustee is acting,
         determine that a successor shall not be appointed and the number of
         Trustees shall be reduced by one.

8.5      TAXES, EXPENSES AND COMPENSATION OF TRUSTEE

         The Trustee shall deduct from and charge against the Trust any taxes
         paid by it which may be imposed upon the Trust, or the income thereof,
         or which the Trustee is required to pay with respect to the interest of
         any Participant or Beneficiary therein. The Employer may pay the
         Trustee's reasonable expenses in administering the Plan and a
         reasonable compensation for its services as Trustee hereunder, either
         directly or through the Fund, at a rate to be agreed upon from time to
         time; provided, however, that no full-time Associate shall receive any
         compensation for acting as Trustee hereunder.

8.6      FUNDING POLICY AND INVESTMENT MANAGERS

         The Employer or its delegate shall be responsible for establishing and
         carrying out a funding policy and method consistent with the objectives
         of this Plan and the requirements of ERISA and shall determine the
         investment policy for the Plan. However, the Employer or its delegate
         may appoint one or more investment managers to manage the assets of the
         Plan (including the power to acquire and dispose of all or part of such
         assets) as the Employer shall designate. In that event, the authority
         over and responsibility for the management of the assets so designated
         shall be the sole responsibility of that investment manager.

         For purposes of this Article, the term "investment manager" means an
         individual who:

         (A)      Has the power to manage, acquire or dispose of any asset of
                  the Plan;

         (B)      Is (i) registered as an investment advisor under the
                  Investment Advisors Act of 1940, (ii) is a bank, as defined in
                  that Act, or (iii) is an insurance company qualified to
                  perform services described in paragraph (A) above; and

         (C)      Has acknowledged in writing that he is a fiduciary with
                  respect to the Plan.

                                       25

<PAGE>

                        FUNDING OF BENEFITS -- SECTION 9

9.1      CONTRIBUTIONS TO THE FUND

         From time to time, the Employer shall make such contributions to the
         Fund as the Employer determines are required to maintain the Plan on a
         sound actuarial basis. In determining the amounts and incidence of such
         contributions, the Employer will take into account such actuarial
         recommendations as may be provided by an enrolled actuary as defined by
         ERISA. Contributions by Participants are neither required nor
         permitted.

9.2      FUND FOR EXCLUSIVE BENEFIT OF PARTICIPANTS

         The Fund is for the exclusive benefit of Participants and other persons
         who may become entitled to benefits hereunder, and may also be used to
         pay any reasonable expenses arising from the administration of the Plan
         not assumed and then paid directly by the Employer. Prior to the
         satisfaction of all liabilities for benefits provided hereunder, no
         contribution made to the Fund will be refunded to the Employer except
         in the following circumstances:

         (A)      The Employer's contributions to the Plan are conditioned upon
                  their deductibility under Section 404 of the Code. If all or
                  part of the Employer's deductions for contributions to the
                  Plan are disallowed by the Internal Revenue Service, the
                  portion of the contributions to which that disallowance
                  applies shall be returned to the Employer without interest,
                  but reduced by any investment loss attributable to those
                  contributions. The return shall be made within one year after
                  the date of the disallowance of deduction.

         (B)      The Employer may recover without interest the amount of its
                  contributions to the Plan made on account of a mistake in
                  fact, reduced by any investment loss attributable to those
                  contributions, if recovery is made within one year after the
                  date of those contributions.

9.3      DISPOSITION OF CREDITS AND FORFEITURES

         No credit or forfeitures arising from the operation of the Plan may be
         used to increase the benefit of any Participant or group of
         Participants but will instead be taken into account in determining
         contributions to be made by the Employer.

                        PLAN ADMINISTRATOR -- SECTION 10

10.1     PLAN ADMINISTRATOR/APPOINTMENT OF COMMITTEE

         To the extent provided in this Section, the general administration of
         the Plan and the responsibility for carrying out the provisions of the
         Plan shall be placed in a Committee of not less than 3 persons
         appointed from time-to-time by the Board of Directors of TruServ
         Corporation to serve at the pleasure of the Board of Directors. Any
         person who is appointed a member of the Committee shall signify his
         acceptance by filing written acceptance with the Board of Directors and
         the Secretary of the Committee. Any member

                                       26

<PAGE>

         of the Committee may resign by delivering his written resignation to
         the Board of Directors and the Secretary of the Committee. If the
         Employer does not appoint a Committee, the Employer shall perform the
         duties of the Committee.

10.2     DUTIES AND AUTHORITY

         The Plan Administrator shall administer the Plan on behalf of the
         Employer in a nondiscriminatory manner for the exclusive benefit of
         Participants and their Beneficiaries.

         The Plan Administrator shall have the exclusive discretionary power to,
         and perform all such duties as are necessary to, operate, administer
         and manage the Plan in accordance with the terms thereof, including but
         not limited to the following:

         (A)      To determine, in its sole discretion, all questions relating
                  to a Participant's coverage under the Plan,

         (B)      To maintain all necessary records for the administration of
                  the Plan,

         (C)      To compute and authorize the payment of a Pension and other
                  benefit payments to eligible Participants and Beneficiaries,

         (D)      To adopt and amend rules for the administration of the Plan
                  and the transaction of its business subject to the limitations
                  of the Plan. The Plan Administrator shall have the sole and
                  unilateral discretionary authority to interpret the Plan and
                  to make factual determinations (including but not limited to,
                  determination of an individual's eligibility for Plan
                  participation, the right, amount and form of any benefit
                  payable under the Plan and the date on which any individual
                  ceases to be a Participant and to remedy ambiguities,
                  inconsistences and/or omissions). The determinations, acts and
                  decisions of the Plan Administrator shall be final, conclusive
                  and binding on all parties and, subject to the claim
                  procedures in Section 10.7(B), shall not be overturned unless
                  determined to be arbitrary and capricious by a court of
                  competent jurisdiction.

         (E)      To advise or assist Participants regarding any rights,
                  benefits or elections available under the Plan.

         The Plan Administrator shall take such actions as are necessary to
         establish and maintain the Plan as a retirement program which is at all
         times in full and timely compliance with any law or regulation having
         pertinence to this Plan.

         The Plan Administrator shall be exclusively granted by the Employer all
         reasonable discretionary powers necessary or appropriate to accomplish
         his duties as Plan Administrator. The Plan Administrator shall use that
         degree of care, skill, prudence and diligence that a prudent man acting
         in a like capacity and familiar with such matters would use in his
         conduct of a similar situation.

10.3     REMOVAL OF PLAN ADMINISTRATOR

         The Plan Administrator may be removed with or without cause by the
         Employer through delivery to him of written notice of removal, to take
         effect at a date specified therein.

                                       27

<PAGE>

10.4     APPOINTMENT OF SUCCESSOR PLAN ADMINISTRATOR

         In the event the office of Plan Administrator is vacant, the Employer
         shall promptly designate a successor Plan Administrator who must
         signify acceptance of this position in writing. In the event no
         successor is appointed, the Board of Directors or other governing body
         of the Employer shall function as the Plan Administrator until a new
         Plan Administrator has been appointed and has accepted such
         appointment.

10.5     PLAN ADMINISTRATION -- MISCELLANEOUS

         (A)      Filing a claim for Benefits. A Participant or Beneficiary
                  shall notify the Plan Administrator of a claim for benefits
                  under the Plan. Such request may be in any form adequate to
                  give reasonable notice to the Plan Administrator and shall set
                  forth the basis of such claim. The claim shall also authorize
                  the Plan Administrator to conduct such examinations as may be
                  necessary to determine the validity of the claim and to take
                  such steps as may be necessary to facilitate the payment of
                  any benefits to which the Participant or Beneficiary may be
                  entitled under the Plan.

         (B)      Claims Procedure. The Plan Administrator shall make all
                  determinations as to the right of any person to receive
                  benefits under the Plan. Any denial by the Plan Administrator
                  of a claim for benefits under the Plan by a Participant,
                  Spouse, retired Participant or beneficiary (collectively
                  referred to herein as "claimant") shall be stated in writing
                  by the Plan Administrator and delivered or mailed to the
                  claimant. Such notice shall set forth:

                  (1)      the specific reasons for denial;

                  (2)      specific reference to pertinent provisions of the
                           Plan upon which the denial is based;

                  (3)      a description of any additional material or
                           information necessary for the claimant to perfect his
                           claim with an explanation of why such material or
                           information is necessary; and

                  (4)      an explanation of claim review procedures under the
                           Plan written in a manner that may be understood
                           without legal or actuarial counsel.

                  A claimant whose claim for benefits has been wholly or
                  partially denied by the Plan Administrator may, within 90 days
                  following the date of such denial:

                           (i)      request a review of such denial in a writing
                                    addressed to the Plan Administrator;

                           (ii)     submit such issues or comments, in writing
                                    or otherwise, as he shall consider relevant
                                    to a determination of his claim, and may
                                    include in his request a request for a
                                    hearing in person before the Plan
                                    Administrator; and

                           (iii)    request to review any pertinent documents,
                                    which may be reviewed prior to his
                                    submitting his request for review.

                                       28

<PAGE>

                  The claimant may, at all stages of review, be represented by
                  counsel, legal or otherwise, of his choice, provided that the
                  fees and expenses of such counsel shall be borne by the
                  claimant.

                  All requests for review shall be promptly resolved. The
                  decision of the Plan Administrator with respect to any such
                  review shall be set forth in writing and such shall be mailed
                  to the claimant not later than 60 days following receipt by
                  the Plan Administrator of the claimant's request unless
                  special circumstances, such as need to hold a hearing, require
                  an extension of time for processing, in which case the
                  decision shall be so mailed not later than 120 days after
                  receipt of such request. All decisions of the Plan
                  Administrator shall be final, conclusive and binding on all
                  parties and shall not be overturned unless such decision is
                  determined by a court of competent jurisdiction to be
                  arbitrary and capricious.

         (C)      Governing Law. To the extent not preempted by ERISA, the Plan
                  shall be construed, regulated and administered under the laws
                  of the State of Illinois.

         (D)      Masculine and Feminine, Singular and Plural. In construing the
                  text of this Plan, the masculine shall include the feminine
                  and the singular shall include the plural, and the plural the
                  singular wherever the context shall plainly so require.

         (E)      Reference to Laws. Any reference herein to any section of the
                  federal Internal Revenue Code, ERISA, TEFRA or any other
                  statute or law shall be deemed to include any successor
                  statute or law of similar import.

         (F)      Non-Assignment. Except as required by any applicable law, no
                  benefit under the Plan shall in any manner be anticipated,
                  assigned, alienated, subject to garnishment, levy, execution
                  or other legal or equitable process, or otherwise subject to
                  the claims of creditors, and any attempt to do so shall be
                  void. However, payment shall be made in accordance with the
                  provisions of any judgment, decree, or order which:

                  (1)      creates for, or assigns to, a spouse, former spouse,
                           child or other dependent of a Participant the right
                           to receive all or a portion of the Participant's
                           benefits under the Plan for the purpose of providing
                           child support, alimony payments or marital property
                           rights to that spouse, child or dependent,

                  (2)      is made pursuant to a State domestic relations law,

                  (3)      does not require the Plan to provide any type of
                           benefit, or any option, not otherwise provided under
                           the Plan, and

                  (4)      otherwise meets the requirements of Section 206(d) of
                           ERISA, as amended, as a "qualified domestic relations
                           order," as determined by the Plan Administrator.

                  If the present value of any series of payments meeting the
                  criteria set forth in clauses (1) through (4) above amounts to
                  $5,000 or less, a lump sum payment of the Actuarial Equivalent
                  of such assigned amount, determined in the manner described in
                  Section 10.5(G), shall be made in lieu of the series of
                  payments.

                                       29

<PAGE>

                  If the amount payable to an alternate payee under a qualified
                  domestic relations order exceeds such $5,000 present value, it
                  may be paid to the alternate payee as soon as practicable
                  after the order has been determined to be qualified by the
                  Plan Administrator if the qualified domestic relations order
                  so provides and the alternate payee consents thereto;
                  otherwise it may not be payable before the earliest of the
                  Participant's termination of employment or earliest retirement
                  date under the Plan.

         (G)      Small Benefits. If the Actuarial Equivalent of the Vesting
                  Percentage of the Participant's Pension under the Plan is
                  $5,000 or less, such Pension shall be distributed without the
                  Participant's consent (or his Spouse's/Beneficiary's consent,
                  if applicable) in the form of a lump sum cash distribution.
                  For purposes of determining such Actuarial Equivalent amount,
                  it shall be assumed that the benefit commencement date is the
                  Participant's Normal Retirement Date.

                  The lump sum payment shall be made as soon as administratively
                  practicable following the Participant's termination of
                  employment or death, but in any event prior to the date his
                  Pension payments would have otherwise commenced. In the event
                  a Participant is not entitled to any Pension upon his
                  termination of employment, he shall be deemed cashed-out under
                  the provisions of this paragraph (G) as of the date he
                  terminated service. However, if a Participant described in the
                  preceding sentence is subsequently restored to service, the
                  provisions of Section 6.11 shall apply to him without regard
                  to such sentence.

         (H)      Conditions of Employment Not Affected by Plan. The
                  establishment of the Plan shall not confer any legal rights
                  upon any Associate or other person for a continuation of
                  employment, nor shall it interfere with the rights of the
                  Employer or an Affiliated Employer to discharge any Associate
                  and to treat him without regard to the effect which that
                  treatment might have upon him as a Participant or potential
                  Participant of the Plan. Participation in the Plan shall not
                  grant any Participant the right to be retained in the service
                  of the Employer or an Affiliated Employer or any other rights
                  other than those to which he is entitled under relevant law or
                  regulations.

         (I)      Clerical Error. If any fact pertaining to eligibility for or
                  amount of benefits payable under the Plan to a Participant or
                  other payee has been misstated, or in the event of clerical
                  error, the benefits will be adjusted by the Plan Administrator
                  on the basis of the correct facts in a manner precluding
                  individual selection.

         (J)      Divestment of Benefits for Cause Precluded. In no event may a
                  Participant be divested for cause of Pension or other benefits
                  which he is eligible to receive.

         (K)      Advisors and Counsel. The Employer, or the Committee acting
                  through the Employer, may employ one or more persons to render
                  advice with respect to any duty or responsibility it may have
                  including, but not limited to, consultants, actuaries,
                  financial advisors, accountants and attorneys.

         (L)      Incompetency. If the Committee receives evidence satisfactory
                  to it that a Participant or his Beneficiary to whom an amount
                  is distributable under this Plan is legally incompetent to
                  receive such amount and give valid receipt therefore, the
                  Committee may cause payment of such amount to be made to the
                  guardian or other legal representative of such Participant or
                  his Beneficiary, or in the absence of a legal guardian or
                  other legal representative, to such other person or
                  institution who is then maintaining and has custody of such
                  Participant or his Beneficiary.

                                       30

<PAGE>

                  Any payments made shall be a complete discharge of liabilities
                  of the Plan for that benefit.

         (M)      Erroneous Payments. In the event that a Participant (or his
                  Beneficiary) receives a distribution under this Plan in excess
                  of the amount, if any, to which he is entitled, by reason of a
                  calculation error or otherwise, the Plan Administrator, in his
                  sole and absolute discretion, may adjust future benefit
                  payments to the Participant (or his Beneficiary) to the extent
                  necessary to recoup the amount which the Participant (or his
                  Beneficiary) received which was in excess of the amount to
                  which he was entitled under the term of the Plan. If the Plan
                  Administrator determines, in his sole and absolute discretion,
                  that it is not feasible or desirable to adjust future benefit
                  payments to the Participant, the Plan Administrator may
                  require the Participant (or his Beneficiary) to repay to the
                  Plan the amount which is in excess of the amount to which the
                  Participant (or his Beneficiary) is entitled under the terms
                  of the Plan. All amounts received by the Participant (or his
                  Beneficiary) under the Plan shall be deemed to be paid subject
                  to these conditions. The determination of the Plan
                  Administrator made pursuant to this Section 10.7(M) shall be
                  final, conclusive and binding on all parties, subject to the
                  claims procedures under Section 10.7(B), and shall not be
                  overturned unless such determinations are arbitrary and
                  capricious.

         (N)      Headings. The headings of the Plan have been inserted for
                  convenience of reference only and are to be ignored in the
                  construction of the Plan.

         (O)      Information. Before any benefit shall be payable by the Plan,
                  each Participant, Spouse, Beneficiary or other person entitled
                  to a benefit shall file with the Committee all the information
                  that the Committee shall require to establish such persons
                  rights and benefits under the Plan.

         (P)      Written Elections. Any elections, notifications or
                  designations made by a Participant or any other individual
                  pursuant to the provisions of the Plan shall be made in
                  writing and filed with the Committee in a time and manner
                  determined by the Committee under rules uniformly applicable
                  to all persons similarly situated. The Committee reserves the
                  right to change from time to time the time and manner for
                  making notifications, elections or designations by such
                  persons under the Plan if it determines after due deliberation
                  that such action is justified in that it improves the
                  administration of the Plan. In the event of a conflict between
                  the provisions for making an election, notification or
                  designation set forth in the Plan and such new administrative
                  procedures, those new administrative procedures shall prevail.

         (Q)      Vested Rights. No person shall have any vested rights under
                  the Plan and Trust except to the extent that such rights may
                  accrue to him as provided under the Plan. Furthermore, any
                  person with vested rights under the Plan and Trust shall look
                  solely to the Plan and Trust and the assets thereunder for
                  satisfaction of such vested rights.

         (R)      Plan Provisions Controlling. In the event of any conflict
                  between the provisions of the Plan and the provisions of a
                  summary or other description of the Plan or the terms of any
                  agreement or instrument related to the Plan, the provisions of
                  the Plan shall control.

                                       31

<PAGE>

         (S)      Interpretation of the Plan. It is the intent of the Employer
                  that the Plan and Trust qualify under Sections 401(a) and
                  501(a) of the Code, respectively, and meet all applicable
                  requirements of ERISA. Accordingly, the Plan and Trust shall
                  be construed and interpreted in such manner as to give effect
                  to this intent.

         (T)      Limitation of Liability. The Employer, the Board of Directors
                  of the Employer or any Affiliated Employer, the members of the
                  Committee, and any of their officers, Associates,
                  representatives, consultants, counsel, or agents shall not
                  incur any liability individually or on behalf of any other
                  individuals or on behalf of the Employer for any act or
                  failure to act, made in good faith in relation to the Plan or
                  the Funds of the Plan. However, this limitation shall not act
                  to relieve any such individual or the Employer from a
                  responsibility or liability for any fiduciary responsibility,
                  obligation or duty under Part 4, Title I of ERISA.

         (U)      Indemnification. The Employer, members of the Committee, the
                  Board of Directors of the Employer or any Affiliated Employer,
                  and their officers, Associates, representatives, consultants,
                  counsel, and agents shall be indemnified against any and all
                  liabilities arising by reason of any act, or failure to act,
                  in relation to the Plan or the Fund of the Plan, including,
                  without limitation, expenses reasonably incurred in the
                  defense of any claim relating to the Plan or the Fund of the
                  Plan, and amounts paid in any compromise or settlement
                  relating to the Plan or the Fund of the Plan, except for such
                  liability, losses or costs which result from:

                  (1)      their actions or failures to act made in bad faith;

                  (2)      their own gross negligence or willful conduct;

                  (3)      any settlement, without TruServ Corporation's prior
                           approval, of an action, suit, or preceding; or

                  (4)      suits or actions at law or in equity advanced by
                           TruServ Corporation against such party.

                  The foregoing indemnification shall be from the Fund of the
                  Plan to the extent of this Fund and to the extent permitted
                  under applicable law; otherwise from the assets of the
                  Employer.

         (V)      Authority to Act

                  (1)      The Employer and the Committee may authorize one or
                           more of its members, Associates, representatives,
                           consultants, counsel, or agents to execute on its
                           behalf instructions or directions to any interested
                           party, and any such interested party may rely
                           thereupon and the information contained therein.

                  (2)      Whenever, under the terms of the Plan or Trust
                           Agreement, the Employer is required or permitted to
                           take action (except when related to administrative
                           duties), such action shall be taken under
                           authorization of the Board of Directors, unless
                           otherwise provided by the Plan or the Trust Agreement
                           or by prior action of such Board of Directors.

                 AMENDMENT AND TERMINATION OF PLAN -- SECTION 11

                                       32

<PAGE>

11.1     AMENDMENT -- GENERAL

         The Employer, by action of its Board of Directors, taken at a meeting
         held either in person or by telephone or other electronic means, or by
         unanimous written consent in lieu of a meeting, reserves the right at
         any time and from time to time, and retroactively if deemed necessary
         or appropriate, to amend in whole or in part any or all of the
         provisions of the Plan. However, no amendment shall make it possible
         for any part of the Fund of the Plan to be used for, or diverted to,
         purposes other than for the exclusive benefit of persons entitled to
         benefits under the Plan, before the satisfaction of all liabilities
         with respect to them. No amendment shall be made which has the effect
         of decreasing the Protected Benefit of any Participant or of reducing
         the nonforfeitable percentage of the Accrued Benefit of a Participant
         below the nonforfeitable percentage computed under the Plan as in
         effect on the date on which the amendment is adopted or, if later, the
         date on which the amendment becomes effective.

11.2     AMENDMENT -- MERGER OR CONSOLIDATION OF PLAN

         This Plan may be amended by the Employer to provide for the merger or
         consolidation of the Plan with another retirement plan, or for the
         transfer of assets and liabilities hereunder to another retirement
         plan. Such an event, however, may not occur unless each Participant
         would receive a retirement benefit under such other retirement plan
         after the merger, consolidation, or transfer (assuming that plan had
         then terminated) which is at least as great as the benefit he would
         have received under this Plan immediately prior to the merger,
         consolidation, or transfer (assuming this Plan had then terminated).

11.3     TERMINATION OF PLAN

         The Employer, by action of its Board of Directors, taken at a meeting
         held either in person or by telephone or other electronic means, or by
         unanimous written consent in lieu of a meeting, may terminate the Plan
         for any reason at any time. In case of termination of the Plan, the
         rights of Participants to their Protected Benefits as of the date of
         the termination, to the extent then funded or protected by law, if
         greater, shall be nonforfeitable. The Funds of the Plan shall be used
         for the exclusive benefit of persons entitled to benefits under the
         Plan as of the date of termination, except as provided in Section 9.2.
         However, any funds not required to satisfy all liabilities of the Plan
         for benefits because of erroneous actuarial computation shall be
         returned to the Employer. The Plan Administrator shall determine on the
         basis of actuarial valuation the share of the Fund of the Plan
         allocable to each person entitled to benefits under the Plan in
         accordance with Section 4044 of ERISA, or corresponding provision of
         any applicable law in effect at the time. In the event of a partial
         termination of the Plan, the provisions of this Section shall be
         applicable to the Participants affected by that partial termination.

          RESTRICTION OF BENEFITS UPON EARLY TERMINATION OF THE PLAN --
                                   SECTION 12

12.1     LIMITATION CONCERNING HIGHLY COMPENSATED EMPLOYEES OR HIGHLY
         COMPENSATED FORMER EMPLOYEES

                                       33

<PAGE>

         (A)      The provisions of this Section shall apply (i) in the event
                  the Plan is terminated, to any Participant who is a Highly
                  Compensated Employee or Former Highly Compensated Employee of
                  the Employer or an Affiliated Employer and (ii) in any other
                  event, to any Participant who is one of the 25 Highly
                  Compensated Employees of former Highly Compensated Employees
                  of the Employer or Affiliated Employer with the greatest
                  compensation in any Plan Year. The amount of the annual
                  payments to any one of the Participants to whom this Section
                  applies shall not be greater than an amount equal to the
                  annual payments that would be made on behalf of the
                  Participant during the year under a single life annuity that
                  is of Actuarial Equivalent to the sum of the Participant's
                  Accrued Benefit and the Participant's other benefits under the
                  Plan.

         (B)      If, (i) after payment of Pension or other benefits to any one
                  of the Participants to whom this Section applies, the value of
                  Plan assets equals or exceeds 110% of the value of current
                  liabilities (as that term is defined in Section 412(l)(7) of
                  the Code) of the Plan, (ii) the value of the Accrued Benefit
                  and other benefits of any one of the Participants to whom this
                  Section applies is less than 1% of the value of current
                  liabilities of the Plan, or (iii) the value of the benefits
                  payable to a Participant to whom this Section applies does not
                  exceed the amount described in Section 411(a)(11)(A) of the
                  Code, the provisions of paragraph (A) above will not be
                  applicable to the payment of benefits to such Participant.

         (C)      If any Participant to whom this Section applies elects to
                  receive a lump sum payment in lieu of his Pension and the
                  provisions of paragraph (B) above are not met with respect to
                  such Participant, the Participant shall be entitled to receive
                  his benefit in full provided he shall agree to repay to the
                  Plan any portion of the lump sum payment which would be
                  restricted by operation of the provisions of paragraph (A),
                  and shall provide adequate security to guarantee that
                  repayment.

         (D)      Notwithstanding paragraph (A) of this Section, in the event
                  the Plan is terminated, the restriction of this Section shall
                  not be applicable if the benefit payable to any Highly
                  Compensated Employee and any former Highly Compensated
                  Employee is limited to a benefit that is nondiscriminatory
                  under Section 401(a)(4) of the Code.

         (E)      If it should subsequently be determined by statute, court
                  decision acquiesced in by the Commissioner of Internal
                  Revenue, or ruling by the Commissioner of Internal Revenue,
                  that the provisions of this Section are no longer necessary to
                  qualify the Plan under the Code, this Section shall be
                  ineffective without the necessity of further amendment to the
                  Plan.

                SPECIAL PENSION BENEFITS PROVISIONS -- SECTION 13

13.1     STATUTORY MAXIMUM PENSION BENEFITS

         The statutory maximum amount of yearly Pension payable during any Plan
         Year, which shall be the limitation year for the purpose attributable
         to the Employer Accrued Benefit shall be determined in accordance with
         the further provisions of this Section 13.1.

         (A)      Basic Limitation

                                       34

<PAGE>

                  Regardless of any other provisions of this Plan, other than
                  paragraphs (B)(4), (C) and (D) below, the amount of yearly
                  Pension payable hereunder for any Limitation Year shall not
                  exceed the lesser of (1) $90,000 or (2) 100% of the
                  Participant's average annual remuneration determined with
                  reference to the three consecutive limitation years of Service
                  which he received the highest aggregate remuneration from the
                  Employer or an Affiliated Employer (referred to hereinafter in
                  this Section 13.1 as "highest average compensation").

         (B)      Secondary Limitations

                  The basic limitation in paragraph (A) shall be reduced or
                  increased, as applicable, for the following situations if they
                  are applicable:

                  (1)      Form of Pension other than a life annuity.

                           If the Pension is payable in a form other than a
                           single life annuity, or a Qualified Joint and
                           Survivor Annuity, the basic limitation in paragraph
                           (A) shall be adjusted to its actuarial equivalent
                           based upon the age at which such Pension commences
                           and an interest rate assumption of the greater of the
                           rate of interest specified in Supplement A - Section
                           A.1.(a) or 5%.

                  (2)      Less Than 10 Years of Service

                           If the Participant has less than 10 full years of
                           Service, the basic limitations in paragraph (A)(2)
                           shall be reduced by multiplying such limitation by a
                           fraction, the numerator of which is the Participant's
                           years of Service (computed to the nearest full month)
                           and the denominator of which is 10. In addition, if
                           the Participant has not been a Participant of the
                           Plan for at least 10 years, the maximum annual
                           Pension in paragraph (A)(1) above shall be multiplied
                           by the ratio which the number of years of his
                           participation in the Plan bears to 10. In both cases,
                           these limits under this Section 13.1(B)(2) shall not
                           be reduced to an amount less than 1/10 of the
                           applicable limitation in Section 13.1(A).

                  (3)      Commencement of Pension

                           For purposes of this Section 13, the Participant's
                           Social Security retirement age shall be the
                           retirement age for the Participant under Section
                           216(l) of the Social Security Act, but shall be
                           applied without regard to the age increase factor
                           under Section 216(l) of the Social Security Act and
                           as if the early retirement age under the Social
                           Security Act were 62 years of age. If the Pension
                           begins before the Participant's Social Security
                           retirement age, the maximum Pension in paragraph
                           (A)(1) above shall be adjusted to the Actuarial
                           Equivalent amount based on an interest rate
                           assumption of the greater of the rate of interest
                           specified in Supplement A-Section A.1.(a) or 5% per
                           year and the Group Annuity Mortality Table specified
                           in Supplement A - Section A.1.(b).

                  (4)      Commencement of Pension After Social Security
                           Retirement Age

                           If the Pension begins after the Participant's Social
                           Security retirement age, the maximum Pension in
                           paragraph (A)(1) above shall be adjusted to the
                           Actuarial Equivalent amount based on an interest rate
                           assumption of the

                                       35

<PAGE>

                           lesser of 5% per year or the interest rate specified
                           in Supplement A-Section A.1.(a). and the Group
                           Annuity Mortality Table specified in Supplement A -
                           Section A.1.(b).

                  (5)      Special Provisions Effective under the Small Business
                           Job Protection Act of 1996.

                           (i)      This Section 13.1(B)(5) is effective on
                           January 1, 2000. As provided in the Small Business
                           Job Protection Act of 1996, for purposes of this
                           Section 13.1, a Participant's annual benefit provided
                           under this Plan, and compliance with the benefit
                           limitations under Section 415 of the Code, shall be
                           determined in accordance with Revenue Ruling 98-1,
                           1998-1 C.B. 249, and specifically Q&A-7 and Q&A-8
                           thereof. The annual benefit for a Participant who is
                           married shall include the benefit payable as a
                           Qualified Joint and Survivor Annuity under Section
                           6.1.

                           (ii)     For purposes of applying Section 415(b) of
                           the Code to an optional form of benefit under
                           Sections 6.3, 6.6, and 6.8 of the Plan that is not
                           subject to Section 417(e)(3) of the Code, the
                           determination as to whether such a benefit satisfies
                           the limitations under Section 415(b) of the Code is
                           made by comparing the equivalent annual benefit
                           determined in Step 1 below with the lesser of the
                           age-adjusted dollar limit determined in Step 2 below
                           and the limitations under Section 415(b) of the Code
                           described in Step 3 below:

                           Step 1:   Under Section 415(b)(2)(B) of the Code,
                           determine the annual benefit in the form of a
                           straight life annuity commencing at the same age
                           that is actuarially equivalent to the retirement
                           benefit. In general, Sections 415(b)(2)(E)(i) and
                           (v) of the Code require that the equivalent annual
                           benefit be the greater of the equivalent annual
                           benefit computed using the interest rate and
                           mortality table, specified in Supplement A -
                           Section A.1 of the Plan for actuarial equivalence
                           for the particular form of benefit payable (Plan
                           rate and Plan mortality table, or Plan tabular
                           factor, respectively) and the equivalent annual
                           benefit computed using a 5 percent interest rate
                           assumption and the applicable mortality table. This
                           step does not apply to a benefit that is not
                           required to be converted to a straight life annuity
                           pursuant to Section 415(b)(2)(B) of the Code (for
                           example, a qualified joint and survivor annuity).

                           Step 2:   Under Section 415(b)(2)(C) or (D) of the
                           Code, determine the dollar limitation under Section
                           415(b) of the Code that applies at the age the
                           benefit is payable (age-adjusted dollar limit). The
                           age-adjusted dollar limit is the annual benefit
                           that is actuarially equivalent to an annual benefit
                           equal to dollar limitation under Section 415(b) of
                           the Code payable at the Participant's social
                           security retirement age (as such term is defined in
                           Section 13.1(B)(3)).

                           If the age at which the benefit is payable is 62 or
                           greater, and less than the Participant's social
                           security retirement age, the age-adjusted dollar
                           limit is determined by reducing the dollar limitation
                           under Section 415(b) of the Code at the Participant's
                           social security retirement age using adjustment
                           factors that are consistent with the factors used to
                           reduce old-age insurance benefits under the Social
                           Security Act. Pursuant to Q&A-5 of

                                       36

<PAGE>

                           Notice 87-21, 1987-1 C.B. 458, the dollar limitation
                           under Section 415(b) of the Code at the Participant's
                           Social Security Retirement Age is reduced by 5/9 of 1
                           percent for each of the first 36 months by which
                           benefits commence before the month in which the
                           Participant's social security retirement age is
                           attained and by 5/12 of 1 percent for each additional
                           month.

                           If the age at which the benefit is payable is less
                           than 62, the age-adjusted dollar limit is determined
                           by reducing the age-adjusted dollar limit at age 62
                           on an actuarially equivalent basis. In general,
                           Sections 415(b)(2)(E)(i) and (v) of the Code require
                           that the reduced age-adjusted dollar limit be the
                           lesser of the equivalent amount computed using the
                           plan rate and plan mortality table (or plan tabular
                           factor) used for actuarial equivalence for early
                           retirement benefits under Supplement A - Section A.1
                           and the amount computed using 5 percent interest and
                           the applicable mortality table under Revenue Ruling
                           95-6, 1995-1, C.B. 80, (used to the extent described
                           in Q&A-6 of Revenue Ruling 98-1, 1998-1 C.B. 249,
                           which provides that for purposes of adjusting any
                           limitation under Sections 415(b)(2)(C) or (D) of the
                           Code that, to the extent a forfeiture does not occur
                           upon death, the mortality decrement may be ignored
                           prior to age 62 and must be ignored after social
                           security retirement age).

                           If the age at which the benefit is payable is greater
                           than the Participant's social security retirement
                           age, the age-adjusted dollar limit is determined by
                           increasing the dollar limitation under Section 415(b)
                           of the Code at the Participant's social security
                           retirement age on an actuarially equivalent basis. In
                           general, Sections 415(b)(2)(E)(i) and (v) of the Code
                           require that the increased age-adjusted dollar limit
                           be the lesser of the equivalent amount computed using
                           the Plan rate and the Plan mortality table (or Plan
                           tabular factor) used for actuarial equivalence for
                           late retirement benefits under Supplement A - Section
                           A.1 and the equivalent amount computed using 5
                           percent interest and the applicable mortality table
                           (used to the extent described in Q&A-6 of Revenue
                           Ruling 98-1, 1998-1 C.B. 249, as described in the
                           prior paragraph).

