Document:

Exhibit 4(o)

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                      AMERICAN ELECTRIC POWER COMPANY, INC.

             ______________________________________________________,
                 as Collateral Agent and Securities Intermediary

                                       and

                        _______________________________,
                           as Purchase Contract Agent

                                   ----------

                                PLEDGE AGREEMENT

                                   ----------

                            Dated as of_____________

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                                TABLE OF CONTENTS

<TABLE>
<S>                      <C>                                                                               <C>
SECTION 1.               Definitions........................................................................1

SECTION 2.               Pledge; Control....................................................................4
         SECTION 2.1     The Pledge.........................................................................4
         SECTION 2.2     Control; Financing Statement.......................................................4
         SECTION 2.3     Termination........................................................................5

SECTION 3.               Distributions on Pledged Collateral................................................5
         SECTION 3.1     Income Distributions...............................................................5
         SECTION 3.2     Principal Payments Following Termination Event.....................................5
         SECTION 3.3     Principal Payments Prior To or On Purchase Contract Settlement Date................5
         SECTION 3.4     Payments to Purchase Contract Agent................................................6
         SECTION 3.5     Assets Not Properly Released.......................................................6

SECTION 4.               Control............................................................................6
         SECTION 4.1     Establishment of Collateral Account................................................6
         SECTION 4.2     Treatment as Financial Assets......................................................6
         SECTION 4.3     Sole Control by Collateral Agent...................................................6
         SECTION 4.4     Securities Intermediary's Location.................................................7
         SECTION 4.5     No Other Claims....................................................................7
         SECTION 4.6     Investment and Release.............................................................7
         SECTION 4.7     Statements and Confirmations.......................................................7
         SECTION 4.8     Tax Allocations....................................................................7
         SECTION 4.9     No Other Agreements................................................................7
         SECTION 4.10    Powers Coupled With An Interest....................................................7

SECTION 5.               Initial Deposit; Establishment of Treasury SPC Units and Reestablishment
                         of SPC Units.......................................................................8
         SECTION 5.1     Initial Deposit of [Preferred Securities] [Notes]..................................8
         SECTION 5.2     Establishment of Treasury SPC Units................................................8
         SECTION 5.3     Reestablishment of SPC Units.......................................................9
         SECTION 5.4     Termination Event.................................................................10
         SECTION 5.5     Cash Settlement...................................................................11
         SECTION 5.6     Early Settlement..................................................................12
         SECTION 5.7     Application of Proceeds Settlement................................................12
         [SECTION 5.8    Tax Event Redemption..............................................................13

SECTION 6.               Voting Rights.....................................................................13

SECTION 7.               Rights and Remedies...............................................................14
         SECTION 7.1     Rights and Remedies of the Collateral Agent.......................................14
         SECTION 7.2     [Substitution of Notes............................................................15
         SECTION 7.3     [Tax Event Redemption.............................................................15
         SECTION 7.4     Substitutions.....................................................................15

SECTION 8.               Representations and Warranties; Covenants.........................................15
         SECTION 8.1     Representations and Warranties....................................................15
         SECTION 8.2     Covenants.........................................................................16

SECTION 9.               The Collateral Agent and the Securities Intermediary..............................16
         SECTION 9.1     Appointment, Powers and Immunities................................................16
         SECTION 9.2     Instructions of the Company.......................................................17
         SECTION 9.3     Reliance by Collateral Agent and Securities Intermediary..........................17
</TABLE>

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<TABLE>
<S>                      <C>                                                                               <C>
         SECTION 9.4     Rights in Other Capacities........................................................17
         SECTION 9.5     Non-Reliance on Collateral Agent and Securities Intermediary......................17
         SECTION 9.6     Compensation and Indemnity........................................................18
         SECTION 9.7     Failure to Act....................................................................18
         SECTION 9.8     Resignation of Collateral Agent and Securities Intermediary.......................19
         SECTION 9.9     Right to Appoint Agent or Advisor.................................................20
         SECTION 9.10    Survival..........................................................................20
         SECTION 9.11    Exculpation.......................................................................20

SECTION 10.              Amendment.........................................................................20
         SECTION 10.1    Amendment Without Consent of Holders..............................................20
         SECTION 10.2    Amendment With Consent of Holders.................................................21
         SECTION 10.3    Execution of Amendments...........................................................21
         SECTION 10.4    Effect of Amendments..............................................................21
         SECTION 10.5    Reference to Amendments...........................................................21

SECTION 11.              Miscellaneous.....................................................................22
         SECTION 11.1    No Waiver.........................................................................22
         SECTION 11.2    Governing Law.....................................................................22
         SECTION 11.3    Notices...........................................................................22
         SECTION 11.4    Successors and Assigns............................................................22
         SECTION 11.5    Counterparts......................................................................22
         SECTION 11.6    Severability......................................................................23
         SECTION 11.7    Expenses, etc.....................................................................23
         SECTION 11.8    Security Interest Absolute........................................................23
         SECTION 11.9    Notice of a Tax Event, Tax Event Redemption and Termination Event.................23
</TABLE>

EXHIBIT A           Instruction from Purchase Contract Agent to Collateral Agent
                    (Establishment of Treasury SPC Units)
EXHIBIT B           Instruction from Collateral Agent to Securities Intermediary
                    (Establishment of Treasury SPC Units)
EXHIBIT C           Instruction from Purchase Contract Agent to Collateral Agent
                    (Reestablishment of SPC Units)
EXHIBIT D           Instruction from Collateral Agent to Securities Intermediary
                    (Reestablishment of SPC Units)
EXHIBIT E           Notice of Cash Settlement from the Securities Intermediary
                    to the Purchase Contract Agent

                                      -ii-

<PAGE>

                                PLEDGE AGREEMENT

     PLEDGE AGREEMENT, dated as of ___________, among AMERICAN ELECTRIC POWER
COMPANY, INC., a New York corporation (the "Company"), ______________________,
as collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), and as a "securities intermediary" within the
meaning of Section 8-102(a)(14) of the UCC (as defined herein) with respect to
the Collateral Account (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and ______________________________, a
New York banking corporation, as purchase contract agent and as attorney-in-fact
of the Holders from time to time of the Securities (in such capacity, together
with its successors in such capacity, the "Purchase Contract Agent") under the
Purchase Contract Agreement.

                                    RECITALS

     The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement dated as of the date hereof (as modified and supplemented and
in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to __________________ SPC Units (the "Securities").

     Each SPC Unit, at issuance, consists of a unit comprised of (a) a stock
purchase contract (as modified and supplemented and in effect from time to time,
a "Purchase Contract") under which [(i)] the Holder will purchase from the
Company not later than the Purchase Contract Settlement Date, for an amount in
cash equal to $[25] (the "Stated Amount"), a number of shares of American
Electric Power Company, Inc. Common Stock $.01 per share par value ("Common
Stock") equal to the Settlement Rate (as defined in the Purchase Contract
Agreement), [and (ii) the Company will pay the Holder Purchase Contract
Payments] and (b) [a Preferred Security (a "Preferred Security") of
____________________ (the "Trust"), having a liquidation amount] [a note of
___________________, a wholly-owned subsidiary of the Company, which note shall
be guaranteed as to payment of principal, premium, if any, and interest by the
Company (a "Note"), having a principal amount] equal to the Stated Amount and
maturing on _____________.

     [address overallotment option, if applicable]

     Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders of the Securities have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral Account to secure the
Obligations.

     Accordingly, the Company, the Collateral Agent, the Securities Intermediary
and the Purchase Contract Agent, on its own behalf and as attorney-in-fact of
the Holders from time to time of the Securities, agree as follows:

     SECTION 1. Definitions.

     For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

     (a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;

     (b) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section, Exhibit or other subdivision;

     (c) the following terms which are defined in the UCC shall have the
meanings set forth therein: "certificated security", "control", "financial
asset", "entitlement order", "securities account" and "securities entitlement";

<PAGE>

     (d) the following terms have the meanings assigned to them in the Purchase
Contract Agreement: "Act," "Bankruptcy Code," "Board Resolution," "Business
Day," "Cash Settlement," "Certificate," "Early Settlement," "Early Settlement
Amount," "Early Settlement Date," "Holders," "Indenture," "Indenture Trustee,"
"Opinion of Counsel," "Outstanding Securities," "SPC Units," "Person," "Purchase
Contract," "Purchase Contract Payments," "Purchase Contract Settlement Date,"
"Purchase Price," "Remarketing Agent," "Remarketing Agreement," "Settlement
Rate," "Termination Event," "Treasury SPC Units," and "Underwriting Agreement";

     (e) the following terms have the meanings assigned to them in the Amended
and Restated Trust Agreement of ____________________, of even date herewith (the
"Trust Agreement"): "Applicable Ownership Interest," "Applicable Principal
Amount," "Failed Remarketing," "Indenture," "Indenture Trustee," "Primary
Treasury Dealer," "Property Trustee," "Quotation Agent," "Redemption Amount,"
"Redemption Price," "Tax Event," "Tax Event Redemption," "Tax Event Redemption
Date," and "Treasury Portfolio;" and

     (f) the following terms have the meanings given to them in this section
1(f):

     "Agreement" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.

     "Cash" means any coin or currency of the United States as at the time shall
be legal tender for payment of public and private debts.

     "Collateral" has the meaning specified in the definition of Collateral
Account.

     "Collateral Account" means the collective reference to:

          (1) Securities Account No. ____ entitled " _____________________,
     maintained at [Collateral Agent] in the name of
     ______________________________, as Purchase Contract Agent on behalf of the
     holders of securities subject to the Security Interest of __________ as
     Collateral Agent under the Pledge Agreement, for the benefit of American
     Electric Power Company, Inc., as pledgee" maintained by the Securities
     Intermediary for the Purchase Contract Agent on behalf of and as
     attorney-in-fact for the Holders;

          (2) all investment property and other financial assets from time to
     time credited to the Collateral Account, including, without limitation, (A)
     [Preferred Securities] and securities entitlements relating thereto which
     are a component of the SPC Units from time to time, (B) the Applicable
     Ownership Interests (as specified in Clause (A) of the definition of such
     term) of the Holders with respect to the Treasury Portfolio which are a
     component of the SPC Units from time to time; (C) the Notes and securities
     entitlements relating thereto which are a component of the SPC Units from
     time to time, (D) any Treasury Securities and securities entitlements
     relating thereto delivered from time to time upon establishment of Treasury
     SPC Units in accordance with Section 5.2 hereof and (E) payments made by
     Holders pursuant to Section 5.5 hereof;

          (3) all Proceeds of any of the foregoing (whether such Proceeds arise
     before or after the commencement of any proceeding under any applicable
     bankruptcy, insolvency or other similar law, by or against the pledgor or
     with respect to the pledgor); and

          (4) all powers and rights now owned or hereafter acquired under or
     with respect to the Collateral Account;

          ((2), (3) and (4) being collectively referred to herein as the
     "Collateral").

     "Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.

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<PAGE>

     "Obligations" means, with respect to each Holder, the collective reference
to all obligations and liabilities of such Holder under such Holder's Purchase
Contract (including, but not limited to, such Holder's obligation to pay the
aggregate Purchase Price for Common Stock on the Purchase Contract Settlement
Date) and this Agreement or any other document made, delivered or given in
connection herewith or therewith, in each case whether on account of principal,
interest (including, without limitation, interest accruing before and after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Holder, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
purchase price, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Company or the
Collateral Agent or the Securities Intermediary that are required to be paid by
the Holder pursuant to the terms of any of the foregoing agreements).

     "Permitted Investments" means any one of the following which shall mature
not later than the next succeeding Business Day:

          (1) any evidence of indebtedness with an original maturity of 365 days
     or less issued, or directly and fully guaranteed or insured, by the United
     States of America or any agency or instrumentality thereof (provided that
     the full faith and credit of the United States of America is pledged in
     support of the timely payment thereof or such indebtedness constitutes a
     general obligation of it);

          (2) deposits, certificates of deposit or acceptances with an original
     maturity of 365 days or less of any institution which is a member of the
     Federal Reserve System having combined capital and surplus and undivided
     profits of not less than $200.0 million at the time of deposit;

          (3) investments with an original maturity of 365 days or less of any
     Person that is fully and unconditionally guaranteed by a bank referred to
     in clause (2);

          (4) repurchase agreements and reverse repurchase agreements relating
     to marketable direct obligations issued or unconditionally guaranteed by
     the United States Government or issued by any agency thereof and backed as
     to timely payment by the full faith and credit of the United States
     Government;

          (5) investments in commercial paper, other than commercial paper
     issued by the Company or its affiliates, of any corporation incorporated
     under the laws of the United States or any State thereof, which commercial
     paper has a rating at the time of purchase at least equal to "A-1" by
     Standard & Poor's Ratings Services ("S&P") or at least equal to "P-1" by
     Moody's Investors Service, Inc. ("Moody's"); and

          (6) investments in money market funds registered under the Investment
     Company Act of 1940, as amended, rated in the highest applicable rating
     category by S&P or Moody's.