                           Step 3:   Determine the Participant's compensation
                           limitation under Section 415(b) of the Code. This
                           limitation is equal to the Participant's
                           compensation averaged over the consecutive
                           three-year period producing the highest average, as
                           provided in Section 415(b)(3) of the Code.

                           The Plan does not satisfy the limitations under
                           Section 415(b) of the Code unless the equivalent
                           annual benefit determined in Step 1 above is not
                           greater than the lesser of the age-adjusted dollar
                           limit determined in Step 2 above and the compensation
                           limitation under Section 415(b) of the Code
                           determined in Step 3 above.

                           (iii)    For purposes of applying Section
                           415(b)(2)(B) of the Code to a benefit that is payable
                           in a form subject to Section 417(e)(3) of the Code,
                           the determination of the equivalent annual benefit is
                           the same as in Step 1 of subsection (2) above, except
                           that, under Section 415(b)(2)(E)(ii) of the Code, the
                           applicable interest rate under Q&A-4 of Revenue
                           Ruling 98-1, 1998-1 C.B. 249, (i.e., "GATT interest
                           rates") is substituted for the 5 percent interest
                           rate under Section 415(b)(2)(E)(i) of the Code. Thus,
                           the

                                       37

<PAGE>

                           equivalent annual benefit must be the greater of the
                           equivalent annual benefit computed using the Plan
                           rate and Plan mortality table (or Plan tabular
                           factor) under Supplement A - Section A.1 and the
                           equivalent annual benefit computed using the
                           applicable interest rate and the applicable mortality
                           table").

         (C)      Minimum Pension

                  If the Participant's yearly Pension is not more than $10,000,
                  as adjusted in accordance with paragraph (B)(2) above, the
                  Participant may receive such $10,000 without regard to the
                  other secondary limitations, provided the Participant did not
                  at any time participate in a defined contribution plan
                  maintained by the Employer.

         (D)      Cost-of-Living Limitation Adjustment

                  Effective January 1, 1988, and each January 1 thereafter, the
                  $90,000 limitation of paragraph (A) above will be
                  automatically adjusted to the new dollar limitation determined
                  by the Commissioner of Internal Revenue for that calendar
                  year. The new limitation will apply to limitation years in
                  which the dollar limitation is changed.

         (E)      Participation in More Than One Defined Benefit Plan

                  If the Participant participated in more than one defined
                  benefit plan maintained by the Employer or an Affiliated
                  Employer regardless of whether any such plans are terminated,
                  the statutory maximum retirement benefit shall be determined
                  as if there were just one defined benefit plan, but the
                  retirement income so determined will apply on a pro rata basis
                  between, or among, such plans.

         (F)      Annual Additions

                  The sum of:

                  (1)      amounts defined as annual additions under applicable
                           defined contribution plans or the Employer or an
                           Affiliated Employer; and

                  (2)      the Participant's non-deductible contributions to
                           this and all other defined benefit plans maintained
                           by the Employer or an Affiliated Employer, regardless
                           of whether any such plan is terminated; and

                  (3)      amounts allocated in Plan Years commencing after
                           March 31, 1984 to an individual medical account, as
                           defined in Section 415(l)(2) of the Code, which is a
                           part of this or any other defined benefit plan
                           maintained by the Employer or an Affiliated Employer;
                           and

                  (4)      amounts derived from contributions paid or accrued
                           attributable to post-retirement medical benefits
                           allocated to the separate account of a key Associate,
                           as defined in Section 419A(d)(3) of the Code, under a
                           welfare benefit fund, as defined in Section 419(e) of
                           the Code, maintained by the Employer or an Affiliated
                           Employer.

         (G)      Participation in one or more Defined Contribution Plans

                                       38

<PAGE>

                  This Section is effective for Plan Years beginning before
                  January 1, 2000. If any Participant is or has been a
                  Participant in a defined contribution plan maintained by the
                  Employer regardless of whether any such plans are terminated,
                  the Participant may not have contributions made to the defined
                  contribution plan(s) which would cause the sum of the defined
                  benefit plan fraction and the defined contribution plan
                  fraction to exceed l.0. This shall be accomplished by reducing
                  the Pension otherwise determined under this Plan to the extent
                  necessary to preclude such excess.

                  (1)      Defined Benefit Fraction

                           A fraction, the numerator of which is the sum of the
                           Participant's projected annual benefit under each
                           defined benefit plan maintained by the Employer or an
                           Affiliated Employer regardless of whether any such
                           plans are terminated, and the denominator of which is
                           the lesser of 125% of the dollar limitation in effect
                           for the limitation year under Section 415(b)(1)(A) of
                           the Code or 140% of the "highest average
                           compensation."

                           Notwithstanding the above, if the Participant was a
                           Participant in one or more defined benefit plans
                           maintained by the Employer which were in existence on
                           July 1, 1982, the denominator of this fraction will
                           not be less than 125% of the sum of the annual
                           benefits under such plans which the Participant had
                           accrued as of December 31, 1982. The preceding
                           sentence applies only if the defined benefit plans
                           individually and in the aggregate satisfied the
                           requirements of Section 415 of the Code as in effect
                           at the end of the 1982 Limitation Year.

                           The projected annual benefit shall be the yearly
                           Pension to which a Participant is entitled under the
                           terms of each applicable defined benefit plan
                           assuming continued employment until normal retirement
                           age, or current age if later, and Compensation and
                           all other relevant factors used to determine benefits
                           under the plan remaining constant until normal
                           retirement age, or current age if later.

                  (2)      Defined Contribution Fraction

                           A fraction, the numerator of which is the sum of the
                           Annual Additions to the Participant's account under
                           all the defined contribution plans maintained by the
                           Employer or an Affiliated Employer regardless of
                           whether any such plans are terminated for the current
                           and all prior limitation years and the denominator of
                           which is the sum of the maximum aggregate amounts for
                           the current and all prior Limitation Years of service
                           with the Employer (regardless of whether a defined
                           contribution plan was maintained by the Employer).
                           The maximum aggregate amount in any limitation year
                           is the lesser of 125% of the dollar limitation in
                           effect under Section 415(c)(1)(A) of the Code or 140%
                           multiplied by 25% of the Participant's Compensation
                           for such year.

                           If the Associate was a Participant in one or more
                           defined contribution plans maintained by the Employer
                           which were in existence on July 1, 1982, the
                           numerator of this fraction will be adjusted if the
                           sum of this fraction and the defined benefit fraction
                           would otherwise exceed 1.0 under the terms of this
                           Plan. Under the adjustment, an amount equal to the
                           product of (1) the

                                       39

<PAGE>

                           excess of the sum of the fractions over 1.0
                           multiplied by (2) the denominator of this fraction,
                           will be permanently subtracted from the numerator of
                           this fraction. The adjustment is calculated using the
                           fractions as they would be computed as of the later
                           of the end of the last Limitation Year beginning
                           before January 1, 1983 or June 30, 1983. This
                           adjustment also will be made if, at the end of the
                           last limitation year beginning before January 1,
                           1984, the sum of the fractions exceeds 1.0 because of
                           accruals or additions that were made before the
                           limitations of this Article became effective to any
                           Plan of the Employer in existence on July 1, 1982.

         (H)      Remuneration

                  For the purposes of this Section 13.1 and the following
                  Section 13.2, a Participant's remuneration means his earned
                  income, wages, salaries, and fees for professional services,
                  and other amounts received for personal services actually
                  rendered in the course of employment with the employer
                  maintaining the plan determined for purposes of Section 13.1
                  before any pre-tax contributions under a "qualified cash or
                  deferred arrangement" (as defined under Section 401(k) of the
                  Code and its applicable regulations) or under a "cafeteria
                  plan" (as defined under Section 125 of the Code and its
                  applicable regulations) or that are a "qualified
                  transportation" fringe benefit (as defined under Section
                  132(f) of the Code) (including, but not limited to,
                  commissions paid salesmen, compensation for services on the
                  basis of a percentage of profits, commissions on insurance
                  premiums, tips and bonuses [except as excluded below]), and
                  excluding the following:

                  (1)      Employer contributions to a plan of deferred
                           compensation which are not included in the
                           Associate's gross income for the taxable year in
                           which contributed or employer contributions under a
                           simplified Associate pension plan to the extent such
                           contributions are deductible by the Associate, or any
                           distributions from a plan of deferred compensation;

                  (2)      Amounts realized from the exercise of a nonqualified
                           stock option, or when restricted stock (or property)
                           held by the Associate either becomes freely
                           transferable or is no longer subject to a substantial
                           risk or forfeiture;

                  (3)      Amounts realized from the sale, exchange or other
                           disposition of stock acquired under a qualified stock
                           option;

                  (4)      Other amounts which received special tax benefits, or
                           contributions made by the employer (whether or not
                           under a salary reduction agreement) towards the
                           purchase of an annuity described in section 403(b) of
                           the Code (whether or not the amounts are actually
                           excludable from the gross income of the Associate).

                           Remuneration for any limitation year is the
                           remuneration actually paid or includible in gross
                           income during such year.

         (I)      Discrepancy With Code

                  The limitations set forth in this Section 13.1 are intended to
                  comply with the provisions of Section 415 of the Code and any
                  regulations issued pursuant thereto, so that the maximum
                  Pension shall be exactly equal to the maximum amount

                                       40

<PAGE>

                  allowed under said Section 415, and any regulations issued
                  pursuant thereto. Should there be any discrepancy between the
                  provisions of this Section 13.1 and those of said Section 415
                  and any regulations issued pursuant thereto, such discrepancy
                  shall be resolved by giving full effect to the provisions of
                  said Section 415 and any regulations issued pursuant thereto.

13.2     TOP-HEAVY PROVISIONS

         As required by TEFRA, the following provisions shall become effective
         in any Plan Year subsequent to the 1983 Plan Year in which this Plan is
         a Top-Heavy Plan.

         The provisions of this Section 13.2 will apply to both active and
         frozen plans and, with the exception of the minimum Pension and minimum
         Vesting Percentage provisions, will apply to any terminated plans which
         were maintained at any time during the five years ending on the
         Determination Date.

         (A)      Top-heavy Plan Status. This Plan will be a Top-Heavy Plan as
                  of a Determination Date if:

                  (1)      this Plan is not a Plan that is required to be
                           aggregated and the ratio of the Present Value of
                           Accrued Benefits of Participants who are Key
                           Employees to the Present Value of the Accrued
                           Benefits of all Participants in the Plan exceeds
                           6/10; or

                  (2)      this Plan is part of a Required Aggregation Group and
                           the ratio of the Present Value of Accrued Benefits of
                           Participants who are Key Employees to the Present
                           Value of Accrued Benefits of all Participants in the
                           Required Aggregation Group exceeds 6/10.

                  Notwithstanding anything in (A)(2) to the contrary, the
                  determination of whether this Plan is a Top-Heavy Plan of a
                  Determination Date shall be made after aggregating all Plans
                  in the Required Aggregation Group, and after aggregating any
                  other Plans which are in the Permissive Aggregation Group, if
                  such permissive aggregation thereby eliminates the Top-Heavy
                  status of the Required Aggregation Group. Regardless of the
                  results of any aggregation, a Plan that was not part of the
                  Required Aggregation Group will not be top-heavy.

         (B)      Super Top-Heavy Plan. This Plan will be a Super Top-Heavy Plan
                  for a given Plan Year in which the ratio defined in A, above,
                  exceeds 9/10.

         (C)      Key Employee. The term Key Employee means any Associate or
                  former Associate (including deceased Associates) of the
                  Employer who at any time during the Plan Year or the four
                  preceding Plan Years is:

                  (1)      An officer of the Employer, but in no event if there
                           are more than 500 Associates, shall more than 50
                           Associates or, if there are less than 500 Associates,
                           shall the greater of three Associates or 10% of all
                           Associates, be taken into account under this
                           subsection as Key Employees;

                           In no event shall an officer whose annual
                           Compensation, as defined in Section 13.1(I) of this
                           Plan, is less than 50% of the limitation in effect
                           under

                                       41

<PAGE>

                           Section 415(b)(1)(A) of the Code as adjusted from
                           time to time, be a Key Employee for any such Plan
                           Year.

                  (2)      One of the ten Associates owning (or considered as
                           owning within the meaning of Section 318 of the Code)
                           the largest interest in the Employer, or, if the
                           Employer is other than a corporation, one of the ten
                           Associates owning the largest interest of the capital
                           or profits interest in the Employer. If two or more
                           Associates own equal interests in the Employer the
                           ranking of ownership share will be in descending
                           order of the Associates' Earnings;

                           In no event shall an Associate who meets the
                           requirements of the prior paragraph but whose
                           interest in the Employer is not greater than 1/2% or
                           whose Compensation is less than the dollar limitation
                           in effect under Section 415(c)(i)(A) of the Code, as
                           adjusted from time to time, be a Key Employee.

                  (3)      Associates owning (or considered as owning within the
                           meaning of Section 318 of the Code, as modified by
                           Section 416(i)(1)(B)(i) of the Code) 5% or more of
                           the outstanding stock of the Employer or stock
                           possessing 5% or more of the total combined voting
                           power of all stock of the Employer, or, if the
                           Employer is other than a corporation, any Associate
                           owning 5% or more of the capital or profits interest
                           in the Employer;

                  (4)      Associates owning (or considered as owning within the
                           meaning of Section 318 of the Code, as modified by
                           Section 416(i)(1)(B)(ii) of the Code) 1% or more of
                           the outstanding stock of the Employer or stock
                           possessing 1% or more of the total combined voting
                           power of all stock of the Employer and whose annual
                           Compensation from the Employer is $150,000 or more,
                           or, if the Employer is other than a corporation, any
                           Associate owning 1% or more of the capital or profits
                           interest in the Employer, and whose annual
                           Compensation from the Employer is $150,000 or more;

                  The beneficiary of any deceased Associate who was a Key
                  Employee shall be considered a Key Employee for the same
                  period as the deceased Associate would have been so
                  considered.

         (D)      Non-Key Employee. A Non-Key Employee means any Associate who
                  is not a Key Employee. Any Associate who previously was a Key
                  Employee and is now a Non-Key Employee will be excluded
                  entirely from the calculation done to determine Top-heavy
                  Status.

         (E)      Employer. For purposes of Section 13.2 the Employer is the
                  Employer who adopts this Plan, and any Affiliated Employer.

         (F)      Accrued Benefit. The Accrued Benefit is the yearly Pension
                  commencing on the Participant's Normal Retirement Date
                  determined in accordance with Section 4 as if the
                  Participant's Termination of Employment had occurred as of the
                  most recent valuation date prior to the Determination Date.
                  For purposes of Section 13.2 the Accrued Benefit will not
                  include the accrued benefit attributable to any Associate who
                  has not performed an Hour of Service during the five-year
                  period ending on the Determination Date, but will include any
                  distribution made to a Key Employee or Non-Key Employee during
                  the five-year period ending on the Determination Date.

                                       42

<PAGE>

                  The extent to which rollover contributions and transfers are
                  to be taken into account in determining the Accrued Benefit
                  will be determined in accordance with Section 416(g)(4)(A) of
                  the Code and IRS Regulation 1.416-1, T-32.

         (G)      Present Value. Present Value shall be based on the actuarial
                  assumptions specified in Supplement A - Section A.1. If this
                  Plan is part of a Required or Permissive Aggregation Group,
                  the mortality and interest assumptions shall be the same for
                  all plans within the Group. In determining Present Value,
                  proportional subsidies shall not be taken into account, but
                  nonproportional subsidies shall be taken into account. The
                  Present Value will be determined as of the valuation date
                  occurring during the twelve-month period ending on the
                  Determination Date. The valuation date is the date used in
                  computing Plan costs for minimum funding.

         (H)      Required Aggregation Group. The term Required Aggregation
                  Group means all of the plans of the Employer which cover a Key
                  Employee during the five-year period ending on the relevant
                  Determination Date, or those plans which during said five-year
                  period were aggregated, so that a plan which covers a Key
                  Employee would satisfy the requirements of Sections 401(a)(4)
                  or 410 of the Code.

         (I)      Permissive Aggregation Group. The term Permissive Aggregation
                  Group means all of the plans of the Employer which are
                  included in the Required Aggregation Group plus any plans of
                  the Employer which provide comparable benefits to the benefits
                  provided by plans in the Required Aggregation Group and are
                  not included in the Required Aggregation Group, but which
                  satisfy the requirements of Sections 401(a)(4) and 410 of the
                  Code when considered together with the Required Aggregation
                  Group.

         (J)      Determination Date. The term Determination Date means, with
                  respect to a Plan Year, the last day of the preceding Plan
                  Year, or, in the case of the first Plan Year of a plan, the
                  last day of the first Plan Year.

         (K)      Minimum Pension Benefit. The yearly amount of Pension as
                  described in Section 4.1 for a Participant who is a Non-Key
                  Employee, shall not be less than the Participant's average
                  yearly Compensation, during the Participant's five
                  highest-paid consecutive calendar years, multiplied by the
                  lesser of (1) 2%, multiplied by the number of the
                  Participant's years of Service after December 31, 1983 in
                  which this Plan is a Top-Heavy Plan, or (2) 20%. This minimum
                  amount is assumed to be payable on a single life annuity
                  basis, commencing on his Normal Retirement Date.

                  If a Participant who is a Non-Key Employee is covered under
                  this Plan and a defined contribution plan maintained by the
                  Employer, the yearly amount of Pension, for such Participant,
                  determined in the preceding paragraph shall not be applicable
                  to such Participant if the minimum contribution under such
                  defined contribution plan is equal to 5% of the Participant's
                  Compensation (or is equal to 7 1/2% of the Participant's
                  Compensation if the Employer uses a factor of 1.25 in
                  computing the denominators of the defined benefit and defined
                  contribution fractions under Section 415(e) of the Code).

                  If this Plan is not Super Top-Heavy, such 2% benefit accrual
                  shall be increased to 3% and such 20% by one percentage point
                  for any year in which the Employer also maintains a defined
                  contribution plan if such increase is necessary to avoid

                                       43

<PAGE>

                  the application of Section 416(h)(1) of the Code relating to
                  special adjustments to Section 415 of the Code limitations for
                  plans which are Top-Heavy, if the adjusted limitations of said
                  Section 416(h)(1) would otherwise be exceeded if such minimum
                  contribution were not so increased.

                  If the minimum Pension payable on a basis other than a single
                  life annuity or on a date other than Normal Retirement Date,
                  it shall be adjusted to be the actuarial equivalent of the
                  single life annuity form payable at Normal Retirement Date.

         (L)      Minimum Vesting Percentage. Notwithstanding any other Vesting
                  Percentage provision of this Plan to the contrary unless it
                  would produce a greater Vesting Percentage, the Vesting
                  Percentage that is applied to the Participant's Accrued
                  Benefit, on and after this Plan becomes a Top-Heavy Plan,
                  shall, in accordance with the further terms of this Plan, be
                  as determined below:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
      YEARS OF SERVICE                                  PERCENTAGE
--------------------------------------------------------------------------------
<S>                                                     <C>
If he has less than 2 years                                  0%
     If he has 2 years                                      20%
     If he has 3 years                                      40%
     If he has 4 years                                      60%
     If he has 5 years                                     100%
--------------------------------------------------------------------------------
</TABLE>

         (M)      Modification to Section 13.1 When a Plan is a Top-Heavy Plan.
                  For any Limitation Year in which the Plan is determined to be
                  a Top-Heavy Plan, the definitions of the "Defined Benefit
                  Fraction" and "Defined Contribution Fraction" shall be changed
                  by substituting in the denominator of each Fraction "100%" for
                  "125%".

                                       44

<PAGE>
I, Diane T. Nauer, Secretary of TruServ Corporation, hereby certify that the
attached document is a correct Copy of the TruServ Corporation Defined Lump Sum
Pension Plan, as amended and restated as of January 1, 1998.

         Dated this 28th day of February, 2002.

/s/ DIANE T. NAUER
-----------------------------
Secretary as Aforesaid
(Corporate Seal)

                                       45

<PAGE>

                                  SUPPLEMENT A

                              ACTUARIAL ASSUMPTIONS

A.1.     LUMP SUM DISTRIBUTIONS

         For purposes of determining "Actuarially Equivalent" or "Actuarial
         Equivalent" lump sum distributions under the Plan, the following
         actuarial assumptions are used:

         (a)      Rate of Interest: The rate in use during a Plan Year shall be
                  the annual rate of interest on 30-year Treasury securities for
                  the month of November immediately preceding such Plan Year as
                  specified by the Commissioner for such month in the Internal
                  Revenue Bulletin but not greater than 8.0%.

         (b)      Mortality: The mortality table prescribed by the Secretary of
                  the Treasury in revenue rulings, notices, or other guidance
                  pursuant to Section 807(d)(5)(A) of the Code that has been
                  published in the Internal Revenue Bulletin as of the date such
                  lump sum distribution is being determined.

A.2.     TYPE OF ANNUITY

         For purposes of determining "Actuarially Equivalent" or "Actuarial
         Equivalent" benefits under the Plan, the following factors shall be
         used in determining benefits that are actuarially equivalent to the
         normal single annuity for the life of the Participant form of benefit
         provided under the Plan (in no event will a factor exceed one):

         (a)      50% Qualified Joint and Survivor Annuity: 90%, plus (or minus)
                  0.4 of 1% for each full year that the Participant is younger
                  (or older) than the Participant's spouse; except that, if the
                  Participant's age at the Annuity Starting Date is less than 55
                  years, "94%" shall be substituted for "90%." In no event will
                  this factor exceed 100%.

         (b)      100% Qualified Joint and Survivor Annuity: 81%, plus (or
                  minus) 0.7 of 1% for each full year that the Participant is
                  younger (or older) than the Participant's spouse; except that,
                  if the Participant's age at the Annuity Starting Date is less
                  than 55 years, "89%" shall be substituted for "81%." In no
                  event will this factor exceed 100%.

         (c)      Life and 10-Year Certain Annuity: 94%; except that, if the
                  Participant's age at the Annuity Starting Date is less than 55
                  years, "98%" shall be substituted for "94%."

                                       46

<PAGE>

                                  SUPPLEMENT B

                    MERGER OF NORTHERN WHOLESALE HARDWARE CO.
                    RETIREMENT PLAN WITH AND INTO PRIOR PLAN

B.1.     MERGER

         Effective as of January 1, 1990, the Northern Wholesale Hardware Co.
         Retirement Plan ("Northern Plan") was amended, continued and merged
         with the Cotter & Company Pension Plan ("Prior Plan").

B.2.     PARTICIPATION

         On January 1, 1990, each former participant in the Northern Plan
         ("Northern Participant") became a Participant in the Prior Plan and
         will have benefits determined and paid in accordance with this Plan.

B.3.     PRESERVATION OF ACCRUED BENEFIT

         Notwithstanding any provisions of the Plan to the contrary, in no event
         shall a Northern Participant's accrued benefit under the Prior Plan as
         in effect on January 1, 1990 be less than the accrued earned by such
         Northern Participant under the Northern Plan as at December 31, 1989.

B.4.     YEARS OF SERVICE

         Each Northern Participant will be credited with the Years of Service
         before January 1, 1990 that such Northern Participant had earned under
         the Northern Plan as in effect on December 31, 1989 for participation,
         vesting and accrued benefit purposes.

B.5.     RECORDS

         The Committee shall maintain such records as it deems necessary and
         desirable to demonstrate the amount of each Northern Participant's
         benefits and Years of Service under Paragraphs B.3 and B.4 above
         pursuant to applicable Internal Revenue Service regulations.

B.6.     EFFECTIVE DATE

         The effective date of this Supplement B is January 1, 1990.

                                       47

<PAGE>

                                  SUPPLEMENT C

                      SERVISTAR COAST TO COAST CORPORATION
                        RETIREMENT INCOME PLAN PROVISIONS

The following provisions from the SERVISTAR Plan are included herein (with
slight modification if appropriate) to assist the administration of this Plan as
it requires inclusion of the SERVISTAR Plan provisions or the calculation of the
Participant's Accrued Benefit under the SERVISTAR Plan:

Certain defined terms from the SERVISTAR Plan are referred to in this Supplement
C, but are not reproduced in the interest of conciseness. The terms - Accrued
Benefit, Code, Contingent Pensioner, Credited Interest, Employee, Employer,
Excess Benefit Plan, Long-Term Disability, Normal Retirement Date, Participant
Pension, Retirement Date, Termination of Employment - should not need further
defining and are intended to continue their meaning from the SERVISTAR Plan. The
term "Plan" was used in the SERVISTAR Plan to refer to itself, but will be used
herein to refer to this Plan. Any reference to "Plan" from the SERVISTAR Plan
document is changed herein to "SERVISTAR Plan" where appropriate. Any use of the
term "Plan Year" in Supplement C will refer to the SERVISTAR Plan Year (July 1
to June 30) unless otherwise indicated. The method used to recast SERVISTAR Plan
"Earnings" for this Plan is described in Plan Section 2.1(K). Vesting Percentage
as used herein is now defined in Section 2.1(NN) of the Plan.

SERVISTAR PLAN SECTION REFERENCES HAVE BEEN CHANGED TO SUPPLEMENT C SECTIONS IF
INCLUDED IN THIS SUPPLEMENT C, OTHERWISE SERVISTAR PLAN REFERENCES HAVE BEEN
MAINTAINED.

The provisions of this Supplement C are subject to Section 4.6 of the Plan which
provides that SERVISTAR Plan service, credited service, earnings and cash
balance credits shall cease on January 2, 1998.

In the event of a conflict in the terms of the SERVISTAR Plan as included in
Supplement C and the SERIVSTAR Plan itself, the terms of the SERVISTAR Plan
shall control.

C.1      EARNINGS

         Includes basic salary or wages paid to an Employee for services
         rendered to the Employer, determined prior to any pre-tax contributions
         under a "qualified cash or deferred arrangement" (as defined under
         Section 401(k) of the Code and its applicable regulations) under a
         "cafeteria plan" (as defined under Section 125 of the Code and its
         applicable regulations), or that are a "qualified transportation"
         fringe benefit (as defined under Section 132(f) of the Code), including
         executive bonuses, pay for which no duties are performed due to
         vacation pay, holiday pay, sick pay, and any other authorized policy
         pay, safe driver awards and perfect attendance awards (effective July
         1, 1994), gain sharing (effective July 1, 1995) and overtime payments
         received from the Employer during each Plan Year, excluding Employer
         contributions to Social Security, contributions to this or through any
         other profit sharing or retirement plan or program, capital income
         compensation or the value of any other fringe benefits (including any
         long-term disability payments) provided at the expense of the Employer
         which are not specifically included herein.

         If, in a Plan Year, a Participant has lower Earnings than he had the
         preceding Plan Year because he was paid either Worker's Compensation or
         Long-Term Disability, or both, Earnings will be considered to be his
         Earnings received in the preceding Plan Year. These higher Earnings
         calculations will continue for the period of time that benefits are

                                       48

<PAGE>

         paid under either Worker's Compensation or Long-Term Disability, or
         both. Notwithstanding the immediately preceding two sentences, for Plan
         Years beginning on or after July 1, 1996, if a Participant is disabled
         in any Plan Year, only the Participant's Earnings in such Plan Year
         shall be taken into account for any purpose under the SERVISTAR Plan.

         Notwithstanding any SERVISTAR Plan provision to the contrary, Earnings
         for any Participant, who transferred employment from Coast to Coast
         Corporation to SERVISTAR Corporation prior to July 1, 1996, shall only
         include such remuneration paid by SERVISTAR Corporation.

C.2      HOUR OF SERVICE

         (1)      each hour for which the Employee is either directly or
                  indirectly paid by the Employer or Affiliated Employer or
                  entitled to payment,

                  (a)      for duties performed during the applicable
                           computation period, and

                  (b)      for reasons other than the performance of duties
                           (such as but not limited to paid sick leave, paid
                           vacation time), irrespective of whether the
                           employment relationship has terminated, and

         (2)      any additional hours as normally would have been credited to
                  the Employee had he worked on a nonovertime basis during the
                  following periods for the Employer or an Affiliated Employer:

                  (a)      temporary layoff,

                  (b)      leave of absence of up to two years,  as authorized
                           by the Employer pursuant to the Employer's
                           established leave policy, and

                  (c)      military leave while the Employee's reemployment
                           rights are protected by law, provided that any such
                           periods qualify as Service in accordance with the
                           terms of the Service definition, and

         (3)      each hour for which back pay is either awarded or agreed to by
                  the Employer or an Affiliated Employer,  irrespective
                  of mitigation of damages.

         Hours of Service shall be credited to the Employee for the computation
         period(s): (1) in which the duties are performed or payments are due,
         (2) in which payments would have been due during a covered unpaid leave
         of absence or layoff, or (3) to which the back pay award or agreement
         pertains. The same Hours of Service shall not be credited under more
         than one paragraph of this definition.

         In no event will Hours of Service be allowed and computed in a manner
         less liberal than the manner described in the Department of Labor
         Regulation 2530.200b-2.

C.3      SERVISTAR PLAN PRIOR FORMULA

         With respect to each Participant who retires or terminates on or after
         July 1, 1996, the yearly amount of basic Pension payable under the Plan
         is equal to the greater of (A) or (B) plus (C):

                                       49

<PAGE>

         (A)      Is (i) less (ii) where:

                  (i)      is 2% of a Participant's Final Earnings multiplied by
                           the years and fraction of Credited Service, up to a
                           maximum of 25, 1/2 of 1% of a Participant's Final
                           Earnings multiplied by the years and fraction of
                           Credited Service over 25 years, and

                  (ii)     is 3/4 of 1% of the Participant's Offset Earnings
                           multiplied by the years and fraction of Credited
                           Service, up to a maximum of 25, plus 1/4 of 1% of (a)
                           the Participant's Offset Earnings, or (b) effective
                           July 1, 1994 the Participant's Final Earnings (if
                           smaller), multiplied by the years and fractions of
                           Credited Service over 25 years, provided that this
                           offset will not be applied until the first of the
                           month following or coincident with the Participant's
                           attainment of Social Security Retirement Age.

                  Notwithstanding any Plan provision to the contrary, for
                  purposes of calculating the benefit under Supplement C Section
                  C.3(A)(i) and (ii), Credited Service shall not include any
                  period after June 30, 1996.

         (B)      Is the amount the Participant would have received under the
                  terms of Section 4.1(B) of the SERVISTAR Plan (referring to
                  the SERVISTAR Plan as in effect on June 30, 1983) assuming
                  level Earnings from that time forward, using Credited Service
                  through June 30, 1994 only.

         (C)      With respect to each Participant who contributed to the
                  SERVISTAR Plan in accordance with its terms prior to July 1,
                  1974, the Employee Accrued Benefit, unless:

                  (1)      if a cash refund of the Participant's Contributions
                           with Credited Interest is elected on or after July 1,
                           1994, the Employee Accrued Benefit is not payable
                           under this paragraph (C);

                  (2)      if a refund of the Participant's contributions with
                           Credited Interest is elected prior to January 1,
                           1994, the benefit calculated under this paragraph (C)
                           is equal to the excess, if any, of the amount
                           determined in paragraph (a) over paragraph (b),
                           where:

                           (a)      is a yearly amount beginning on the
                                    Participant's Normal Retirement Date
                                    determined on an equivalent Value (using the
                                    monthly interest rate in effect when the
                                    refund is paid instead of the yearly rate)
                                    to the cash refund of the Participant's
                                    contributions; and

                           (b)      is the Employee Accrued Benefit;

         provided, however, that the yearly benefit under Supplement C Section
         C.3 of a Participant who is affected by the imposition of the $150,000
         limitation on Earnings shall be equal to the greater of (a) the
         Participant's benefit calculated under the provisions of Supplement C
         Section C.3 as determined with regard to such imposition, or (b) the
         benefit equal to the Participant's Accrued Benefit determined as of the
         last day of the Plan Year beginning in 1993, plus the Participant's
         Accrued Benefit based solely on Credited Service after such date under
         the provisions of Supplement C Section C.3 as determined with regard to
         such imposition. For purposes of the SERVISTAR Plan, the Accrued
         Benefit

                                       50

<PAGE>

         determined as of the last day of the Plan Year beginning in 1993 shall
         be equal to the greater of (c) the Participant's Accrued Benefit
         determined as of the last day of the Plan Year beginning in 1993 as
         determined with regard to the $200,000 limitation on Earnings, or (d)
         the Participant's Accrued Benefit determined as of the last day of the
         Plan Year beginning in 1988, plus the Participant's Accrued Benefit
         based solely on Credited Service after such date under the provisions
         of the SERVISTAR Plan as determined with regard to such limitation.

         In no event will the Pension determined for a Participant on his
         Retirement Date to be less than the highest amount of Pension the
         Participant would have received in the same form of payment had his
         Credited Service ceased at any time prior to his Retirement Date when
         he was eligible to receive an immediate Pension.

         In no event will any amendment to the SERVISTAR Plan reduce the Accrued
         Benefit to the effective date of such amendment including, but not
         limited to, any Pension payable as a result of the delayed application
         of the offset in Supplement C Section C.3.(A)(ii).

         In addition, effective July 1, 1988, in no event will the annuities
         purchased for Participants in the Employer's Excess Benefit Plan plus
         retirement income payable under the Plan (as limited by the maximums
         outlined in Section 13.1 of the Plan) exceed the total retirement
         income as calculated in this Supplement C Section C.3 and the Cash
         Balance Formula under Section 4.4 of the SERVISTAR Plan (assuming the
         maximums in Section 13.1 of the Plan had not been in effect). Any
         excess will be subtracted from the yearly amount of retirement income
         payable under the Plan after reduction to comply with the maximums as
         outlined in Section 13.1 of the Plan. This provision will not reduce
         the amount of retirement income accrued under the SERVISTAR Plan as of
         July 1, 1988.