     "Person" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof.

     "Pledge" means the pledge, lien and security interest created by this
Agreement.

     "Pledged Notes" means the Notes and securities entitlements with respect
thereto from time to time credited to the Collateral Account and not then
released from the Pledge.

     "Pledged Preferred Securities" means the Preferred Securities and
securities entitlements with respect thereto from time to time credited to the
Collateral Account and not then released from the Pledge.

     "Pledged Treasury Securities" means Treasury Securities and securities
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.

     "Proceeds" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the UCC) and

                                      -3-

<PAGE>

other property received, receivable or otherwise distributed upon the sale,
exchange, collection or disposition of any financial assets from time to time
held in the Collateral Account.

     "Purchase Contract Agent" has the meaning specified in the paragraph
preceding the recitals of this Agreement.

     "TRADES" means the Treasury Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.

     "TRADES Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.

     "Transfer" means:

          (1) in the case of certificated securities in registered form,
     delivery as provided in Section 8-301(a) of the UCC, indorsed to the
     transferee or in blank by an effective indorsement;

          (2) in the case of Treasury Securities, registration of the transferee
     as the owner of such Treasury Securities on TRADES; and

          (3) in the case of securities entitlements, including, without
     limitation, securities entitlements with respect to Treasury Securities, a
     securities intermediary indicating by book entry that such security
     entitlement has been credited to the transferee's securities account.

     "Treasury Securities" means zero-coupon U.S. Treasury Securities (Cusip
No.___________________) which are the principal strips of the _____% U.S.
Treasury Securities which mature on _____________________.

     "UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time.

     "Value" means, with respect to any item of Collateral on any date, as to
(1) Cash, the face amount thereof, [(2) Preferred Securities, the liquidation
amount thereof] and (3) Treasury Securities or Notes, the aggregate principal
amount thereof at maturity.

     SECTION 2. Pledge; Control.

     SECTION 2.1 The Pledge.

     Each Holder, from time to time acting through the Purchase Contract Agent
as such Holder's attorney-in-fact, hereby pledges and grants to the Collateral
Agent, as agent of and for the benefit of the Company, as collateral security
for the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations, a continuing first
priority security interest in and to, and a lien upon and right of set off
against, all of the right, title and interest of such Holder and the Purchase
Contract Agent in and to the Collateral and the Collateral Account. The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.

     SECTION 2.2 Control; Financing Statement.

     (a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Section 4 of this Agreement.

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<PAGE>

     (b) On the date of initial issuance of the Securities, the Purchase
Contract Agent shall deliver to the Collateral Agent a financing statement
prepared by the Company for filing in the Office of the Secretary of State of
the State of New York, signed by the Purchase Contract Agent, as attorney-in-
fact for the Holders, as Debtors, and describing the Collateral.

     SECTION 2.3 Termination.

     As to each Holder, this Agreement and the Pledge created hereby shall
terminate upon the satisfaction of such Holder's Obligations. Upon such
termination, the Securities Intermediary shall Transfer such Holder's portion of
the Collateral to the Purchase Contract Agent for distribution to such Holder in
accordance with his interest, free and clear of any lien, pledge or security
interest created hereby.

     SECTION 3. Distributions on Pledged Collateral.

     SECTION 3.1 Income Distributions.

     All income distributions received by the Securities Intermediary on account
of the [Preferred Securities, the Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) in the Treasury Portfolio,] the Notes
or Permitted Investments from time to time held in the Collateral Account shall
be distributed to the Purchase Contract Agent for the benefit of the applicable
Holders as provided in the Purchase Contracts or the Purchase Contract
Agreement.

     SECTION 3.2 Principal Payments Following Termination Event.

     All payments received by the Securities Intermediary following a
Termination Event of (1) the [liquidation amount of Pledged Preferred Securities
or securities entitlements with respect thereto or (2) the Applicable Ownership
Interests (as specified in Clause (A) of the definition thereof) in the Treasury
Portfolio, (3) the] principal amount of Pledged Notes or securities entitlements
with respect thereto or (4) the principal amount of the Pledged Treasury
Securities or securities entitlements with respect thereto, shall be distributed
to the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests.

     SECTION 3.3 Principal Payments Prior To or On Purchase Contract Settlement
                 Date.

     (a) Subject to the provisions of Section 7.2, and except as provided in
clause 3.3(b) below, if no Termination Event shall have occurred, all payments
received by the Securities Intermediary of (1) the [liquidation amount of
Pledged Preferred Securities or securities entitlements with respect thereto or
(2) the Applicable Ownership Interests (as specified in Clause (A) of the
definition thereof) in the Treasury Portfolio, (3)] the principal amount with
respect to the Pledged Notes or securities entitlements with respect thereto or
(4) the principal amount of Pledged Treasury Securities or securities
entitlements with respect thereto, shall be held and invested in Permitted
Investments until the Purchase Contract Settlement Date and on the Purchase
Contract Settlement Date distributed to the Company as provided in Section 5.7
hereof. Any balance remaining in the Collateral Account shall be distributed to
the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests.

     (b) All payments received by the Securities Intermediary of (1) the
liquidation amount of Pledged Preferred Securities or securities entitlements
with respect thereto, or (2) the Applicable Ownership Interests (as specified in
Clause (A) of the definition thereof) in the Treasury Portfolio, or (3) the
principal amount of Notes or securities entitlements with respect thereto or (4)
the principal amount of Treasury Securities or securities entitlements with
respect thereto, that, in each case, have been released from the Pledge shall be
distributed to the Purchase Contract Agent for the benefit of the applicable
Holders for distribution to such Holders in accordance with their respective
interests.

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<PAGE>

     SECTION 3.4 Payments to Purchase Contract Agent.

     Payments to the Purchase Contract Agent hereunder shall be made to the
account designated by the Purchase Contract Agent for such purpose not later
than 12:00 p.m. (New York City time) on the Business Day such payment is
received by the Securities Intermediary; provided, however, that if such payment
is received on a day that is not a Business Day or after 12:00 p.m. (New York
City time) on a Business Day, then such payment shall be made no later than
10:30 a.m. (New York City time) on the next succeeding Business Day.

     SECTION 3.5 Assets Not Properly Released.

     If the Purchase Contract Agent or any Holder shall receive any principal
payments on account of financial assets credited to the Collateral Account and
not released therefrom in accordance with this Agreement, the Purchase Contract
Agent or such Holder shall hold the same as trustee of an express trust for the
benefit of the Company and, upon receipt of an Officers' Certificate (as defined
in the Purchase Contract Agreement) of the Company so directing, promptly
deliver the same to the Securities Intermediary for credit to the Collateral
Account or to the Company for application to the obligations of the Holders
under the related Purchase Contracts, and the Purchase Contract Agent and
Holders shall acquire no right, title or interest in any such payments of
principal amounts so received.

     SECTION 4. Control.

     SECTION 4.1 Establishment of Collateral Account.

     The Securities Intermediary hereby confirms that:

          (1) the Securities Intermediary has established the Collateral
     Account;

          (2) the Collateral Account is a securities account;

          (3) subject to the terms of this Agreement, the Securities
     Intermediary shall treat the Purchase Contract Agent as entitled to
     exercise the rights that comprise any financial asset credited to the
     Collateral Account;

          (4) all property delivered to the Securities Intermediary pursuant to
     this Agreement or the Purchase Contract Agreement will be credited promptly
     to the Collateral Account;

          (5) all securities or other property underlying any financial assets
     credited to the Collateral Account shall be registered in the name of the
     Securities Intermediary, indorsed to the Securities Intermediary, or in
     blank or credited to another securities account maintained in the name of
     the Securities Intermediary, and in no case will any financial asset
     credited to the Collateral Account be registered in the name of the
     Purchase Contract Agent or any Holder, payable to the order of the Purchase
     Contract Agent or any Holder or specially indorsed to the Purchase Contract
     Agent or any Holder.

     SECTION 4.2 Treatment as Financial Assets.

     Each item of property (whether investment property, financial asset,
security, instrument or cash) credited to the Collateral Account shall be
treated as a financial asset.

     SECTION 4.3 Sole Control by Collateral Agent.

     Except as provided in Section 6, at all times prior to the termination of
the Pledge, the Collateral Agent shall have sole control of the Collateral
Account, and the Securities Intermediary shall take instructions and directions
with respect to the Collateral Account solely from the Collateral Agent. If at
any time the Securities Intermediary shall receive an entitlement order issued
by the Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase

                                      -6-

<PAGE>

Contract Agent or any Holder or any other Person. Until termination of the
Pledge, the Securities Intermediary will not comply with any entitlement orders
issued by the Purchase Contract Agent or any Holder.

     SECTION 4.4 Securities Intermediary's Location.

     The Collateral Account, and the rights and obligations of the Securities
Intermediary, the Collateral Agent, the Purchase Contract Agent and the Holders
with respect thereto, shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's location.

     SECTION 4.5 No Other Claims.

     Except for the claims and interest of the Collateral Agent and of the
Purchase Contract Agent and the Holders in the Collateral Account, the
Securities Intermediary does not know of any claim to, or interest in, the
Collateral Account or in any financial asset credited thereto. If any person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the
Collateral Account or in any financial asset carried therein, the Securities
Intermediary will promptly notify the Collateral Agent and the Purchase Contract
Agent.

     SECTION 4.6 Investment and Release.

     All proceeds of financial assets from time to time deposited in the
Collateral Account shall be invested and reinvested as provided in this
Agreement. At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement or
upon written instructions of the Collateral Agent.

     SECTION 4.7 Statements and Confirmations.

     The Securities Intermediary will promptly send copies of all statements,
confirmations and other correspondence concerning the Collateral Account and any
financial assets credited thereto simultaneously to each of the Purchase
Contract Agent and the Collateral Agent at their addresses for notices under
this Agreement.

     SECTION 4.8 Tax Allocations.

     The Purchase Contract Agent shall report all items of income, gain, expense
and loss recognized in the Collateral Account to the Internal Revenue Service
and all state and local taxing authorities under the names and taxpayer
identification numbers of the holders which are the beneficial owners thereof.

     SECTION 4.9 No Other Agreements.

     The Securities Intermediary has not entered into, and prior to the
termination of the Pledge will not enter into, any agreement with any other
Person relating to the Collateral Account or any financial assets credited
thereto, including, without limitation, any agreement to comply with entitlement
orders of any Person other than the Collateral Agent.

     SECTION 4.10 Powers Coupled With An Interest.

     The rights and powers granted in this Section 4 to the Collateral Agent
have been granted in order to perfect its security interests in the Collateral
Account, are powers coupled with an interest and will be affected neither by the
bankruptcy of the Purchase Contract Agent or any Holder nor by the lapse of
time. The obligations of the Securities Intermediary under this Section 4 shall
continue in effect until the termination of the Pledge.

                                      -7-

<PAGE>

     SECTION 5. Initial Deposit; Establishment of Treasury SPC Units and
                Reestablishment of SPC Units.

     SECTION 5.1 Initial Deposit of [Preferred Securities] [Notes].

     Prior to or concurrently with the execution and delivery of this Agreement,
the Purchase Contract Agent, on behalf of the initial Holders of the SPC Units,
shall Transfer to the Securities Intermediary, for credit to the Collateral
Account, the [Preferred Securities] [Notes] or securities entitlements relating
thereto, and the Securities Intermediary shall indicate by book-entry that a
securities entitlement to such [Preferred Securities] [Notes] has been credited
to the Collateral Account.

     SECTION 5.2 Establishment of Treasury SPC Units.