C.4      FINAL EARNINGS

         The highest average Earnings received in any five consecutive Plan
         Years ending on or before June 30, 1996, excluding any Plan Year in
         which the Credited Service is not granted under Supplement C Section
         C.5. Notwithstanding the foregoing, for the purposes of determining a
         Participant's Final Earnings, all Earnings received during the Plan
         Year starting January 1, 1976 and ending July 1, 1976 shall be
         annualized and counted as a full Plan Year's Earnings.

C.5      CREDITED SERVICE

         That portion of a Participant's Service which is included for purposes
         of determining the amount of his accrued Pension attributable to the
         Prior Formula. With respect to any employment period, a Participant's
         Credited Service shall include employment with the Employer
         corresponding with Service allowed except:

         (1)      Any Plan Year in which the Participant has less than 1,000
                  Hours of Service, except for the Plan Year commencing on
                  January 1, 1976, as determined in Supplement C Section C.6.

         (2)      Service prior to a break-in-service if the Participant
                  received a lump sum payment equal to the equivalent Value of
                  his vested accrued Pension at the time of his latest
                  termination.

                                       51

<PAGE>

         A Participant's Credited Service shall be counted in whole years and
         full months. In no event will a Participant receive Credited Service
         for a period that is considered a "break-in-service," as determined in
         the Service definition.

         Notwithstanding any Plan provision to the contrary, Credited Service
         shall not include any Service for periods after June 30, 1996.

C.6      SERVICE

         Shall be the aggregate number of years of employment with the Employer
         excluding any period or portion of any period as determined in
         accordance with the following rules. Service is used to determine an
         Employee's participation and vesting status, and effective for Plan
         Years beginning on or after July 1, 1996, Service also is used to
         determine the Participant's Plan Year Cash Balance Formula benefit
         credit under Section 4.4 of the SERVISTAR Plan.

         (1)      With respect to any employment periods prior to January 1,
                  1976, an Employee's last period of continuous employment
                  immediately prior to such date will be counted as Service.

         (2)      With respect to any employment periods on and after January 1,
                  1976 and before January 2, 1998:

                  (a)      If in any Plan Year an Employee has at least 1000
                           hours of Service,  he will be credited with one year
                           of Service.

                  (b)      If in any Plan Year an Employee has less than 1000
                           Hours of Service, no Service will be credited for
                           such Plan Year but a break-in service" will not be
                           deemed to have occurred.

                  (c)      If in any Plan Year an Employee has 500 or less Hours
                           of Service, no Service will be credited for such Plan
                           Year, and a "break-in-service" will be deemed to have
                           occurred.

                  Solely for purposes of determining whether a one year
                  break-in-service has occurred in a Plan Year, an Employee who
                  is absent from work for maternity or paternity reasons shall
                  receive credit for up to 501 Hours of Service which would
                  otherwise have been credited to such Employer but for such
                  absence, or in any case in which such hours cannot be
                  determined 8 Hours of Service per day of such absence. For
                  purposes of this paragraph, an absence from work for maternity
                  or paternity reasons means an absence:

                  (a)      by reason of the pregnancy of the Employee,

                  (b)      by reason of a birth of a child of the Employee,

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

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

                                       52

<PAGE>

                  The Hours of Service credited under this paragraph shall be
                  credited (a) in the Plan Year in which the absence begins if
                  the crediting is necessary to prevent a break-in-service in
                  that period, or (b) in all other cases, in the following Plan
                  Year.

         (3)      Service prior to a break-in-service which occurs before July
                  1, 1985 will be determined in accordance with the terms of the
                  SERVISTAR Plan as of the date the break-in-service occurred.

         (4)      If an Employee who has a break-in-service which occurs after
                  July 1, 1985 is later reemployed by the Employer,  the
                  following special rule shall apply:

                  Service prior to his most recent break-in-service shall be
                  counted along with any Service earned on or after the
                  Employee's reemployment date:

                  (a)      he was entitled to any vested Pension attributable
                           to Employer contributions in accordance with
                           Section 6 of the SERVISTAR Plan prior to his most
                           recent break-in-service, or

                  (b)      he was not entitled to any vested Pension
                           attributable to Employer contributions and the length
                           of his latest break-in-service did not equal or
                           exceed the greater of:

                           (i)      the Employee's aggregate number of years of
                                    prebreak Service; or

                           (ii)     5 years.

                  If a reemployed Employee fails to meet any of the tests
                  described in (a) or (b) above, any Service earned prior to his
                  most recent break-in-service shall be disregarded.

         (5)      Absence from employment shall be counted as Service if the
                  following circumstances apply:

                  (a)      temporary layoff,

                  (b)      subject to Section 2.1(L) of the SERVISTAR Plan, a
                           leave of absence of up to two years, as authorized by
                           the Employer pursuant to the Employer's established
                           leave policy,

                  (c)      military leave while the Employee's re-employment
                           rights are protected by law,

                  provided that the Employee returns to active employment with
                  the Employer when recalled (if temporary layoff), within 2
                  years (if leave of absence), or within 90 days after he
                  becomes eligible for release from active duty (if military
                  leave). Except as required by law for military leaves, if the
                  Employee does not return to active employment with the
                  Employer, his Service will be deemed to have ceased on the
                  date his absence commenced, and he will receive credit for 501
                  Hours of Service for each year of continuous absence.

                  The Employer's leave policy shall be applied in a uniform and
                  nondiscriminatory manner to all Employees under similar
                  circumstances.

                                       53

<PAGE>

         (6)      Employment with a predecessor company shall be counted as
                  Service to the extent required by ERISA.

         (7)      Transfers and Service with an Affiliated Employer or as a
                  Leased Employee

                  (a)      If an Employee (i) becomes employed by the Employer
                           in any capacity other than as an Employee, or (ii)
                           becomes employed by an Affiliated Employer, or (iii)
                           becomes a Leased Employee, he shall retain any
                           Credited Service he has under the SERVISTAR Plan.
                           Upon his later retirement or termination of
                           employment with the Employer or Affiliated Employer
                           (or upon benefit commencement in the case of a Leased
                           Employee), any benefits to which the Employee is
                           entitled under the SERVISTAR Plan shall be determined
                           under the SERVISTAR Plan provisions in effect on the
                           date he ceases to be an Employee, and only on the
                           basis of his Credited Service accrued while he was an
                           Employee.

                  (b)      Subject to the break-in-service provisions of this
                           Supplement C Section C.6, in the case of a person who
                           (i) was originally employed by the Employer in any
                           capacity other than as an Employee, or (ii) was
                           originally employed by an Affiliated Employer, or
                           (iii) was originally providing services to the
                           Employer as a Leased Employee, and thereafter becomes
                           an Employee, upon his later retirement or termination
                           of employment, the benefits payable under the
                           SERVISTAR Plan shall be computed under the SERVISTAR
                           Plan provisions in effect at that time, and only on
                           the basis of the Credited Service accrued while he is
                           an Employee.

                  (c)      Any Participant who was formerly employed with Coast
                           to Coast Stores, Inc. (as it was formerly known)
                           shall receive credit for service with Coast to Coast
                           Stores, Inc. prior to May 29, 1990 (as defined at
                           that time by Coast to Coast Stores, Inc.) for
                           purposes of calculating his Service for the Vested
                           Percentage.

                  (d)      For any Participant who is an Employee of the
                           Employer on July 1, 1996, Service, with respect to
                           Plan Years beginning on or after July 1, 1996, shall
                           include all service recognized under the Coast Profit
                           Sharing and Savings Plan for purposes of vesting
                           thereunder and credited to the Participant as of June
                           30, 1996.

C.7      OFFSET EARNINGS

         The average of the Employee's Earnings for the three consecutive Plan
         Years preceding the Plan Year in which the Employee's employment ceases
         or June 30, 1996, if earlier. In determining the Offset Earnings, any
         Earnings for a Plan Year in excess of the taxable wage base in effect
         under Section 230 of the Social Security Act shall be disregarded.
         Prior to June 30, 1994, Offset Earnings shall not include any Plan Year
         excluded from Credited Service under Supplement C Section C.5 and shall
         be the average of the Employee's Earnings for the three highest
         consecutive Plan Years ending with the Plan Year that the Employee's
         employment ceases. Notwithstanding the foregoing, Offset Earnings shall
         not exceed Covered Compensation for the Plan Year in which the
         Employee's employment ceases.

C.8      COVERED COMPENSATION

                                       54

<PAGE>

         For any Participant, the average of the taxable wage bases in effect
         under Section 230 of the Social Security Act for each year in the
         35-year period ending with the year in which the Participant attains
         his Social Security Retirement Age rounded to the nearest $600 or such
         other similar amount designated by the Internal Revenue Service. In
         determining a Participant's Covered Compensation for any Plan Year, the
         taxable wage base for the current Plan Year and any subsequent Plan
         Year shall be assumed to be the same as the taxable wage base in effect
         as of the beginning of the Plan Year for which the determination is
         made.

C.9      SOCIAL SECURITY RETIREMENT AGE

         Age 65 with respect to a Participant who was born before January 1,
         1938; age 66 with respect to a Participant who was born after December
         31, 1937 and before January 1, 1955; and age 67 with respect to a
         Participant who was born after December 31, 1954. For employees who
         terminate prior to July 1, 1994, Social Security Act means the age (in
         years and months) at which he or she qualifies for unreduced old age
         Social Security benefits.

C.10     NORMAL RETIREMENT DATE

         For benefit eligibility and vesting purposes, the day on which the
         Participant attains his 60th birthday. For all other purposes, the
         first day of the month coinciding with or next following the
         Participant's 60th birthday.

C.11     VALUE

         With respect to the refund of a Participant's contribution under
         Supplement C Section C.20 or the calculation of the monthly benefit
         derived from the Participant's contributions under Supplement C Section
         C.3(C)(2)(a), Value means the present value of a Participant's Pension
         based upon the Pension Benefit Guaranty Corporation's male annuity
         rates, factors, tables, assumptions and procedures for lump sum
         payments in effect for the month in which the refund is distributed.
         For all other Pensions based on the provisions of the SERVISTAR Plan:
         (i) for terminations occurring on or after July 1, 1996, Value shall
         mean the equivalent actuarial value of the Ten-Year Certain and Life
         form of payment as described in Supplement C Section C.17 computed on
         the basis of the Participant's age at distribution (or the
         Beneficiary's age, if the benefit is payable due to the Participant's
         death prior to commencement of benefits), the 1983 Group Annuity
         Mortality Table as set forth in Revenue Ruling 95-28 or such other
         mortality table as may be required by the Internal Revenue Service in
         any ruling superseding Revenue Ruling 95-28, with interest at the
         annual rate of interest on 30-Year Treasury securities. The rate of
         interest shall be fixed for each Plan Year and shall be determined by
         the rate of interest on 30-year Treasury securities set in April and
         published by the Board of Governors of the Federal Reserve System in
         May of the preceding Plan Year; and (ii) for terminations occurring
         before July 1, 1996, Value shall mean the equivalent actuarial value
         calculated as above but based on the Pension Benefit Guaranty
         Corporation's male annuity rates, factors, tables, assumptions and
         procedures for lump sum payments in effect at the beginning of the Plan
         Year in which the distribution is made.

                                       55

<PAGE>

C.12     ADJUSTMENT FACTOR

         The appropriate adjustment factor(s) which may be applicable to a
         Participant's Pension under the SERVISTAR Plan in accordance with the
         further terms of the SERVISTAR Plan.

         With respect to each Participant whose Retirement Date occurs after
         August 1, 1983, the appropriate Adjustment Factors are the applicable
         gender-neutral Adjustment Factors based on the 1971 GAM, 6% interest
         and the gender mix as shown in the Tables attached hereto and, with
         respect to Participants who are retiring after the Normal Retirement
         Date, the late retirement Adjustment Factors. Table A shall apply to
         Accrued Benefit as of June 30, 1994 in accordance with the procedures
         in Section 5.4 of the SERVISTAR Plan.

C.13     CASH BALANCE ACCOUNT

         Is the bookkeeping account established for eligible Participants who
         accrue Service under the SERVISTAR Plan after June 30, 1996 and who are
         entitled to a Cash Balance Benefit.

C.14     CASH BALANCE BENEFIT

         The benefit described in Cash Balance Formula under Section 4.4 of the
         SERVISTAR Plan derived from a Participant's Cash Balance Account, which
         if not distributed in a lump sum, will be the annual benefit which has
         a Value equal to the Participant's Cash Balance Account, adjusted as
         necessary to reflect the form of payment elected by the Participant by
         applying the Adjustment Factor.

C.15     AMOUNT OF EARLY PENSION REDUCTION

         During the period commencing July 1, 1994 and ending June 30, 1996, the
         yearly amount of early Pension payable to the Participant will be equal
         to the amount determined in Supplement C Section C.3, based on Credited
         Service to the date the Participant's employment ceases or June 30,
         1996, if earlier, and then reduced by 1/4 of 1%, for each month (3% per
         year) by which the early retirement date precedes the Normal Retirement
         Date up to 60 months early (5 years) and then 2/5 of 1% for each month
         (4.8% per year) thereafter.

C.16     NORMAL FORM OF PAYMENT - JOINT AND SURVIVOR

         If the Participant has a Spouse on his Retirement Date, the normal form
         of payment is the Joint and Survivor form. This form provides that,
         upon the Participant's death on or after his Retirement Date, 50% of
         the Pension payable to the Participant, will be paid to such Spouse, if
         surviving the Participant, for the balance of the Spouse's life.
         However, if the Participant dies within the ten-year period commencing
         on his Retirement Date, a Pension in the same amount as the Participant
         would have received will be paid until the end of such ten-year period.

         As an alternative to the 50% continuation described above, a
         Participant may elect that 66-2/3% or 100% of the benefit payable to
         him, be continued to his Spouse upon his death. Such election will not
         require Spousal Consent as provided in the Plan.

                                       56

<PAGE>

C.17     NORMAL FORM OF PAYMENT - TEN-YEARS CERTAIN

         If the Participant does not have a Spouse on his Retirement Date or if
         his Termination of Employment occurred prior to January 1, 1976, the
         normal form of payment is the Ten Years Certain form. This form
         provides that payments will be made to the Participant in an amount
         determined in accordance with Supplement C Section C.3 and the Cash
         Balance Formula under Section 4.4 of the SERVISTAR Plan during his
         lifetime and that, if his death occurs within the 10-year period
         commencing upon his Retirement Date, a Pension in the same amount as
         the Participant would have received will be paid to the Beneficiary
         designated by the Participant for the balance of the 10-year period.

C.18     CONTINGENT PENSION OPTION

         Subject to the right to elect the lump sum payment of the Cash Balance
         Benefit, the Participant who elects this option will receive a reduced
         Pension amount during his lifetime so that, after his death, a Pension
         in the same amount or 66-2/3% or 50% thereof (as specified in the
         election) will be paid for the life of the Contingent Pensioner
         designated by the Participant if surviving the Participant. However, if
         the Participant dies within the ten-year period commencing on his
         Retirement Date, payments will not be reduced to the elected percentage
         until the tenth anniversary of his Retirement Date.

         If the option is in effect on the Participant's Retirement Date, the
         amount of Pension payable to the Participant will be determined using
         the same procedures specified in Section 4.3(A) of the Plan except that
         the Contingent Pensioner Adjustment Factor will be applied instead of
         the Joint and Survivor Adjustment Factor.

         This option will be inoperative if the Contingent Pensioner dies before
         the Participant's Retirement Date or the Participant dies before his
         Retirement Date and the terms of the next paragraph are not applicable.

         If a Participant who has elected this option dies on or after his
         Normal Retirement Date, but before his Pension is due to commence, his
         Contingent Pensioner will receive Pension payments beginning on the
         first day of the month next following the Participant's death and
         continuing for the balance of his life. Prior to the tenth anniversary
         of such first day of the month, these Pension payments will be equal to
         the amount of Pension which would have been payable to the Participant
         had he retired hereunder on such first day of the month with the option
         in effect; any such payments payable thereafter will be adjusted by the
         continuation percentage (100%, 66-2/3%, or 50%) elected by the
         Participant.

C.19     CASH BALANCE BENEFIT PAYMENT OPTION

         Notwithstanding any Plan provision to the contrary, the entire Vesting
         Percentage of the Cash Balance Benefit portion of the Participant's
         Pension may be distributed in a cash lump sum form of payment if
         elected by the Participant, or his Beneficiary if applicable. Such
         distribution may commence as soon as practicable after the earliest to
         occur of the following: the Participant's death, disability, or
         retirement, or termination of service and in no event later than the
         dates described in Section 8.9 of the Plan. The spousal consent rules
         described in Section 8.4 of the Plan shall apply to such distribution.

                                       57

<PAGE>

C.20     REFUND OF PARTICIPANT'S CONTRIBUTIONS TO PARTICIPANT

         If a Participant's Service ceases by reason other than death prior to
         his Normal Retirement Date, he may elect prior to or on his Retirement
         Date to receive a refund of his Participant's contributions made prior
         to July 1, 1974, together with Credited Interest computed thereon to
         the date the election is made.

         Effective July 1, 1994, the cash refund of the Participant's
         contributions shall be no less than the equivalent Value of the yearly
         amount of Pension that can be provided by the Participant's
         contributions with Credited Interest computed to the date such amount
         is applied to purchase this Pension in accordance with the rates in
         Table C. Such benefit shall be on a Full Cash Refund - Ten-Year Certain
         Form of payment.

         Credited Interest on a Participant's Contributions means interest for
         the number of full months from the January 1 following the date each
         such contribution was paid to the Fund to the date specified herein.

         Prior to January 1, 1960, the rate of Credited Interest was 2 1/2% per
         annum, compounded annually. From January 1, 1960 to January 1, 1976,
         the rate of Credited Interest was 3% per annum, compounded annually.
         From January 1, 1976 to July 1, 1983, the rate of Credited Interest is
         5% per annum. On and after July 1, 1983, the rate of Credited Interest
         is 7% per annum, compounded on each July 1. Any change in the rate of
         Credited Interest will apply to interest allowed for months occurring
         after the effective date of change.

                                       58

<PAGE>

                                  SUPPLEMENT D

                       1999 SPECIAL RETIREMENT OPPORTUNITY

I.       Each Participant employed at the Employer's World Headquarters location
         (other than the Employer's corporate officers) who will be at least age
         55 and have at least 5 Years of Service on December 31, 1999 and who
         elects to retire by filing a written notice and waiver agreement with
         the Employer on or before August 9, 1999 will be eligible to retire
         between July 1 and December 31, 1999. The actual date of retirement
         will be determined by the Participant's department management.

         Any Participant electing to so retire will be entitled to an enhanced
         Pension. The Pension will be calculated by adding 5 Years of Service
         and 5 years of age to the Participant's Years of Service and age at his
         retirement date. All other benefit provisions will be applied as stated
         in the Plan.

         Any Participant who is eligible for this Special Retirement Opportunity
         and does not elect to retire as provided herein shall not have this
         Opportunity available at any future time.

II.      Each Participant employed at the Employer's West Loop Facility whose
         employment was terminated as a result of that Facility's closing in
         July, 1999 and who would have attained at least 30 Years of Service by
         the end of the year 2000 if he had continued employment with the
         Employer will be eligible for a Pension at the time of such termination
         calculated on the basis of the Years of Service he would have at
         December 31, 2000. All other benefit provisions will be applied as
         stated in the Plan.

         Any Participant who is eligible for this Pension enhancement and
         transfers employment within the Employer or Affiliated Employer rather
         than retire shall not have this enhancement available at any future
         time.

                                       59
<PAGE>

                                  SUPPLEMENT E

                          EFFECTIVE DATES PRIOR TO 1998

The following Sections of the Plan shall apply to the Prior Plan and the
SERVISTAR Plan effective as of the indicated dates prior to January 1, 1998 as a
part of such plans as each had existed prior to January 1, 1998.

<TABLE>
<CAPTION>
----------------------------------------------
PLAN SECTION                  EFFECTIVE DATES
----------------------------------------------
<S>                          <C>
   2.1(K)                      January 1, 1995
----------------------------------------------
   2.1(s)                      January 1, 1997
----------------------------------------------
   4.5                       December 12, 1994
----------------------------------------------
   6.7                         January 1, 1997
----------------------------------------------
Supplement A.1                 January 1, 1995
----------------------------------------------
Supplement C.3                 January 1, 1995
----------------------------------------------
</TABLE>

                                       60
<PAGE>

                                     TABLE A

                        LATE RETIREMENT ADJUSTMENT FACTOR

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                Number of Years and Months from Normal Retirement Date to Late Retirement Date
--------------------------------------------------------------------------------------------------------------------
Months:   Years:     0         1        2        3        4        5        6        7        8        9        10
--------------------------------------------------------------------------------------------------------------------
<S>       <C>      <C>       <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
   0                         107.2%   114.4%   122.8%   131.2%   140.8%   150.4%   161.2%   172.0%   182.8%   193.6%
   1               100.6%    107.8    115.1    123.5    132.0    141.6    151.3    162.1    172.9    183.7
   2               101.2     108.4    115.8    124.2    132.8    142.4    152.2    163.0    173.8    184.6
   3               101.8     109.0    116.5    124.9    133.6    143.2    153.1    163.9    174.7    185.5
   4               102.4     109.6    117.2    125.6    134.4    144.0    154.0    164.8    175.6    186.4
   5               103.0     110.2    117.9    126.3    135.2    144.8    154.9    165.7    176.5    187.3
   6               103.6     110.8    118.6    127.0    136.0    145.6    155.8    166.6    177.4    188.2
   7               104.2     111.4    119.3    127.7    136.8    146.4    156.7    167.5    178.3    189.1
   8               104.8     112.0    120.0    128.4    137.6    147.2    157.6    168.4    179.2    190.0
   9               105.4     112.6    120.7    129.1    138.4    148.0    158.5    169.3    180.1    190.9
  10               106.0     113.2    121.4    129.8    139.2    148.8    159.4    170.2    181.0    191.8
  11               106.6     113.8    122.1    130.5    140.0    149.6    160.3    171.1    181.9    192.7
--------------------------------------------------------------------------------------------------------------------
</TABLE>

Factors for other years and months will be determined in a manner consistent
with the manner used in determining these factors.

<PAGE>

                                     TABLE B

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                      JOINT AND SURVIVOR ADJUSTMENT FACTORS
                                50% CONTINUATION

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
                                 Participant
-------------------------------------------------------------------------
      Age*      55       56       57       58       59       60       61
-------------------------------------------------------------------------
<S>   <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
C      41      89.1     88.4     87.7     86.9     86.2     85.4     84.6
O      42      89.3     88.7     88.0     87.2     86.4     85.7     84.9
N      43      89.6     89.0     88.2     87.5     86.7     86.0     85.2
T      44      89.9     89.3     88.5     87.8     87.0     86.3     85.5
I      45      90.1     89.5     88.8     88.1     87.3     86.6     85.8
G     -------------------------------------------------------------------
E      46      90.4     89.8     89.1     88.4     87.7     86.9     86.2
N      47      90.7     90.2     89.4     88.7     88.0     87.3     86.6
T      48      91.0     90.5     89.8     89.0     88.3     87.6     86.9
       49      91.3     90.8     90.1     89.4     88.7     88.0     87.3
       50      91.6     91.1     90.4     89.7     89.0     89.3     87.6
      -------------------------------------------------------------------
       51      91.9     91.4     90.7     90.1     89.4     88.7     88.0
       52      92.3     91.7     91.1     90.4     89.8     89.1     88.4
       53      92.6     92.1     91.4     90.8     90.1     89.5     88.8
       54      92.9     92.4     91.8     91.1     90.5     89.9     89.2
       55      93.2     92.7     92.1     91.5     90.9     90.3     89.6
      -------------------------------------------------------------------
P      56      93.5     93.1     92.5     91.9     91.3     90.7     90.1
E      57      93.8     93.4     92.8     92.2     91.7     91.1     90.5
N      58      94.2     93.7     93.2     92.6     92.1     91.5     90.9
S      59      94.5     94.1     93.5     93.0     92.4     91.9     91.4
I      60      94.8     94.4     93.9     93.4     92.8     92.3     91.8
O     -------------------------------------------------------------------
N      61      95.1     94.7     94.2     93.7     93.2     92.7     92.2
E      62      95.4     95.0     94.6     94.1     93.6     93.1     92.6
R      63      95.7     95.4     94.9     94.4     94.0     93.5     93.1
       64      96.0     95.7     95.2     94.8     94.4     93.9     93.5
       65      96.3     96.0     95.6     95.2     94.8     94.3     93.9
      -------------------------------------------------------------------
       66      96.5     96.3     95.9     95.5     95.1     94.7     94.7
       67      96.8     96.5     96.2     95.8     95.5     95.1     94.7
       68      97.1     96.8     96.5     96.1     95.8     95.5     95.1
       69      97.3     97.1     96.8     96.5     96.1     95.8     95.5
       70      97.6     97.4     97.1     96.8     96.5     96.2     95.9
      -------------------------------------------------------------------
       71      97.8     97.6     97.3     97.0     96.8     96.5     96.2
       72      98.0     97.8     97.5     97.3     97.0     96.8     96.5
       73      98.2     98.0     97.8     97.6     97.3     97.1     96.9
       74      98.4     98.2     98.0     97.8     97.6     97.4     97.2
       75      98.6     98.4     98.3     98.1     97.9     97.7     97.5
-------------------------------------------------------------------------
</TABLE>

* Age nearest birthday on Retirement Date, or on date option becomes effective,
  if later.

  Factors for other age combinations will be determined in a manner consistent
  with the manner used in determining these factors.

<PAGE>

                               TABLE B (CONTINUED)

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                              66-2/3% CONTINUATION

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
                                 Participant
-------------------------------------------------------------------------
      Age*      55       56       57       58       59       60       61
-------------------------------------------------------------------------
<S>   <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
C      41      85.9     85.2     84.2     83.3     82.4     81.4     80.5
O      42      86.3     85.5     84.6     83.6     82.7     81.8     80.9
N      43      86.6     85.8     84.9     84.0     83.1     82.2     81.2
T      44      86.9     86.2     85.3     84.3     83.4     82.5     81.6
I      45      87.3     86.5     85.6     84.7     83.8     82.9     82.0
G     -------------------------------------------------------------------
E      46      87.6     86.9     86.0     85.1     84.2     83.3     82.4
N      47      88.0     87.3     86.4     85.5     84.6     83.7     82.9
T      48      88.4     87.7     86.8     85.9     85.0     84.2     83.3
       49      88.8     88.1     87.2     86.3     85.5     84.6     83.7
       50      89.1     88.4     87.6     86.7     85.9     85.0     84.2
      -------------------------------------------------------------------
       51      89.5     88.9     88.0     87.2     86.3     85.5     84.7
       52      89.9     89.3     88.5     87.6     86.8     86.0     85.2
       53      90.3     89.7     88.9     88.1     87.3     86.5     85.7
       54      90.7     90.1     89.3     88.5     87.7     87.0     86.2
       55      91.1     90.5     89.8     89.0     88.2     87.4     86.7
      -------------------------------------------------------------------
P      56      91.5     91.0     90.2     89.5     88.7     87.9     87.2
E      57      91.9     91.4     90.7     89.9     89.2     88.5     87.7
N      58      92.4     91.8     91.1     90.4     89.7     89.0     88.3
S      59      92.8     92.2     91.6     90.9     90.2     89.5     88.8
I      60      93.2     92.7     92.0     91.3     90.7     90.0     89.3
O     -------------------------------------------------------------------
N      61      93.6     93.1     92.4     91.8     91.2     90.5     89.9
E      62      93.9     93.5     92.9     92.3     91.7     91.0     90.4
R      63      94.3     93.9     93.3     92.7     92.2     91.6     91.0
       64      94.7     94.3     93.8     93.2     92.6     92.1     91.5
       65      95.1     94.7     94.2     93.7     93.1     92.6     92.1
      -------------------------------------------------------------------
       66      95.4     95.1     94.6     94.1     93.6     93.1     92.6
       67      95.8     95.4     95.0     94.5     94.0     93.6     93.1
       68      96.1     95.8     95.4     94.9     94.5     94.0     93.6
       69      96.4     96.2     95.8     95.3     94.9     94.5     94.1
       70      96.8     96.5     96.1     95.8     95.4     95.0     94.6
      -------------------------------------------------------------------
       71      97.0     96.8     96.5     96.1     95.7     95.4     95.1
       72      97.3     97.1     96.8     96.4     96.1     95.8     95.5
       73      97.6     97.4     97.1     96.8     96.5     96.2     95.9
       74      97.8     97.7     97.4     97.1     96.8     96.6     96.3
       75      98.1     97.9     97.7     97.4     97.2     97.0     96.7
-------------------------------------------------------------------------
</TABLE>

* Age nearest birthday on Retirement Date, or on date Contingent Pensioner
  option becomes effective, if later.

  Factors for other age combinations will be determined in a manner consistent
  with the manner used in determining these factors.

<PAGE>

                               TABLE B (CONTINUED)

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                              66-2/3% CONTINUATION

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
                                 Participant
-------------------------------------------------------------------------
      Age*      62       63       64       65       66       67       68
-------------------------------------------------------------------------
<S>   <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
C      41      79.5     78.5     77.5     76.5     75.5     74.5     73.5
O      42      79.9     78.9     77.9     76.9     75.9     74.9     73.9
N      43      80.2     79.2     78.2     77.2     76.2     75.3     74.3
T      44      80.6     79.6     78.6     77.6     76.6     75.7     74.7
I      45      81.0     80.0     79.0     78.0     77.0     76.1     75.1
G     -------------------------------------------------------------------
E      46      81.4     80.4     79.5     78.5     77.5     76.5     75.6
N      47      81.9     80.9     79.9     78.9     78.0     77.0     76.1
T      48      82.3     81.4     80.4     79.4     78.4     77.5     76.5
       49      82.8     81.8     80.8     79.9     78.9     78.0     77.0
       50      83.2     82.3     81.3     80.3     79.4     78.4     77.5
      -------------------------------------------------------------------
       51      83.7     82.8     81.8     80.9     79.9     79.0     78.1
       52      84.2     83.3     82.4     81.4     80.5     79.6     78.6
       53      84.7     83.8     82.9     82.0     81.1     80.1     79.2
       54      85.3     84.3     83.4     82.5     81.6     80.7     79.8
       55      85.8     84.9     84.0     83.1     82.2     81.3     80.4
      -------------------------------------------------------------------
P      56      86.3     85.4     84.6     83.7     82.8     81.9     81.0
E      57      86.9     86.0     85.2     84.3     83.4     82.6     81.7
N      58      87.4     86.6     85.8     84.9     84.1     83.2     82.3
S      59      88.0     87.2     86.3     85.5     84.7     83.8     83.0
I      60      88.5     87.7     86.9     86.1     85.3     84.5     83.7
O     -------------------------------------------------------------------
N      61      89.1     88.3     87.6     86.8     86.0     85.2     84.4
E      62      89.7     88.9     88.2     87.4     86.7     85.9     85.1
R      63      90.3     89.5     88.8     88.1     87.4     86.6     85.8
       64      90.8     90.1     89.4     88.8     88.1     87.3     86.6
       65      91.4     90.7     90.1     89.4     88.7     88.0     87.3
      -------------------------------------------------------------------
       66      91.9     91.3     90.7     90.0     89.4     88.7     88.0
       67      92.5     91.9     91.3     90.7     90.1     89.4     88.7
       68      93.0     92.5     91.9     91.3     90.7     90.1     89.5
       69      93.6     93.0     92.5     92.0     91.4     90.8     90.2
       70      94.1     93.6     93.1     92.6     92.1     91.5     90.9
      -------------------------------------------------------------------
       71      94.6     94.1     93.6     93.1     92.7     92.1     91.6
       72      95.0     94.6     94.1     93.7     93.3     92.7     92.2
       73      95.5     95.1     94.7     94.2     93.8     93.4     92.9
       74      95.9     95.5     95.2     94.8     94.4     94.0     93.5
       75      96.4     96.0     95.7     95.4     95.0     94.6     94.2
-------------------------------------------------------------------------
</TABLE>

* Age nearest birthday on Retirement Date, or on date Contingent Pensioner
  option becomes effective, if later.

  Factors for other age combinations will be determined in a manner consistent
  with the manner used in determining these factors.

<PAGE>

                               TABLE B (CONTINUED)

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                                100% CONTINUATION

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
                                 Participant
-------------------------------------------------------------------------
      Age*      55       56       57       58       59       60       61
-------------------------------------------------------------------------
<S>   <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
C      41      80.3     79.3     78.1     76.9     75.7     74.5     73.4
O      42      80.8     79.7     78.5     77.4     76.2     75.0     73.8
N      43      81.2     80.2     79.0     77.8     76.6     75.5     74.3
T      44      81.6     80.6     79.4     78.3     77.1     75.9     74.7
I      45      82.1     81.0     79.9     78.7     77.5     76.4     75.2
G     -------------------------------------------------------------------
E      46      82.6     81.6     80.4     79.2     78.1     76.9     75.8
N      47      83.1     82.1     80.9     79.8     78.6     77.5     76.3
T      48      83.6     82.6     81.4     80.3     79.2     78.0     76.9
       49      84.1     83.1     82.0     80.8     79.7     78.6     77.4
       50      84.6     83.6     82.5     81.4     80.2     79.1     78.0
      -------------------------------------------------------------------
       51      85.1     84.2     83.1     82.0     80.9     79.8     78.6
       52      85.6     84.7     83.7     82.6     81.5     80.4     79.3
       53      86.2     85.3     84.2     83.2     82.1     81.0     79.9
       54      86.7     85.9     84.8     83.8     82.7     81.7     80.6
       55      87.3     86.4     85.4     84.4     83.3     82.3     81.2
      -------------------------------------------------------------------
P      56      87.8     87.0     86.0     85.0     84.0     83.0     82.0
E      57      88.4     87.6     86.6     85.6     84.7     83.7     82.7
N      58      89.0     88.2     87.3     86.3     85.3     84.4     83.4
S      59      89.5     88.8     87.9     86.9     86.0     85.0     84.1
I      60      90.1     89.4     88.5     87.6     86.7     85.7     84.8
O     -------------------------------------------------------------------
N      61      90.6     90.0     89.1     88.2     87.3     86.5     85.6
E      62      91.2     90.6     89.7     88.9     88.0     87.2     86.3
R      63      91.7     91.1     90.3     89.5     88.7     87.9     87.1
       64      92.3     91.7     90.9     90.2     89.4     88.6     87.8
       65      92.8     92.3     91.5     90.8     90.1     89.3     88.6
      -------------------------------------------------------------------
       66      93.3     92.8     92.1     91.4     90.7     90.0     89.7
       67      93.8     93.3     92.7     92.0     91.3     90.7     90.0
       68      94.3     93.8     93.2     92.6     92.0     91.3     90.7
       69      94.8     94.4     93.8     93.2     92.6     92.0     91.4
       70      95.3     94.9     94.3     93.8     93.2     92.7     92.1
      -------------------------------------------------------------------
       71      95.6     95.3     94.8     94.3     93.8     93.2     92.7
       72      96.0     95.7     95.2     94.8     94.3     93.8     93.3
       73      96.4     96.1     95.7     95.2     94.8     94.4     93.9
       74      96.8     96.5     96.1     95.7     95.3     94.9     94.5
       75      97.2     96.9     96.6     96.2     95.9     95.5     95.1
-------------------------------------------------------------------------
</TABLE>

* Age nearest birthday on Retirement Date, or on date Contingent Pensioner
  option becomes effective, if later.

  Factors for other age combinations will be determined in a manner consistent
  with the manner used in determining these factors.

<PAGE>

                               TABLE B (CONTINUED)

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                                100% CONTINUATION

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
                                 Participant
-------------------------------------------------------------------------
      Age*      62       63       64       65       66       67       68
-------------------------------------------------------------------------
<S>   <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
C      41      72.1     70.9     69.7     68.5     67.2     66.1     65.0
O      42      72.6     71.4     70.1     68.9     67.7     66.6     65.4
N      43      73.1     71.8     70.6     69.4     68.2     67.0     65.9
T      44      73.5     72.3     71.1     69.8     68.6     67.5     66.3
I      45      74.0     72.8     71.5     70.3     69.1     67.9     66.8
G     -------------------------------------------------------------------
E      46      74.5     73.3     72.1     70.9     69.7     68.5     67.4
N      47      75.1     73.9     72.7     71.5     70.2     69.1     68.0
T      48      75.7     74.5     73.2     72.0     70.8     69.7     68.5
       49      76.2     75.0     73.8     72.6     71.4     70.3     69.1
       50      76.8     75.6     74.4     73.2     72.0     70.8     69.7
      -------------------------------------------------------------------
       51      77.5     76.3     75.1     73.9     72.7     71.5     70.4
       52      78.1     76.9     75.7     74.6     73.4     72.2     71.1
       53      78.8     77.6     76.4     75.2     74.1     72.9     71.8
       54      79.4     78.3     77.1     75.9     74.8     73.6     72.5
       55      80.1     78.9     77.8     76.6     75.5     74.3     73.2
      -------------------------------------------------------------------
P      56      80.8     79.7     78.5     77.4     76.3     75.2     74.0
E      57      81.6     80.4     79.3     78.2     77.1     76.0     74.9
N      58      82.3     81.2     80.1     79.0     77.9     76.8     75.7
S      59      83.0     81.9     80.9     79.8     78.7     77.6     76.5
I      60      83.8     82.7     81.6     80.6     79.5     78.4     77.4
O     -------------------------------------------------------------------
N      61      84.5     83.5     82.5     81.4     80.4     79.4     78.3
E      62      85.3     84.3     83.3     82.3     81.3     80.3     79.2
R      63      86.1     85.1     84.2     83.2     82.2     81.2     80.2
       64      86.9     85.9     85.0     84.0     83.1     82.1     81.1
       65      87.7     86.7     85.8     84.9     84.0     83.0     82.1
      -------------------------------------------------------------------
       66      88.4     87.5     86.7     85.8     84.9     84.0     83.1
       67      89.2     88.3     87.5     86.7     85.8     84.9     84.0
       68      89.9     89.1     88.3     87.5     86.8     85.9     85.0
       69      90.7     89.9     89.2     88.4     87.7     86.8     86.0
       70      91.4     90.7     90.0     89.3     88.6     87.8     87.0
      -------------------------------------------------------------------
       71      92.1     91.4     90.7     90.1     89.4     88.7     87.9
       72      92.7     92.1     91.5     90.9     90.2     89.5     88.8
       73      93.4     92.8     92.2     91.6     91.1     90.4     89.7
       74      94.0     93.5     92.9     92.4     91.9     91.3     90.6
       75      94.7     94.2     93.7     93.2     92.7     92.1     91.5
-------------------------------------------------------------------------
</TABLE>

* Age nearest birthday on Retirement Date, or on date Contingent Pensioner
  option becomes effective, if later.

  Factors for other age combinations will be determined in a manner consistent
  with the manner used in determining these factors.

<PAGE>

                                     TABLE C

                                IMMEDIATE ANNUITY
                             10-YEAR CERTAIN ANNUITY
                             MONTHLY INCOME PER 1000

<TABLE>
<CAPTION>
---------------------------------------------
Age*                           Monthly Income
---------------------------------------------
<S>                            <C>
 45                                  7.72
 46                                  7.81
 47                                  7.89
 48                                  7.98
 49                                  8.07
 50                                  8.16
 51                                  8.26
 52                                  8.36
 53                                  8.46
 54                                  8.57
 55                                  8.68
 56                                  8.80
 57                                  8.93
 58                                  9.05
 59                                  9.19
 60                                  9.33
 61                                  9.47
 62                                  9.62
 63                                  9.77
 64                                  9.93
 65                                 10.10
 66                                 10.26
---------------------------------------------
</TABLE>

* Age, nearest birthday, or annuity commencement date.

  Purchase of retirement annuity with employee contributions plus Credited
  Interest.
<PAGE>

                               FIRST AMENDMENT OF
                               TRUSERV CORPORATION
                          DEFINED LUMP SUM PENSION PLAN
            (AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1998)

         WHEREAS, TruServ Corporation (the "Company") has established and
maintains the Truserv Corporation Defined Lump Sum Pension Plan (the "Plan");
and

         WHEREAS, the Company desires to amend the Plan to reflect: (i) certain
provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001
("EGTRRA"); (ii) revised mortality tables promulgated under Internal Revenue
Service Revenue Ruling 2002-62; and (iii) 2002 Final and Temporary Regulations
under Section 401(a)(9) of the Internal Revenue Code of 1986, as amended, and
intends that this amendment be in good faith compliance with the requirements
thereof; and

         NOW, THEREFORE, by virtue and in exercise of the power reserved to the
Company by Section 11.01 of the Plan and pursuant to the authority delegated to
the undersigned officer of the Company by resolution of its Board of Directors,
the Plan be and is hereby amended in the following particulars:

         1. By adding the following to the end of the second paragraph of
Section 2.1(k) of the Plan as a part thereof:

         "Commencing with the Plan Year beginning in 2002, Compensation taken
into account for any purpose under the Plan, including the determination of
Average Compensation, shall not exceed $200,000 per year (as adjusted for
cost-of-living increases in accordance with Section 401(a)(17)(B) of the Code).
Prior to January 1, 2002, the cost-of-living adjustment in effect for a calendar
year applies to Compensation for the Plan Year that begins with or within such
calendar year. For purposes of determining Accrued Benefits in a Plan Year
beginning after December 31, 2001, Compensation for prior Plan Years shall be
limited to $160,000 for any Plan Year beginning in 1997, 1998, or 1999; and
$170,000 for any Plan Year beginning in 2000 or 2001."

<PAGE>

         2. By adding the following at the end of Sections 5.4, 6.7 and 6.9 of
the Plan as parts thereof:

         "Notwithstanding any other provision of the Plan to the contrary, with
respect to distributions under the Plan made for calendar years beginning on or
after January 1, 2003 pursuant to Section 401(a)(9) of the Code, the minimum
distribution requirements set out in Section 6.13 shall apply."

         3. By substituting the following for the last sentence of Section
6.12(B)(2) of the Plan:

         "An 'eligible retirement plan' shall also mean an annuity contract
described in Section 403(b) of the Code and an eligible plan under Section
457(b) of the Code which is maintained by a state, political subdivision of a
state, or any agency or instrumentality of a state or political subdivision of a
state and which agrees to separately account for amounts transferred into such
plan from the Plan. The definition of eligible retirement plan shall also apply
in the case of a distribution to a surviving Spouse, or to a Spouse or former
Spouse who is the alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code."

         4. By adding the following new Section 6.13 at the end of Section 6 of
the Plan as a part thereof:

"6.13    Minimum Distribution Requirements After December 31, 2002.

         (A) Requirements of Treasury Regulations Incorporated. All
distributions after December 31, 2002 required under this Section 6.13 will be
determined and made in accordance with Treasury Regulations under Section
401(a)(9) of the Code.

         (B) TEFRA Section 242(b)(2) Elections. Notwithstanding the other
provisions of this Section 6.13, distributions may be made as elected under and
in accordance with Section 6.10.

         (C) Time and Manner of Distributions.

                  (1) Required Beginning Date. The Participant's entire interest
         will be distributed, or begin to be distributed, to the Participant no
         later than the Participant's required beginning date.

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

<PAGE>

                           (i)      If the Participant's surviving Spouse is the
                                    Participant's sole designated Beneficiary,
                                    distributions to the surviving Spouse will
                                    begin by December 31 of the calendar year
                                    immediately following the calendar year in
                                    which the Participant died, or by December
                                    31 of the calendar year in which the
                                    Participant would have attained age 70 1/2,
                                    if later.

                           (ii)     If the Participant's surviving spouse is not
                                    the Participant's sole designated
                                    Beneficiary, distributions to the designated
                                    Beneficiary will begin by December 31 of the
                                    calendar year immediately following the
                                    calendar year in which the Participant died.

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

                           (iv)     If the Participant's surviving spouse is the
                                    Participant's sole designated Beneficiary
                                    and the surviving spouse dies after the
                                    Participant but before distributions to the
                                    surviving spouse begin, this Section
                                    6.13(C), other than Section 6.13(C), will
                                    apply as if the surviving spouse were the
                                    Participant.

                           (v)      If the Participant or his designated
                                    Beneficiary so elects no later than the
                                    earlier of September 30 of the calendar year
                                    in which distribution would be required to
                                    begin in Sections (i) or (ii) above or by
                                    September 30 of the calendar year which
                                    contains the fifth anniversary of the
                                    Participant's (or, if applicable, surviving
                                    spouse's) death, such Participant or
                                    Beneficiary may receive the Participant's
                                    entire interest by December 31 of the
                                    calendar year containing the fifth
                                    anniversary of the Participant's death.

                  For purposes of this Section 6.13(C)(2) and Section 6.13(F),
         distributions are considered to begin on the Participant's required
         beginning date (or, if Section 6.13(C)(2)(iv) applies, the date
         distributions are required to begin to the surviving Spouse under
         Section 6.13(C)(2)(i)). If annuity payments irrevocably commence to the
         Participant before the Participant's required beginning date (or to the
         Participant's surviving Spouse before the date distributions are
         required to begin to the surviving Spouse under Section 6.13(C)(2)(i)),
         the date distributions are considered to begin is the date
         distributions actually commence.

                  (3) Form of Distribution. Unless the Participant's interest is
         distributed in the form of an annuity purchased from an insurance
         company or in a single sum on or before the required beginning date, as
         of the first distribution calendar year distributions will be made in
         accordance with Sections 6.13(D), (E), and (F). If the Participant's
         interest is distributed in the form of an annuity purchased from an
         insurance company, distributions thereunder will be made in accordance
         with the requirements of Section 401(a)(9) of the

<PAGE>

         Code and the Treasury Regulations. Any part of the Participant's
         interest which is in the form of an individual account described in
         Section 414(k) of the Code will be distributed in a manner satisfying
         the requirements of Section 401(a)(9) of the Code and the Treasury
         Regulations that apply to individual accounts.

         (D) Determination of Amount to be Distributed Each Year.

                  (1) General Annuity Requirements. If the Participant's
         interest is paid in the form of annuity distributions under the Plan,
         payments under the annuity will satisfy the following requirements:

                           (i)      the annuity distributions will be paid in
                                    periodic payments made at intervals not
                                    longer than one year;

                           (ii)     the distribution period will be over a life
                                    (or lives) or over a period certain not
                                    longer than the period described in Section
                                    6.13(E) or (F);

                           (iii)    once payments have begun over a period
                                    certain, the period certain will not be
                                    changed even if the period certain is
                                    shorter than the maximum permitted;

                           (iv)     payments will either be nonincreasing or
                                    increase only as follows:

                                             (a) by an annual percentage
                                    increase that does not exceed the annual
                                    percentage increase in a cost-of-living
                                    index that is based on prices of all items
                                    and issued by the U.S. Bureau of Labor
                                    Statistics;

                                            (b) to the extent of the reduction
                                    in the amount of the Participant's payments
                                    to provide for a survivor benefit upon
                                    death, but only if the Beneficiary whose
                                    life was being used to determine the
                                    distribution period described in Section
                                    6.13(E) dies or is no longer the
                                    Participant's Beneficiary pursuant to a
                                    qualified domestic relations order within
                                    the meaning of Section 414(p) of the Code;

                                             (c) to provide cash refunds of
                                    Associate contributions upon the
                                    Participant's death; or

                                             (d) to pay increased benefits that
                                    result from a Plan amendment.

                  (2) Amount Required to be Distributed by Required Beginning
         Date. The amount that must be distributed on or before the
         Participant's required beginning date (or, if the Participant dies
         before distributions begin, the date distributions are required to
         begin under Section 6.13(C)(2)(i) or (ii)) is the payment that is
         required for one payment interval. The second payment need not be made
         until the end of the next payment interval

<PAGE>

         even if that payment interval ends in the next calendar year. Payment
         intervals are the periods for which payments are received, e.g.,
         bi-monthly, monthly, semi-annually, or annually. All of the
         Participant's benefit accruals as of the last day of the first
         distribution calendar year will be included in the calculation of the
         amount of the annuity payments for payment intervals ending on or after
         the Participant's required beginning date.

                  (3) Additional Accruals After First Distribution Calendar
         Year. Any additional benefits accruing to the Participant in a calendar
         year after the first distribution calendar year will be distributed
         beginning with the first payment interval ending in the calendar year
         immediately following the calendar year in which such amount accrues.

         (E)      Requirements For Annuity Distributions That Commence During
                  Participant's Lifetime (Period Certain Annuities).

                   Unless the Participant's Spouse is the sole designated
         Beneficiary and the form of distribution is a period certain and no
         life annuity, the period certain for an annuity distribution commencing
         during the Participant's lifetime may not exceed the applicable
         distribution period for the Participant under the Uniform Lifetime
         Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations
         for the calendar year that contains the Annuity Starting Date. If the
         Annuity Starting Date precedes the year in which the Participant
         reaches age 70, the applicable distribution period for the Participant
         is the distribution period for age 70 under the Uniform Lifetime Table
         set forth in Section 1.401(a)(9)-9 of the Treasury Regulations plus the
         excess of 70 over the age of the Participant as of the Participant's
         birthday in the year that contains the Annuity Starting Date. If the
         Participant's Spouse is the Participant's sole designated Beneficiary
         and the form of distribution is a period certain and no life annuity,
         the period certain may not exceed the longer of the Participant's
         applicable distribution period, as determined under this Section
         6.13(E)(2), or the joint life and last survivor expectancy of the
         Participant and the Participant's Spouse as determined under the Joint
         and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the
         Treasury Regulations, using the Participant's and Spouse's attained
         ages as of the Participant's and Spouse's birthdays in the calendar
         year that contains the Annuity Starting Date.

         (F)      Requirements For Minimum Distributions Where Participant Dies
                  Before Date Distributions Begin.

                  (1) Participant Survived by a Designated Beneficiary. Except
         as provided in Section 6.13(C)(2)(v), if the Participant dies before
         the date distribution of his or her interest begins and there is a
         designated Beneficiary, the Participant's entire interest will be
         distributed, beginning no later than the time described in Section
         6.13(C)(2)(i) or (ii), over the life of the designated Beneficiary or
         over a period certain not exceeding:

                           (i)      unless the Annuity Starting Date is before
                                    the first distribution calendar year, the
                                    life expectancy of the designated
                                    Beneficiary determined using the
                                    Beneficiary's age as of the Beneficiary's
                                    birthday in the calendar year immediately
                                    following the calendar year of the
                                    Participant's death; or

<PAGE>

                           (ii)     if the Annuity Starting Date is before the
                                    first distribution calendar year, the life
                                    expectancy of the designated Beneficiary
                                    determined using the Beneficiary's age as of
                                    the Beneficiary's birthday in the calendar
                                    year that contains the Annuity Starting
                                    Date.

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

                  (3) Death of Surviving Spouse Before Distributions to
         Surviving Spouse Begin. If the Participant dies before the date
         distribution of his or her interest begins, the Participant's surviving
         Spouse is the Participant's sole designated beneficiary, and the
         surviving spouse dies before distributions to the surviving spouse
         begin, this Section 6.13(F) will apply as if the surviving Spouse were
         the Participant, except that the time by which distributions must begin
         will be determined without regard to Section 6.13(C)(2)(i).

         (G)      Definitions. These definitions apply to the terms used in
                  Sections 6.13(C)-(G).

                  (1) Designated Beneficiary. The designated Beneficiary is the
         individual who is designated as the Beneficiary under Section 2.9(H)
         and is the designated beneficiary under Section 401(a)(9) of the Code
         and Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.

                  (2) Distribution calendar year. A distribution calendar year
         is a calendar year for which a minimum distribution is required. For
         distributions beginning before the Participant's death, the first
         distribution calendar year is the calendar year immediately preceding
         the calendar year which contains the Participant's required beginning
         date. For distributions beginning after the Participant's death, the
         first distribution calendar year is the calendar year in which
         distributions are required to begin pursuant to Section 6.9(B).

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

                  (4) Required beginning date. A Participant's required
         beginning date is the April 1 of the calendar year following the later
         of

                           (I) the calendar year in which the Participant
                  attains age 70 1/2, or

                           (II) if the Participant is not a 5% owner (as defined
                  in Section 416(i) of the Code) with respect to the Plan Year
                  ending in the calendar year in which the Participant attains
                  age 70 1/2, the calendar year in which the Participant
                  retires."

         5. By substituting the following for Section 13.1(A) of the Plan:

<PAGE>

         "Regardless of any other provisions of this Plan, other than paragraphs
(B)(4), (C) and (D) below, the amount of yearly Pension payable hereunder for
any Limitation Year shall not exceed the lesser of (1) the Defined Benefit
Dollar Limitation or (2) 100% of the Participant's average annual remuneration
determined with reference to the three consecutive limitation years of Service
which he received the highest aggregate remuneration from the Employer or an
Affiliated Employer (referred to hereinafter in this Section 13.1 as 'highest
average compensation').

         The 'Defined Benefit Dollar Limitation' is $160,000, as adjusted,
effective January 1 of each year, under Section 415(d) of the Code in such
manner as the Secretary of the Treasury shall prescribe, and payable in the form
of a straight life annuity. A limitation as adjusted under Section 415(d) of the
Code will apply to limitation years ending with or within the calendar year for
which the adjustment applies."

         6. By substituting the following for Section 13.1(B)(3) of the Plan:

         "If the Pension of a Participant begins prior to age 62, the Defined
Benefit Dollar Limitation applicable to the Participant at such earlier age is
an annual benefit payable in the form of a straight life annuity beginning at
the earlier age that is the actuarial equivalent of the Defined Benefit Dollar
Limitation applicable to the Participant at age 62 (adjusted under Section
13.1(B)(2), if required). The Defined Benefit Dollar Limitation applicable at an
age prior to age 62 is determined as the lesser of (i) the actuarial equivalent
(at such age) of the Defined Benefit Dollar Limitation computed using the
interest rate and Group Annuity Mortality Table specified in Supplement A -
Section A.1. and (ii) the actuarial equivalent (at such age) of the Defined
Benefit Dollar Limitation computed using a 5 percent interest rate and the Group
Annuity Mortality Table as specified in Supplement A - Section A.1.(b). Any
decrease in the Defined Benefit Dollar Limitation determined in accordance with
this Section 13(B)(3) shall not reflect a mortality decrement if benefits are
not forfeited upon the death of the Participant. If any benefits are forfeited
upon death, the full mortality decrement is taken into account.

         7. By substituting the following Section 13.1(B)(4) of the Plan:

         "If the Pension benefit of a Participant begins after the Participant
attains age 65, the Defined Benefit Dollar Limitation applicable to the
Participant at the later age is the annual benefit payable in the form of a
straight life annuity beginning at the later age that is actuarially equivalent
to the Defined Benefit Dollar Limitation applicable to the Participant at age 65
(adjusted under Section 13.1(B)(2), if required). The actuarial equivalent of
the Defined Benefit Dollar Limitation applicable at an age after age 65 is
determined as (i) the lesser of the actuarial equivalent (at such age) of the
Defined Benefit Dollar Limitation computed using the interest rate and Group
Annuity Mortality Table specified in Supplement A - Section A.1. and (ii) the
actuarial equivalent (at such age) of the Defined Benefit Dollar Limitation
computed using a 5 percent interest rate assumption and the applicable Group
Annuity Mortality Table specified in Supplement A - Section A.1.(b). For these
purposes, mortality between age 65 and the age at which benefits commence shall
be ignored.

<PAGE>

         8. By adding the following new subsection (iv) to the end of Section
13.1(B)(5) of the Plan as a part thereof:

         "(iv) Notwithstanding any other Plan provisions to the contrary, any
reference to the mortality table under Revenue Ruling 95-6, 1995-1 C.B. 80,
shall be construed as a reference to the mortality table prescribed in Revenue
Ruling 2001-62, 2001-2 C.B. 632, for all purposes under the Plan. For any
distribution with an Annuity Starting Date on or after the effective date of
this subsection and before the adoption date of this subsection, if application
of this subsection as of the Annuity Starting Date would have caused a reduction
in the amount of any distribution, such reduction is not reflected in any
payment made before the adoption date of this subsection. However, the amount of
any such reduction that is required under Code Section 415(b)(2)(B) must be
reflected actuarially over any remaining payments to the Participant."

         9. By adding the following new Section 13.1(B)(6) to Section 13 of the
Plan as a part thereof:

         "(b) Notwithstanding the above, for limitation years beginning before
January 1, 2002, the maximum permissible benefit will not exceed the Defined
Benefit Dollar Limitation. In the case of a Participant who has fewer than 10
years of Service with the Employer, the Defined Benefit Compensation Dollar
Limitation shall be multiplied by a fraction, (i) the numerator of which is the
number of years (or part thereof) of Service and (ii) the denominator of which
is 10."

         10. By deleting the phrase "or the four preceding Plan Years" where it
appears in the first sentence of Section 13.2(c) of the Plan.

         11. By substituting the following for the first paragraph of 13.2(C)(1)
of the Plan:

         "An officer of the Employer having annual compensation (within the
meaning of Code Section 415(c)(3)) greater than $130,000 (as adjusted under
Section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002),
but in no event if there are more than 500 Associates, shall more than 50
Associates or, if there are less than 500 Associates, shall the greater of three
Associates or 10% of all Associates, be taken into account under this subsection
as Key Employees."

         12. By deleting Section 13.2(C)(2) of the Plan and redesignating
Sections 13.2(C)(3) and (4) as Sections 13.2(C)(2) and (3), respectively.

<PAGE>

         13. By substituting the phrase "compensation (within the meaning of
Code Section 415(c)(3))" for the word "Compensation" where it appears in Section
13.2(C)(3) of the Plan as amended by particular 12 above.

         14. By adding the following sentence to the end of Section 13.2(K) of
the Plan as a part thereof:

         "In determining Years of Service with the Employer for purposes of
determining a Participant's minimum Pension benefit under this Section 13.2(K),
any Service with the Employer shall be disregarded to the extent that such
Service occurs during a Plan Year when the Plan benefits (within the meaning of
Section 410(b) of the Code) no Key Employee."

         15. By adding the following new Section 13.2(N) immediately following
Section 13.2(M) of the Plan as follows:

         "(N) Determination of Present Values and Amounts. This Section 13.2(N)
shall apply for purposes of determining the present values of Accrued Benefits
and the amounts of account balances of Participants as of the Determination
Date.

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

                  (2) Participants not performing services during the year
         ending on the Determination Date. The Accrued Benefits and accounts of
         any individual who has not performed Service for the Employer during
         the 1-year period ending on the Determination Date shall not be taken
         into account."

         16. By adding the following to the end of Supplement A - Section
A.1.(a) of the Plan as a part thereof:

<PAGE>

         "Notwithstanding any other Plan provisions to the contrary (with
exception of Section 13.1(B)(5)(iv)), the applicable mortality table used for
purposes of adjusting any benefit or limitation under Section 415(b)(2)(B), (C),
or (D) of the Code and satisfying the requirements of Section 417(e) of the Code
is the table prescribed in Revenue Ruling 2001-62, 2001-2 C.B. 632. For any
distribution with an Annuity Starting Date on or after the effective date of
this subsection and before the adoption date of this subsection, if application
of this paragraph as of the Annuity Starting Date would have caused a reduction
in the amount of any distribution, such reduction is not reflected in any
payment made before the adoption date of this subsection. However, the amount of
any such reduction that is required under Code Section 415(b)(2)(B) must be
reflected actuarially over any remaining payments to the Participant."

                                    * * * * *

         Particulars 2 and 4 shall be effective for distributions with required
beginning dates on or after January 1, 2003. Particulars 6, 7, and 9 shall be
effective for all Participants who have one Hour of Service after December 31,
2002. All remaining particulars shall be effective on January 1, 2002.

         IN WITNESS WHEREOF, Company has caused this amendment to be executed on
its behalf by its duly authorized officer, this 30th day of December,
2002.

                                       TruServ Corporation

                                       By: /s/ AMY MYSEL
                                          --------------------------------------
                                       Its: Vice President of Human Resources
                                           -------------------------------------

ATTEST:

By: /s/ BILL EVANS
    ------------------------------
Its: Director of Employee Benefits
    ------------------------------<PAGE>
                                                                    EXHIBIT 10-D

                               TRUSERV CORPORATION

                     SAVINGS AND COMPENSATION DEFERRAL PLAN

                             As Amended and Restated

                              as of January 1, 1998

                   Including amendments through December 2002
<PAGE>

                               TRUSERV CORPORATION
                     SAVINGS AND COMPENSATION DEFERRAL PLAN
                (AS AMENDED & RESTATED EFFECTIVE JANUARY 1, 1998)
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          PAGE
<S>                                                                                       <C>
Article 1.  Definitions ..............................................................       1

Article 2.  Participation and Entry Date .............................................      15

     2.01     Eligibility for Income Deferral Contributions ..........................      15

     2.02     Participation ..........................................................      15

     2.03     Eligibility upon Reemployment ..........................................      16

     2.04     Transferred Participants ...............................................      16

Article 3.  Income Deferral Contributions ............................................      16

     3.01     Income Deferral Contributions ..........................................      16

     3.02     Matching Contributions .................................................      18

     3.03     Rollover Contributions .................................................      19

     3.04     Change in Contributions ................................................      20

     3.05     Suspension of Contributions ............................................      20

     3.06     Actual Deferral Percentage Test ........................................      21

     3.07     Contribution Percentage Test ...........................................      23

     3.08     Aggregate Contribution Limitation ......................................      25

     3.09     Additional Discrimination Testing Provisions ...........................      25

     3.10     Annual Additions Limitations ...........................................      27

     3.11     Contributions Not Contingent Upon Profits ..............................      32

     3.12     Contributions During Period of Military Leave ..........................      32

     3.13     Refund of Contributions ................................................      33

Article 4.  Accounts and Investment Funds ............................................      34

     4.01     Accounts ...............................................................      34

     4.02     Investment Funds and Participant Directions ............................      35

     4.03     Crediting of Investment Results ........................................      37

     4.04     Annual Statements ......................................................      38

     4.05     Merger of Cotter Plan and SERVISTAR Plan Accounts ......................      38

Article 5.  Vesting of Accounts ......................................................      39

     5.01     All Accounts Except Matching Account ...................................      39
</TABLE>

                                      -i-
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                          PAGE
<S>                                                                                       <C>
     5.02     Company Matching Account ...............................................      39

     5.03     Allocation of Forfeitures ..............................................      41

     5.04     Restoration of Forfeited Accrued Benefit ...............................      41

Article 6.   Payment of Benefits .....................................................      42

     6.01     Time of Payment of Accrued Benefit .....................................      42

     6.02     Age 70 1/2Distribution .................................................      43

     6.03     Small Benefits .........................................................      43

     6.04     Method of Payment of Accrued Benefit ...................................      44

     6.05     Status of Accounts Pending Distribution ................................      49

     6.06     Proof of Death and Right of Beneficiary or Other Person ................      50

     6.07     Direct Rollover of Certain Distributions ...............................      50

Article 7.  Withdrawals and Loans ....................................................      51

     7.01     Savings Account Withdrawals ............................................      51

     7.02     Deferral Account Withdrawals After Age 59 1/2 ..........................      51

     7.03     Deferral Account Withdrawals ...........................................      51

     7.04     Withdrawal Procedures ..................................................      53

     7.05     Loans to Participants ..................................................      54

     7.06     Missing Participants and Beneficiaries .................................      57

Article 8.  Administration of the Plan ...............................................      58

      8.01    Committee ..............................................................      58

      8.02    Meeting, Majority Rule .................................................      59

      8.03    Responsibility for Administration of the Plan ..........................      60

      8.04    Compensation and Expenses ..............................................      62

      8.05    Limitation of Liability ................................................      62

      8.06    Indemnification ........................................................      62

      8.07    Prudent Conduct ........................................................      63

      8.08    Service in More Than One Fiduciary Capacity ............................      63

      8.09    Written Elections ......................................................      64

      8.10    Claims Procedure .......................................................      64

Article 9.  Management of Funds ......................................................      66
</TABLE>

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                          PAGE
<S>                                                                                       <C>
     9.01     Trust Agreement ........................................................      66

     9.02     Exclusive Benefit Rule .................................................      66

     9.03     Appointment of Investment Manager ......................................      66

Article 10.  Amendment, Termination, Mergers and Consolidations of the Plan ..........      67

     10.01    Plan Amendment .........................................................      67

     10.02    Plan Termination .......................................................      67

     10.03    Mergers and Consolidations of Plans ....................................      69

     10.04    Distribution of Accounts Upon a Sale of Assets or a Sale of a Subsidiary      69

     10.05    Reorganizations ........................................................      70

Article 11.  General Provisions ......................................................      70

     11.01    Applicable Law .........................................................      70

     11.02    Nonalienation ..........................................................      71

     11.03    Severability of Provisions .............................................      72

     11.04    Facility of Payment ....................................................      72

     11.05    Gender and Number ......................................................      72

     11.06    Conditions of Employment Not Affected by Plan ..........................      72

     11.07    Erroneous Allocations ..................................................      73

     11.08    Additional Participating Employers .....................................      73

Article 12.  Top-Heavy Provisions ....................................................      74

     12.01    Top-Heaviness Defined ..................................................      74

     12.02    Company Contributions ..................................................      78

     12.03    Impact on Maximum Benefits .............................................      79

SUPPLEMENT A .........................................................................      80
</TABLE>

                                      -iii-
<PAGE>

ARTICLE 1. DEFINITIONS

1.01  Account means the entire interest of a Participant in the Trust Fund as of
      the date of reference. A Participant's Account shall consist of his
      Deferral Account, Profit Sharing Account, Matching Account, Savings
      Account, Pension Account and Rollover Account and, if applicable, his loan
      fund under Section 7.03.

1.02  Accrued Benefit means the amount standing in a Participant's Account as of
      any date, derived from both Company contributions and Associate
      contributions, if any.

1.03  Actual Deferral Percentage means, with respect to a specified group of
      Associates, the average of the ratios, calculated separately for each
      Associate in that group, of (a) the amount of Income Deferral
      Contributions made pursuant to Article 3. hereof for a Plan Year
      (including Income Deferral Contributions returned to a Highly Compensated
      Employee under Section 3.01(c) and Income Deferral Contributions returned
      to any Associate pursuant to Section 3.01(d), to (b) the Associates'
      Compensation for that entire Plan Year, provided that, upon direction of
      the Committee, Compensation for a Plan Year shall only be counted if
      received during the period an Associate is, or is eligible to become, a
      Participant. The Actual Deferral Percentage for each group and the ratio
      determined for each Associate in the group shall be calculated to the
      nearest one one-hundredth of one percent. For purposes of determining the
      Actual Deferral Percentage for a Plan Year, Income Deferral Contributions
      may be taken into account for a Plan Year only if they:

      (a)   relate to compensation that either would have been received by the
            Associate in the Plan Year but for the deferral election, or are
            attributable to services performed by the Associate in the Plan Year
            and would have been received by the Associate within 2 1/2 months
            after the close of the Plan Year but for the deferral election,
<PAGE>

      (b)   are allocated to the Associate as of a date within that Plan Year
            and the allocation is not contingent on the participation or
            performance of service after such date, and

      (c)   are actually paid to the Trustee no later than 12 months after the
            end of the Plan Year to which the contributions relate.