     (a) [So long as no Tax Event Redemption shall have occurred, and the Trust
shall not have been dissolved and liquidated,] at any time prior to or on the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of SPC Units shall have the right to establish or reestablish
Treasury SPC Units by substitution of Treasury Securities or securities
entitlements thereto for the Pledged [Preferred Securities] [Notes] comprising a
part of such Holder's SPC Units in integral multiples of 40 SPC Units by:

          (1) transferring to the Securities Intermediary for credit to the
     Collateral Account Treasury Securities or securities entitlements thereto
     having a Value equal to the [liquidation] [principal] amount of the Pledged
     [Preferred Securities] [Notes] to be released, accompanied by a notice,
     substantially in the form of Exhibit C to the Purchase Contract Agreement,
     whereupon the Purchase Contract Agent shall deliver to the Collateral Agent
     a notice, substantially in the form of Exhibit A hereto, (A) stating that
     such Holder has Transferred Treasury Securities or securities entitlements
     thereto to the Securities Intermediary for credit to the Collateral
     Account, (B) stating the Value of the Treasury Securities or securities
     entitlements thereto Transferred by such Holder and (C) requesting that the
     Collateral Agent release from the Pledge the Pledged [Preferred Securities]
     [Notes] that are a component of such SPC Units; and

          (2) delivering the related SPC Units to the Purchase Contract Agent.

     Upon receipt of such notice and confirmation that Treasury Securities or
securities entitlements thereto have been credited to the Collateral Account as
described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice, substantially in the form of Exhibit B hereto, to
release such Pledged [Preferred Securities] [Notes] from the Pledge by Transfer
to the Purchase Contract Agent for distribution to such Holder, free and clear
of any lien, pledge or security interest created hereby.

     (b) If a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the SPC Units, a Holder of SPC Units shall not have the
right to establish or reestablish Treasury SPC Units.

     (c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Notes have become a component of the
SPC Units, at any time on or prior to the seventh Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of SPC Units shall
have the right to substitute Treasury Securities or securities entitlements
thereto for the Pledged Notes comprising a part of such Holder's SPC Units in
integral multiples of 40 SPC Units by:

          (1) Transferring to the Securities Intermediary for credit to the
     Collateral Account Treasury Securities or securities entitlements with
     respect thereto having a Value equal to the aggregate principal amount at
     maturity of Pledged Notes to be released, accompanied by a notice,
     substantially in the form of Exhibit C to the Purchase Contract Agreement,
     whereupon the Purchase Contract Agent shall deliver to the Collateral Agent
     a notice, substantially in the form of Exhibit A hereto, (A) stating that
     such Holder has Transferred Treasury Securities or securities entitlements
     with respect thereto to the Securities Intermediary for credit to the
     Collateral Account, (B) stating the Value of the Treasury Securities or
     securities

                                      -8-

<PAGE>

     entitlements with respect thereto Transferred by such Holder and (C)
     requesting that the Collateral Agent release from the Pledge the Pledged
     Notes that are a component of such SPC Units; and

          (2) delivering the related SPC Units to the Purchase Contract Agent.

     Upon receipt of such notice and confirmation that Treasury Securities or
securities entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release such Pledged Notes from the Pledge by Transfer to
the Purchase Contract Agent for distribution to such Holder free and clear of
any lien, pledge or security interest created hereby.

     (d) Upon credit to the Collateral Account of Treasury Securities or
securities entitlements thereto delivered by a Holder of SPC Units and receipt
of the related instruction from the Collateral Agent, the Securities
Intermediary shall release the Pledged [Preferred Securities or] Notes[, as the
case may be,] and shall promptly transfer the same to the Purchase Contract
Agent for distribution to such Holder, free and clear of any lien, pledge or
security interest created hereby.

     SECTION 5.3 Reestablishment of SPC Units.

     (a) [So long as no Tax Event Redemption shall have occurred, and the Trust
shall not have been dissolved and liquidated,] at any time prior to or on the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of Treasury SPC Units shall have the right to reestablish SPC
Units by substitution of [Preferred Securities] [Notes] or securities
entitlements thereto for Pledged Treasury Securities in integral multiples of 40
Treasury SPC Units by:

          (1) Transferring to the Securities Intermediary for credit to the
     Collateral Account [Preferred Securities] [Notes] or securities
     entitlements thereto having a [liquidation] [principal] amount equal to the
     Value of the Pledged Treasury Securities to be released, accompanied by a
     notice, substantially in the form of Exhibit C to the Purchase Contract
     Agreement, whereupon the Purchase Contract Agent shall deliver to the
     Collateral Agent a notice, substantially in the form of Exhibit C hereto,
     (A) stating that such Holder has Transferred [Preferred Securities] [Notes]
     or securities entitlements thereto to the Securities Intermediary for
     credit to the Collateral Account and (B) requesting that the Collateral
     Agent release from the Pledge the Pledged Treasury Securities related to
     such Treasury SPC Units; and

          (2) delivering the related Treasury SPC Units to the Purchase Contract
     Agent.

     Upon receipt of such notice and confirmation that [Preferred Securities]
[Notes] or securities entitlements thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice in the form provided in Exhibit D hereto to
release such Pledged Treasury Securities from the Pledge by Transfer to the
Purchase Contract Agent for distribution to such Holder.

     (b) If a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the SPC Units, a holder of a Treasury SPC Unit shall not
have the right to reestablish a SPC Unit.]

     (c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Notes have become a component of the
SPC Units, at any time on or prior to the seventh Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of Treasury SPC Units
shall have the right to reestablish SPC Units by substitution of Notes or
securities entitlements with respect thereto for Pledged Treasury Securities in
integral multiples of 40 Treasury SPC Units by:

          (1) Transferring to the Securities Intermediary for credit to the
     Collateral Account Notes or securities entitlements having a principal
     amount equal to the Value of the Pledged Treasury Securities to be
     released, accompanied by a notice,

                                      -9-

<PAGE>

     substantially in the form of Exhibit C to the Purchase Contract Agreement,
     whereupon the Purchase Contract Agent shall deliver to the Collateral Agent
     a notice, substantially in the form of Exhibit C hereto, stating that such
     Holder has Transferred the Notes or securities entitlements with respect
     thereto to the Securities Intermediary for credit to the Collateral Account
     and requesting that the Collateral Agent release from the Pledge the
     Pledged Treasury Securities related to such Treasury SPC Units; and

          (2) delivering the related Treasury SPC Units to the Purchase Contract
     Agent.

     Upon receipt of such notice and confirmation that Notes or securities
entitlements have been credited to the Collateral Account as described in such
notice, the Collateral Agent shall instruct the Securities Intermediary by a
notice in the form provided in Exhibit D to release such Pledged Treasury
Securities from Pledge by Transfer to the Purchase Contract Agent for
distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.

     (d) Upon credit to the Collateral Account of [Preferred Securities or]
Notes[, as the case may be,] or securities entitlements thereto, and receipt of
the related instruction from the Collateral Agent, the Securities Intermediary
shall release the applicable Pledged Treasury Securities and shall promptly
Transfer the same to the Purchase Contract Agent for distribution to such
Holder, free and clear of any lien, pledge or security interest created hereby.

     SECTION 5.4 Termination Event.

     (a) Upon receipt by the Collateral Agent of written notice from the Company
or the Purchase Contract Agent that a Termination Event has occurred, the
Collateral Agent shall release all Collateral from the Pledge and shall promptly
Transfer:

          (1) any Pledged [Preferred Securities] [Notes]or securities
     entitlements with respect thereto [or the Applicable Ownership Interest (as
     specified in clause (A) of the definition of such term) in the Treasury
     Portfolio (if a Tax Event Redemption has occurred and the Treasury
     Portfolio has become a component of the SPC Units) or the Pledged Notes (if
     the Trust has been dissolved and liquidated, and the or securities
     entitlements with respect thereto have become a component of the SPC
     Units)]; and

          (2) any Pledged Treasury Securities, to the Purchase Contract Agent
     for the benefit of the Holders for distribution to such Holders in
     accordance with their respective interests, free and clear of any lien,
     pledge or security interest or other interest created hereby; provided,
     however, if any Holder shall be entitled to receive less than $1,000 with
     respect to his interest in the Applicable Ownership Interest (as specified
     in clause (A) of the definition of such term) in the Treasury Portfolio,
     the Purchase Contract Agent shall have the right to dispose of such
     interest for cash and deliver to such Holder cash in lieu of delivering the
     Applicable Ownership Interest (as specified in clause (A) of the definition
     of such term) in the Treasury Portfolio.

     (b) If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
[Preferred Securities, the Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) in the Treasury Portfolio, the Pledged]
Notes or the Pledged Treasury Securities, as the case may be, as provided by
this Section 5.4, the Purchase Contract Agent shall:

          (1) use its best efforts to (i) obtain, at the expense of the Company,
     an opinion of a nationally recognized law firm reasonably acceptable to the
     Collateral Agent to the effect that, as a result of the Company's being the
     debtor in such a bankruptcy case, the Collateral Agent will not be
     prohibited from releasing or Transferring the Collateral as provided in
     this Section 5.4, and (ii) deliver such opinion to the Collateral Agent
     within ten days after the occurrence of such Termination Event, and if (A)
     the Purchase Contract Agent shall be unable to obtain such opinion within
     ten days after the occurrence of such Termination Event or (B) the
     Collateral Agent shall continue, after delivery of such opinion, to refuse
     to effectuate the release and Transfer of all Pledged [Preferred
     Securities, the Applicable Ownership Interest (as specified in clause (A)
     of the definition of such term) in the Treasury Portfolio, the Pledged]
     Notes, all

                                      -10-

<PAGE>

     the Pledged Treasury Securities or the Proceeds of any of the foregoing, as
     the case may be, as provided in this Section 5.4, then the Purchase
     Contract Agent shall within fifteen days after the occurrence of such
     Termination Event commence (subject to Section 7.1(b)(3) of the Purchase
     Contract Agreement) an action or proceeding in the court having
     jurisdiction of the Company's case under the Bankruptcy Code seeking an
     order requiring the Collateral Agent to effectuate the release and transfer
     of all Pledged [Preferred Securities, the Applicable Ownership Interest (as
     specified in clause (A) of the definition of such term) in the Treasury
     Portfolio, the Pledged] Notes or all the Pledged Treasury Securities, as
     the case may be, as provided by this Section 5.4; or

          (2) commence (subject to Section 7.1(b)(3) of the Purchase Contract
     Agreement) an action or proceeding like that described in clause
     5.4(b)(1)(B) hereof within ten days after the occurrence of such
     Termination Event.

     SECTION 5.5 Cash Settlement.

     (a) Upon receipt by the Collateral Agent of (1) a notice from the Purchase
Contract Agent promptly after the receipt by the Purchase Contract Agent of a
notice from a Holder of SPC Units or Treasury SPC Units that such Holder has
elected, in accordance with the procedures specified in Section 5.4(a)(i) or
(d)(i) of the Purchase Contract Agreement, respectively, to effect a Cash
Settlement and (2) payment by such Holder by deposit in the Collateral Account
prior to or on 11:00 a.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date [in the case of a
SPC Unit, unless a Tax Event Redemption has occurred, or on the Business Day
prior to the Purchase Contract Settlement Date in the case of Treasury SPC Units
or a SPC Unit, if a Tax Event Redemption has occurred,] of the Purchase Price in
lawful money of the United States by certified or cashier's check or wire
transfer of immediately available funds payable to or upon the order of the
Securities Intermediary, then the Collateral Agent shall:

          (1) instruct the Securities Intermediary promptly to invest any such
     Cash in Permitted Investments [maturing on or prior to the Contract
     Settlement Date];

          (2) release from the Pledge (i) in the case of a Holder of SPC Units,
     the related [Pledged Preferred Securities, Applicable Ownership Interest
     (as specified in clause (A) of the definition of such term) in the Treasury
     Portfolio, or] Pledged Notes [as applicable] or (ii) in the case of a
     Holder of Treasury SPC Units, the related Pledged Treasury Securities with
     a [liquidation] [principal] amount equal to the product of (x) the Stated
     Amount times (y) the number of Purchase Contracts as to which such Holder
     has elected to effect a Cash Settlement pursuant to this Section 5.5(a);
     and

          (3) instruct the Securities Intermediary to Transfer all such Pledged
     [Preferred Securities, Applicable Ownership Interest (as specified in
     clause (A) of the definition of such term) in the Treasury Portfolio, or]
     Pledged Notes or Pledged Treasury Securities, as the case may be, to the
     Purchase Contract Agent for the benefit of such Holder, in each case free
     and clear of the Pledge created hereby, for distribution to such Holder.

     Upon receipt of the proceeds upon the maturity of the Permitted Investments
on the Purchase Contract Settlement Date, the Collateral Agent shall (A)
instruct the Securities Intermediary to pay the portion of such proceeds and
deliver any certified or cashier's checks received, in an aggregate amount equal
to the Purchase Price, to the Company on the Purchase Contract Settlement Date,
and (B) instruct the Securities Intermediary to release any amounts in excess of
the Purchase Price of the interest earned from such Permitted Investments to the
Purchase Contract Agent for distribution to the such Holder.