1.04  Adjustment Factor means the cost of living adjustment factor prescribed by
      the Secretary of the Treasury under Section 415(d) of the Code for
      calendar years beginning on or after January 1, 1988, and applied to such
      items and in such manner as the Secretary shall provide.

1.05  Affiliated Company means any company not participating in the Plan which
      is a member of a controlled group of corporations (as defined in Section
      414(b) of the Code) which also includes as a member TruServ Corporation,
      any trade or business under common control (as defined in Section 414(c)
      of the Code) with TruServ Corporation, a member of an affiliated service
      group (as defined in Section 414(m) of the Code) which includes TruServ
      Corporation, or any other entity required to be aggregated with TruServ
      Corporation pursuant to Regulations under Section 414(o) of the Code,
      except that with respect to Section 3.10 and the definition of "leased
      employee" in Section 1.09 "more than 50%" shall be substituted for "at
      least 80%" where it appears in Section 1563(a)(1) of the Code.

1.06  Anniversary Date means the last day in each Plan Year.

1.07  Annual Dollar Limit means $150,000 commencing with the 1994 Plan Year. The
      Annual Dollar Limit shall be adjusted in accordance with Section
      401(a)(17)(B) of the Code.

                                       2
<PAGE>

1.08  Annuity Starting Date means the first day of the first period for which an
      amount is paid as an annuity or any other form following a Participant's
      retirement or other termination of employment.

1.09  Associate means any person employed by the Company who receives stated
      compensation other than a pension, severance pay, retainer or fee under
      contract and is a member of a group of Associates to whom the Plan has
      been and continues to be extended by the Company. Any person considered to
      be an independent contractor or consultant by the Company shall be
      excluded from the definition of Associate, regardless of such person's
      classification by the Internal Revenue Service for tax withholding
      purposes. Associate shall not include any "leased employee" and any person
      who is included in a unit of Associates covered by a collective bargaining
      agreement which does not provide for his participation in the Plan. The
      term "leased employee" means any person (other than an employee of the
      recipient) who pursuant to an agreement between the recipient and any
      other person ("leasing organization") has performed services for the
      recipient (or for the recipient and related persons determined in
      accordance with Section 414(n)(6) of the Code) on a substantially full
      time basis for a period of at least one year, and such services are
      performed under primary direction or control by the recipient.
      Contributions or benefits provided a leased employee by the leasing
      organization which are attributable to services performed for the
      recipient employer shall be treated as provided by the recipient employer.

      A leased employee shall not be considered an employee of the recipient if:
      (i) such employee is covered by a money purchase pension plan providing:
      (1) a nonintegrated employer contribution rate of at least 10 percent of
      compensation, as defined in Section 415(c)(3) of the Code, but including
      amounts contributed pursuant to a salary reduction agreement which are
      excludable from the employee's gross income under Section 125,

                                       3
<PAGE>

      Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code; (2)
      immediate participation; and (3) full and immediate vesting; and (ii)
      leased employees do not constitute more than 20 percent of the recipient's
      nonhighly compensated work force. In the case of any person who is a
      leased employee immediately before or after a period of service as an
      Associate, the entire period during which he has performed services for
      the Company or an Affiliated Company as a leased employee shall be counted
      as service as an Associate for all purposes of the Plan, except that he
      shall not, by reason of that status, become a Participant of the Plan.

1.10  Beneficiary means any person, persons or entity named by a Participant by
      written designation filed with the Committee to receive benefits payable
      in the event of the Participant's death. However, if the Participant is
      married, his spouse shall be deemed to be the Beneficiary unless another
      Beneficiary has been named by a written designation filed with the
      Committee which has been signed by the Participant with Spousal Consent.
      If no such designation is in effect at the time of death of the
      Participant, or if no person, persons or entity so designated shall
      survive the Participant, the Participant's surviving spouse, if any, shall
      be deemed to be the Beneficiary; otherwise the Beneficiary(ies) shall be,
      at the Committee's discretion, any relative by blood, adoption or marriage
      in such proportion as the Committee determines or the estate of the last
      to die of the Participant or his designated Beneficiary.

1.11  Board of Directors means the Board of Directors of the Company.

1.12  Break in Service means an event affecting forfeitures, which shall occur
      as of the Participant's Severance Date if he is not reemployed by the
      Company or an Affiliated Company within one year after a Severance Date.
      However, if an Associate is absent from

                                       4
<PAGE>

      work immediately following his active employment, irrespective of whether
      the Associate's employment is terminated, because of the Associate's
      pregnancy, the birth of the Associate's child, the placement of a child
      with the Associate in connection with the adoption of that child by the
      Associate or for purposes of caring for that child for a period beginning
      immediately following that birth or placement and that absence from work
      began on or after the first day of the Plan Year which began in 1985, a
      Break in Service shall occur only if the Participant does not return to
      work within two years of his Severance Date. A Break in Service shall not
      occur during an approved leave of absence which is included in the
      Associate's Service pursuant to Section 1.44.

1.13  Coast Plan means the SERVISTAR/Coast to Coast Profit Sharing and Savings
      Plan sponsored by the SERVISTAR/Coast to Coast Corporation, which was
      merged into the SERVISTAR plan as of August 1, 1996.

1.14  Code means the Internal Revenue Code of 1986, as amended.

1.15  Committee means the committee named as such pursuant to the provisions of
      Article 8.

1.16  Company means TruServ Corporation and any successor entity thereto which
      adopts this Plan. Cotter & Company and SERVISTAR COAST TO COAST
      Corporation merged on July 1, 1997 and became TruServ Corporation.

1.17  Compensation means the total remuneration actually paid to the Participant
      by the Company during the Plan Year to which reference is made, determined
      prior to any pre-tax contributions under a "qualified cash or deferred
      arrangement" (as defined under Section 401(k) of the Code and its
      applicable regulations), under a "cafeteria plan" (as defined under

                                       5
<PAGE>

      Section 125 of the Code and its applicable regulations) or, effective
      January 1, 2000, that is a "qualified transportation fringe benefit" (as
      defined under Section 132(f) of the Code). Compensation shall include
      basic salary or wages (including commissions, bonuses (other than sign-on
      bonuses)), and all other direct current remuneration, such as vacation,
      holiday and sick pay, but shall not include severance pay, moving or
      relocation allowances or bonuses, tuition reimbursements, automobile or
      travel allowances or bonuses, or long-term disability pay paid during the
      period the Participant is an active Participant, Company Contributions to
      Social Security, contributions to this or any other deferred profit
      sharing or retirement plan or program, stock options, or the value of any
      other fringe benefits provided at the expense of the Company and not
      specifically included herein. However, Compensation shall not exceed the
      Annual Dollar Limit, provided that such Annual Dollar Limit shall not be
      applied in determining Highly Compensated Employees under Section 1.27.

1.18  Contribution Percentage means, with respect to a specified group of
      Associates, the average of the ratios, calculated separately for each
      Associate in that group, of (a) the amount of Participant's Matching
      Contributions (excluding any Matching Contributions forfeited under the
      provisions of Sections 3.01 and 3.06), to (b) the Associate's Compensation
      for that Plan Year, provided that upon direction of the Committee,
      Compensation for a Plan Year shall only be counted if received during the
      period an Associate is, or is eligible to become, a Participant. The
      Contribution Percentage for each group and the ratio determined for each
      Associate in the group shall be calculated to the nearest one
      one-hundredth of one percent.

                                       6
<PAGE>

1.19  Cotter Plan means the Cotter & Company Employees' Savings and Compensation
      Deferral Plan, originally effective January 1, 1976, which was merged with
      the SERVISTAR Plan effective January 1, 1998 to create this Plan.

1.20  Date of Employment means the first date on which an Associate completes an
      Hour of Service as an Associate, provided that in the case of a Break in
      Service the "Date of Employment" shall be the first date thereafter on
      which he completes an Hour of Service.

1.21  Deferral Account means so much of the Participant's Account as is
      attributable to a Participant's Income Deferral Contributions, adjusted as
      provided herein for investment income, gain or loss and expenses. The
      Deferral Account shall hold:

      (a)   the Participant's "Deferral Account" under the Cotter Plan,

      (b)   the Participant's "Pre-Tax Account" under the SERVISTAR Plan (known
            as the "Savings Plus Account" prior to July 1, 1996), which also
            includes

      (c)   the Participant's Coast Plan "Pre-Tax Account" merged into the
            SERVISTAR Plan as of August 1, 1996.

1.22  Disability means total and permanent physical or mental disability, as
      evidenced by:

      (a)   receipt of Social Security disability pension, or

      (b)   receipt of disability payments under the Company's long-term
            disability program.

1.23  Earnings means the amount of earnings to be returned with any excess
      deferrals, excess contributions or excess aggregate contributions under
      Section 3.01, 3.06, 3.07 or 3.08 for a Plan Year, determined as of the
      last day of such Plan Year under the Plan's method of allocating income to
      Participants' Accounts pursuant to Section 4.03.

                                       7
<PAGE>

1.24  Effective Date means January 1, 1998 for this amended and restated Plan.
      Notwithstanding this Effective Date, the provisions described in
      Supplement A of this Plan shall have effective dates which are prior to
      January 1, 1998 as set forth in Supplement A.

1.25  Entry Date means any day of the Plan Year following an Associate's
      completion of one year of Service.

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

1.27  Highly Compensated Employee means any Associate of the Company or an
      Affiliated Company (whether or not eligible for membership in the Plan)
      who:

      (a)   was a 5% owner of the Company (as defined in Section 416(i) of the
            Code) for such Plan Year or the prior Plan Year, or

      (b)   for the preceding Plan Year received Compensation in excess of
            $80,000 commencing with the 1997 Plan Year.

      The $80,000 amount referenced above is adjusted at the same time and in
      the same manner as under Section 415(d) of the Code, except that the base
      period is the calendar quarter ending September 30, 1996. A highly
      compensated former employee is based on the rules applicable to
      determining highly compensated employee status as in effect for that
      determination year, in accordance with Section 1.414(q)-1T, A-4 of the
      temporary Treasury Regulations and Internal Revenue Service Notice 97-45.

      The Company's preceding Plan Year election as described above, shall be
      used consistently in determining Highly Compensated Employees for
      determination years of all Associate

                                       8
<PAGE>

      benefit plans of the Company and any Affiliated Company for which Section
      414(q) of the Code applies (other than a multiemployer plan) that begin
      with or within the same calendar year, until such election is changed by
      Plan amendment in accordance with Internal Revenue Service requirements.
      Notwithstanding the foregoing, the consistency provision in the preceding
      sentence shall not apply for the Plan Year beginning in 1997, and for Plan
      Years beginning in 1998 and 1999, shall apply only with respect to all
      qualified retirement plans (other than a multiemployer plan) of the
      Company and any Affiliated Company.

      Notwithstanding the foregoing, Associates who are nonresident aliens and
      who receive no earned income from the Company or an Affiliated Company
      which constitutes income from sources within the United States shall be
      disregarded for all purposes of this Section.

      The provisions of this Section shall be further subject to such additional
      requirements as shall be described in Section 414(q) of the Code and its
      applicable regulations, which shall override any aspects of this Section
      inconsistent therewith.

1.28  Hour of Service means each hour for which an Associate is directly or
      indirectly paid, or entitled to payment, by the Company or an Affiliated
      Company for the performance of duties.

1.29  Income Deferral Contributions means amounts contributed pursuant to
      Section 3.01.

1.30  Investment Fund means any one of or all of the investment funds available
      to a Participant as provided in Section 4.02.

1.31  Matching Account means so much of a Participant's Account as is
      attributable to the Company's Matching Contributions, adjusted as provided
      herein for investment income, gain

                                       9
<PAGE>

      or loss and expenses. The Matching Account shall also hold the
      Participant's match account under any plan merged, either directly or
      indirectly, into this Plan.

1.32  Matching Contributions means amounts contributed by the Company pursuant
      of Section 3.02.

1.33  Nonhighly Compensated Employees means for any Plan Year an Associate of
      the Company or an Affiliated Company who is not a Highly Compensated
      Employee for that Plan Year.

1.34  Normal Retirement Age means attainment of age 65.

1.35  Participant means any person who is an Associate and who has been admitted
      to participation in this Plan pursuant to the eligibility provisions of
      Article 2. A Participant ceases to be a Participant when all assets in his
      Account to which he is entitled under the Plan have been distributed in
      accordance with the Plan.

1.36  Pension Account means so much of the Participant's Account which was
      credited the "Participant's Pension Account" under the Coast Plan which
      had been transferred into the SERVISTAR Plan on behalf of the Participant
      from the Coast America Retirement Savings Plan, adjusted as provided
      herein for investment income, gain or loss and expenses.

1.37  Plan means the TruServ Corporation Savings and Compensation Deferral Plan
      as set forth herein, and as the same may from time to time hereafter be
      amended. This Plan was created by merger of the Cotter & Company
      Employees' Savings and Compensation Deferral Plan and the SERVISTAR COAST
      TO COAST Corporation Supplemental Retirement Plan, effective January 1,
      1998.

                                       10
<PAGE>

1.38  Plan Year means the twelve-month period commencing each January 1.

1.39  Profit Sharing Account means so much of a Participant's Account as is
      attributable to the SERVISTAR Plan "Profit Sharing Account" merged into
      this Plan as of January 1, 1998, adjusted as provided herein for
      investment income, gain or loss and expenses. This SERVISTAR Plan "Profit
      Sharing Account" was called the "Company Contribution Account" prior to
      July 1, 1996. The "Profit Sharing Account" shall also hold the
      Participant's Coast Plan "Retirement Account" merged into the SERVISTAR
      Plan as of August 1, 1996.

1.40  Qualified Joint and Survivor Annuity means an annuity payable for the life
      of a Participant, and, after the Participant's death, an annuity payable
      to his spouse for life at the rate of not less than 50% nor more than 100%
      of the amount payable to the Participant.

1.41  Rollover Account means so much of the Participant's Account into which
      shall be credited the Rollover Contributions made by a Participant as set
      forth in Section 3.03, adjusted as provided herein for investment income,
      gain or loss and expenses. This Rollover Account shall also hold the
      Participant's Cotter Plan "Rollover Account" and SERVISTAR Plan "Rollover
      Account" (which includes the Coast Plan "Rollover Account" merged as of
      August 1, 1996) merged into this Plan as of January 1, 1998.

1.42  Rollover Contributions means amounts contributed pursuant to Section 3.03.

1.43  Savings Account means so much of a Participant's Account as is
      attributable to a Participant's after-tax contributions under the Cotter
      Plan or the SERVISTAR Plan or any other plan previously merged into them,
      adjusted as provided herein for investment income,

                                       11
<PAGE>

      gain or loss and expenses. This Savings Account was called the Employee
      Contribution Account prior to July 1, 1986. The Savings Account shall hold
      the Participant's Coast Plan "Employee Thrift Account" merged into this
      Plan as of August 1, 1996.

1.44  Service means, with respect to any Associate, his period of employment
      with the Company or an Affiliated Company, whether or not as an Associate,
      beginning on the date he first completes an Hour of Service (or the date
      he first completes an Hour of Service upon reemployment after a Break in
      Service) and ending on his Severance Date, provided that:

      (a)   if his employment terminates and he is reemployed within one year of
            the earlier of:

            (i)   his date of termination, or

            (ii)  the first day of an absence from service immediately preceding
                  his date of termination,

            the period between his Severance Date and his date of reemployment
            shall be included in his Service;

      (b)   to the extent provided by the Company in a written agreement, an
            Associate's service with any predecessor to the Company will be
            considered as employment by the Company, thus, Service shall include
            an Associate's continuous employment with Cotter & Company under the
            provisions of the Cotter Plan, "Years of Service" with the SERVISTAR
            Corporation under the provisions of the SERVISTAR Plan, and
            continuous service with the Coast-to-Coast Corporation prior to its
            acquisition by the SERVISTAR Corporation, as recognized under the
            provisions of the Coast-to-Coast Corporation qualified retirement
            plan;

      (c)   if he is on a leave of absence, any portion of that period of leave
            which is not otherwise included in his Service shall be included in
            his Service. A leave of absence means any of the following:

                                       12
<PAGE>

            (i)   Absence on leave granted by the Company or an Affiliated
                  Company for any cause for the period stated in such leave and
                  any extension that the Company or an Affiliated Company may
                  grant in writing. For the purpose of this subsection, the
                  Company or an Affiliated Company shall give uniform treatment
                  to all Associates in similar circumstances;

            (ii)  Absence in any circumstances so long as the Associate
                  continues to receive his regular pay from the Company or an
                  Affiliated Company; or

            (iii) Absence by reason of vacation, holidays, illness, disability,
                  maternity or jury duty.

            When a leave of absence ceases and the Associate does not return to
            Service, the last day of the leave shall be deemed a Severance Date
            unless his Service actually terminated prior to the expiration of
            the leave.

      (d)   if a former Associate who is not vested with respect to any portion
            of his Deferral Account or Matching Account is reemployed by the
            Company or an Affiliated Company after he has incurred five
            consecutive one-year Breaks in Service, his period of Service prior
            to such five consecutive one-year Breaks in Service shall be
            disregarded for purposes of determining the vested portion of his
            Matching Account upon his reemployment if the consecutive number of
            his one-year Breaks in Service equal or exceed his years of Service.
            In no event shall a period of Service after an Associate has
            incurred five consecutive one-year Breaks in Service be taken into
            account in determining the vested portion of his Matching Account
            attributable to Service prior to such five year Break in Service.

1.45  SERVISTAR Plan means the SERVISTAR COAST TO COAST Corporation Supplemental
      Retirement Plan, originally effective July 1, 1964, which was merged with
      the Cotter Plan effective January 1, 1998 to create this Plan.

                                       13
<PAGE>

1.46  Severance Date means the earlier of:

      (a)   the date an Associate quits, retires, is discharged or dies, or

      (b)   the first anniversary of the date on which an Associate is first
            absent from service, with or without pay, for any reason such as
            vacation, sickness, disability, layoff or leave of absence.

1.47  Spousal Consent means the written consent of a Participant's spouse to the
      Participant's election of a specified form of benefit or designation of a
      specified Beneficiary. The specified form or specified Beneficiary shall
      not be changed unless further Spousal Consent is given. Spousal Consent
      shall be duly witnessed by a Plan representative or notary public and
      shall acknowledge the effect on the spouse of the Participant election.
      The requirement for Spousal Consent may be waived by the Committee in the
      event that the Participant establishes to its satisfaction that he has no
      spouse, that such spouse cannot be located, or under such other
      circumstances as may be permitted under applicable Treasury Department
      regulations. Spousal Consent shall be applicable only to the particular
      spouse who provides such consent.

1.48  Trust Fund means such money or property as shall from time to time be paid
      to the Trustee under this Plan, and such earnings, profits, increments,
      additions and appreciation thereto, decreased by losses, depreciation,
      benefits paid and expenses incurred in the administration of the Plan and
      Trust.

1.49  Trustee means the party or parties so designated pursuant to a trust
      agreement by the Company for this Plan and any duly appointed successor
      Trustee or Trustees acting hereunder.

                                       14
<PAGE>

1.50  Valuation Date means any business day of the Plan Year.

ARTICLE 2. PARTICIPATION AND ENTRY DATE

2.01  ELIGIBILITY FOR INCOME DEFERRAL CONTRIBUTIONS

      Any Participant in the Cotter Plan or SERVISTAR Plan on December 31, 1997
      shall be a Participant in this Plan on January 1, 1998 based on his
      contribution election in effect in each respective plan on December 31,
      1997. Any Associate who was eligible to participate on December 31, 1997
      shall be eligible to become a Participant on January 1, 1998 provided he
      is then still an Associate. Each other Associate shall be eligible to make
      Income Deferral Contributions on any Entry Date coinciding with or
      immediately following the date he completes one year of Service. Any
      former Associate of Advocate Services, Inc. who becomes an Associate on or
      after January 1, 1998, shall be eligible to become a Participant when he
      becomes an Associate.

2.02  PARTICIPATION

      An eligible Associate shall become a Participant for purposes of Section
      2.01 on the first Entry Date coinciding with or immediately following the
      date he completes one year of Service, provided he has completed the
      enrollment procedures established by the Committee for:

      (a)   making an election for Income Deferral Contributions under Section
            3.01;

      (b)   authorizing the Company to reduce his Compensation;

      (c)   making an investment election; and

      (d)   designating a Beneficiary.

                                       15
<PAGE>

2.03  ELIGIBILITY UPON REEMPLOYMENT

      Any Associate whose employment terminates and who is subsequently
      reemployed shall become a Participant in accordance with Section 2.01.
      Upon reemployment, the eligible Associate must complete the enrollment
      procedures under Section 2.02.

2.04  TRANSFERRED PARTICIPANTS

      A Participant who remains in the employ of the Company or an Affiliated
      Company but ceases to be an Associate (e.g., the Associate enters a
      nonparticipating collective bargaining unit) shall continue to be a
      Participant of the Plan but shall not be eligible to receive allocations
      of Income Deferral Contributions or Matching Contributions while his
      employment status is other than as an Associate.

ARTICLE 3. INCOME DEFERRAL CONTRIBUTIONS

3.01  INCOME DEFERRAL CONTRIBUTIONS

      (a)   A Participant may elect on his application filed under Section 2.02
            hereof to reduce his Compensation payable while a Participant by not
            less than 1% and not more than 15%, in multiples of 1% as elected by
            the Participant, and have that amount contributed to the Plan by the
            Company in a manner to be determined by the Committee. The Income
            Deferral Contributions shall be paid to the Trustee as of the
            earliest date on which such contributions can reasonably be
            segregated from the Company's general assets, but no later than the
            15th day of the month following the month in which the Income
            Deferral Contributions were made and shall be credited to the
            Participant's Deferral Account. A Participant shall be 100% vested
            at all times in his Deferral Account. Income Deferral Contributions
            shall be further limited as provided below and in Sections 3.01(b),
            3.06 and 3.10.

                                       16
<PAGE>

      (b)   In no event shall the Participant's Income Deferral Contributions
            and similar contributions made on his behalf by the Company or an
            Affiliated Company to all plans, contracts or arrangements subject
            to the provisions of Section 401(a)(30) of the Code in any calendar
            year exceed $9,500, as adjusted from time to time for the
            cost-of-living pursuant to Section 402(g) of the Code. If a
            Participant's Income Deferral Contributions in a calendar year reach
            that dollar limitation, his election of Income Deferral
            Contributions for the remainder of the calendar year will be
            canceled. As of the first pay period of the following calendar year,
            the Participant's election of Income Deferral Contributions shall
            again become effective in accordance with his previous election,
            unless the Participant elects otherwise.

      (c)   In the event that the sum of the Income Deferral Contributions and
            similar contributions to any other qualified defined contribution
            plan maintained by the Company or an Affiliated Company exceeds the
            dollar limitation in subsection (b) above for any calendar year, the
            Participant shall be deemed to have elected a return of Income
            Deferral Contributions in excess of such limit ("excess deferrals")
            from this Plan. The excess deferrals, together with Earnings, shall
            be returned to the Participant no later than the April 15 following
            the end of the calendar year in which the excess deferrals were
            made. The amount of excess deferrals to be returned for any calendar
            year shall be reduced by any Income Deferral Contributions
            previously returned to the Participant under Section 3.06 for that
            calendar year. In the event any Income Deferral Contributions
            returned under this paragraph (b) were matched by Matching
            Contributions under Section 3.02, those Matching Contributions,
            together with Earnings, shall be forfeited and used to reduce
            Company contributions.

      (d)   If a Participant makes tax-deferred contributions under another
            qualified defined contribution plan for any calendar year and those
            contributions when added to his Income Deferral Contributions under
            this Plan exceed the dollar limitation under

                                       17
<PAGE>

            subsection (b) above for that calendar year, the Participant may
            allocate all or a portion of such excess deferrals to this Plan. In
            that event, the excess deferrals, with Earnings thereon, as
            allocated shall be returned to the Participant no later than the
            April 15 following the end of the calendar year in which the excess
            deferrals were made. However, the Plan shall not be required to
            return excess deferrals unless the Participant notifies the
            Committee, in writing, by March 1 of that following calendar year of
            the amount of the excess deferrals allocated to this Plan. The
            amount of excess deferrals to be returned for any calendar year
            shall be reduced by any Income Deferral Contributions previously
            returned to the Participant under Section 3.06 for that calendar
            year. In the event any Income Deferral Contributions returned under
            this paragraph (d) were matched by Matching Contributions under
            Section 3.02, those Matching Contributions, together with Earnings,
            shall be forfeited and used to reduce Company contributions.

3.02  MATCHING CONTRIBUTIONS

      Effective as of the first payroll period ending after July 1, 2000 (a) the
      Company may thereafter authorize Matching Contributions on behalf of each
      Participant who elects to make Income Deferral Contributions in an amount
      equal to a percentage of such Income Deferral Contributions with such
      maximum percentage amount as determined from time to time by the Company
      in its sole discretion; (b) any such Matching Contributions shall be
      allocated on an annual basis only to the accounts of Participants who are
      actively employed by the Company as of the Anniversary Date, who are on
      authorized medical leave of absence as of the Anniversary Date, or whose
      employment has terminated during the Plan Year after attainment of Normal
      Retirement Age, as a result of involuntary termination by the Company, or
      as a result of death or Disability; and (c) the Company reserves the right
      not to make any Matching Contributions for any reason it deems
      appropriate. The Matching Contributions

                                       18
<PAGE>

      are made expressly conditional on the Plan satisfying the provisions of
      Sections 3.01, 3.06, 3.07 and 3.08. If any portion of the Income Deferral
      Contributions to which the Matching Contribution relates is returned to
      the Participant under Sections 3.01, 3.06 and 3.08, the corresponding
      Matching Contribution shall be forfeited and if any amount of the Matching
      Contribution is deemed an excess aggregate contribution under Section
      3.07, such amount shall be forfeited in accordance with the provisions of
      that Section.

      For contributions made prior to July 1, 2000 the Company shall contribute
      on behalf of each Participant who elects to make Income Deferral
      Contributions an amount equal to 100% of the first 3% plus 50% of the next
      3% of Compensation which is contributed as Income Deferral Contributions
      on behalf of or by the Participant to the Plan during each payroll period.
      In no event, however, shall the Matching Contributions pursuant to this
      Section exceed 4.5% of the Participant's Compensation while a Participant
      with respect to a particular Plan Year.

3.03  ROLLOVER CONTRIBUTIONS

      (a)   With the permission of the Committee and without regard to any
            limitations on contributions set forth in Article 3, the Plan may
            receive from a Participant, or an Associate who has not yet met the
            eligibility requirements for membership, in cash, any amount
            previously received (or deemed to be received) by him from a
            qualified plan. The Plan may receive such amount either directly
            from the Participant or Associate or from an individual retirement
            account or from a qualified plan in the form of a direct rollover.
            Notwithstanding the foregoing, the Plan shall not accept any amount
            unless such amount is eligible to be rolled over to a qualified
            trust in accordance with applicable law and the Participant provides
            evidence satisfactory to the Committee that such amount qualifies
            for rollover treatment. Unless received by the Plan in the form of a
            direct rollover, the Rollover Contribution must be paid to the

                                       19
<PAGE>

            Trustee on or before the 60th day after the day it was received by
            the Participant. No "rollover amount" will be accepted, directly or
            indirectly, from an individual retirement account to which the
            Associate contributed on his own behalf or which consists, in whole
            or in part, of insurance contracts.

      (b)   The Trustee shall establish a Rollover Account on whose behalf such
            "rollover amount" was received.

      (c)   All "rollover amounts" shall be fully vested in the Associate on
            whose behalf they are established.

      (d)   The assets held on behalf of any Associate in a rollover account
            shall be aggregated with any other vested interest he may have in
            this Plan for the purpose of distribution and shall be distributed
            at the same time and by the same method as the remainder of his
            vested interest in this Plan.

3.04  CHANGE IN CONTRIBUTIONS

      The percentages of Compensation designated by a Participant under Section
      3.01 shall automatically apply to increases and decreases in his
      Compensation. Subject to the provisions of Section 3.01, a Participant may
      change the percentage of his authorized payroll deduction or reduction at
      any time. The changed percentage shall become effective as soon as
      administratively feasible following receipt of notice by the Committee,
      according to rules established by the Committee.

3.05  SUSPENSION OF CONTRIBUTIONS

      A Participant may suspend his contributions under Section 3.01 and/or
      revoke his election under Section 3.01 at any time by giving notice to the
      Committee. The suspension or revocation shall become effective as soon as
      administratively feasible following receipt of notice by the Committee or
      its delegate, according to rules established by the Committee. A

                                       20
<PAGE>

      Participant who has suspended and/or revoked his contributions under
      Section 3.01 may apply to the Committee to have them resumed and to have
      his Compensation reduced in accordance with Section 3.01 as soon as
      administratively feasible following receipt of notice by the Committee or
      its delegate, according to rules established by the Committee.

3.06  ACTUAL DEFERRAL PERCENTAGE TEST

      With respect to each Plan Year commencing on or after January 1, 1997, the
      Actual Deferral Percentage for that Plan Year for Highly Compensated
      Employees who are Participants or eligible to become Participants for that
      Plan Year shall not exceed the Actual Deferral Percentage for the
      preceding Plan Year for all Nonhighly Compensated Employees for the
      preceding Plan Year who were Participants or eligible to become
      Participants during the preceding Plan Year multiplied by 1.25. If the
      Actual Deferral Percentage for such Highly Compensated Employees does not
      meet the foregoing test, the Actual Deferral Percentage for such Highly
      Compensated Employees for that Plan Year may not exceed the Actual
      Deferral Percentage for the preceding Plan Year for all Nonhighly
      Compensated Employees for the preceding Plan Year who were Participants or
      eligible to become Participants during the preceding Plan Year by more
      than two percentage points, and such Actual Deferral Percentage for such
      Highly Compensated Employees for the Plan Year may not be more than 2.0
      times the Actual Deferral Percentage for the preceding Plan Year for all
      Nonhighly Compensated Employees for the preceding Plan Year who were
      Participants or eligible to become Participants during the preceding Plan
      Year (or such lesser amount as the Committee shall determine to satisfy
      the provisions of Section 3.08). Notwithstanding the foregoing, the
      Company may elect to use the Actual Deferral Percentage for Nonhighly
      Compensated Employees for the Plan Year being tested rather than the
      preceding Plan Year provided that such election must be evidenced by a
      Plan amendment and once made may not be changed except as provided by the
      Secretary of the Treasury.

                                       21
<PAGE>

      The Committee may implement rules limiting the Income Deferral
      Contributions which may be made on behalf of some or all Highly
      Compensated Employees so that this limitation is satisfied. If the
      Committee determines that the limitation under this Section has been
      exceeded in any Plan Year as a result of the level of Income Deferral
      Contributions made on behalf of some or all Highly Compensated Employees,
      the portion of such Income Deferral Contributions that cause the Plan to
      exceed such limitations ("excess contributions") shall be determined and
      distributed to such Highly Compensated Employees as follows:

      (a)   The Income Deferral Contributions of the Highly Compensated Employee
            with the highest dollar amount of Income Deferral Contributions
            shall be reduced to the extent necessary so that the Plan does not
            exceed the limitations of this section or by the amount required to
            cause that Highly Compensated Employee's Income Deferral
            Contributions to equal the dollar amount of the Income Deferral
            Contributions of the Highly Compensated Employee with the next
            highest dollar amount of Income Deferral Contributions. This
            procedure is repeated until all excess contributions are allocated.
            The amount of excess contributions distributed to a Highly
            Compensated Employee, shall be distributed to him or her with
            Earnings thereon and in accordance with the provisions of paragraph
            (b).

      (b)   The excess contributions, together with Earnings thereon, allocated
            to a Participant shall be paid to the Participant before the close
            of the Plan Year following the Plan Year in which the excess
            contributions were made, and to the extent practicable, within 2 1/2
            months of the close of the Plan Year in which the excess
            contributions were made. However, any excess contributions for any
            Plan Year shall be reduced by any Income Deferral Contributions
            previously returned to the Participant under Section 3.01 for that
            Plan Year. In the event any Income Deferral Contributions returned
            under this Section were matched by Matching Contributions, such

                                       22
<PAGE>

            corresponding Matching Contributions, with Earnings thereon, shall
            be forfeited and used to reduce Company contributions.

3.07  CONTRIBUTION PERCENTAGE TEST

      With respect to each Plan Year commencing on or after January 1, 1997, the
      Contribution Percentage for that Plan Year for Highly Compensated
      Employees who are Participants or eligible to become Participants for that
      Plan Year shall not exceed the Contribution Percentage for the preceding
      Plan Year for all Nonhighly Compensated Employees for the preceding Plan
      Year who were Participants or eligible to become Participants during the
      preceding Plan Year multiplied by 1.25. If the Contribution Percentage for
      such Plan Year for such Highly Compensated Employees does not meet the
      foregoing test, the Contribution Percentage for such Highly Compensated
      Employees for the Plan Year may not exceed the Contribution Percentage for
      the preceding Plan Year for all Nonhighly Compensated Employees for the
      preceding Plan Year who were Participants or eligible to become
      Participants during the preceding Plan Year by more than two percentage
      points, and the Contribution Percentage for such Highly Compensated
      Employees for the Plan Year may not be more than 2.0 times the
      Contribution Percentage for the preceding Plan Year for all Nonhighly
      Compensated Employees for the preceding Plan Year who were Participants or
      eligible to become Participants during the preceding Plan Year (or such
      lesser amount as the Committee shall determine to satisfy the provisions
      of Section 3.08). Notwithstanding the foregoing, the Company may elect to
      use the Actual Contribution Percentage for Nonhighly Compensated Employees
      for the Plan Year being tested rather than the preceding Plan Year
      provided that such election must be evidenced by a Plan amendment and once
      made may not be changed except as provided by the Secretary of the
      Treasury.

                                       23
<PAGE>

      If the Committee determines that the limitation under this Section 3.07
      has been exceeded in any Plan Year as a result of the level of Matching
      Contributions made on behalf of some or all Highly Compensated Employees,
      the portion of such contributions that causes the Plan to exceed such
      limitations ("excess aggregate contributions") shall be determined and
      distributed to such Highly Compensated Employees or forfeited as follows:

      (a)   The Matching Contributions of the Highly Compensated Employee with
            the highest dollar amount of such contributions shall be reduced to
            the extent necessary so that the Plan does not exceed the
            limitations of this Section or by the amount required to cause that
            Highly Compensated Employee's Matching Contributions to equal the
            dollar amount of matching contributions of the Highly Compensated
            Employee with the next highest dollar amount of such Contributions.
            This procedure is repeated until all excess aggregate contributions
            are allocated. The amount of excess aggregate contributions
            allocated to each Highly Compensated Employee, together with
            Earnings thereon, shall be distributed or forfeited in accordance
            with the provisions of paragraph (b) below.

      (b)   Excess aggregate contributions allocated to a Highly Compensated
            Employee under paragraph (a) above shall be distributed or forfeited
            as follows: so much of the Matching Contributions, together with
            Earnings, as shall be necessary to equal the balance of the excess
            aggregate contributions shall be reduced, with the vested Matching
            Contributions, together with applicable Earnings, being paid to the
            Participant and the Matching Contributions which are forfeitable
            under the Plan, together with applicable Earnings, being forfeited
            and applied to reduce Company contributions.

      (c)   Any repayment or forfeiture of excess aggregate contributions shall
            be made before the close of the Plan Year following the Plan Year
            for which the excess aggregate contributions were made, and to the
            extent practicable, any repayment or forfeiture

                                       24
<PAGE>

            shall be made within 2 1/2 months of the close of the Plan Year in
            which the excess aggregate contributions were made.

3.08  AGGREGATE CONTRIBUTION LIMITATION

      Notwithstanding the provisions of Sections 3.06 and 3.07, in no event
      shall the sum of the Actual Deferral Percentage of the group of eligible
      Highly Compensated Employees and the Contribution Percentage of such
      group, after applying the provisions of Sections 3.06 and 3.07, exceed the
      "aggregate limit" as provided in Section 401(m)(9) of the Code and the
      regulations issued thereunder. In the event the aggregate limit is
      exceeded for any Plan Year, the Contribution Percentages of the Highly
      Compensated Employees shall be reduced to the extent necessary to satisfy
      the aggregate limit in accordance with the procedure set forth in Section
      3.07.

3.09  ADDITIONAL DISCRIMINATION TESTING PROVISIONS

      (a)   If any Highly Compensated Employee is a member of another qualified
            plan of the Company or an Affiliated Company, other than an employee
            stock ownership plan described in Section 4975(e)(7) of the Code or
            any other qualified plan which must be mandatorily disaggregated
            under Section 410(b) of the Code, under which deferred cash
            contributions or matching contributions are made on behalf of the
            Highly Compensated Employee or under which the Highly Compensated
            Employee makes after-tax contributions, the Committee shall
            implement rules, which shall be uniformly applicable to all
            Associates similarly situated, to take into account all such
            contributions for the Highly Compensated Employee under all such
            plans in applying the limitations of Sections 3.06, 3.07 and 3.08.
            If any other such qualified plan has a plan year other than the Plan
            Year defined in Section 1.38, the contributions to be

                                       25
<PAGE>

            taken into account in applying the limitations of Sections 3.06,
            3.07 and 3.08 will be those made in the plan years ending with or
            within the same calendar year.

      (b)   In the event that this Plan is aggregated with one or more other
            plans to satisfy the requirements of Sections 401(a)(4) and 410(b)
            of the Code (other than for purposes of the average benefit
            percentage test) or if one or more other plans is aggregated with
            this Plan to satisfy the requirements of such sections of the Code,
            then the provisions of Sections 3.06, 3.07 and 3.08 shall be applied
            by determining the Actual Deferral Percentage and Contribution
            Percentage of Associates as if all such plans were a single plan. If
            this Plan is permissively aggregated with any other plan or plans
            for purposes of satisfying the provisions of Section 401(k)(3) of
            the Code, the aggregated plans must also satisfy the provisions of
            Sections 401(a)(4) and 410(b) of the Code as though they were a
            single plan. Plans may be aggregated under this paragraph (b) only
            if they have the same plan year.

      (c)   The Company may elect to use Income Deferral Contributions to
            satisfy the tests described in Sections 3.07 and 3.08, provided that
            the test described in Section 3.06 is met prior to such election,
            and continues to be met following the Company's election to shift
            the application of those Income Deferral Contributions to Sections
            3.06 and 3.07.

      (d)   The Company may authorize that special "qualified nonelective
            contributions" shall be made for a Plan Year, which shall be
            allocated in such amounts and to such Participants, who are
            Nonhighly Compensated Employees, as the Committee shall determine.
            The Committee shall establish such separate accounts as may be
            necessary. Qualified nonelective contributions shall be 100%
            nonforfeitable when made. Any qualified nonelective contributions
            made on or after January 1, 1989 and any earnings credited on any
            qualified nonelective contributions after such date shall only be
            available for withdrawal under the provisions of Section 7.03.
            Qualified

                                       26
<PAGE>

            nonelective contributions made for the Plan Year may be used to
            satisfy the tests described in Sections 3.06, 3.07 and 3.08, where
            necessary.

      (e)   For Plan Years commencing on and after January 1, 1999, if the
            Company elects to apply the provisions of Section 410(b)(4)(B) to
            satisfy the requirements of Section 401(k)(3)(A)(i) of the Code, the
            Company may apply the provisions of Sections 3.06, 3.07 and 3.08 by
            excluding from consideration all eligible Associates (other than
            Highly Compensated Employees) who have not met the minimum age and
            service requirements of Section 410(a)(1)(A) of the Code.

3.10  ANNUAL ADDITIONS LIMITATIONS

      (a)   Notwithstanding the provisions of Sections 3.01 or 3.02, in no event
            shall the "annual addition" to a Participant's Account for any Plan
            Year (which shall be the "limitation year"), when added to the
            Participant's "annual addition" for that Plan Year under any other
            qualified defined contribution plan of the Company and an Affiliated
            Company, exceed the lesser of $30,000 (as revised for the Adjustment
            Factor) or 25% of such Participant's aggregate remuneration for that
            Plan Year as defined hereinafter.

      (b)   For purposes of this Section, the "annual addition" to a
            Participant's Account under this Plan or any other qualified defined
            contribution plan maintained by the Company or an Affiliated Company
            shall be the sum of:

            (i)   the total of contributions, including Income Deferral
                  Contributions made on the Participant's behalf, by the Company
                  and any Affiliated Company,

            (ii)  all Participant contributions (disregarding in any event
                  Rollover Contributions), and

            (iii) forfeitures, if applicable, that have been allocated to the
                  Participant's Account under this Plan or his accounts under
                  any other such qualified defined contribution plan, and solely
                  for purposes of the 25% limitation stated above,

                                       27
<PAGE>

            (iv)  amounts described in Sections 415(l)(1) and 419A(d)(2) of the
                  Code allocated to the Participant.

            For purposes of this paragraph (b), any Income Deferral
            Contributions distributed under Sections 3.06 and any after-tax or
            Matching Contributions distributed under the provisions of Sections
            3.01, 3.06, 3.07 or 3.08 shall be included in the annual addition
            for the year allocated. However (i) any loan repayment made under
            Article 7; (ii) amounts required to be repaid under Section 5.04 as
            a condition of the restoration of a Participant's forfeited Account
            balance; and (iii) any excess deferrals timely distributed from the
            Plan under Section 3.01(c) or (d) shall be excluded from the
            definition of annual addition.

      (c)   For purposes of this Section, the term "remuneration" with respect
            to any Participant shall mean the wages, salaries and other amounts
            paid in respect of that Participant by the Company or an Affiliated
            Company for personal services actually rendered, including, but not
            limited to, bonuses, overtime payments and commissions, but
            excluding deferred compensation, stock options and other
            distributions which receive special tax benefits under the Code.
            Notwithstanding the foregoing, for limitation years commencing prior
            to January 1, 1998, remuneration shall exclude amounts contributed
            by the Company pursuant to a salary reduction agreement which are
            not includible in the gross income of the Associate under Sections
            125, 402(g)(3) or 457 of the Code.

      (d)   The Committee shall have the duty and responsibility to monitor each
            Participant's Account and to determine if any annual additions may
            be in excess of the aforementioned limits, and, if so, the amount by
            which the annual additions should be reduced for such Plan Year.

                                       28
<PAGE>

      (e)   If an excess results from the application of any of these limits,
            the annual addition to the Participant's Account shall be reduced to
            the extent necessary to bring such annual addition within these
            limitations in the following order:

            (i)   the Participant's unmatched Income Deferral Contributions
                  under Section 3.01 shall be reduced to the extent necessary.
                  The amount of the reduction shall be returned to the
                  Participant, together with any earnings on the contributions
                  to be returned.

            (ii)  the Participant's matched Income Deferral Contributions under
                  Section 3.01 and corresponding Matching Contributions shall be
                  reduced to extent necessary. The amount of the reduction
                  attributable to the Participant's matched Income Deferral
                  Contributions shall be returned to the Participant together
                  with any earnings on those contributions to be returned, and
                  the amount attributable to the Matching Contributions shall be
                  forfeited and used to reduce subsequent Matching Contributions
                  payable by the Company.

            Any Income Deferral Contributions returned to a Participant under
            this paragraph (e) shall be disregarded in applying the dollar
            limitation on Income Deferral Contributions under Section 3.01(b),
            and in performing the Actual Deferral Percentage Test under Section
            3.06. Any Matching Contributions returned under this paragraph (e)
            shall be disregarded in performing the Contribution Percentage Test
            under Section 3.07.

      (g)   Participation in one or more Defined Benefit Plans

            This Section is effective for Plan Years beginning before January 1,
            2000. If any Participant is or has been a Participant in a defined
            benefit plan maintained by the Company regardless of whether any
            such plans are terminated, the Participant may not have
            contributions made to this Plan which would cause the sum of the
            defined benefit plan fraction and the defined contribution plan
            fraction to exceed l.0. This shall

                                       29
<PAGE>

            be accomplished by reducing contributions to Participants under this
            Plan to the extent necessary to preclude such excess.

            (1)   Defined Benefit Fraction

                  A fraction, the numerator of which is the sum of the
                  Participant's projected annual benefit under each defined
                  benefit plan maintained by the Company or any Affiliated
                  Company regardless of whether any such plans are terminated,
                  and the denominator of which is the lesser of 125% of the
                  dollar limitation in effect for the limitation year under
                  Section 415(b)(1)(A) of the Code or 140% of the "highest
                  average compensation."

                  Notwithstanding the above, if the Participant was a
                  Participant in one or more defined benefit plans maintained by
                  the Company which were in existence on July 1, 1982, the
                  denominator of this fraction will not be less than 125% of the
                  sum of the annual benefits under such plans which the
                  Participant had accrued as of December 31, 1982. The preceding
                  sentence applies only if the defined benefit plans
                  individually and in the aggregate satisfied the requirements
                  of Section 415 of the Code as in effect at the end of the 1982
                  Limitation Year.

                  The projected annual benefit shall be the yearly pension to
                  which a Participant is entitled under the terms of each
                  applicable defined benefit plan assuming continued employment
                  until normal retirement age, or current age if later, and
                  compensation and all other relevant factors used to determine
                  benefits under the plan remaining constant until normal
                  retirement age, or current age if later.

            (2)   Defined Contribution Fraction

                  A fraction, the numerator of which is the sum of the Annual
                  Additions to the Participant's account under all the defined
                  contribution plans maintained by the Company or an Affiliated
                  Company regardless of whether any such plans are terminated
                  for the current and all prior limitation years and the
                  denominator of

                                       30
<PAGE>

                  which is the sum of the maximum aggregate amounts for the
                  current and all prior limitation years of service with the
                  Company (regardless of whether a defined contribution plan was
                  maintained by the Company). The maximum aggregate amount in
                  any limitation year is the lesser of 125% of the dollar
                  limitation in effect under Section 415(c)(1)(A) of the Code or
                  140% multiplied by 25% of the Participant's Compensation for
                  such year.

                  If the Associate was a Participant in one or more defined
                  contribution plans maintained by the Company which were in
                  existence on July 1, 1982, the numerator of this fraction will
                  be adjusted if the sum of this fraction and the defined
                  benefit fraction would otherwise exceed 1.0 under the terms of
                  this Plan. Under the adjustment, an amount equal to the
                  product of (1) the excess of the sum of the fractions over 1.0
                  multiplied by (2) the denominator of this fraction, will be
                  permanently subtracted from the numerator of this fraction.
                  The adjustment is calculated using the fractions as they would
                  be computed as of the later of the end of the last limitation
                  year beginning before January 1, 1983 or June 30, 1983. This
                  adjustment also will be made if, at the end of the last
                  limitation year beginning before January 1, 1984, the sum of
                  the fractions exceeds 1.0 because of accruals or additions
                  that were made before the limitations of this section became
                  effective to any Plan of the Company in existence on July 1,
                  1982.

                                       31
<PAGE>

3.11  CONTRIBUTIONS NOT CONTINGENT UPON PROFITS

      The Company may make contributions to the Plan without regard to the
      existence or the amount of current and accumulated earnings and profits.
      Notwithstanding the foregoing, however, this Plan is designed to qualify
      as a "profit sharing plan" for all purposes of the Code.

3.12  CONTRIBUTIONS DURING PERIOD OF MILITARY LEAVE

      (a)   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 Code. Without regard to any limitations on contributions set
            forth in this Article 3, a Participant who is reemployed on or after
            August 1, 1990 and is credited with Service under the provisions of
            Section 1.44 because of a period of service in the uniformed
            services of the United States, may elect to contribute to the Plan
            the Income Deferral Contributions that could have been contributed
            to the Plan in accordance with the provisions of the Plan had he
            remained continuously employed by the Company throughout such period
            of absence ("make-up contributions"). The amount of make-up
            contributions shall be determined on the basis of the Participant's
            Compensation in effect immediately prior to the period of absence,
            and the terms of the Plan at such time. Any Income Deferral
            Contributions so determined shall be limited as provided in Sections
            3.01(b), 3.02, 3.06, 3.07 and 3.08 with respect to the Plan Year or
            Years to which such contributions relate rather than the Plan Year
            in which payment is made. Any payment to the Plan described in this
            paragraph shall be made during the applicable repayment period. The
            repayment period shall equal three times the period of absence, but
            not longer than five years and shall begin on the latest of:

            (i)   the Participant's date of reemployment,

                                       32
<PAGE>

            (ii)  October 13, 1996, or

            (iii) the date the Company notifies the Associate of his rights
                  under this Section. Earnings (or losses) on make-up
                  contributions shall be credited commencing with the date the
                  make-up contribution is made in accordance with the provisions
                  of Article 4.

      (b)   With respect to a Participant who makes the election described in
            paragraph (a) above, the Company shall make Matching Contributions
            as in effect for the Plan Year to which such make-up contributions
            relate. Matching Contributions under this paragraph shall be made
            during the period described in paragraph (a) above. Earnings (or
            losses) on Matching Contributions shall be credited commencing with
            the date the contributions are made in accordance with the
            provisions of Article 4. Any limitations on Matching Contributions
            described in Sections 3.02, 3.06, 3.07 and 3.08 shall be applied
            with respect to the Plan Year or Years to which such contributions
            relate rather than the Plan Year or Years in which payment is made.

3.13  REFUND OF CONTRIBUTIONS

      All contributions made by the Company are made for the exclusive benefit
      of the Participants and their Beneficiaries and such contributions shall
      not be used for nor diverted to purposes other than for the exclusive
      benefit of the Participants and their Beneficiaries (including the costs
      of maintaining and administering the Plan and Trust Fund). Notwithstanding
      the foregoing, amounts contributed to the Trust Fund by the Company may be
      refunded to the Company by the Trustee under the following circumstances
      and subject to the following limitations:

      (a)   To the extent that a federal income tax deduction is disallowed by
            the Internal Revenue Service for any contribution made by the
            Company, the Trustee shall refund to the Company upon demand the
            amount so disallowed or the net asset

                                       33
<PAGE>

            value of such amount, whichever is less. For this purpose, all
            contributions made by the Company are expressly declared to be
            conditioned upon their deductibility under Section 404 of the Code.

      (b)   In the case of a contribution which is made in whole or in part by
            reason of a mistake of fact, so much of such contribution as is
            attributable to the mistake of fact or the net asset value of such
            contribution, whichever is less shall be returnable to the Company
            on demand. The aforesaid demand must be satisfactory to the Trustee
            and the demand and repayment must be effectuated within one year
            after the date of such disallowance or payment of the contribution
            to which the mistake applies. All refunds shall be limited in
            amount, circumstance and timing to the provisions of Section 403(c)
            of ERISA.

      (c)   In the event that Income Deferral Contributions made under Article 3
            hereof are returned to the Company in accordance with the provisions
            of this Section 3.13, the elections to reduce Compensation which
            were made by Participants on whose behalf those contributions were
            made shall be void retroactively to the beginning of the period for
            which those contributions were made. The Income Deferral
            Contributions so returned shall be distributed in cash to those
            Participants for whom those contributions were made.

ARTICLE 4. ACCOUNTS AND INVESTMENT FUNDS

4.01  ACCOUNTS

      The Committee shall also cause to be established and maintained accounts
      in the name of each Participant as follows:

      (a)   Deferral Account, to which shall be credited the respective Income
            Deferral Contributions of each Participant.

                                       34
<PAGE>

      (b)   Matching Account, to which shall be credited for each active
            Participant who elects to make Income Deferral Contributions, a
            Matching Contribution as determined in Section 3.02.

      (c)   Profit Sharing Account, to which shall be credited the balance in a
            Participant's profit sharing account under the SERVISTAR Plan, which
            is merged into this Plan.

      (d)   Rollover Account, to which shall be credited rollovers for each
            Participant who elects to roll over amounts from another qualified
            plan pursuant to Section 3.03.

      (e)   Savings Account, to which shall be credited the balances in a
            Participant's after-tax accounts under the Cotter Plan or the
            SERVISTAR Plan, which are merged into this Plan.

      (f)   Pension Account, to which shall be credited the "Member's Pension
            Account" under the Coast Plan.

4.02  INVESTMENT FUNDS AND PARTICIPANT DIRECTIONS

      Every Participant shall have the right to designate the Investment Funds
      in which the Trustee is to invest Trust Fund assets held on behalf of such
      Participant.

      (a)   The Trust Fund shall consist of such Investment Fund(s) as the
            Committee shall determine from time to time. Pending investment,
            reinvestment or distribution as provided in the Plan, the Trustee
            may temporarily retain the assets of any one or more of the
            Investment Funds in cash, commercial paper, short-term obligations
            or undivided interests or participations in common or collective
            short-term investment funds. Any Investment Fund may be partially or
            totally invested in any common or commingled trust fund, in any
            group annuity, deposit administration or separate account contract
            issued by a legal reserve life insurance company which is invested
            generally in property of the kind specified for the Investment Fund,
            in mutual funds, or in any other property so specified by the
            Committee. The Committee, in its

                                       35
<PAGE>

            discretion, may direct the Trustee to establish Investment Funds or
            terminate Investment Funds as it shall from time to time consider
            appropriate and in the best interest of Participants. Investment
            Funds will be described in materials provided under the summary plan
            description for this Plan or in investment materials supplementing
            the summary plan description.

      (b)   Each Participant may elect to have a percentage or all of his
            contributions invested in one or any of the Investment Funds (in
            multiplies of 1%). This election will also apply to any subsequent
            contributions allocated to his Account. A Participant may change a
            percentage designation made by him and such change will apply to any
            contributions on or after the date such change is implemented by the
            Trustee.

      (c)   Subject to any restrictions on the transfer from or to a particular
            Investment Fund which may be established by the Committee, each
            Participant may elect to transfer amounts credited to his Account
            under one Investment Fund to his Account under any other Investment
            Fund, in increments of 1% or a specified dollar amount of such
            Participant's Account balances. Such transfers (the number and
            frequency of which shall be established from time to time by the
            Committee) will occur as of any Valuation Date or as soon as
            practicable thereafter provided that the Participant makes his
            transfer election according to procedures established by the
            Committee for this purpose.

      (d)   Subject to such rules and restrictions as the Committee may
            establish, any election described in this subsection shall be made
            pursuant to one of the following methods as determined by the
            Committee in its sole discretion:

            (i)   in writing, by filing a written election form specified by the
                  Committee,

            (ii)  by telephone (to the extent permitted by law), through a
                  telephone system designated by the Committee for this purpose,
                  or

                                       36
<PAGE>

            (iii) by any other method (to the extent permitted by law)
                  designated by the Committee.

            If the Committee in its discretion determines that elections under
            this subsection shall be made in a manner other than in writing, any
            Participant who makes an election pursuant to such method shall
            receive written confirmation of such election; further, any such
            election and confirmation will be the equivalent of a writing for
            all purposes.

      (e)   In the absence of any Participant designation of Investment Fund
            preference in accordance with Article 4, the Trustee shall invest
            the Participant Account balance as directed by the Committee.

      (f)   In the event the Participant is a borrower from the Fund, the
            Trustee shall establish a "loan fund" as provided in Section 7.05.

      (g)   Each Participant is solely responsible for the selection of his
            investment options. The Trustee, the Committee, the Company, and the
            officers, supervisors and other Associates of the Company are not
            empowered to advise a Participant as to the manner in which his
            Accounts shall be invested. The fact that an Investment Fund is
            available to Participants for investment under the Plan shall not be
            construed as a recommendation for investment in that Investment
            Fund.

      (h)   An administration fee established from time to time by the Committee
            may be assessed during each Plan Year.

4.03  CREDITING OF INVESTMENT RESULTS

      As of each Valuation Date, the Committee shall cause adjustment in the
      Participant's Accounts in the Investment Funds as follows: charge (or
      credit) to the proper Accounts all withdrawals, distributions, loans or
      transfers made since the last preceding Valuation Date that have not been
      charged (or credited) previously, credit each Participant's Account with
      its

                                       37
<PAGE>

      prorata share of any increase, or charge the Account with its prorata
      share of any decrease, in the value of the "adjusted net worth," as
      defined below, of the Investment Fund as of that date that has not been
      credited or charged previously, credit Participant's Income Deferral
      Contributions, if any, that are to be credited to the proper Accounts as
      of that date that have not been credited previously, and credit Matching
      Contributions and forfeitures, if any, that are to be credited as of that
      date that have not been credited previously. The "adjusted net worth" of
      an Investment Fund as at any Valuation Date means the then net worth of
      that Fund (that is, the fair market value of the Fund, less its
      liabilities other than liabilities to persons entitled to benefits under
      the Plan) as reported to or determined by the Trustee, less an amount
      equal to the sum of the portions of the Income Deferral Contributions and
      Matching Contributions paid to the Trustee which are invested in that Fund
      and which have not been credited to the Accounts of Participants as of a
      prior Valuation Date. Each Participant's Accounts will reflect the amounts
      invested in each Investment Fund(s) established under the Plan.

4.04  ANNUAL STATEMENTS

      At least once a year, each Participant shall be furnished with a statement
      setting forth the value of his Accounts and the vested portion of his
      Accounts.

4.05  MERGER OF COTTER PLAN AND SERVISTAR PLAN ACCOUNTS

      The Participant account balances in the Cotter Plan and SERVISTAR Plan
      merged into this Plan effective as of January 1, 1998 shall be allocated
      to the Accounts indicated in Article 1 of this Plan and will be
      administrated in accordance with the general provisions applicable to the
      respective Accounts unless a specific provision provides for different
      administrative procedures.

                                       38
<PAGE>

ARTICLE 5. VESTING OF ACCOUNTS

5.01  ALL ACCOUNTS EXCEPT MATCHING ACCOUNT

      A Participant shall at all times be 100% vested in, and have a
      nonforfeitable right to, his Savings Account, Deferral Account, Pension
      Account, Profit Sharing Account and Rollover Account. Any Participant in
      the SERVISTAR Plan on December 31, 1997 who becomes a Participant in this
      Plan on January 1, 1998 shall be 100% vested in his Profit Sharing Account
      balance under the SERVISTAR Plan which was merged into this Plan effective
      as of January 1, 1998.

5.02  COMPANY MATCHING ACCOUNT

      (a)   If a Participant's employment terminates prior to his Normal
            Retirement Age, then for each year of Service he shall receive a
            vested percentage of his Matching Account equal to the following
            vesting schedule:

<TABLE>
<CAPTION>
                  PARTICIPANT'S YEARS OF SERVICE                    VESTED PERCENTAGE
                  ------------------------------                    -----------------
<S>                                                                 <C>
                  Less than 1 year                                          0%

                  1 year                                                    20%

                  2 years                                                   40%

                  3 years                                                   60%

                  4 years                                                   80%

                  5 year or more                                            100%
</TABLE>

      (b)   In addition to the foregoing, a Participant shall be 100% vested in,
            and have a nonforfeitable right to, his Matching Account upon (i)
            death, (ii) termination of Service due to a Disability, (iii) early
            retirement from service with the Company after attaining age 55 with
            3 years of Service, or (iv) after attaining Normal Retirement Age.

            Any Participant in the SERVISTAR Plan on December 31, 1997 who
            became a Participant in this Plan on January 1, 1998 shall be
            credited with an additional year of

                                       39
<PAGE>

            Service on January 1, 1998 and, upon his attaining age 50, also be
            100% vested in his Matching Account. In addition, any Participant
            whose Service is terminated as a result of the Company permanently
            closing a facility or eliminating a job position on or after January
            1, 1997, shall be 100% vested in his Accounts. A Participant will be
            considered to have terminated employment with the Company or any
            Affiliated Company for purposes of a Disability if he is no longer
            on the payroll (and performing services for) the Company or any
            Affiliated Company. If a Participant is transferred from employment
            with the Company to employment with an Affiliated Company, his
            termination date will not be considered to have occurred until his
            employment with the Company and any Affiliated Company has
            terminated.

      (c)   A Participant's forfeiture, if any, of his Accrued Benefit derived
            from Matching Contributions shall occur under the Plan as of the
            Anniversary Date of the Plan Year in which the Participant:

            (i)   receives a cash-out distribution of the vested percentage of
                  his Accrued Benefit as a result of his termination of
                  participation in the Plan, or, if earlier and if applicable;

            (ii)  first incurs five consecutive one-year Breaks in Service.

            The Committee shall determine the percentage of a Participant's
            Accrued Benefit forfeiture, if any, under this Section solely by
            reference to the vesting schedule of this Section.

                                       40
<PAGE>

5.03  ALLOCATION OF FORFEITURES

      Any amounts in a Participant Matching Account forfeited during the Plan
      Year in accordance with Section 5.02(c) hereof shall be applied to reduce
      the Company's subsequent Matching Contributions or to restore forfeited
      Accrued Benefits in accordance with Section 5.04 hereof.

5.04  RESTORATION OF FORFEITED ACCRUED BENEFIT

      (a)   If an amount of a Participant's Matching Account has been forfeited
            under Section 5.02(c), that amount shall be subsequently restored to
            the Participant's Matching Account, provided he is reemployed by the
            Company or an Affiliated Company before he has incurred five
            consecutive one-year Breaks in Service. Upon reemployment, the
            Committee shall restore to such Participants' Matching Account an
            amount equal to X where X = P(AB + D) - D, where: P is the vested
            interest that the Participant had in his Matching Account at the
            relevant time; AB is the Matching Account balance at the relevant
            time; D is the amount of the distribution; R is the ratio of the
            account balance at the relevant time to this account balance after
            distribution; and the relevant time is the time at which, under the
            Plan, the vested percentage in the Matching Account cannot increase.

      (b)   To restore the Participant's Accrued Benefit, the Committee, to the
            extent necessary, shall allocate to the Participant's Account in the
            following order:

            (i)   the amount, if any, of Participant forfeitures the Committee
                  would otherwise allocate under Section 5.03; and

            (ii)  to the extent the amount(s) available for restoration for a
                  particular Plan Year are insufficient to enable the Committee
                  to make the required restoration, the Company shall
                  contribute, such additional amount as is necessary to enable
                  the Committee to make the required restoration. The Committee
                  shall not

                                       41
<PAGE>

                  take into account the allocation(s) under this Section in
                  applying the limitation on allocations under Section 3.10.

ARTICLE 6. PAYMENT OF BENEFITS

6.01  TIME OF PAYMENT OF ACCRUED BENEFIT

      (a)   Upon a Participant's termination of employment his vested Accrued
            Benefit shall be distributed as provided in this Article.

      (b)   Unless a Participant elects in writing, his vested Accrued Benefit
            will commence to be distributed as soon as administratively
            practical following the later of:

            (i)   The date the Participant attains his Normal Retirement Age
                  (except that for any participant in the SERVISTAR Plan on
                  December 31, 1997 who became a participant in this Plan on
                  January 1, 1998, the date shall be the date the Participant
                  attains his age 62); or

            (ii)  The date the Participant terminates employment with the
                  Company or any Affiliated Company

            (but no later than 60 days after the close of the Plan Year in which
            the later of (i) or (ii) occurs).

      (c)   In lieu of a distribution as described in subsection (b) above, a
            Participant may, in accordance with such procedures as the Committee
            shall prescribe, elect to have the distribution of his vested
            Accrued Benefit commence as soon as administratively practicable
            following:

            (i)   his termination of Service, or

            (ii)  as of any subsequent date following his termination of
                  Service, which is before his Normal Retirement Age.

                                       42
<PAGE>

6.02  AGE 70 1/2 DISTRIBUTION

      (a)   Notwithstanding any provision of the Plan to the contrary, if a
            Participant is a 5% owner (as defined in Section 416(i) of the
            Code), distribution of the Participant's Accounts shall begin no
            later than the April 1 following the calendar year in which he
            attains age 70 1/2 provided that such commencement in active service
            shall not be required with respect to a Participant who elected by
            filing a written designation with the Committee prior to January 1,
            1984 to have distribution of his Account balance made in accordance
            with the terms and provisions of the Cotter Plan as in effect
            immediately before January 1, 1984, who will have distributions made
            in accordance with such election. However, if a Participant who is
            not a 5% owner (as defined in Section 416(i) of the Code) remains in
            service after the April 1 following the calendar year in which he
            attains age 70 1/2, he may (but does not have to) elect to have the
            provisions of paragraph (b) apply as if the Participant was a 5%
            owner. Such election shall be made in accordance with such
            administrative procedures as the Committee shall prescribe.

      (b)   In the event a Participant is required or elects to begin receiving
            payments while in service under the provisions of paragraph (a)
            above, the Participant will receive one lump sum payment on or
            before such Participant's required beginning date equal to his
            entire Account balance and annual lump sum payments thereafter of
            amounts accrued during each Plan Year.

      The commencement of payments under this Section 6.02 shall not constitute
      an Annuity Starting Date for purposes of Sections 72, 401(a)(11) and 417
      of the Code. Upon the Participant's subsequent termination of employment,
      payment of the Participant's Accounts shall be made in accordance with the
      provisions of Section 6.04.

6.03  SMALL BENEFITS

                                       43
<PAGE>

      Notwithstanding any provision of the Plan to the contrary, a lump sum
      payment shall be made in lieu of all vested benefits if the value of the
      Participant's nonforfeitable Accrued Benefit as of his termination of
      employment or as of any subsequent Anniversary Date is $5,000 or less. The
      lump sum payment shall automatically be made as soon as administratively
      practicable following the Participant's termination date or the last day
      of any Plan Year thereafter. For this purpose, the termination date is (a)
      for periods prior to January 1, 2000, the Participant's last active day of
      service plus all remaining earned or accrued vacation and any other
      accrued benefit days, and (b) for periods after December 31, 1999, the
      Participant's last active day of service. To the extent permitted by law,
      if the Participant's nonforfeitable Accrued Benefit exceeds $5,000 upon an
      initial determination, the Participant's nonforfeitable Accrued Benefit
      shall be reviewed annually as of the last day of each subsequent Plan
      Year. If at that time its value is $5,000 or less, a lump sum benefit
      payable shall be made as soon as practicable following that determination.
      In no event shall a lump sum payment be made following the date payments
      have commenced as an annuity or in installments.

6.04  METHOD OF PAYMENT OF ACCRUED BENEFIT

      (a)   Subject to Section 5.04, after all required accounting adjustments,
            the Trustee shall make payment of the Participant's vested Accrued
            Benefit in a lump sum distribution except as provided under the
            provisions of Section 6.04(b) in relation to the account balances
            merged from the Cotter Plan, under Section 6.04(c) in relation to
            the account balances merged from the SERVISTAR Plan, and under
            Section 6.04(d) and (e) in relation to the account balances merged
            from the Coast Plan.

      (b)   For account balances merged into this Plan from the Cotter Plan
            effective as of January 1, 1998, in the case of a Participant (or
            Beneficiary) in the Cotter Plan who had an Account balance in that
            plan on January 1, 1989, the Account balance

                                       44
<PAGE>

            merged into this Plan may also be distributed in a series of
            quarterly installments over a period of fifteen years (or, if less,
            the life expectancy of the Participant and his designated
            Beneficiary; provided that, if such Beneficiary is not the
            Participant's spouse and is more than ten years younger than the
            Participant, the installments shall be paid over a period not
            exceeding the joint life expectancy of the Participant and a
            Beneficiary ten years younger than the Participant).

      (c)   For Account balances merged into this Plan from the SERVISTAR Plan
            effective as of January 1, 1998, a Participant shall have an
            additional method of payment available in relation to those merged
            accounts. A Participant may elect, in such manner as the Committee
            shall prescribe, to receive payment in substantially equal
            installments under a fixed reasonable period of time, not exceeding
            the life expectancy of the Participant, or the joint life and last
            survivor expectancy of the Participant and an individual the
            Participant designates as his Beneficiary. Furthermore, upon the
            Participant's written request, the Committee, in his sole
            discretion, may accelerate the payment of all, or any portion, of
            the Participant's unpaid Accrued Benefit.