     (b) [So long as a Tax Event Redemption shall not have occurred,] if a
Holder of SPC Units notifies the Purchase Contract Agent as provided in
paragraph 5.4(a)(i) of the Purchase Contract Agreement of its intention to pay
the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.4(a)(ii) of the Purchase Contract Agreement, such Holder shall be
deemed to have consented to the disposition of such Holder's Pledged [Preferred
Securities or] Notes in accordance with paragraph 5.4(a)(iii) of the Purchase
Contract Agreement.

                                      -11-

<PAGE>

     (c) If a Holder of Treasury SPC Units [or, if a Tax Event Redemption shall
have occurred, a Holder of SPC Units,] notifies the Purchase Contract Agent as
provided in paragraph 5.4(d)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.4(d)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have elected to pay the Purchase Price in accordance with
paragraph 5.4(d)(iii) of the Purchase Contract Agreement.

     (d) Prior to 3:00 p.m. (New York City time) on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, the Securities
Intermediary shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating (i) the amount of cash
that it has received with respect to the Cash Settlement of SPC Units and (ii)
the amount of cash that it has received with respect to the Cash Settlement of
Treasury SPC Units.

     SECTION 5.6 Early Settlement.

     Upon receipt by the Collateral Agent of a notice from the Purchase Contract
Agent that a Holder of Securities has elected to effect Early Settlement of its
obligations under the Purchase Contracts forming a part of such Securities in
accordance with the terms of the Purchase Contracts and Section 5.9 of the
Purchase Contract Agreement (which notice shall set forth the number of such
Purchase Contracts as to which such Holder has elected to effect Early
Settlement), and that the Purchase Contract Agent has received from such Holder,
and paid to the Company as confirmed in writing by the Company, the related
Early Settlement Amounts pursuant to the terms of the Purchase Contracts and the
Purchase Contract Agreement and that all conditions to such Early Settlement
have been satisfied, then the Collateral Agent shall release from the Pledge,
(1) Pledged [Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definitions at such term) in the
Treasury Portfolio or] Notes in the case of a Holder of SPC Units or (2) Pledged
Treasury Securities, in the case of a Holder of Treasury SPC Units, with a Value
equal to the product of (x) the Stated Amount times (y) the number of Purchase
Contracts as to which such Holder has elected to effect Early Settlement, and
shall instruct the Securities Intermediary to Transfer all such Pledged
[Preferred Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definitions at such term) in the Treasury
Portfolio or] Notes or Pledged Treasury Securities, as the case may be, to the
Purchase Contract Agent for the benefit of such Holder, in each case free and
clear of the Pledge created hereby, for distribution to such Holder. A Treasury
SPC Unit holder may settle early only in integral multiples of 40 Purchase
Contracts.

     SECTION 5.7 Application of Proceeds Settlement.

     (a) So long as a Tax Event Redemption has not occurred, if a Holder of SPC
Units has not elected to make an effective Cash Settlement by notifying the
Purchase Contract Agent in the manner provided for in Section 5.4(a)(i) in the
Purchase Contract Agreement, or has given such notice but failed to deliver the
required cash prior to 11:00 A.M. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, such Holder shall
be deemed to have elected to pay for the shares of Common Stock to be issued
under such Purchase Contracts from the Proceeds of the remarketing of the
related [Pledged Preferred Securities or] Pledged Notes. In such event, the
Collateral Agent shall instruct the Securities Intermediary to Transfer the
related [Pledged Preferred Securities or] Pledged Notes to the Remarketing Agent
for remarketing. Upon receiving such [Pledged Preferred Securities or] Pledged
Notes, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement, will use reasonable efforts to remarket such [Pledged Preferred
Securities or] Pledged Notes on such date. The Remarketing Agent will deposit
the entire amount of the Proceeds of such remarketing in the Collateral Account.
On the Purchase Contract Settlement Date, the Collateral Agent shall instruct
the Securities Intermediary to apply a portion of the Proceeds from such
remarketing equal to the aggregate principal amount of such [Pledged Preferred
Securities or] Pledged Notes to satisfy in full such Holder's obligations to pay
the Purchase Price to purchase the shares of Common Stock under the related
Purchase Contracts. The Collateral Agent shall also instruct the Securities
Intermediary to apply a portion of the Proceeds of such remarketing equal to
$[.0625] per [Pledged Preferred Security or] Pledged Note to pay the Remarketing
Agent for its services rendered in connection with the remarketing. The balance
of the Proceeds from such remarketing, if any, shall be transferred to the
Purchase Contract Agent for the benefit of such Holder for distribution to such
Holder.

                                      -12-

<PAGE>

     If the Remarketing Agent advises the Collateral Agent in writing that there
has been a Failed Remarketing, thus resulting in an event of default under the
Purchase Contract Agreement and hereunder, the Collateral Agent, for the benefit
of the Company shall, at the written direction of the Company, dispose of the
[Pledged Preferred Security or] Pledged Notes in accordance with applicable law
and satisfy in full, from such disposition, such Holder's obligations to pay the
Purchase Price for the shares of American Electric Power Company, Inc. Stock.

     (b) If a Holder of Treasury SPC Units [ or, if a Tax Event Redemption has
occurred, a SPC Unit,] has not elected to make an effective Cash Settlement by
notifying the Purchase Contract Agent in the manner provided for in Section
5.4(d)(i) of the Purchase Contract Agreement, or has given such notice but
failed to make such payment in the manner required by Section 5.4(d)(ii) of the
Purchase Contract Agreement, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contracts from
the Proceeds of the related Pledged Treasury Securities [(or such Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio, as the case may be]. Upon maturity of the Pledged
Treasury Securities [or Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) in the Treasury Portfolio, as the case may
be], the Securities Intermediary, at the written direction of the Collateral
Agent, shall invest the Cash Proceeds of the maturing Pledged Treasury
Securities [or Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio, as the case may be,] in
Permitted Investments [maturing on or prior to the Purchase Contract Settlement
Date]. Without receiving any instruction from any such Holder, the Collateral
Agent shall apply the Proceeds of the related Pledged Treasury Securities [or
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in the Treasury Portfolio, as the case may be], to the settlement of
such Purchase Contracts on the Purchase Contract Settlement Date. In the event
the sum of the Proceeds from the related Pledged Treasury Securities [or
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in the Treasury Portfolio, as the case may be], and the investment
earnings from the investment in Permitted Investments exceeds the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the Collateral
Agent shall instruct the Securities Intermediary to distribute such excess, when
received, to the Purchase Contract Agent for the benefit of such Holder for
distribution to such Holder.

     [SECTION 5.8 Tax Event Redemption.

     If the Securities Intermediary receives notice from the Company or the
Purchase Contract Agent that a Tax Event Redemption has occurred prior to the
Purchase Contract Settlement Date, the Securities Intermediary, promptly after
receipt of such notice, shall apply the Redemption Amount to purchase the
Treasury Portfolio and the Securities Intermediary shall credit the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio to the Collateral Account and shall transfer the
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) in the Treasury Portfolio to the Purchase Contract Agent for
distribution to the Holders of the SPC Units. Upon credit to the Collateral
Account of the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio having a Value equal to the
liquidation amount of the Pledged Preferred Securities or the aggregate
principal amount of the Pledged Notes, the Securities Intermediary shall release
the Pledged Preferred Securities or the Pledged Notes, as applicable, from the
Collateral Account and shall promptly transfer the Pledged Preferred Securities
to the Trust and the Pledged Notes to the Company, as applicable.]

     SECTION 6. Voting Rights.

     The Purchase Contract Agent may exercise, or refrain from exercising, any
and all voting and other consensual rights pertaining to the [Pledged Preferred
Securities or] Pledged Notes or any part thereof for any purpose not
inconsistent with the terms of this Agreement and in accordance with the terms
of the Purchase Contract Agreement; provided, that the Purchase Contract Agent
shall not exercise or shall not refrain from exercising such right, as the case
may be, if, in the judgment of the Purchase Contract Agent, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the [Pledged Preferred Securities or] Pledged Notes; and provided, further, that
the Purchase Contract Agent shall give the Company and the Collateral Agent at
least five Business Days' prior written notice of the manner in which it intends
to exercise, or its reasons for refraining from exercising, any such right. Upon
receipt of any notices and other communications in respect of any [Pledged
Preferred Securities or] Pledged Notes, including notice of any meeting at which
holders of the [Preferred Securities

                                      -13-

<PAGE>

or] Notes are entitled to vote or solicitation of consents, waivers or proxies
of holders of the [Preferred Securities or] Notes, the Collateral Agent shall
use reasonable efforts to send promptly to the Purchase Contract Agent such
notice or communication, and as soon as reasonably practicable after receipt of
a written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such [Pledged Preferred Securities or] Pledged Notes (in form and substance
satisfactory to the Collateral Agent) as are prepared by the Purchase Contract
Agent with respect to the [Pledged Preferred Securities or] Pledged Notes.

     SECTION 7. Rights and Remedies.

     SECTION 7.1 Rights and Remedies of the Collateral Agent.

     (a) In addition to the rights and remedies specified in Sections 5.5 and
5.7 hereof or otherwise available at law or in equity, after an event of default
(as specified in Section 7.1(b) below) hereunder, the Collateral Agent shall
have all of the rights and remedies with respect to the Collateral of a secured
party under the UCC (whether or not the UCC is in effect in the jurisdiction
where the rights and remedies are asserted) and the TRADES Regulations and such
additional rights and remedies to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights and remedies hereunder may
be asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the
[Pledged Preferred Securities,] [Pledged Treasury Securities] or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term)] Pledged Notes[, as the case may be,] in full satisfaction of the
Holders' obligations under the Purchase Contracts or (2) sale of the [Pledged
Preferred Securities,] [Pledged Treasury Securities] or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term)] Pledged Notes[, as the case may be] in one or more public or private
sales and application of the proceeds in full satisfaction of the Holders'
obligations under the Purchase Contracts.

     (b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of [the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio, or on account of ] principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof, in satisfaction of the
Obligations of the Holder of [the SPC Units (if a Tax Event Redemption has
occurred) of which such appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) in the Treasury Portfolio or] the
Holder of the Treasury SPC Units of which such Pledged Treasury Securities are a
part under the related Purchase Contracts, the inability to make such payments
shall constitute an event of default hereunder and the Collateral Agent shall
have and may exercise, with reference to such Pledged Treasury Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio, as applicable, and such
Obligations of such Holder, any and all of the rights and remedies available to
a secured party under the UCC and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.

     (c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the liquidation amount of
the Pledged Preferred Securities, (ii) the principal amount of the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio, (iii) the principal amount of the Pledged Notes and
(iv) the principal amount of the Pledged Treasury Securities subject, in each
case, to the provisions of Section 3 hereof, and as otherwise granted herein.

     (d) The Purchase Contract Agent individually and as attorney-in-fact for
each Holder of Securities, and each Holder of Securities agrees that, from time
to time, upon the written request of the Collateral Agent, or the Purchase
Contract Agent, such Holder shall execute and deliver such further documents and
do such other acts and things as the Collateral Agent may reasonably request in
order to maintain the Pledge, and the perfection and priority thereof, and to
confirm the rights of the Collateral Agent hereunder. The Purchase Contract
Agent shall have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder, except for
liability for its own negligent acts, its own negligent failure to act or its
own willful misconduct.

                                      -14-

<PAGE>

     SECTION 7.2 [Substitution of Notes.

     If the Trust shall have been dissolved and liquidated prior to the Purchase
Contract Settlement Date, the Securities Intermediary shall transfer to the
Collateral Agent Notes having a Value equal to the liquidation amount of the
Pledged Preferred Securities for credit to the Collateral Account. Upon credit
to the Collateral Account of such Notes, the Collateral Agent shall release the
Pledged Preferred Securities from the Collateral Account and shall promptly
transfer the same to the Trust.]

     SECTION 7.3 [Tax Event Redemption.

     Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount shall be
credited to the Collateral Account by the Property Trustee or, in case there has
been a dissolution of the Trust and the distribution of the related Notes, by
the Indenture Trustee, on or prior to 12:30 p.m., New York City time on such Tax
Event Redemption Date, by federal funds check or wire transfer of immediately
available funds. The Collateral Agent is hereby authorized to present the
Pledged Preferred Securities or the Pledged Notes for payment as may be required
by their respective terms. Upon receipt of such funds, the Pledged Preferred
Securities or Pledged Notes, as the case may be, shall be released from the
Collateral Account. In the event such funds are credited to the Collateral
Account, the Collateral Agent, at the written direction of the Company, shall
instruct the Securities Intermediary to (a) apply an amount equal to the
Redemption Amount of such Redemption Price to purchase the Treasury Portfolio
from the Quotation Agent for credit to the Collateral Account and (b) promptly
remit the remaining portion of such Redemption Price, if any, to the Purchase
Contract Agent for payment to the Holders of SPC Units.]