      (d)   For account balances merged into the SERVISTAR Plan from the Coast
            Plan effective as of October 21, 1996, and subsequently merged into
            this Plan as of January 1, 1998, a Participant shall have an
            additional method of payment available in relation to those merged
            accounts (except as provided in Section 6.04(e) relating to the
            Pension Account). A Participant may elect, in such manner as the
            Committee shall prescribe, to receive a purchased nonforfeitable
            fixed annuity, in the form of a Qualified Joint and Survivor
            Annuity. A Participant may elect not to take the Qualified Joint and
            Survivor Annuity and to take instead a life annuity or a lump sum
            payment. Elections under this subsection shall be in writing and in
            the event of an

                                       45
<PAGE>

            election of a life annuity or a lump sum payment by a married
            Participant, shall be subject to receipt by the Committee of Spousal
            Consent to that election.

      (e)   (i)   Notwithstanding the foregoing provisions of this Article,
                  the amounts credited to the Participant's Pension Account
                  shall be paid:

                  (A)   In the form of a life annuity if the Participant is
                        unmarried on his Annuity Starting Date; or

                  (B)   In the form of a Qualified Joint and Survivor Annuity if
                        the Participant is married on his Annuity Starting Date;

                  unless the Participant elects otherwise pursuant to subsection
                  (ii) below. Annuities shall be purchased from an insurance
                  company in accordance with such procedures as the Committee
                  shall prescribe.

            (ii)  Alternatively, a married Participant may elect to receive his
                  Pension Account in the form of a life annuity or in a lump sum
                  payment. An election pursuant to this subsection (ii) shall be
                  in writing and filed with the Committee at any time during the
                  90-day period ending on the Participant's Annuity Starting
                  Date. A married Participant's election of a lump sum or life
                  annuity shall not be effective without Spousal Consent.

            (iii) Notwithstanding the foregoing provisions of this Article, if a
                  Participant dies before his Accounts have been distributed,
                  the value of his Pension Account shall be distributed as
                  follows:

                  (A)   if the Participant is unmarried on his date of death, it
                        shall be paid in a lump sum to his Beneficiary as soon
                        as practicable; or

                  (B)   if the Participant is married on his date of death, it
                        shall be used to purchase a nonforfeitable fixed annuity
                        for the life of his spouse unless the spouse elects, in
                        accordance with such procedures as the Committee shall
                        prescribe, to receive a lump sum payment in lieu

                                       46
<PAGE>

                        thereof. Annuity payments shall commence as soon as
                        administratively practicable following the Valuation
                        Date coincident with or next following what would have
                        been the Participant's 62nd birthday, unless the spouse
                        elects to have reduced annuity payments commence as soon
                        as administratively practicable following the Valuation
                        Date coincident with or next following the Participant's
                        date of death.

      (f)   The Committee shall furnish to each Participant a written
            explanation in nontechnical language of the terms and conditions of
            the payments available to the Participant in the normal and optional
            forms. Such explanation shall include a general description of the
            eligibility conditions for, and the material features and relative
            values of, the optional forms of payment under the Plan, any rights
            the Participant may have to defer commencement of his payment, the
            requirement for Spousal Consent, and the right of the Participant to
            make, and to revoke, elections. The Committee must provide the
            notice no more than 90 days and no less than 30 days prior to the
            Participant's Annuity Starting Date. A Participant's Annuity
            Starting Date may not occur less than 30 days after receipt of the
            notice. An election shall be made on a form provided by the
            Committee and may be made during the 90-day period ending on the
            Participant's Annuity Starting Date, but not prior to the date the
            Participant receives the written explanation described herein.
            However, a Participant may, after having received the notice,
            affirmatively elect to have his benefit commence sooner than 30 days
            following his receipt of the notice, provided all of the following
            requirements are met:

            (i)   the Committee clearly informs the Participant that he has a
                  period of at least 30 days after receiving the notice to
                  decide when to have his benefits begin and, if applicable, to
                  choose a particular optional form of payment;

                                       47
<PAGE>

            (ii)  the Participant affirmatively elects a date for his benefits
                  to begin and, if applicable, an optional form of payment,
                  after receiving the notice;

            (iii) the Participant is permitted to revoke his election until the
                  later of his Annuity Starting Date or seven days following the
                  day he received the notice; and

            (iv)  payment does not commence less than seven days following the
                  day after the notice is received by the Participant.

            An election of an option may be revoked on a form provided by the
            Committee, and subsequent elections and revocations may be made at
            any time and from time to time during the election period. An
            election of an optional benefit shall be effective on the
            Participant's Annuity Starting Date and may not be modified or
            revoked after his Annuity Starting Date unless otherwise provided. A
            revocation of any election shall be effective when the completed
            form is filed with the Committee. If a Participant who has elected
            an optional benefit dies before the date the election of the option
            becomes effective, the election shall be revoked. If the Beneficiary
            designated under an option dies before the date the election of the
            option becomes effective, the election shall be revoked.

      (g)   Upon the death of the Participant, the Committee shall direct the
            Trustee to pay the Participant's vested Accrued Benefit in
            accordance with this subsection. If the Participant's death occurs
            after the Trustee has commenced payment of the Participant's vested
            Accrued Benefit, the Committee shall direct the Trustee to complete
            payment over a period which does not exceed the payment period which
            had commenced. If the Participant's death occurs prior to the time
            the Trustee commences payment of the Participant's vested Accrued
            Benefit, the payment shall be a lump sum payment except as otherwise
            provided herein and in no event will the Committee direct the
            Trustee to make payment over a period exceeding (i) five years after
            the date of the Participant's death, or (ii) if the Beneficiary is a
            designated

                                       48
<PAGE>

            Beneficiary, in installments over the Beneficiary's life expectancy.
            The Committee shall not direct payment of the Participant's vested
            Accrued Benefit over a period described in (i) unless the Trustee
            will commence payment to the designated Beneficiary no later than
            one year after the date of the Participant's death or, if later, and
            the designated Beneficiary is the Participant's surviving spouse,
            the date the Participant would have attained age 70 1/2. The
            Committee will not recalculate life expectancies.

      (h)   Notwithstanding any other provision of this Article 6, all
            distributions from this Plan shall conform to the regulations issued
            under Section 401(a)(9) of the Code, including the incidental death
            benefit provisions of Section 401(a)(9)(G) of the Code and Section
            1.401(a)(9)-2 of the proposed Treasury Regulations. Further, such
            regulations shall override any Plan provision that is inconsistent
            with Section 401(a)(9) of the Code. With respect to distributions
            under the Plan made for calendar years beginning on or after January
            1, 2001, the Plan will apply the minimum distribution requirements
            of Section 401(a)(9) of the Code in accordance with the regulations
            under Section 401(a)(9) that were proposed in January 2001,
            notwithstanding any provision of the Plan to the contrary. This
            provision shall continue in effect until the end of the last
            calendar year beginning before the effective date of final
            regulations under Sections 401(a)(9) of the Code or such other date
            as may be specified in guidance published by the Internal Revenue
            Service.

6.05  STATUS OF ACCOUNTS PENDING DISTRIBUTION

      Until completely distributed under Section 6.01 or 6.02 the Accounts of a
      Participant who is entitled to a distribution shall continue to be
      invested as part of the Investment Funds of the Plan.

                                       49
<PAGE>

6.06  PROOF OF DEATH AND RIGHT OF BENEFICIARY OR OTHER PERSON

      The Committee may require and rely upon such proof of death and such
      evidence of the right of any Beneficiary or other person to receive the
      value of the Accounts of a deceased Participant as the Committee may deem
      proper and its determination of the right of that Beneficiary or other
      person to receive payment shall be conclusive.

6.07  DIRECT ROLLOVER OF CERTAIN DISTRIBUTIONS

      Notwithstanding any provision of the Plan to the contrary that would
      otherwise limit a distributee's election under this Section, a distributee
      may elect, at the time and in the manner prescribed by the 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. The following definitions apply to the terms used in this
      Section:

      (a)   "Eligible rollover distribution" means any distribution of all or
            any portion of the balance to the credit of the distributee, except
            that an eligible rollover distribution does not include any
            distribution that is one of a series of substantially equal periodic
            payments (not less frequently than annually) made for the life (or
            life expectancy) of the distributee or the joint lives (or joint
            life expectancies) of the distributee and the distributee's
            designated Beneficiary, or for a specified period of 10 years or
            more, any distribution to the extent such distribution is required
            under Section 401(a)(9) of the Code, and the portion of any
            distribution that is not includible in gross income (determined
            without regard to the exclusion for net unrealized appreciation with
            respect to employer securities) and for distributions made after
            December 31, 1999, any Deferral Account withdrawal made under
            Section 7.03;

      (b)   "Eligible retirement plan" means an individual retirement account
            described in Section 408(a) of the Code, an individual retirement
            annuity described in Section

                                       50
<PAGE>

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

      (c)   "Distributee" means an Associate or former Associate. In addition,
            the Associate's or former Associate's surviving spouse and the
            Associate's or former Associate's spouse or former spouse who is the
            alternate payee under a qualified domestic relations order as
            defined in Section 414(p) of the Code, are distributees with regard
            to the interest of the spouse or former spouse; and

      (d)   "Direct rollover" means a payment by the Plan to the eligible
            retirement plan specified by the distributee.

ARTICLE 7. WITHDRAWALS AND LOANS

7.01  SAVINGS ACCOUNT WITHDRAWALS

      The Participant may withdraw from the Trust Fund all or part of his
      Savings Account.

7.02  DEFERRAL ACCOUNT WITHDRAWALS AFTER AGE 59 1/2

      A Participant who has attained age 59 1/2 may elect to withdraw any
      portion or all of his Deferral Account balance while continuing to be
      employed by the Company or an Affiliated Company. Each election by a
      Participant under this Section 7.02 shall be made at such time and in such
      manner as the Committee shall determine.

7.03  DEFERRAL ACCOUNT WITHDRAWALS

                                       51
<PAGE>

      A Participant who has withdrawn the total amount available for withdrawal
      under the Sections 7.01 and 7.02 may elect to withdraw all or part of the
      Income Deferral Contributions (but not the earnings thereon) made on his
      behalf to his Deferral Account upon furnishing proof to the Committee that
      a financial hardship has caused an immediate and heavy financial need on
      the Participant. For the purposes of this subsection, a financial hardship
      shall include:

      (a)   expenses for medical care described in Section 213(d) of the Code
            incurred by the Participant, his spouse or dependents (as defined in
            Section 152 of the Code), or not yet incurred but necessary for
            those persons to obtain medical care;

      (b)   costs directly related to the purchase of a principal residence of
            the Participant (excluding mortgage payments);

      (c)   payment of tuition and related educational fees for the next 12
            months of post-secondary education for the Participant, his spouse,
            his children or dependents; or

      (d)   payment of amounts necessary to prevent the eviction of the
            Participant from his principal residence or to avoid foreclosure in
            the mortgage of the Participant's principal residence.

            The amount to be withdrawn shall not exceed the amount required to
            meet the immediate financial need created by the hardship, including
            amounts necessary to pay any taxes or penalties reasonably
            anticipated to result from the withdrawal.

            The Participant must request, on such form as the Committee shall
            prescribe, that the Committee make its determination of the
            necessity for the withdrawal solely on the basis of his application.
            In that event, the Committee shall make such determination, provided
            all of the following requirements are met:

                                       52
<PAGE>

      (e)   the Participant has obtained all distributions, other than
            distributions available only on account of hardship, and all
            nontaxable loans currently available under all plans of the Company
            and any Affiliated Company,

      (f)   the Participant is prohibited from making Income Deferral
            Contributions to the Plan and all other plans of the Company and any
            Affiliated Company under the terms of such plans or by means of an
            otherwise legally enforceable agreement for at least 12 months after
            receipt of the distribution, and

      (g)   the limitation on elective deferrals described in Section 3.01(b)
            under all plans of the Company and any Affiliated Company for the
            calendar year following the year in which the withdrawal is made
            must be reduced by the Participant's elective deferral made in the
            calendar year of the distribution for hardship. For purposes of
            subsection (f), "all other plans of the Company and any Affiliated
            Company" shall include stock option plans, stock purchase plans,
            qualified and nonqualified deferred compensation plans and such
            other plans as may be designated under regulations issued under
            Section 401(k) of the Code, but shall not include health and welfare
            benefit plans or the mandatory employee contribution portion of a
            defined benefit plan.

      However, such rules shall not require a Participant to take any action
      that would increase, rather than alleviate the financial hardship.

7.04  WITHDRAWAL PROCEDURES

      Withdrawal requests must be made on forms provided by the Committee. Any
      withdrawals will be made pro rata from each of the Participant's
      Investment Funds based on the values determined on the Valuation Date
      immediately preceding the withdrawal. An administrative fee as established
      from time to time by the Committee may be assessed on each with-

                                       53
<PAGE>

      drawal. If a loan and a hardship withdrawal are processed as of the same
      Valuation Date, the amount available for the hardship withdrawal will
      equal the vested portion of the Participant's Accounts on such Valuation
      Date reduced by the amount of the loan. Subject to the provisions of
      Section 6.07, all payments to Participants under this Article shall be
      made in cash as soon as practicable.

7.05  LOANS TO PARTICIPANTS

      (a)   A Participant who is an Associate of the Company or an Affiliated
            Company may borrow, on written application to the Committee and on
            approval by the Committee under such uniform rules as it shall
            adopt, an amount which, when added to the outstanding balance of any
            other loans to the Participant from the Plan, does not exceed the
            lesser of

            (i)   50% of the vested portion of his Accounts (excluding the
                  Pension Account), or

            (ii)  $50,000 reduced by the excess, if any, of (A) the highest
                  outstanding balance of loans to the Participant from the Plan
                  during the one year period ending on the day before the day
                  the loan is made, over (B) the outstanding balance of loans to
                  the Participant from the Plan on the date on which the loan is
                  made. The minimum loan shall be $1,000.

      (b)   A reasonable interest rate to be charged on loans made shall be
            determined at the time of the loan application and shall be
            specified by the Committee. The interest rate so determined for
            purposes of the Plan shall be fixed for the duration of each loan.

      (c)   The amount of the loan is to be transferred from the Participant's
            Accounts, in the following order: first, from the Deferral Account,
            then from the Savings Account, then from the Rollover Account, then
            from the Matching Account, and last from the Profit

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<PAGE>

            Sharing Account, pro rata from each Investment Fund thereunder to a
            special "loan fund" for the Participant under the Plan. The loan
            fund consists solely of the amount of the Participant's Account
            transferred to the loan fund and is invested solely in the loan made
            to the Participant. The amount of the Participant's Account
            transferred to the loan fund shall be pledged as security for the
            loan. Payments of principal on the loan will reduce the amount held
            in the Participant's loan fund. Those payments, together with the
            attendant interest payment, will be credited to the Participant's
            Accounts in the following order: first, to the Profit Sharing
            Account, then to the Matching Account, then to the Rollover Account,
            then to the Savings Account, and finally to the Deferral Account,
            and invested in the Investment Funds in accordance with the
            Participant's then effective investment election.

      (d)   In addition to such rules and regulations as the Committee may
            adopt, all loans shall comply with the following terms and
            conditions:

            (i)   An application for a loan by a Participant may be made by
                  telephone to the Trustee or its agent, who will process the
                  application for approval by a Plan representative, whose
                  action in approving or disapproving the application shall be
                  made pursuant to uniform nondiscriminatory policies and shall
                  be final;

            (ii)  Each loan shall be evidenced by a promissory note payable to
                  the Plan containing terms deemed necessary by the Committee to
                  protect the Plan's investment;

            (iii) The period of repayment for any loan shall be arrived at by
                  mutual agreement between the Committee and the Trustee or its
                  agent, but that period shall not exceed 60 months unless the
                  loan is to be used in conjunction with the purchase of a
                  dwelling which within a reasonable time is

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<PAGE>

                   to be used (determined at the time of the loan) as the
                   principal residence of the Participant in which event the
                   period shall not exceed 180 months;

            (iv)   Payments of principal and interest will be made by payroll
                   deductions or in a manner agreed to by the Participant and
                   the Trustee or its agent in substantially level amounts, but
                   no less frequently than quarterly, in an amount sufficient to
                   amortize the loan over the repayment period;

            (v)    Loan repayments will be suspended under this Plan as
                   permitted under Section 414(u) of the Code;

            (vi)   A loan may be prepaid in full as of any date following the
                   first three months of the loan period, without penalty
                   (partial prepayment of principal is not permitted);

            (vii)  Only one loan may be outstanding at any given time, except
                   that any loans outstanding as of January 1, 1998 may continue
                   until repaid under their established terms.

            (viii) A loan processing fee and annual maintenance fee may be
                   charged by the Plan, as determined by the Committee.

      (e)   If a loan is not repaid in accordance with the terms contained in
            the promissory note and a default occurs, the Plan may execute upon
            its security interest in the Participant's Account under the Plan to
            satisfy the debt and any other security held by the Plan; however,
            the Plan shall not levy against any portion of the loan fund
            attributable to amounts held in the Participant's Deferral Account
            or Matching Account or Profit Sharing Account until such time as a
            distribution of the Deferral Account or Matching Account or Profit
            Sharing Account could otherwise be made under the Plan.

      (f)   Any additional rules or restrictions as may be necessary to
            implement and administer the loan program shall be in writing and
            communicated to Associates. Such further

                                       56
<PAGE>

            documentation is hereby incorporated into the Plan by reference, and
            the Committee is hereby authorized to make such revisions to these
            rules as it deems necessary or appropriate, on the advice of
            counsel.

      (g)   To the extent required by law and under such rules as the Committee
            shall adopt, loans shall also be made available on a reasonably
            equivalent basis to any Beneficiary or former Associate (i) who
            maintains an account balance under the Plan and (ii) who is still a
            party-in-interest (within the meaning of Section 3(14) of ERISA).

      (h)   If, on a Participant's Severance Date, any loan or portion of a loan
            made to him under the Plan, together with the accrued interest
            thereon, remains unpaid, the entire amount of the unpaid loan and
            accrued interest shall be due and payable by the Participant;
            provided that, if such amount is not repaid, an amount equal to such
            loan or any part thereof, together with the accrued interest
            thereon, shall be charged to the Participant's Accounts after all
            other adjustments required under the Plan, but before any
            distribution pursuant to Section 6.04.

      (i)   All loans made prior to January 1, 1998 shall be subject to the
            rules in effect under the Plan at that time the loan was made.

7.06  MISSING PARTICIPANTS AND BENEFICIARIES

      Each Participant and each designated Beneficiary must file with the
      Committee from time to time in writing his post office address and each
      change of post office address. Any communication, statement or notice
      addressed to a Participant or Beneficiary at his last post office address
      filed with the Committee, or if no address is filed with the Committee
      then, in the case of a Participant, at his last post office address as
      shown on the Company's records, will be binding on the Participant and his
      Beneficiary for all purposes of the Plan. Neither the Company nor the
      Committee will be required to search for or locate a Participant or
      Beneficiary. If the Committee notifies a Participant or Beneficiary that
      he is entitled to a

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<PAGE>

      payment and also notifies him of the provisions of this subsection, and
      the Participant or Beneficiary fails to claim his benefits or make his
      whereabouts known to the Committee within three years after the
      notification, the benefits of the Participant or Beneficiary will be
      disposed of, to the extent permitted by applicable law, as follows:

      (a)   If the whereabouts of the Participant then is unknown to the
            Committee but the whereabouts of the Participant's spouse then is
            known to the Committee, payment will be made to the spouse;

      (b)   If the whereabouts of the Participant and his spouse, if any, then
            is unknown to the Committee but the whereabouts of the Participant's
            designated Beneficiary then is known to the Committee, payment will
            be made to the designated Beneficiary;

      (c)   If the whereabouts of the Participant, his spouse and the
            Participant's designated Beneficiary then is unknown to the
            Committee but the whereabouts of one or more relatives by blood,
            adoption or marriage of the Participant is known to the Committee,
            the Committee may direct the Trustee to pay the Participant's
            benefits to one or more of such relatives and in such proportions as
            the Committee decides; or

      (d)   If the whereabouts of such relatives and the Participant's
            designated Beneficiary then is unknown to the Committee, then
            benefits of such Participant or Beneficiary will be disposed of in
            an equitable manner permitted by law under rules adopted by the
            Committee.

ARTICLE 8. ADMINISTRATION OF THE PLAN

8.01  COMMITTEE

      This Plan administrator shall be the Committee composed of five or more
      persons who may, but need not be, Associates of the Company, as appointed
      by the Company. Any Committee member may be dismissed at any time, with or
      without cause, on 10 days' notice

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<PAGE>

      from the Company. Any Committee member may resign by delivering his
      written resignation to the Company with 10 day's notice. Vacancies rising
      by the death, resignation or removal of a Committee member shall be filled
      by the Company.

8.02  MEETING, MAJORITY RULE

      (a)   The Committee shall hold meetings upon such notice, at such place or
            places and at such time or times as it may from time to time
            determine. Notice shall not be required if waived in writing. A
            majority of the members of the Committee at the time in office shall
            constitute a quorum for the transaction of business. All resolutions
            or other actions take by the Committee at any meeting shall be by
            majority vote of the members of the Committee. Resolutions may be
            adopted or other action taken without a meeting upon written
            consent, signed by a majority of the members of the Committee. If,
            because of the number qualified to act, there is an even division of
            opinion among the Committee members as to a matter, a disinterested
            party selected by the Committee shall decide the matter and his
            decision shall control.

      (b)   The Committee shall appoint one of its members to act as its
            chairman and shall appoint a secretary, who need not be a member of
            the Committee, who shall keep all records of the meetings and of any
            action taken by the Committee and who shall perform such other
            services as may be prescribed by the Committee. All third parties
            may rely on a certificate of the Committee's secretary or a majority
            of the Committee members that the Committee has taken or authorized
            any action. A Committee member by writing may delegate any or all of
            his rights, powers, duties or discretions to any other member, with
            the consent of the latter. Except as otherwise provided by law, no
            member of the Committee shall be liable or responsible for an act or
            omission of the other Committee members in which the former has not
            concurred.

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<PAGE>

      (c)   The Committee may, by written majority decision, delegate to each or
            any of its number or to its secretary authority to sign any
            documents on its behalf, or to perform ministerial acts, but no
            person to whom such authority is delegated shall perform any act
            involving the exercise of any discretion without first obtaining the
            concurrence of a majority of the members of the Committee, even
            though he alone may sign any document required by third parties. If
            at any time there will be less than three members of the Committee
            in office, pending the appointment of a successor(s) to fill an
            existing vacancy, the remaining members shall have the authority to
            act as Committee.

      (d)   If a member of the Committee is also a Participant in the Plan, he
            may not decide or determine any matter or question concerning
            distributions of any kind to be made to him or the nature or mode of
            settlement of his benefits unless such decision or determination
            could be made by him under the Plan if he were not serving on the
            Committee.

8.03  RESPONSIBILITY FOR ADMINISTRATION OF THE PLAN

      The Committee shall have complete discretionary control of the management,
      operation and administration of this Plan with all powers necessary to
      enable it to carry out its duties in that respect, including to adopt such
      rules or procedures and regulations as in its opinion and sole discretion
      may be necessary for the proper and efficient administration of the Plan
      and as are consistent with the Plan and Trust Agreement. The Committee
      shall be designated agent for service of legal process.

      Without limiting the foregoing, the Committee shall have the following
      specific discretionary duties and responsibilities:

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<PAGE>

      (a)   to maintain and retain records relating to Plan Participants, former
            Participants and each of their Beneficiaries, and all other records
            necessary for the proper operation of the Plan and to furnish the
            Company or any Affiliated Company with such information as may be
            required by them;

      (b)   to prepare and furnish during normal business hours to Participants
            all information required under Federal law or provisions of this
            Plan to be furnished to them;

      (c)   to prepare and furnish to the Trustee sufficient Associate data and
            the amount of contributions received from all sources so that the
            Trustee may maintain separate Accounts for Participants and make
            required payments of benefits;

      (d)   to provide directions to the Trustee with respect to the methods of
            benefit payment, all other matters where called for in the Plan or
            requested by the Trustee;

      (e)   to prepare and file or publish with the Secretary of Labor, the
            Secretary of the Treasury, their delegates and all other appropriate
            government official all reports, forms, documents, and other
            information required under law to be so filed or published;

      (f)   in its sole discretion, to construe and interpret the provisions of
            the Plan, to correct defects therein, to supply omissions thereto
            and determine all questions of fact (including, but not limited to,
            discretionary determination of an individual's eligibility to Plan
            participation, the right and amount to any benefit payable under the
            Plan, and the date on which any individual ceases to be a
            Participant) that may arise thereunder and any such construction or
            determination shall be conclusively binding upon all persons
            interested in the Plan to the extent permitted by applicable law;

      (g)   to engage such assistants or representatives as deemed necessary for
            the effective exercise of duties and to allocate and delegate to
            such assistants or representatives any powers or duties, both
            ministerial and discretionary, as deemed expedient and

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<PAGE>

            appropriate, provided that any allocation or delegation and the
            acceptance thereof shall be in writing;

      (h)   to engage such professional consultants in its sole discretion,
            deemed necessary or advisable, including, but not limited to,
            accountants, attorneys, consultants, and medical practitioners;

      (i)   to arrange for bonding as required by law; and

      (j)   in its sole discretion, to provide procedures for determination of
            claims for benefits.

8.04  COMPENSATION AND EXPENSES

      The members of the Committee and any individual who receives full-time pay
      from the Company or any Affiliated Company shall serve without
      compensation for their services to the Plan but shall be reimbursed by the
      Company for all necessary expenses incurred in the discharge of their
      duties.

8.05  LIMITATION OF LIABILITY

      The Company, any Affiliated Company, their Board of Directors, the
      Committee, and any officer, Associate or agent of the Company or an
      Affiliated Company shall not incur any liability individually or on behalf
      of any other individuals or on behalf of the Company or an Affiliated
      Company for any act or failure to act, made in good faith in relation to
      the Plan or the funds of the Plan. However, this limitation shall not act
      to relieve any such individual or the Company or an Affiliated Company
      from a responsibility or liability for any fiduciary responsibility,
      obligation or duty under Part 4, Title I of ERISA.

8.06  INDEMNIFICATION

      The Company, any Affiliated Company, their Board of Directors, the
      Committee and the officers, Associates and agents of the Company or an
      Affiliated Company shall be

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<PAGE>

      indemnified against any and all liabilities arising by reason of any act,
      or failure to act, in relation to the Plan or the funds of the Plan,
      including, without limitation, expenses reasonably incurred in the defense
      of any claim relating to the Plan or the funds of the Plan, and amounts
      paid in any compromise or settlement relating to the Plan or the funds of
      the Plan, except such liability, losses or costs which result from:

      (a)   actions or failures to act made in bad faith;

      (b)   their own gross negligence or willful misconduct;

      (c)   any settlement, without the Company's prior approval, of an action,
            suit, or proceeding; or

      (d)   suits or actions at law or in equity advanced by the Company against
            such party.

      Indemnification shall be from the funds of the Plan to the extent of those
      funds and to the extent permitted under applicable law; otherwise from the
      assets of the Company. Rights granted hereunder shall be in addition to
      and not in lieu of any rights to indemnification to which the Committee
      member may be entitled pursuant to the by-laws of the Company. Service on
      the Committee shall be deemed in partial fulfillment of the Committee
      member's function as an Associate, officer and/or director of the Company,
      if he serves in such other capacity as well. The foregoing shall not
      relieve any one of them from any responsibility or liability for
      responsibility, obligation or duty that they may have pursuant to ERISA.

8.07  PRUDENT CONDUCT

      The Committee shall use that degree of care, skill, prudence and diligence
      that a prudent man acting in a like capacity and familiar with such
      matters would use in his conduct of a similar situation and shall
      administer the Plan on a reasonable and nondiscriminatory basis and shall
      apply uniform rules to all persons similarly situated.

8.08  SERVICE IN MORE THAN ONE FIDUCIARY CAPACITY

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<PAGE>

      Any individual, entity or group of persons may serve in more than one
      fiduciary capacity with respect to the Plan and/or the funds of the Plan.

8.09  WRITTEN ELECTIONS

      Any elections, notifications or designations made by a Participant
      pursuant to the provisions of the Plan shall be made in writing and filed
      with the Committee in a time and manner determined by the Committee under
      rules uniformly applicable to all Associates similarly situated. The
      Committee reserves the right to change from time to time the time and
      manner for making notifications, elections or designations by Participants
      under the Plan if it determines after due deliberation that such action is
      justified in that it improves the administration of the Plan. In the event
      of a conflict between the provisions for making an election, notification
      or designation set forth in the Plan and such new administrative
      procedures, those new administrative procedures shall prevail.

8.10  CLAIMS PROCEDURE

      The Committee shall make all determinations as to the right of any person
      to receive benefits under the Plan. Any denial by the Committee of a claim
      for benefits under the Plan by a Participant, Spouse, retired Participant
      or beneficiary (collectively referred to herein as "claimant") shall be
      stated in writing by the Committee and delivered or mailed to the
      claimant. Such notice shall set forth:

            (1)   the specific reasons for denial;

            (2)   specific reference to pertinent provisions of the Plan upon
                  which the denial is based;

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<PAGE>

            (3)   a description of any additional material or information
                  necessary for the claimant to perfect his claim with an
                  explanation of why such material or information is necessary;
                  and

            (4)   an explanation of claim review procedures under the Plan
                  written in a manner that may be understood without legal
                  counsel.

      A claimant whose claim for benefits has been wholly or partially denied by
      the Committee may, within 90 days following the date of such denial:

            (i)   request a review of such denial in a writing addressed to the
                  Committee;

            (ii)  submit such issues or comments, in writing or otherwise, as he
                  shall consider relevant to a determination of his claim, and
                  may include in his request a request for a hearing in person
                  before the Committee; and

            (iii) request to review any pertinent documents, which may be
                  reviewed prior to his submitting his request for review.

            The claimant may, at all stages of review, be represented by
            counsel, legal or otherwise, of his choice, provided that the fees
            and expenses of such counsel shall be borne by the claimant.

            All requests for review shall be promptly resolved. The decision of
            the Committee with respect to any such review shall be set forth in
            writing and such shall be mailed to the claimant not later than 60
            days following receipt by the Committee of the claimant's request
            unless special circumstances, such as need to hold a hearing,
            require an extension of time for processing, in which case the
            decision shall be so mailed not later than 120 days after receipt of
            such request. All decisions of the Committee shall be final,
            conclusive and binding on all parties and

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<PAGE>

            shall not be overturned unless such decision is determined by a
            court of competent jurisdiction to be arbitrary and capricious.

ARTICLE 9. MANAGEMENT OF FUNDS

9.01  TRUST AGREEMENT

      All the funds of the Plan shall be held by a Trustee appointed from time
      to time by the Board of Directors under a Trust Agreement adopted, or as
      amended, by the Board of Directors for use in providing the benefits of
      the Plan and paying its expenses not paid directly by the Company. The
      Company shall have no liability for the payment of benefits under the Plan
      nor for the administration of the funds paid over to the Trustee. Neither
      the Committee nor the Company or any Affiliated Company in any way
      guarantees the Trust Fund from loss or depreciation.

9.02  EXCLUSIVE BENEFIT RULE

      Except as otherwise provided in the Plan, no part of the corpus or income
      of the funds of the Plan shall be used for, or diverted to, purposes other
      than for the exclusive benefit of Participants and other persons entitled
      to benefits under the Plan and paying the expenses of the Plan not paid
      directly by the Company. No person shall have any interest in or right to
      any part of the earnings of the funds of the Plan, or any right in, or to,
      any part of the assets held under the Plan, except as and to the extent
      expressly provided in the Plan.

9.03  APPOINTMENT OF INVESTMENT MANAGER

      The Company may, in its discretion, appoint one or more investment
      managers (within the meaning of Section 3(38) of ERISA) to manage
      (including the power to acquire and dispose of) all or part of the assets
      of the Plan, as the Company shall designate. In that event

                                       66
<PAGE>

      authority over and responsibility for the management of the assets so
      designated shall be the sole responsibility of that investment manager.

ARTICLE 10. AMENDMENT, TERMINATION, MERGERS AND CONSOLIDATIONS OF THE PLAN

10.01 PLAN AMENDMENT

      The Company, by action of its Board of Directors, reserves the right at
      any time and from time to time, and retroactively if deemed necessary or
      appropriate, to amend in whole or in part any or all of the provisions of
      the Plan. However, no amendment shall make it possible for any part of the
      funds of the Plan to be used for, or diverted to, purposes other than for
      the exclusive benefit of persons entitled to benefits under the Plan. No
      amendment shall be made which has the effect of decreasing the balance of
      the Accounts of any Participant or of reducing the nonforfeitable
      percentage of the balance of the Accounts of a Participant below the
      nonforfeitable percentage computed under the Plan as in effect on the date
      on which the amendment is adopted or, if later, the date on which the
      amendment becomes effective.

      Notwithstanding the foregoing, the duties and liabilities of the Committee
      cannot be changed substantially without its consent.

10.02 PLAN TERMINATION

      (a)   The Company expects to continue this Plan and the payment of its
            contributions hereunder indefinitely, but the continuance of this
            Plan is not assumed as a contractual obligation of the Company, and
            the Company expressly reserves the right to discontinue the Plan in
            its entirety at any time for any reason whatsoever upon 30 day's
            advance written notice of termination given to the Committee, the
            Trustee and any other participating Affiliated Companies.

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<PAGE>

      (b)   In the event of the full or partial termination of this Plan or upon
            the permanent discontinuance of Company contributions under the
            Plan, the rights of all affected Participants to the amounts
            credited to the affected Participants' Accounts shall be
            nonforfeitable. Said Plan termination or discontinuance of
            contributions shall be effective as of the date specified by
            resolution of the Board of Directors.