     SECTION 7.4 Substitutions.

     Whenever a Holder has the right to substitute Treasury Securities,
[Preferred Securities] Notes [the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be,] or securities entitlements to any
of them, for financial assets held in the Collateral Account, such substitution
shall not constitute a novation of the security interest created hereby.

     SECTION 8. Representations and Warranties; Covenants.

     SECTION 8.1 Representations and Warranties.

     Each Holder from time to time, acting through the Purchase Contract Agent
as attorney-in-fact (it being understood that the Purchase Contract Agent shall
not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represents and warrants to the Collateral Agent (with respect to
such Holder's interest in the Collateral), which representations and warranties
shall be deemed repeated on each day a Holder Transfers Collateral that:

          (1) such Holder has the power to grant a security interest in and lien
     on the Collateral;

          (2) such Holder is the sole beneficial owner of the Collateral and, in
     the case of Collateral delivered in physical form, is the sole holder of
     such Collateral and is the sole beneficial owner of, or has the right to
     Transfer, the Collateral it Transfers to the Securities Intermediary for
     credit to the Collateral Account, free and clear of any security interest,
     lien, encumbrance, call, liability to pay money or other restriction other
     than the security interest and lien granted under Section 2 hereof;

          (3) upon the Transfer of the Collateral to the Securities Intermediary
     for credit to the Collateral Account, the Collateral Agent, for the benefit
     of the Company, will have a valid and perfected first priority security
     interest therein (assuming that any central clearing operation or any
     securities intermediary or other entity not within the control of the
     Holder involved in the Transfer of the Collateral, including the Collateral
     Agent and the Securities Intermediary, gives the notices and takes the
     action

                                      -15-

<PAGE>

     required of it hereunder and under applicable law for perfection of that
     interest and assuming the establishment and exercise of control pursuant to
     Section 4 hereof); and

          (4) the execution and performance by the Holder of its obligations
     under this Agreement will not result in the creation of any security
     interest, lien or other encumbrance on the Collateral other than the
     security interest and lien granted under Section 2 hereof or violate any
     provision of any existing law or regulation applicable to it or of any
     mortgage, charge, pledge, indenture, contract or undertaking to which it is
     a party or which is binding on it or any of its assets.

     SECTION 8.2 Covenants.

     The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any covenant made by or on behalf of a Holder), hereby
covenant to the Collateral Agent that for so long as the Collateral remains
subject to the Pledge:

          (1) neither the Purchase Contract Agent nor such Holders will create
     or purport to create or allow to subsist any mortgage, charge, lien, pledge
     or any other security interest whatsoever over the Collateral or any part
     of it other than pursuant to this Agreement; and

          (2) neither the Purchase Contract Agent nor such Holders will sell or
     otherwise dispose (or attempt to dispose) of the Collateral or any part of
     it except for the beneficial interest therein, subject to the Pledge
     hereunder, transferred in connection with the Transfer of the Securities.

     SECTION 9. The Collateral Agent and the Securities Intermediary.

     It is hereby agreed as follows:

     SECTION 9.1 Appointment, Powers and Immunities.

     The Collateral Agent shall act as agent for the Company hereunder with such
powers as are specifically vested in the Collateral Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto.
The Collateral Agent shall:

          (1) have no duties or responsibilities except those expressly set
     forth in this Agreement and no implied covenants or obligations shall be
     inferred from this Agreement against the Collateral Agent, nor shall the
     Collateral Agent be bound by the provisions of any agreement by any party
     hereto beyond the specific terms hereof;

          (2) not be responsible for any recitals contained in this Agreement,
     or in any certificate or other document referred to or provided for in, or
     received by it under, this Agreement, the Securities or the Purchase
     Contract Agreement, or for the value, validity, effectiveness, genuineness,
     enforceability or sufficiency of this Agreement (other than as against the
     Collateral Agent), the Securities or the Purchase Contract Agreement or any
     other document referred to or provided for herein or therein or for any
     failure by the Company or any other Person (except the Collateral Agent) to
     perform any of its obligations hereunder or thereunder or for the
     perfection, priority or, except as expressly required hereby, maintenance
     of any security interest created hereunder;

          (3) not be required to initiate or conduct any litigation or
     collection proceedings hereunder (except pursuant to directions furnished
     under Section 9.2 hereof, subject to Section 9.6 hereof);

          (4) not be responsible for any action taken or omitted to be taken by
     it hereunder or under any other document or instrument referred to or
     provided for herein or in connection herewith or therewith, except for its
     own negligence or willful misconduct; and

                                      -16-

<PAGE>

          (5) not be required to advise any party as to selling or retaining, or
     taking or refraining from taking any action with respect to, any securities
     or other property deposited hereunder.

     Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.

     No provision of this Agreement shall require the Collateral Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any amount in excess of the Value of the Collateral.
Notwithstanding the foregoing, each of the Collateral Agent and the Securities
Intermediary in its individual capacity hereby waives any right of setoff,
bankers' lien, liens or perfection rights as securities intermediary or any
counterclaim with respect to any of the Collateral.

     SECTION 9.2 Instructions of the Company.

     The Company shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, or to direct the taking or refraining from taking of any
action authorized by this Agreement; provided, however, that (i) such direction
shall not conflict with the provisions of any law or of this Agreement and (ii)
the Collateral Agent shall be adequately indemnified as provided herein. Nothing
contained in this Section 9.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.

     SECTION 9.3 Reliance by Collateral Agent and Securities Intermediary.

     Each of the Securities Intermediary and the Collateral Agent shall be
entitled to rely upon any certification, order, judgment, opinion, notice or
other written communication (including, without limitation, any thereof by
telephone, telecopy, e-mail or similar electronic media, telex or facsimile)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons (without being required to determine
the correctness of any fact stated therein) and upon advice and statements of
legal counsel and other experts selected by the Collateral Agent and the
Securities Intermediary. As to any matters not expressly provided for by this
Agreement, the Collateral Agent and the Securities Intermediary shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions given by the Company in accordance with this
Agreement.

     SECTION 9.4 Rights in Other Capacities.

     The Collateral Agent and the Securities Intermediary and their affiliates
may (without having to account therefor to the Company) accept deposits from,
lend money to, make their investments in and generally engage in any kind of
banking, trust or other business with the Purchase Contract Agent or the
Securities Intermediary, as the case may be, any other Person interested herein
and any Holder of Securities (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of Securities without having to
account for the same to the Company; provided that each of the Securities
Intermediary and the Collateral Agent covenants and agrees with the Company that
it shall not accept, receive or permit there to be created in favor of itself
and shall take no affirmative action to permit there to be created in favor of
any other Person, any security interest, lien or other encumbrance of any kind
in or upon the Collateral other than the lien created by the Pledge.

     SECTION 9.5 Non-Reliance on Collateral Agent and Securities Intermediary.

     Neither the Securities Intermediary nor the Collateral Agent shall be
required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Securities of this Agreement, the
Purchase Contract Agreement, the Securities or any other document referred to or
provided for

                                      -17-

<PAGE>

herein or therein or to inspect the properties or books of the Purchase Contract
Agent or any Holder of Securities. Neither the Collateral Agent nor the
Securities Intermediary shall have any duty or responsibility to provide the
Company with any credit or other information concerning the affairs, financial
condition or business of the Purchase Contract Agent or any Holder of Securities
(or any of their respective affiliates) that may come into the possession of the
Collateral Agent or the Securities Intermediary or any of their respective
affiliates.

     SECTION 9.6 Compensation and Indemnity.

     The Company agrees to:

          (1) pay the Collateral Agent and the Securities Intermediary from time
     to time such compensation as shall be agreed in writing between the Company
     and the Collateral Agent or the Securities Intermediary, as the case may
     be, for all services rendered by them hereunder; and

          (2) indemnify the Collateral Agent and the Securities Intermediary
     for, and hold each of them harmless from and against, any loss, liability
     or reasonable out-of-pocket expense incurred without negligence, willful
     misconduct or bad faith on its part, arising out of or in connection with
     the acceptance or administration of its powers and duties under this
     Agreement, including the reasonable out-of-pocket costs and expenses
     (including reasonable fees and expenses of counsel) of defending itself
     against any claim or liability in connection with the exercise or
     performance of such powers and duties.

     The Collateral Agent and the Securities Intermediary shall each promptly
notify the Company of any third party claim which may give rise to indemnity
hereunder and give the Company the opportunity to participate in the defense of
such claim with counsel reasonably satisfactory to the indemnified party, and no
such claim shall be settled without the written consent of the Company, which
consent shall not be unreasonably withheld.

     SECTION 9.7 Failure to Act.

     In the event of any ambiguity in the provisions of this Agreement or any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Securities Intermediary shall be entitled, after prompt
notice to the Company and the Purchase Contract Agent, at its sole option, to
refuse to comply with any and all claims, demands or instructions with respect
to such property or funds so long as such dispute or conflict shall continue,
and the Collateral Agent and the Securities Intermediary shall not be or become
liable in any way to any of the parties hereto for its failure or refusal to
comply with such conflicting claims, demands or instructions. The Collateral
Agent and the Securities Intermediary shall be entitled to refuse to act until
either:

          (1) such conflicting or adverse claims or demands shall have been
     finally determined by a court of competent jurisdiction or settled by
     agreement between the conflicting parties as evidenced in a writing
     satisfactory to the Collateral Agent or the Securities Intermediary; or

          (2) the Collateral Agent or the Securities Intermediary shall have
     received security or an indemnity satisfactory to it sufficient to save it
     harmless from and against any and all loss, liability or reasonable out-of-
     pocket expense which it may incur by reason of its acting.

     The Collateral Agent and the Securities Intermediary may in addition elect
to commence an interpleader action or seek other judicial relief or orders as
the Collateral Agent or the Securities Intermediary may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Securities Intermediary shall be required to take any
action that is in its opinion contrary to law or to the terms of this Agreement,
or which would in its opinion subject it or any of its officers, employees or
directors to liability.

                                      -18-

<PAGE>

     SECTION 9.8 Resignation of Collateral Agent and Securities Intermediary.

     (a) Subject to the appointment and acceptance of a successor Collateral
Agent as provided below:

          (1) the Collateral Agent may resign at any time by giving notice
     thereof to the Company and the Purchase Contract Agent as attorney-in-fact
     for the Holders of Securities;

          (2) the Collateral Agent may be removed at any time by the Company;
     and

          (3) if the Collateral Agent fails to perform any of its material
     obligations hereunder in any material respect for a period of not less than
     20 days after receiving written notice of such failure by the Purchase
     Contract Agent and such failure shall be continuing, the Collateral Agent
     may be removed by the Purchase Contract Agent.

     The Purchase Contract Agent shall promptly notify the Company of any
removal of the Collateral Agent pursuant to clause (3) of the immediately
preceding sentence. Upon any such resignation or removal, the Company shall have
the right to appoint a successor Collateral Agent. If no successor Collateral
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Collateral Agent's giving of notice of
resignation or such removal, then the retiring Collateral Agent may petition any
court of competent jurisdiction for the appointment of a successor Collateral
Agent. The Collateral Agent shall be a bank which has an office in New York City
with a combined capital and surplus of at least $50,000,000 and shall not be the
Purchase Contract Agent or any of its affiliates. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent, and
the retiring Collateral Agent shall take all appropriate action to transfer any
money and property held by it hereunder (including the Collateral) to such
successor Collateral Agent. The retiring Collateral Agent shall, upon such
succession, be discharged from its duties and obligations as Collateral Agent
hereunder. After any retiring Collateral Agent's resignation hereunder as
Collateral Agent, the provisions of this Section 9 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Collateral Agent.

     (b) Subject to the appointment and acceptance of a successor Securities
Intermediary as provided below:

          (1) the Securities Intermediary may resign at any time by giving
     notice thereof to the Company and the Purchase Contract Agent as attorney-
     in-fact for the Holders of Securities;

          (2) the Securities Intermediary may be removed at any time by the
     Company; and

          (3) if the Securities Intermediary fails to perform any of its
     material obligations hereunder in any material respect for a period of not
     less than 20 days after receiving written notice of such failure by the
     Purchase Contract Agent and such failure shall be continuing, the
     Securities Intermediary may be removed by the Purchase Contract Agent.