      (c)   Termination of the Plan shall have no effect upon payment of
            installments and benefits to former Participant and their
            Beneficiaries, whose benefit payments commenced prior to Plan
            termination. The Trustee shall retain sufficient assets to complete
            any such payments, and shall have the right, upon direction by the
            Committee, to purchase annuity contracts to assure the completion of
            such payments or to pay the value of the remaining payments in a
            lump sum distribution.

      (d)   The Company shall instruct the Trustee either (1) to continue to
            manage and administer the assets of the Trust for the benefit of the
            Participants and their Beneficiaries pursuant to the terms and
            provisions of the applicable trust agreement, or (2) to pay over to
            each Participant (and any vested former Participant) the value of
            his vested interest, and to thereupon dissolve the Trust Fund.

      (e)   Upon termination of the Plan, Income Deferral Contributions, with
            earnings thereon, shall only be distributed to Participants if (1)
            neither the Company nor an Affiliated Company establishes or
            maintains a successor defined contribution plan, and (2) payment is
            made to the Participants in the form of a lump sum distribution (as
            defined in Section 402(d)(4) of the Code, without regard to clauses
            (i) through (iv) of subparagraph (A), subparagraph (B), or
            subparagraph (F) thereof). For purposes of this paragraph, a
            "successor defined contribution plan" is a defined contribution plan
            (other than an employee stock ownership plan as defined in Section
            4975(e)(7) of the Code ("ESOP") or a simplified employee pension as
            defined in Section 408(k) of the Code ("SEP")) which exists at the
            time the Plan is terminated or within the 12-

                                       68
<PAGE>

            month period beginning on the date all assets are distributed.
            However, in no event shall a defined contribution plan be deemed a
            successor plan if fewer than 2% of the Associates who are eligible
            to participate in the Plan at the time of its termination are or
            were eligible to participate under another defined contribution plan
            of the Company or an Affiliated Company (other than an ESOP or a
            SEP) at any time during the period beginning 12 months before and
            ending 12 months after the date of the Plan's termination.

10.03 MERGERS AND CONSOLIDATIONS OF PLANS

      In the event of any merger or consolidation with, or transfer of assets or
      liabilities to, any other plan, each Participant in the event of
      termination shall have a benefit in the surviving or transferee plan
      (determined as if such plan were then terminated immediately after such
      merger, etc.) that is equal to or greater than the benefit he would have
      been entitled to receive immediately before such merger, etc. in this Plan
      (had this Plan been terminated at that time). For the purposes hereof,
      former Participants and Beneficiaries shall be considered Participants.

10.04 DISTRIBUTION OF ACCOUNTS UPON A SALE OF ASSETS OR A SALE OF A SUBSIDIARY

      Upon the disposition by the Company of at least 85% of the assets (within
      the meaning of Section 409(d)(2) of the Code) used by the Company in a
      trade or business or upon the disposition by the Company of its interest
      in a subsidiary (within the meaning of Section 409(d)(3) of the Code),
      Income Deferral Contributions, with earnings thereon, may be distributed
      to those Participants who continue in employment with the employer
      acquiring such assets or with the sold subsidiary, provided that:

      (a)   the Company maintains the Plan after the disposition,

                                       69
<PAGE>

      (b)   the buyer does not adopt the Plan or otherwise become a
            participating employer in the Plan and does not accept any transfer
            of assets or liabilities from the Plan to a plan it maintains in a
            transaction subject to Section 414(l)(1) of the Code, and

      (c)   payment is made to the Participant in the form of a lump sum
            distribution (as defined in Section 402(d)(4) of the Code, without
            regard to clauses (i) through (iv) of subparagraph (A), subparagraph
            (B), or subparagraph (F) thereof).

10.05 REORGANIZATIONS

      No Plan termination will occur solely as a result of the judicially
      declared bankruptcy or insolvency of the Company or any participating
      Affiliated Company, or the dissolution, merger, consolidation or
      reorganization of the Company or any participating Affiliated Company, or
      the sale by the Company or any participating Affiliated Company of all or
      substantially all of its assets, or the termination or complete
      discontinuance of contributions by any Company. However, arrangements may
      be made with the consent of the Company whereby the Plan will be continued
      by any successor to the Company or any participating Affiliated Company or
      any purchaser of all or substantially all of its assets, in which case the
      successor or purchaser will be substituted for the Company or any
      participating Affiliated Company under the Plan and the Trust Agreement;
      provided that, if the Company or any participating Affiliated Company is
      merged, dissolved, or in any other way organized into, or consolidated
      with, any other employer, the Plan as applied to the Company or any
      participating Affiliated Company will automatically continue in effect
      without a termination thereof.

ARTICLE 11. GENERAL PROVISIONS

11.01 APPLICABLE LAW

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<PAGE>

      This Plan shall be construed, regulated and administered under the laws of
      the State of Illinois, except where ERISA controls.

11.02 NONALIENATION

      (a)   Except as required by applicable law or by paragraph (c), no benefit
            under the Plan shall in any manner be anticipated, assigned or
            alienated, and any attempt to do so shall be void. However, payment
            shall be made in accordance with the provisions of any judgment,
            decree, or order which:

            (i)   creates for, or assigns to, a spouse, former spouse, child or
                  other dependent of a Participant the right to receive all or a
                  portion of the Participant's benefits under the Plan for the
                  purpose of providing child support, alimony payments or
                  marital property rights to that spouse, child or dependent,

            (ii)  is made pursuant to a State domestic relations law,

            (iii) does not require the Plan to provide any type of benefit, or
                  any option, not otherwise provided under the Plan, and

            (iv)  otherwise meets the requirements of Section 206(d) of ERISA,
                  as amended, as a qualified domestic relations order, as
                  determined by the Committee.

      (b)   Notwithstanding anything herein to the contrary, if the amount
            payable to the alternate payee under the qualified domestic
            relations order is $5,000 or less such amount shall be paid in one
            lump sum as soon as practicable following the qualification of the
            order. If the amount exceeds $5,000, it may be paid as soon as
            practicable following the qualification of the order if the
            qualified domestic relations order so provides and the alternate
            payee consents thereto; otherwise it may not be payable before the
            earliest of (i) the Participant's termination of employment, (ii)
            the time such amount could be withdrawn under Article 7 or (iii) the
            Participant's attainment of age 50.

                                       71
<PAGE>

            (c)   A Participant's benefit under the Plan shall be offset or
                  reduced by the amount the Participant is required to pay to
                  the Plan under the circumstances set forth in Section
                  401(a)(13)(C) of the Code.

11.03 SEVERABILITY OF PROVISIONS

      If any provision of this Plan shall be held invalid and unenforceable,
      such invalidity or unenforceability shall not affect any other provisions
      hereof, and this Plan shall be construed and enforced as if such
      provisions had not been included.

11.04 FACILITY OF PAYMENT

      If the Committee shall find that a Participant or other person entitled to
      a benefit is unable to care for his affairs because of illness or accident
      or because he is a minor, the Committee may direct that any benefit due
      him, unless claim shall have been made for the benefit by a duly appointed
      legal representative, be paid to his spouse, a child, a parent or other
      blood relative, or to a person with whom he resides. Any payment so made
      shall be a complete discharge of the liabilities of the Plan for that
      benefit.

11.05 GENDER AND NUMBER

      Except where otherwise clearly indicated by context, the masculine and the
      neuter shall include the feminine and the neuter, the singular shall
      include the plural, and vice-versa.

11.06 CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN

      The establishment of the Plan shall not confer any legal rights upon any
      Associate or other person for a continuation of employment, nor shall it
      interfere with the rights of the Company to discharge any Associate and to
      treat him without regard to the effect which that treatment might have
      upon him as a Participant or potential Participant of the Plan.

                                       72
<PAGE>

11.07 ERRONEOUS ALLOCATIONS

      Notwithstanding any provision of the Plan to the contrary, if a
      Participant's Account is credited with an erroneous amount due to a
      mistake in fact or law, the Committee shall adjust such Account in such
      equitable manner as it deems appropriate to correct the erroneous
      allocation.

11.08 ADDITIONAL PARTICIPATING EMPLOYERS

      (a)   If any company is or becomes an United States subsidiary of or
            Associated with the Company, the Board of Directors may include the
            Associates of that subsidiary or Associated company in the
            membership of the Plan upon appropriate action by that company
            necessary to adopt the Plan. In that event, or if any persons become
            Associates of the Company as the result of merger or consolidation
            or as the result of acquisition of all or part of the assets or
            business of another company, the Board of Directors shall determine
            to what extent, if any, previous service with the subsidiary,
            Associated or other company shall be recognized under the Plan, but
            subject to the continued qualification of the trust for the Plan as
            tax-exempt under the Code.

      (b)   Any subsidiary or Associated company may terminate its participation
            in the Plan upon appropriate action by it. In that event the funds
            of the Plan held on account of Participant in the employ of that
            company, and any unpaid balances of the Accounts of all Participants
            who have separated from the employ of that company, shall be
            determined by the Committee. Those funds shall be distributed as
            provided in Section 10.02 if the Plan should be terminated, or shall
            be segregated by the Trustee as a separate trust, pursuant to
            certification to the Trustee by the Committee, continuing the Plan
            as a separate plan for the Associates of that company under

                                       73
<PAGE>

            which the board of directors of that company shall succeed to all
            the powers and duties of the Board of Directors, including the
            appointment of the members of the committee.

ARTICLE 12. TOP-HEAVY PROVISIONS

The provisions of this Article shall become applicable under the circumstances
described in the following special provisions. In the event that the provisions
contained in this Article are inconsistent with the terms contained in the
remainder of the Plan, the provisions contained in this Article shall take
precedence.

12.01 TOP-HEAVINESS DEFINED

      (a)   For purposes of this Article, the Plan shall be "top-heavy" if, as
            of the Determination Date,

            (i)   the value of the aggregate of the account balances under the
                  Plan for key employees exceeds 60% of the value of the
                  aggregate of the Account balances under the Plan for all
                  Associates, or

            (ii)  the Plan is part of a required aggregation group, and the sum
                  of the present values of the cumulative account balances and
                  the aggregate present values of accrued benefits of key
                  employees in all plans in the required aggregation group
                  exceeds 60% of a similar sum determined for all Associates.
                  Notwithstanding the results of the said 60% test, the Plan
                  shall not be considered top-heavy for any Plan Year in which
                  the Plan is in a required aggregation group or the Company
                  elects to treat the Plan as a part of a permissive aggregation
                  group and such group is not determined to be top-heavy.

                                       74
<PAGE>

      (b)   For purposes of this Article, the following terms shall be
            interpreted according to the definitions assigned to them:

            (i)   "Account balance" means the sum of (i) the balance of a
                  Participant's Accounts as of the most recent Valuation Date
                  occurring within the 12-month period ending on the
                  determination date, and (ii) the value of any contributions
                  actually made after the Valuation Date but on or prior to the
                  determination date. The term shall include the aggregate
                  distributions made with respect to such Participant under the
                  Plan during the five-year period ending on the determination
                  date but shall not include any qualifying rollover
                  distributions (or similar transfers) initiated by the
                  Associate, and shall not include the account balance of a
                  non-key employee who was a key employee for any prior Plan
                  Year, or the account balance of any Participant who has not
                  performed services for the Company during the five-year period
                  ending on the determination date.

            (ii)  "Compensation" means the amount paid to the Associate by the
                  Company as stated on the Associate's Form W-2 for the calendar
                  year that ends with or within the applicable Plan Year, but
                  such amount shall be deemed not to exceed the Annual Dollar
                  Limit.

            (iii) "Defined benefit plan" means a qualified pension plan which is
                  not a defined contribution plan; however, in the case of a
                  defined benefit plan which provides a benefit which is based
                  partly on the balance of the separate account of a
                  Participant, that plan shall be treated as a defined
                  contribution plan to the extent benefits are based on the
                  separate account of a Participant and as a defined benefit
                  plan with respect to the remaining portion of the benefits
                  under the plan.

                                       75
<PAGE>

            (iv)  "Defined contribution plan" means a qualified plan which
                  provides for an individual account for each Participant and
                  for benefits based solely upon the amount contributed to the
                  Participant's account, and any income, expenses, gains and
                  losses, and any forfeitures of accounts of other Participants
                  which may be allocated to that Participant's accounts, subject
                  to (iii) above.

            (v)   "Determination date" means the last day of the preceding Plan
                  Year, or in the case of the first Plan Year, the last day of
                  that Plan Year.

            (vi)  "5% owner of the Company" means any person who either directly
                  or constructively (as defined in Section 318 of the Code) owns
                  more than 5% of either the value of the outstanding stock of
                  the Company or the total combined voting power of all of the
                  Company's stock.

            (vii) Associate includes such Beneficiary or beneficiaries who
                  obtain an interest in the Plan by Beneficiary designation,
                  will, devise or through the laws of intestacy.

           (viii) "Key Employee" means any Associate or former Associate in
                  this Plan who, at any time during the Plan Year ending on the
                  determination date, or during any of the four preceding Plan
                  Years which began after 1982, was:

                  (A)   An officer of the Company,

                  (B)   A 5% owner of the Company,

                  (C)   One of the top ten owners of the Company, or

                  (D)   A 1% owner of the Company having an annual compensation
                        of more than $150,000.

                  The term shall also include beneficiaries of key employees.

            (ix)  "Non-key employee" means any Associate who is not a key
                  employee.

            (x)   "Officer" means at any time during the Plan Year or any four
                  preceding Plan Years an Associate who serves as an
                  administrative executive for the

                                       76
<PAGE>

                  Company or an Affiliated Company on a regular and continuous
                  basis and during the applicable year has annual compensation
                  from the Company or an Affiliated Company greater than 50% of
                  the amount in effect under Section 415(b)(1)(A) of the Code.
                  The maximum number of Associates who shall be deemed to be
                  officers for purposes of this Article shall be the lesser of:

                  (A)   50, or

                  (B)   The greater of 3, or 10% of all Associates.

                  If the actual number of officers of the Company exceeds the
                  maximum number of Associates who are deemed to be officers
                  hereunder, the maximum number of officers for purposes of this
                  Article shall include those officers who had the highest
                  one-year compensation while serving as an officer of the
                  Company during any applicable Plan Year.

            (xi)  "1% owner of the Company" means any person, who either
                  directly or constructively (as defined in Section 318 of the
                  Code) owns more than 1% of either the outstanding stock of the
                  Company or the total combined voting power of all of the
                  Company's stock.

           (xii) "Permissive aggregation group" means each qualified plan in
                  the required aggregation group and any other qualified defined
                  benefit and defined contribution plan of the Company or an
                  Affiliated Company with contributions or benefits at least
                  comparable to the contributions or benefits under this Plan in
                  which all members are non-key employees, if the resulting
                  aggregation group continues to meet the requirements of
                  Section 401(a)(4) and 410 of the Code.

           (xiii) "Required aggregation group" includes:

                                       77
<PAGE>

                  (A)   Each qualified defined benefit plan and defined
                        contribution plan of the Company or an Affiliated
                        Company (regardless of whether the Plan terminated
                        within the past five years) in which a key employee is a
                        Participant, and

                  (B)   Each other qualified defined benefit and defined
                        contribution plan of the Company or an Affiliated
                        Company which enables any plan described in paragraph
                        (xiii)(A), above, to meet the requirements of Section
                        401(a)(4) or 410 of the Code.

            (xiv) "Top ten owner" means the 10 Associates who own directly or
                  constructively (as defined in Section 318 of the Code) both
                  more than 1/2% ownership interest in value and the largest
                  percentage ownership interest in value of the Company and any
                  Affiliated Company and during the applicable year have annual
                  compensation from the Company or an Affiliated Company greater
                  than 100% of the amount in effect under Section 415(c)(1)(A)
                  of the Code.

12.02 COMPANY CONTRIBUTIONS

      The following provisions shall be applicable to Participants for any Plan
      Year with respect to which the Plan is top-heavy:

      (a)   If the required minimum contribution is not provided by the Plan for
            any Participant who is a non-key employee, then in each Plan Year,
            in addition to the contributions otherwise provided under the Plan,
            the Company shall make contributions on behalf of any such
            Participant (or each Associate eligible to become a Participant) who
            is a non-key employee and who has not separated from service as of
            the last day of the Plan Year (regardless of whether the non-key
            employee elects to make Income Deferral Contributions) which, when
            added to the Company contributions allocated to his Matching Account
            for the Plan Year (and not needed to meet the Contribution

                                       78
<PAGE>

            Percentage Test) will be equal to a percentage of the Participant's
            compensation for the Plan Year, that percentage to be the lesser of
            3% or the percentage rate, determined for the key employee for whom
            that percentage is the highest, equivalent to the fraction the
            numerator of which is the contribution allocated to that key
            employee in accordance with this Section 12.02 and the denominator
            of which is the compensation of the key employee for that Plan Year.

      (b)   For purposes of this Section 12.02, all defined contribution plans
            required to be included in a required aggregation group shall be
            treated as one plan. This Section 12.02 shall not apply if this Plan
            is required to be included in a required aggregation group under
            Section 12.01 and if this Plan enables a defined benefit plan
            required to be included in such group to meet the requirements of
            Section 401(a)(4) or 410 of the Code.

      (c)   Notwithstanding the foregoing provisions, no minimum contribution
            shall be made with respect to a Participant (or an Associate
            eligible to become a Participant) if the required minimum benefit
            under Section 416(c)(1) of the Code is provided under a Company
            sponsored defined benefit plan.

12.03 IMPACT ON MAXIMUM BENEFITS

      For any Plan Year in which the Plan is a top-heavy plan, Section 3.10
      shall be read by substituting the number "1.0" for the number "1.25"
      wherever it appears therein except such substitution shall not have the
      effect of reducing any benefit accrued under a defined benefit plan
      sponsored by the Company prior to the first day of the Plan Year in which
      this provision becomes applicable.

                                       79
<PAGE>
I, Diane T. Nauer, Secretary of TruServ Corporation, hereby certify that the
attached document is a correct Copy of the TruServ Corporation Savings and
Compensation Deferral Plan, as amended and restated as of January 1, 1998.

         Dated this 28th day of February, 2002.

/s/ DIANE T. NAUER
-----------------------------
Secretary as Aforesaid
(Corporate Seal)
<PAGE>

                                  SUPPLEMENT A

                                       TO

                               TRUSERV CORPORATION

                     SAVINGS AND COMPENSATION DEFERRAL PLAN

The following Sections of the Plan shall apply to the Plan, the Coast Plan and
the SERVISTAR Plan effective as of the indicated dates prior to January 1, 1998
as a part of such plans as each had existed prior to January 1, 1998:

<TABLE>
<CAPTION>
              Plan Section                                   Effective Date
              ------------                                   --------------

<S>                                                         <C>
                 1.07                                       January 1, 1994

                 1.09                                       January 1, 1997

                 1.27                                       January 1, 1997

                 3.06                                       January 1, 1997

                 3.07                                       January 1, 1997

                 3.12                                       December 12, 1994

                 6.02                                       January 1, 1997

                 6.04(h)                                    January 1, 1997
</TABLE>

<PAGE>

                               SECOND AMENDMENT OF
                               TRUSERV CORPORATION
                     SAVINGS AND COMPENSATION DEFERRAL PLAN
            (AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1998)

      WHEREAS, TruServ Corporation (the "Company") has established and maintains
the TruServ Corporation Savings and Compensation Deferral Plan (the "Plan"); and

      WHEREAS, the Company desires to amend the Plan to reflect: (i) certain
provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001; and
(ii) Final and Temporary Regulations under ss.401(a)(9) of the Internal Revenue
Code of 1986, as amended, and intends that this amendment be in good faith
compliance with the requirements thereof; and

      NOW, THEREFORE, by virtue and in exercise of the power reserved to the
Company by Section 10.01 of the Plan and pursuant to the authority delegated to
the undersigned officer of the Company by resolution of its Board of Directors,
the Plan be and is hereby amended in the following particulars:

1. By substituting the following for Section 1.07 of the Plan:

      "Annual Dollar Limit means $150,000 commencing with the 1994 Plan Year
($200,000 commencing with the 2002 Plan Year). The Annual Dollar Limit shall be
adjusted in accordance with Section 401(a)(17)(B) of the Code."

2. By substituting "50%" for "15%" where it appears in Section 3.01(a) of the
Plan.

3. By substituting the following for the first sentence of Section 3.01(b) of
the Plan:

      "In no event shall the Participant's Income Deferral Contributions and
similar contributions made on his behalf by the Company or an Affiliated Company
to all plans, contracts, or arrangements subject to the provisions of Section
401(a)(30) of the Code in any calendar year exceed
<PAGE>

the dollar limitation contained in Section 402(g) of the Code in effect for such
taxable year, except to the extent permitted under Section 3.01(e) and Section
414(v) of the Code, if applicable."

4. By adding the following new Section (e) immediately following Section 3.01(d)
of the Plan as a part thereof:

      "(e) All Participants who are eligible to make Income Deferral
Contributions and who have attained age 50 before the close of the Plan Year
shall be eligible to make catch-up contributions in accordance with, and subject
to the limitations of, Section 414(v) of the Code. Such catch-up contributions
shall not be taken into account for purposes of the provisions of the Plan
implementing the required limitations of Sections 402(g) and 415 of the Code.
The Plan shall not be treated as failing to satisfy the provisions of the Plan
implementing the requirements of Sections 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions. A Participant's catch-up contributions shall not be
included in his Income Deferral Contributions for purposes of receiving Matching
Contributions under Section 3.02. A Participant's catch-up contribution shall be
held in the Participant's Deferral Account."

5. By substituting the following for Section 3.03(a) of the Plan:

      "(a) With the permission of the Committee and without regard to any
limitations on contributions set forth in Article 3, the Plan may receive from a
Participant, or an Associate who has not yet met the eligibility requirements
for membership, in cash, any amount (other than after-tax employee
contributions) previously received (or deemed to be received) by him from a
qualified plan described in Section 401(a) or 403(a) of the Code. In addition,
at the time and in the manner prescribed by the Committee, the Plan may also
receive from such Participant or Associate, any amount (other than after-tax
employee contributions) received (or deemed to be received) by him from an
annuity contract described in Section 403(b) of the Code, from an eligible plan
under Section 457(b) of the Code which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state. The Plan may receive such amount either directly from
the Participant or Associate or from an individual retirement account or from a
qualified plan in the form of a direct rollover. Notwithstanding the foregoing,
the Plan shall not accept any amount unless such amount is eligible to be rolled
over to a qualified trust in accordance with applicable law and the Participant
provides evidence satisfactory to the Committee that such amount qualifies for
rollover treatment. Unless received by the Plan in the form of a direct
rollover, the Rollover Contribution must be paid to the Trustee on or before the
60th day after the day it was received by the Participant. No `rollover amount'
will be accepted, directly or indirectly, from an individual retirement account
to which the Associate contributed on his own behalf or which consists, in whole
or in part, of insurance contracts."
<PAGE>

6. By adding the following to the end of Section 3.08 of the Plan as a part
thereof:

      "This Section 3.08 shall not be effective for Plan Years beginning on or
after January 1, 2002."

7. By substituting the following for Section 3.10(a) of the Plan:

      "Notwithstanding the provisions of Sections 3.01 or 3.02 and except to the
extent permitted under Section 3.01(e) and Section 414(v) of the Code, in no
event shall the `annual addition' to the Participant's Account for any Plan Year
(which shall be the `limitation year'), when added to the Participant's `annual
addition' for that Plan Year under any other qualified defined contribution plan
of the Company and an Affiliated Company, exceed the lesser of $40,000 (as
revised for the Adjustment Factor) or 100% of such Participant's compensation
(within the meaning of Section 415(c)(3) of the Code) for that Plan Year. The
compensation limit above shall not apply to any contribution for medical
benefits after separation from Service (within the meaning of Sections 401(h) or
419A(f)(2) of the Code) which is otherwise treated as an annual addition under
Section 3.10(b)."

8. By adding the following immediately following the third sentence of Section
6.02 and the fourth sentence of Section 6.04(h) of the Plan as parts thereof:

      "Notwithstanding any provision of the Plan to the contrary (including any
provisions of this Section), with respect to distributions under the Plan made
for calendar years beginning on or after January 1, 2003 pursuant to Section
401(a)(9) of the Code, the Plan will apply the minimum distribution requirements
set out in Section 6.08."

9. By substituting the following for the first sentence of Section 6.03 of the
Plan:

      "Notwithstanding any provision of the Plan to the contrary, a lump sum
payment shall be made in lieu of all vested benefits if the value of the
Participant's nonforfeitable Accrued Benefit (determined without regard to
Rollover Contributions (and earnings allocable thereto) within the meaning of
Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the
Code) as of his termination of employment or as of any subsequent Anniversary
Date is $5,000 or less."

10. By substituting the following for the last sentence of Section 6.07(b) of
the Plan:

      "An 'eligible retirement plan' shall also mean an annuity contract
described in Section 403(b) of the Code and an eligible plan under Section
457(b) of the Code which is maintained by a state, political subdivision of a
state, or any agency or instrumentality of a state or political subdivision of a
state and which agrees to separately account for amounts transferred into such
plan from the Plan. The definition of eligible retirement plan shall also apply
in the case of a distribution to a surviving
<PAGE>

spouse, or to a spouse or former spouse who is the alternate payee under a
qualified domestic relation order, as defined in Section 414(p) of the Code."

11. By adding the following new Section 6.08 to the end of Article 6 of the Plan
as a part thereof:

"6.08 Minimum Distribution Requirements after December 31, 2002

      (a) Requirements of Treasury Regulations Incorporated. All distributions
after December 31, 2002 required under this Section 6.08 will be determined and
made in accordance with the Treasury Regulations under Section 401(a)(9) of the
Code.

      (b) TEFRA Section 242(b)(2) Elections. Notwithstanding the other
provisions of this Section 6.08, distributions may be made under a designation
made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax
Equity and Fiscal Responsibility Act (`TEFRA') and the provisions of the Plan
that relate to Section 242(b)(2) of TEFRA.

      (c) Time and Manner of Distributions.

            (i) Required Beginning Date. The Participant's entire interest will
      be distributed, or begin to be distributed, to the Participant no later
      than the Participant's required beginning date.

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

                  (A)   If the Participant's surviving spouse is the
                        Participant's sole designated Beneficiary, then
                        distributions to the surviving spouse will begin by
                        December 31 of the calendar year immediately following
                        the calendar year in which the Participant died, or by
                        December 31 of the calendar year in which the
                        Participant would have attained age 70 1/2, if later.

                  (B)   If the Participant's surviving spouse is not the
                        Participant's sole designated Beneficiary, then
                        distributions to the designated Beneficiary will begin
                        by December 31 of the calendar year immediately
                        following the calendar year in which the Participant
                        died.

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

                  (D)   If the Participant's surviving spouse is the
                        Participant's sole designated Beneficiary and the
                        surviving spouse dies after the Participant but before
                        distributions to the surviving spouse begin, this
                        Section 6.08(c)(ii), other than Section 6.08(c)(ii)(A),
                        will apply as if the surviving spouse were the
                        Participant.

                  (E)   If the Participant or his designated Beneficiary so
                        elects no later than the earlier of September 30 of the
                        calendar year in which distribution would be required to
                        begin under Sections (A) or (B)
<PAGE>

                        above, or by September 30 of the calendar year which
                        contains the fifth anniversary of the Participant's (or,
                        if applicable, surviving spouses) death, such
                        Participant or Beneficiary will receive the
                        Participant's entire interest by December 31 of the
                        calendar year containing the fifth anniversary of the
                        Participant's death.

      For purposes of this Section 6.08(c)(ii) and Section 6.08(e), unless
      Section 6.08(c)(ii)(D) applies, distributions are considered to begin on
      the Participant's required beginning date. If Section 6.08(c)(ii)(D)
      applies, distributions are considered to begin on the date distributions
      are required to begin to the surviving spouse under Section
      6.08(c)(ii)(A). If distributions under an annuity purchased from an
      insurance company irrevocably commence to the Participant before the
      Participant's required beginning date (or to the Participant's surviving
      spouse before the date distributions are required to begin to the
      surviving spouse under Section 6.08(c)(ii)(A)), the date distributions are
      considered to begin is the date distributions actually commence.

            (iii) Forms of Distribution. Unless the Participant's interest is
      distributed in the form of an annuity purchased from an insurance company
      or in a single sum on or before the required beginning date, as of the
      first distribution calendar year distributions will be made in accordance
      with Sections 6.08(d) and (e). If the Participant's interest is
      distributed in the form of an annuity purchased from an insurance company,
      distributions thereunder will be made in accordance with the requirements
      of Section 401(a)(9) of the Code and the Treasury Regulations.

      (d) Required Minimum Distributions During Participant's Lifetime.

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

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

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

            (ii) Lifetime Required Minimum Distributions Continue Through Year
      of Participant's Death. Required minimum distributions will be determined
      under this Section 6.08(d) beginning with the first distribution calendar
      year and up to and including the distribution calendar year that includes
      the participant's date of death.

      (e) Required Minimum Distributions After Participant's Death.

                  (i) Death On or After Date Distributions Begin.
<PAGE>

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

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

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

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

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

            (ii) Death Before Date Distributions Begin.

                  (A)   Participant Survived by Designated Beneficiary. Except
                        as provided in Section 6.08(c)(ii)(E), if the
                        Participant dies before the date distributions begin and
                        there is a designated Beneficiary, the minimum amount
                        that will be distributed for each distribution calendar
                        year after the year of the Participant's death is the
                        quotient
<PAGE>

                        obtained by dividing the Participant's Account balance
                        by the remaining life expectancy of the Participant's
                        designated Beneficiary, determined as provided in
                        Section 6.08(e)(i).

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

                  (C)   Death of Surviving Spouse Before Distributions to
                        Surviving Spouse Are Required to Begin. If the
                        Participant dies before the date distributions begin,
                        the Participant's surviving spouse is the Participant's
                        sole designated Beneficiary, and the surviving spouse
                        dies before distributions are required to begin to the
                        surviving spouse under Section 6.08(c)(ii)(A), this
                        Section 6.08(e)(ii) will apply as if the surviving
                        spouse were the Participant."

      (f) Definitions.

            (i) Designated Beneficiary. The designated Beneficiary is the
      individual who is designated as the Beneficiary under Section 1.10 of the
      Plan and is the designated beneficiary under Section 401(a)(9) of the Code
      and Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.

            (ii) Distribution calendar year. A distribution calendar year is a
      calendar year for which a minimum distribution is required. For
      distributions beginning before the Participant's death, the first
      distribution calendar year is the calendar year immediately preceding the
      calendar year which contains the Participant's required beginning date.
      For distributions beginning after the Participant's death, the first
      distribution calendar year is the calendar year in which distributions are
      required to begin under Section 6.08(c). The required minimum distribution
      for the Participant's first distribution calendar year will be made on or
      before the Participant's required beginning date. The required minimum
      distribution for other distribution calendar years, including the required
      minimum distribution for the distribution calendar year in which the
      Participant's required beginning date occurs, will be made on or before
      December 31 of that distribution calendar year.

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

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

      transferred in the valuation calendar year.

            (v) Required beginning date. A Participant's required beginning date
      is the April 1 of the calendar year following the later of

                  (I) the calendar year in which the Participant attains age 70
            1/2, or

                  (II) if the Participant is not a 5% owner (as defined in
            Section 416(i) of the Code) with respect to the Plan Year ending in
            the calendar year in which the Participant attains age 70 1/2, the
            calendar year in which the Participant retires."

12. By substituting the phrase "6 months" for the phrase "12 months" where it
appears in Section 7.03(f) of the Plan.

13. By substituting the following for Section 12.01(b)(viii) of the Plan:

            "(viii) `Key Employee' means any Associate or former Associate in
      this Plan who, at any time during the Plan Year ending on the
      Determination Date, was:

                  (A)   An officer of the Company having annual compensation
                        (within the meaning of Code Section 415(c)(3)) greater
                        than $130,000 (as adjusted under Section 416(i)(1) of
                        the Code for Plan Years beginning after December 31,
                        2002),

                  (B)   A 5% owner of the Company, or

                  (C)   A 1% owner of the Company having an annual compensation
                        (within the meaning of Code Section 415(c)(3)) of more
                        than $150,000.

            The term shall also include beneficiaries of key employees."

14. By inserting a new Section 12.01(c) immediately following Section 12.01(b)
of the Plan as follows:

      "(c) Special Top-Heavy Rule.

            (i) For purposes of determining the present values of Accrued
      Benefits and the amounts of Account balances of Associates as of the
      Determination Date, the present values and amounts shall be increased by
      the distributions made with respect to the Associate under the Plan and
      any plan aggregated with the Plan under Section 416(g)(2) of the Code
      during the 1-year period ending on the Determination Date. The preceding
      sentence shall also apply to distributions under a terminated plan which,
      had it not been terminated, would have been aggregated with the Plan under
      Section 416(g)(2)(A)(i) of the Code. In the case of a
<PAGE>

      distribution made for a reason other than separation from Service, death,
      or disability, this provision shall be applied by substituting '5-year
      period' for '1-year period.'

            (ii) The Accrued Benefits and Accounts of any individual who has not
      performed Service for the Company during the 1-year period ending on the
      Determination Date shall not be taken into account."

                                    * * * * *

      Particulars 8 and 11 shall be effective for distributions with required
beginning dates after January 1, 2003. Particular 9 shall be effective on
January 1, 2003. All remaining particulars shall be effective on January 1,
2002.

      IN WITNESS WHEREOF, Company has caused this amendment to be executed on
its behalf by its duly authorized officer this 30th day of December, 2002.

                                       TruServ Corporation

                                       By: /s/ AMY MYSEL
                                          --------------------------------------

                                       Its: Vice President of Human Resources
                                           -------------------------------------

ATTEST:

By: /s/ BILL EVANS
   -------------------------------
Its: Director of Employee Benefits
    ------------------------------

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