     The Purchase Contract Agent shall promptly notify the Company of any
removal of the Securities Intermediary pursuant to clause (3) of the immediately
preceding sentence. Upon any such resignation or removal, the Company shall have
the right to appoint a successor Securities Intermediary. If no successor
Securities Intermediary shall have been so appointed and shall have accepted
such appointment within 30 days after the retiring Securities Intermediary's
giving of notice of resignation or such removal, then the retiring Securities
Intermediary may petition any court of competent jurisdiction for the
appointment of a successor Securities Intermediary. The Securities Intermediary
shall be a bank which has an office in New York City with a combined capital and
surplus of at least $50,000,000 and shall not be the Purchase Contract Agent or
any of its affiliates. Upon the acceptance of any appointment as Securities
Intermediary hereunder by a successor Securities Intermediary, such successor
Securities Intermediary shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Securities
Intermediary, and the retiring Securities Intermediary

                                      -19-

<PAGE>

shall take all appropriate action to transfer any money and property held by it
hereunder (including the Collateral) to such successor Securities Intermediary.
The retiring Securities Intermediary shall, upon such succession, be discharged
from its duties and obligations as Securities Intermediary hereunder. After any
retiring Securities Intermediary's resignation hereunder as Securities
Intermediary, the provisions of this Section 9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Securities Intermediary.

     SECTION 9.9 Right to Appoint Agent or Advisor.

     The Collateral Agent shall have the right to appoint agents or advisors in
connection with any of its duties hereunder, and the Collateral Agent shall not
be liable for any action taken or omitted by, or in reliance upon the advice of,
such agents or advisors selected in good faith. The appointment of agents
pursuant to this Section 9.9 shall be subject to prior consent of the Company,
which consent shall not be unreasonably withheld.

     SECTION 9.10 Survival.

     The provisions of this Section 9 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Securities Intermediary.

     SECTION 9.11 Exculpation.

     Anything contained in this Agreement to the contrary notwithstanding, in no
event shall the Collateral Agent or the Securities Intermediary or their
officers, directors, employees or agents be liable under this Agreement to any
third party for indirect, special, punitive, or consequential loss or damage of
any kind whatsoever, including lost profits, whether or not the likelihood of
such loss or damage was known to the Collateral Agent or the Securities
Intermediary, or any of them, incurred without any act or deed that is found to
be attributable to gross negligence or willful misconduct on the part of the
Collateral Agent or the Securities Intermediary.

     SECTION 10. Amendment.

     SECTION 10.1 Amendment Without Consent of Holders.

     Without the consent of any Holders, the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form satisfactory to the Company, the
Collateral Agent, the Securities Intermediary and the Purchase Contract Agent,
to:

          (1) evidence the succession of another Person to the Company, and the
     assumption by any such successor of the covenants of the Company;

          (2) evidence and provide for the acceptance of appointment hereunder
     by a successor Collateral Agent, Securities Intermediary or Purchase
     Contract Agent;

          (3) add to the covenants of the Company for the benefit of the
     Holders, or surrender any right or power herein conferred upon the Company,
     provided such covenants or such surrender do not adversely affect the
     validity, perfection or priority of the Pledge created hereunder; or

          (4) cure any ambiguity (or formal defect), correct or supplement any
     provisions herein which may be inconsistent with any other such provisions
     herein, or make any other provisions with respect to such matters or
     questions arising under this Agreement, provided such action shall not
     adversely affect the interests of the Holders.

                                      -20-

<PAGE>

     SECTION 10.2 Amendment With Consent of Holders.

     With the consent of the Holders of not less than a majority of the Purchase
Contracts at the time outstanding, by Act of such Holders delivered to the
Company, the Purchase Contract Agent, the Securities Intermediary and the
Collateral Agent, the Company, the Purchase Contract Agent, the Securities
Intermediary and the Collateral Agent may amend this Agreement for the purpose
of modifying in any manner the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that no such
supplemental agreement shall, without the unanimous consent of the Holders of
each Outstanding Security adversely affected thereby:

          (1) change the amount or type of Collateral underlying a Security,
     impair the right of the Holder of any Security to receive distributions on
     the underlying Collateral or otherwise adversely affect the Holder's rights
     in or to such Collateral;

          (2) otherwise effect any action that would require the consent of the
     Holder of each Outstanding Security affected thereby pursuant to the
     Purchase Contract Agreement if such action were effected by an agreement
     supplemental thereto; or

          (3) reduce the percentage of Purchase Contracts the consent of whose
     Holders is required for any such amendment;

     provided that if any amendment or proposal referred to above would
adversely affect only the SPC Units or only the Treasury SPC Units, then only
the affected class of Holders( as of the record date, if any) for the Holders
entitled to vote thereon will be entitled to vote on such amendment or proposal,
and such amendment or proposal shall not be effective except with the consent of
Holders of not less than a majority of such class; provided, further, that the
unanimous consent of the Holders of each outstanding Purchase Contract of such
class affected thereby shall be required to approve any amendment or proposal
specified in clauses (1) through (3) above.

     It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.

     SECTION 10.3 Execution of Amendments.

     In executing any amendment permitted by this Section, the Collateral Agent,
the Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.1 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied.

     SECTION 10.4 Effect of Amendments.

     Upon the execution of any amendment under this Section, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated, executed on behalf of the Holders and delivered
under the Purchase Contract Agreement shall be bound thereby.

     SECTION 10.5 Reference to Amendments.

     Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any amendment pursuant to this Section may, and shall if
required by the Collateral Agent or the Purchase Contract Agent, bear a notation
in form approved by the Purchase Contract Agent and the Collateral Agent as to
any matter provided for in such amendment. If the Company shall so determine,
new Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders

                                      -21-

<PAGE>

and delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Outstanding Security Certificates.

     SECTION 11. Miscellaneous.

     SECTION 11.1 No Waiver.

     No failure on the part of the Collateral Agent or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.

     SECTION 11.2 Governing Law.

     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

     The Company, the Collateral Agent, the Securities Intermediary and the
Holders from time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company, the Collateral Agent, the
Securities Intermediary and the Holders from time to time of the Securities,
acting through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

     SECTION 11.3 Notices.

     All notices, requests, consents and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof or,
as to any party, at such other address as shall be designated by such party in a
notice to the other parties (or in the case of Holders, as may be made and
deemed given as provided in Section 1.6 of the Purchase Contract Agreement).
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.

     SECTION 11.4 Successors and Assigns.

     This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, and the Holders from
time to time of the Securities, by their acceptance of the same, shall be deemed
to have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.

     SECTION 11.5 Counterparts.

     This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the
parties hereto may execute this Agreement by signing any such counterpart.

                                      -22-

<PAGE>

     SECTION 11.6 Severability.

     If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

     SECTION 11.7 Expenses, etc.

     The Company agrees to reimburse the Collateral Agent and the Securities
Intermediary for:

          (1) all reasonable out-of-pocket costs and expenses of the Collateral
     Agent and the Securities Intermediary (including, without limitation, the
     reasonable fees and expenses of counsel to the Collateral Agent and the
     Securities Intermediary), in connection with (i) the negotiation,
     preparation, execution and delivery or performance of this Agreement and
     (ii) any modification, supplement or waiver of any of the terms of this
     Agreement;

          (2) all reasonable costs and expenses of the Collateral Agent and the
     Securities Intermediary (including, without limitation, reasonable fees and
     expenses of counsel) in connection with (i) any enforcement or proceedings
     resulting or incurred in connection with causing any Holder of Securities
     to satisfy its obligations under the Purchase Contracts forming a part of
     the Securities and (ii) the enforcement of this Section 11.7; and

          (3) all transfer, stamp, documentary or other similar taxes,
     assessments or charges levied by any governmental or revenue authority in
     respect of this Agreement or any other document referred to herein and all
     costs, expenses, taxes, assessments and other charges incurred in
     connection with any filing, registration, recording or perfection of any
     security interest contemplated hereby.

     SECTION 11.8 Security Interest Absolute.

     All rights of the Collateral Agent and security interests hereunder, and
all obligations of the Holders from time to time hereunder, shall be absolute
and unconditional irrespective of:

          (1) any lack of validity or enforceability of any provision of the
     Purchase Contracts or the Securities or any other agreement or instrument
     relating thereto;

          (2) any change in the time, manner or place of payment of, or any
     other term of, or any increase in the amount of, all or any of the
     obligations of Holders of the Securities under the related Purchase
     Contracts, or any other amendment or waiver of any term of, or any consent
     to any departure from any requirement of, the Purchase Contract Agreement
     or any Purchase Contract or any other agreement or instrument relating
     thereto; or

          (3) any other circumstance which might otherwise constitute a defense
     available to, or discharge of, a borrower, a guarantor or a pledgor.

     SECTION 11.9 Notice of a Tax Event, Tax Event Redemption and Termination
                  Event

     Upon the occurrence of a Tax Event, a Tax Event Redemption or a Termination
Event, the Company shall deliver written notice to the Collateral Agent and the
Securities Intermediary. Upon the written request of the Collateral Agent or the
Securities Intermediary, the Company shall inform such party whether or not a
Tax Event, a Tax Event Redemption or a Termination Event has occurred.

                                      -23-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

<TABLE>
<S>                                                          <C>
AMERICAN ELECTRIC POWER COMPANY, INC.                        ______________________________, as Purchase Contract
                                                             Agent and as attorney-in- fact of the Holders from time
                                                             to time of the Securities

By:                                                          By:
    ----------------------------------                           ----------------------------------
Name:                                                        Name:
Title:                                                       Title:

Address for Notices:                                         Address for Notices:

Attention:                                                   Attention:
Telecopy:                                                    Telecopy:

___________________________________, as Collateral Agent     ____________________________________, as Securities
                                                             Intermediary

By:                                                          By:
   ---------------------------------                            ----------------------------------
Name:                                                        Name:
Title:                                                       Title:

Address for Notices:                                         Address for Notices:

Attention:                                                   Attention:
Telecopy:                                                    Telecopy:
</TABLE>

                                      -24-

<PAGE>

                                                                       EXHIBIT A

                                   INSTRUCTION
                          FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT
                      (Establishment of Treasury SPC Units)

---------------------------

---------------------------

---------------------------

---------------------------
Attention:
           ----------------
Telecopy:
           ----------------

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company") and
          [_________________] [_____________________]

     Please refer to the Pledge Agreement, dated as of ____________________ (the
"Pledge Agreement"), among the Company, you, as Collateral Agent,
__________________, as Securities Intermediary, and the undersigned, as Purchase
Contract Agent and as attorney-in-fact for the holders of SPC Units from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.

     We hereby notify you in accordance with Section 5.2 of the Pledge Agreement
that the holder of securities named below (the "Holder") has elected to
substitute $__________ Value of Treasury Securities or securities entitlements
thereto in exchange for an equal Value of Pledged [Preferred Securities] [Notes]
and has delivered to the undersigned a notice stating that the Holder has
Transferred such Treasury Securities or securities entitlements thereto to the
Securities Intermediary, for credit to the Collateral Account.

     We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or securities entitlements thereto
have been credited to the Collateral Account, to release to the undersigned an
equal Value of Pledged [Preferred Securities] [Notes] in accordance with Section
5.2 of the Pledge Agreement. [We also hereby confirm that no Tax Event
Redemption has occurred.]

                                     -----------------------------------

                                     By:
                                              --------------------------------
                                              Name:
                                              Title:

Date:

<PAGE>

Please print name and address of Holder electing to substitute Treasury
Securities or securities entitlements thereto for the Pledged [Preferred
Securities] [Notes]:

                               _________________________________________Social
          -----------------    Security  or other Taxpayer Identification
                Name           Number, if any

------------------
Address

------------------

------------------

                                      -2-

<PAGE>

                                                                       EXHIBIT B

                                   INSTRUCTION
                              FROM COLLATERAL AGENT
                           TO SECURITIES INTERMEDIARY
                      (Establishment of Treasury SPC Units)

---------------------------

---------------------------

---------------------------

---------------------------
Attention:
           ----------------
Telecopy:
           ----------------

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company")
          Securities Account No. ____. entitled
          "_________________________________ , as Collateral Agent, Securities
          Account (American Electric Power Company, Inc.)" (the "Collateral
          Account")

     Please refer to the Pledge Agreement, dated as of ________________ (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
_______________________, as Purchase Contract Agent and as attorney-in-fact for
the holders of SPC Units from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.

     When you have confirmed that $__________ Value of Treasury Securities or
securities entitlements thereto has been credited to the Collateral Account by
or for the benefit of _________, as Holder of SPC Units (the "Holder"), you are
hereby instructed to release from the Collateral Account an equal Value of
[Preferred Securities] [Notes] or securities entitlements thereto by Transfer to
the Purchase Contract Agent.

                                     -------------------------------------

                                     By:
                                              ----------------------------
                                              Name:
                                              Title:

Dated:
      ------------------

<PAGE>

Please print name and address of Holder:

                               _________________________________________Social
          -----------------    Security  or other Taxpayer Identification
                Name           Number, if any

------------------
Address

------------------

------------------

                                       -2-

<PAGE>

                                                                       EXHIBIT C

                                   INSTRUCTION
                          FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT
                         (Reestablishment of SPC Units )

Attention:
Telecopy:

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company") and
          [______________] [_________________]

     Please refer to the Pledge Agreement, dated as of _______________________
(the "Pledge Agreement"), among the Company, you, as Collateral Agent,
______________________, as Securities Intermediary, and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of SPC Units
from time to time. Capitalized terms used herein but not defined shall have the
meanings set forth in the Pledge Agreement.

     We hereby notify you in accordance with Section 5.3(a) of the Pledge
Agreement that the holder of securities listed below (the "Holder") has elected
to substitute $__________ Value of [Preferred Securities] [Notes] or securities
entitlements thereto in exchange for $__________ Value of Pledged Treasury
Securities and has delivered to the undersigned a notice stating that the Holder
has Transferred such [Preferred Securities] [Notes] or securities entitlements
thereto to the Securities Intermediary, for credit to the Collateral Account.

     We hereby request that you instruct the Securities Intermediary, upon
confirmation that such [Preferred Securities] [Notes] or securities entitlements
thereto have been credited to the Collateral Account, to release to the
undersigned $__________ Value of Treasury Securities or securities entitlements
thereto related to _______ Treasury SPC Units of such Holder in accordance with
Section 5.3(a) of the Pledge Agreement. [We also hereby confirm that no Tax
Event Redemption has occurred.]

                                     -------------------------------------

                                     By:
                                              ----------------------------
                                              Name:
                                              Title:

Dated:
       ----------------------

<PAGE>

Please print name and address of Holder electing to substitute Pledged
[Preferred Securities] [Notes] or securities entitlements thereto for Pledged
Treasury Securities:

                               _________________________________________Social
          -----------------    Security  or other Taxpayer Identification
                Name           Number, if any

-----------------
Address

-----------------

-----------------

                                       -2-

<PAGE>

                                                                       EXHIBIT D

                                   INSTRUCTION
                              FROM COLLATERAL AGENT
                           TO SECURITIES INTERMEDIARY
                         (Reestablishment of SPC Units)

---------------------------

---------------------------

---------------------------

---------------------------
Attention:
           ----------------
Telecopy:
           ----------------

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company")
          Securities Account No. _____. entitled " ______________________, as
          Collateral Agent, Securities Account (American Electric Power Company,
          Inc.)" (the "Collateral Account")

     Please refer to the Pledge Agreement, dated as of ____________________ (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
_____________________, as Purchase Contract Agent and as attorney-in-fact for
the holders of SPC Units from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.

     When you have confirmed that $_________ Value of [Preferred Securities]
[Notes] or securities entitlements thereto has been credited to the Collateral
Account by or for the benefit of _________, as Holder of SPC Units (the
"Holder"), you are hereby instructed to release from the Collateral Account
$__________ Value of Treasury Securities or securities entitlements thereto by
Transfer to the Purchase Contract Agent.

                                     -------------------------------------

                                     By:
                                              ----------------------------
                                              Name:
                                              Title:

Dated:
       --------------------

<PAGE>

Please print name and address of Holder:

                               _________________________________________Social
          -----------------    Security  or other Taxpayer Identification
                Name           Number, if any

------------------
Address

------------------

------------------

                                      -2-

<PAGE>

                                                                       EXHIBIT E

             NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY
                           TO PURCHASE CONTRACT AGENT
                            (Cash Settlement Amounts)

---------------------------

---------------------------
New York, New York
                   --------
Attention:
           ----------------
Telecopy:
           ----------------

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company") and
          [__________________] [___________________]

     Please refer to the Pledge Agreement, dated as of ___________________ the
"Pledge Agreement"), among you, the Company, ____________________, as Collateral
Agent and the undersigned, as Securities Intermediary. Unless otherwise defined
herein, terms defined in the Pledge Agreement are used herein as defined therein

     In accordance with Section 5.5(d) of the Pledge Agreement, we hereby notify
you that as of 11:00 a.m., [on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date], we have received (i) $_____ in immediately
available funds paid in an aggregate amount equal to the Purchase Price owing to
the Company on the Purchase Contract Settlement Date with respect to __________
SPC Units and (ii) $_________ in immediately available funds paid in an
aggregate amount equal to the Purchase Price owing to the Company on the
Purchase Contract Settlement Date with respect to ______ Treasury SPC Units.

                                     -------------------------------------

                                     By:
                                              ----------------------------
                                              Name:
                                              Title:

Dated:
       --------------------Exhibit 10.1

                                 AMENDMENT NO. 2

                    FIRST NIAGARA FINANCIAL GROUP 401(K) PLAN

The Plan  named  above  gives  the  Employer  the right to amend it at any time.
According  to that  right,  the Plan is  amended  effective  April 1,  2002,  as
follows:

By striking the following adopting employers from the "ADOPTING  EMPLOYERS" list
in SECTION 2.04--ADOPTING EMPLOYERS - SINGLE PLAN of Article II:

         NAME                                          DATE OF ADOPTION

  First Niagara Securities, Inc.                       January 1, 1998
  First Niagara Realty, Inc.                           January 1, 1998
  First Niagara Funding, Inc.                          January 1, 1998
  Empire National Leasing, Inc.                        January 1, 2000
  Cayuga Financial Services                            January 1, 2001

By adding the following  adopting  employer to the "ADOPTING  EMPLOYERS" list in
SECTION 2.04--ADOPTING EMPLOYERS - SINGLE PLAN of Article II:

          NAME                                          DATE OF ADOPTION

  First Niagara Leasing, Inc.                          January 1, 2000

By striking the fourth  paragraph in  subsection  (a) of SECTION  3.01--EMPLOYER
CONTRIBUTIONS in Article III and substituting the following:

     Elective Deferral  Contributions cannot be more than 8% of Compensation for
     Highly Compensated Employees.

By striking the second  sentence in the last paragraph of SECTION  5.06--LOAN TO
PARTICIPANTS in Article V and substituting the following:

     An  outstanding  loan will  become due and  payable in full 90 days after a
     Participant ceases to be an Employee and a party-in-interest  as defined in
     ERISA or after complete termination of the Plan.

This amendment is made an integral part of the aforesaid Plan and is controlling
over the terms of said Plan  with  respect  to the  particular  items  addressed
expressly  herein.  All  other  provisions  of the  Plan  remain  unchanged  and
controlling.

Unless otherwise stated on any page of this amendment,  eligibility for benefits
and the amount of any benefits  payable to or on behalf of an individual  who is
an  Inactive  Participant  on the  effective  date(s)  stated  above,  shall  be
determined according to the provisions of the aforesaid Plan as in effect on the
day before he became an Inactive Participant.

Signing this amendment,  the Employer, as plan sponsor, has made the decision to
adopt  this plan  amendment.  The  Employer  is acting  in  reliance  on its own
discretion and on the legal and tax advice of its own advisors,  and not that of
any member of the Principal  Financial Group or any  representative  of a member
company of the Principal Financial Group.

<PAGE>
                                 AMENDMENT NO. 1

                    FIRST NIAGARA FINANCIAL GROUP 401(K) PLAN

The Plan  named  above  gives  the  Employer  the right to amend it at any time.
According to that right, the Plan is amended effective as of February 7, 2002:

By  striking  the  first   paragraph   from   subsection  (b)  of  the  EMPLOYER
CONTRIBUTIONS SECTION of Article III and substituting the following:

     The Employer shall make Matching  Contributions  in an amount equal to 100%
     of Elective Deferral  Contributions  which are not over 2% of Compensation,
     plus  75%  of  Elective  Deferral   Contributions  which  are  over  2%  of
     Compensation but are not over 6% of Compensation.

By  striking  the  third   paragraph   from   subsection  (b)  of  the  EMPLOYER
CONTRIBUTIONS SECTION of Article III and substituting the following:

     Matching  Contributions  for a  person  shall  not be  more  than 5% of his
     Compensation for the Plan Year.

This amendment is made an integral part of the aforesaid Plan and is controlling
over the terms of said Plan  with  respect  to the  particular  items  addressed
expressly  herein.  All  other  provisions  of the  Plan  remain  unchanged  and
controlling.

Unless otherwise stated on any page of this amendment,  eligibility for benefits
and the amount of any benefits  payable to or on behalf of an individual  who is
an  Inactive  Participant  on the  effective  date(s)  stated  above,  shall  be
determined according to the provisions of the aforesaid Plan as in effect on the
day before he became an Inactive Participant.

Signing this amendment,  the Employer, as plan sponsor, has made the decision to
adopt  this plan  amendment.  The  Employer  is acting  in  reliance  on its own
discretion and on the legal and tax advice of its own advisors,  and not that of
any member of the Principal  Financial Group or any  representative  of a member
company of the Principal Financial Group.

Signed this       12        day of  April          ,  2002.
            ---------------        ----------------  ------

                                            FIRST NIAGARA FINANCIAL GROUP, INC.

                                            By:      /s/  Kathleen P. Monti
                                                    ----------------------------
                                                    Executive Vice President
                                                    ----------------------------
                                                              Title

<PAGE>

                          FIRST NIAGARA FINANCIAL GROUP

                                   401(k) PLAN

Defined Contribution Plan 8.0

Restated January 1, 1997

<PAGE>

                                TABLE OF CONTENTS

INTRODUCTION

ARTICLE I                           FORMAT AND DEFINITIONS

         Section 1.01      -----    Format
         Section 1.02      -----    Definitions

ARTICLE II                          PARTICIPATION

         Section 2.01      -----    Active Participant
         Section 2.02      -----    Inactive Participant
         Section 2.03      -----    Cessation of Participation
         Section 2.04      -----    Adopting Employers - Single Plan

ARTICLE III                         CONTRIBUTIONS

         Section 3.01      -----    Employer Contributions
         Section 3.01A     -----    Voluntary Contributions by Participants
         Section 3.01B     -----    Rollover Contributions
         Section 3.02      -----    Forfeitures
         Section 3.03      -----    Allocation
         Section 3.04      -----    Contribution Limitation
         Section 3.05      ----     Excess Amounts

ARTICLE IV                          INVESTMENT OF CONTRIBUTIONS

         Section 4.01      -----    Investment and Timing of Contributions
         Section 4.01A     -----    Investment in Qualifying Employer Securities

ARTICLE V                           BENEFITS

         Section 5.01      -----    Retirement Benefits
         Section 5.02      -----    Death Benefits
         Section 5.03      -----    Vested Benefits
         Section 5.04      -----    When Benefits Start
         Section 5.05      -----    Withdrawal Benefits
         Section 5.06      -----    Loans to Participants
         Section 5.07      -----    Distributions Under Qualified Domestic
                                    Relations Orders

                                       3

<PAGE>

ARTICLE VI                          DISTRIBUTION OF BENEFITS

         Section 6.01      -----    Automatic Forms of Distribution
         Section 6.02      -----    Optional Forms of Distribution
         Section 6.03      -----    Election Procedures
         Section 6.04      -----    Notice Requirements

ARTICLE VII                         DISTRIBUTION REQUIREMENTS

         Section 7.01      -----    Application
         Section 7.02      -----    Definitions
         Section 7.03      -----    Distribution Requirements

ARTICLE VIII                        TERMINATION OF THE PLAN

ARTICLE IX                          ADMINISTRATION OF THE PLAN

         Section 9.01      -----    Administration
         Section 9.02      -----    Expenses
         Section 9.03      -----    Records
         Section 9.04      -----    Information Available
         Section 9.05      -----    Claim and Appeal Procedures
         Section 9.06      -----    Delegation of Authority
         Section 9.07      -----    Exercise of Discretionary Authority
         Section 9.08      -----    Voting and Tender of Qualifying Employer
                                    Securities

ARTICLE X                           GENERAL PROVISIONS

         Section 10.01     -----    Amendments
         Section 10.02     -----    Direct Rollovers
         Section 10.03     -----    Mergers and Direct Transfers
         Section 10.04     -----    Provisions Relating to the Insurer and Other
                                    Parties
         Section 10.05     -----    Employment Status
         Section 10.06     -----    Rights to Plan Assets
         Section 10.07     -----    Beneficiary
         Section 10.08     -----    Nonalienation of Benefits
         Section 10.09     -----    Construction
         Section 10.10     -----    Legal Actions
         Section 10.11     -----    Small Amounts
         Section 10.12     -----    Word Usage
         Section 10.13     -----    Change in Service Method
         Section 10.14     -----    Military Service

                                       4
<PAGE>

ARTICLE XI                          TOP-HEAVY PLAN REQUIREMENTS

         Section 11.01     -----    Application
         Section 11.02     -----    Definitions
         Section 11.03     -----    Modification of Vesting Requirements
         Section 11.04     -----    Modification of Contributions
         Section 11.05     -----    Modification of Contribution Limitation

PLAN EXECUTION

                                       5
<PAGE>

                                  INTRODUCTION

     Lockport  Savings Bank (now known as First  Niagara Bank)  established  the
Lockport  Savings Bank 401(k)  effective as of January 1, 1990.  Effective as of
January 1, 2001, First Niagara Financial Group, Inc. became the plan sponsor and
the name of the Plan was changed to be the First Niagara  Financial group 401(k)
Plan.

     The Primary Employer is of the opinion that the plan should be changed.  It
believes  that the best  means to  accomplish  these  changes  is to  completely
restate the plan's terms, provisions and conditions. The restatement,  effective
January 1, 1997, is set forth in this document and is substituted in lieu of the
prior document.

     This  restatement  is made  retroactively  to reflect the law changes  made
through the Internal Revenue Service  Restructuring  and Reform Act of 1998. The
provisions of this Plan apply as of the effective date of the restatement except
as provided in the attached  addendums  which  reflect the operation of the Plan
between the effective date of the restatement  and the date this  restatement is
adopted and identify those provisions which are not amended retroactively.

     The restated plan continues to be for the exclusive benefit of employees of
the Employer.  All persons  covered  under the plan on December 31, 1996,  shall
continue to be covered under the restated plan with no loss of benefits.

     It is  intended  that the plan,  as  restated,  shall  qualify  as a profit
sharing  plan  under the  Internal  Revenue  Code of 1986,  including  any later
amendments to the Code.

     This  restatement  of the Plan also serves as a restatement  of the several
plans that have been  merged  into this Plan (the  "Merged  Plans").  The Merged
Plans were active between January 1, 1997 and the date on which they were merged
into this Plan.  Accordingly,  this restatement  contains provisions intended to
amend the Merged  Plans to reflect  operational  rules in effect  prior to their
merger into this Plan  (e.g.,  the  Addendums  detail the plans that were merged
into this Plan,  date of merger,  describes the ADP and ACP Testing methods that
were in  effect  between  January  1, 1997 and the date  contributions  to those
Merged Plans ceased).

                                       6
<PAGE>

                                    ARTICLE I

                             FORMAT AND DEFINITIONS

SECTION 1.01--FORMAT.

     Words and  phrases  defined in the  DEFINITIONS  SECTION of Article I shall
have that  defined  meaning when used in this Plan,  unless the context  clearly
indicates otherwise.

     These  words  and  phrases  have  an  initial  capital  letter  to  aid  in
identifying them as defined terms.

SECTION 1.02--DEFINITIONS.

          Account means, for a Participant, his share of the Plan Fund. Separate
          accounting records are kept for those parts of his Account that result
          from:

         (a) Voluntary Contributions

         (b) Elective Deferral Contributions

         (c) Matching Contributions

         (d) Other Employer Contributions

         (e) Rollover Contributions

          If the Participant's Vesting Percentage is less than 100% as to any of
          the Employer Contributions,  a separate accounting record will be kept
          for any part of his Account resulting from such Employer Contributions
          and,  if  there  has  been  a  prior   Forfeiture   Date,   from  such
          Contributions made before a prior Forfeiture Date.

          A  Participant's  Account shall be reduced by any  distribution of his
          Vested Account and by any Forfeitures.  A Participant's  Account shall
          participate  in the  earnings  credited,  expenses  charged,  and  any
          appreciation or  depreciation  of the Investment  Fund. His Account is
          subject  to  any  minimum  guarantees  applicable  under  the  Annuity
          Contract  or  other   investment   arrangement  and  to  any  expenses
          associated therewith.

          Accrual Computation Period means a consecutive  12-month period ending
          on the last day of each Plan Year, including corresponding consecutive
          12-month periods before January 1, 1990.

          ACP Test means the  nondiscrimination  test  described in Code Section
          401(m)(2) as provided for in  subparagraph  (d) of the EXCESS  AMOUNTS
          SECTION of Article III.

          Active   Participant  means  an  Eligible  Employee  who  is  actively
          participating  in the Plan  according to the  provisions in the ACTIVE
          PARTICIPANT SECTION of Article II.

                                       7

<PAGE>

          Adopting Employer means an employer which is a Controlled Group member
          and which is listed in the ADOPTING EMPLOYERS - SINGLE PLAN SECTION of
          Article II.

          ADP Test means the  nondiscrimination  test  described in Code Section
          401(k)(3) as provided for in  subparagraph  (c) of the EXCESS  AMOUNTS
          SECTION of Article III.

          Affiliated Service Group means any group of corporations, partnerships
          or other  organizations  of which the  Employer is a part and which is
          affiliated  within the meaning of Code Section 414(m) and  regulations
          thereunder.  Such a group includes at least two  organizations  one of
          which is either a service  organization  (that is, an organization the
          principal   business  of  which  is   performing   services),   or  an
          organization the principal business of which is performing  management
          functions on a regular and continuing basis. Such service is of a type
          historically  performed  by  employees.  In the  case of a  management
          organization, the Affiliated Service Group shall include organizations
          related,  within the meaning of Code Section 144(a)(3),  to either the
          management  organization  or the  organization  for which it  performs
          management functions. The term Controlled Group, as it is used in this
          Plan, shall include the term Affiliated Service Group.

          Alternate  Payee  means any spouse,  former  spouse,  child,  or other
          dependent of a Participant  who is recognized by a qualified  domestic
          relations order as having a right to receive all, or a portion of, the
          benefits payable under the Plan with respect to such Participant.

          Annual   Compensation   means,   for  a  Plan  Year,   the  Employee's
          Compensation  for the  Compensation  Year  ending  with or within  the
          consecutive 12-month period ending on the last day of the Plan Year.

          Annuity  Contract  means the annuity  contract or contracts into which
          the Primary Employer enters with the Insurer for guaranteed  benefits,
          for the investment of Contributions in separate accounts,  and for the
          payment of benefits under this Plan.  The term Annuity  Contract as it
          is used in this Plan  shall  include  the plural  unless  the  context
          clearly indicates the singular is meant.

          Annuity Starting Date means,  for a Participant,  the first day of the
          first period for which an amount is payable as an annuity or any other
          form.

          Beneficiary  means the person or  persons  named by a  Participant  to
          receive any benefits under the Plan when the Participant dies. See the
          BENEFICIARY SECTION of Article X.

          Claimant  means any person who makes a claim for  benefits  under this
          Plan. See the CLAIM AND APPEAL PROCEDURES SECTION of Article IX.

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

          Compensation means, except for purposes of the CONTRIBUTION LIMITATION
          SECTION of Article III and Article XI, the total  earnings,  except as
          modified in this definition,  paid or made available to an Employee by
          the Employer or a  Predecessor  Employer  which did not maintain  this
          Plan during any specified  period.  Earnings  exclude earnings while a
          partner or proprietor of such Predecessor Employer.

          "Earnings" in this  definition  means wages within the meaning of Code
          Section  3401(a)  for the  purposes of income tax  withholding  at the
                                       8
<page>

          source  but  determined  without  regard to any rules  that  limit the
          remuneration  included in wages based on the nature or location of the
          employment  or the  services  performed  (such  as the  exception  for
          agricultural labor in Code Section 3401(a)(2)).

          For any Self-employed Individual, Compensation means Earned Income.

          Compensation  shall  also  include  elective  contributions.  For this
          purpose,   elective  contributions  are  amounts  contributed  by  the
          Employer  pursuant to a salary  reduction  agreement and which are not
          includible in the gross income of the Employee under Code Section 125,
          402(e)(3),   402(h)(1)(B),  or  403(b).  Elective  contributions  also
          include compensation deferred under a Code Section 457 plan maintained
          by  the  Employer  and  employee   contributions   "picked  up"  by  a
          governmental  entity and, pursuant to Code Section 414(h)(2),  treated
          as Employer  contributions.  For years  beginning  after  December 31,
          1997, elective contributions shall also include amounts contributed by
          the Employer  pursuant to a salary  reduction  agreement and which are
          not  includible in the gross income of the Employee under Code Section
          132(f)(4).

          For  purposes  of the  EXCESS  AMOUNTS  SECTION of  Article  III,  the
          Employer may elect to use an alternative  nondiscriminatory definition
          of Compensation in accordance with the regulations  under Code Section
          414(s).

          For Plan Years  beginning  on or after  January  1,  1994,  the annual
          Compensation  of each  Participant  taken into account for determining
          all  benefits  provided  under the Plan for any  determination  period
          shall  not  exceed   $150,000,   as  adjusted  for  increases  in  the
          cost-of-living  in  accordance  with Code Section  401(a)(17)(B).  The
          cost-of-living adjustment in effect for a calendar year applies to any
          determination period beginning in such calendar year.

          If a determination period consists of fewer than 12 months, the annual
          limit is an amount  equal to the  otherwise  applicable  annual  limit
          multiplied by a fraction.  The numerator of the fraction is the number
          of months in the short  determination  period,  and the denominator of
          the fraction is 12.

          If  Compensation  for any prior  determination  period  is taken  into
          account in determining a Participant's  contributions  or benefits for
          the current Plan Year, the Compensation  for such prior  determination
          period is  subject  to the  applicable  annual  compensation  limit in
          effect for that determination period. For this purpose, in determining
          contributions  or benefits in Plan Years beginning on or after January
          1, 1994,  the annual  compensation  limit in effect for  determination
          periods beginning before that date is $150,000.

          Compensation  means,  for a  Leased  Employee,  Compensation  for  the
          services the Leased Employee performs for the Employer,  determined in
          the same manner as the  Compensation  of Employees  who are not Leased
          Employees,   regardless  of  whether  such  Compensation  is  received
          directly from the Employer or from the leasing organization.

          Compensation Year means the consecutive  12-month period ending on the
          last day of each Plan Year,  including  corresponding  periods  before
          January 1, 1990.

          Contingent  Annuitant means an individual  named by the Participant to
          receive a lifetime benefit after the Participant's death in accordance
          with a survivorship life annuity.
                                       9
<page>
         Contributions means
                  Elective Deferral Contributions
                  Matching Contributions
                  Discretionary Contributions
                  Rollover Contributions

          as set out in Article III, unless the context  clearly  indicates only
          specific contributions are meant.

          Controlled  Group  means  any  group  of  corporations,   trades,   or
          businesses  of which the  Employer  is a part  that are  under  common
          control.  A  Controlled  Group  includes  any  group of  corporations,
          trades, or businesses, whether or not incorporated,  which is either a
          parent-subsidiary  group, a brother-sister  group, or a combined group
          within the meaning of Code Section  414(b),  Code  Section  414(c) and
          regulations  thereunder and, for purposes of determining  contribution
          limitations under the CONTRIBUTION  LIMITATION SECTION of Article III,
          as modified by Code Section 415(h) and, for the purpose of identifying
          Leased  Employees,  as modified by Code  Section  144(a)(3).  The term
          Controlled  Group, as it is used in this Plan,  shall include the term
          Affiliated  Service  Group  and  any  other  employer  required  to be
          aggregated  with  the  Employer  under  Code  Section  414(o)  and the
          regulations thereunder.

          Direct Rollover means a payment by the Plan to the Eligible Retirement
          Plan specified by the Distributee.

          Discretionary  Contributions means discretionary contributions made by
          the Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION
          of Article III.

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

          Earned Income means, for a Self-employed Individual, net earnings from
          self-employment  in the  trade or  business  for  which  this  Plan is
          established if such Self-employed Individual's personal services are a
          material  income  producing  factor  for that trade or  business.  Net
          earnings  shall be determined  without regard to items not included in
          gross income and the  deductions  properly  allocable to or chargeable
          against  such items.  Net  earnings  shall be reduced for the employer
          contributions to the Employer's  qualified  retirement  plan(s) to the
          extent deductible under Code Section 404.

          Net earnings shall be determined with regard to the deduction  allowed
          to the Employer by Code  Section  164(f) for taxable  years  beginning
          after December 31, 1989.

          Elective  Deferral  Contributions  means  contributions  made  by  the
          Employer  to fund  this  Plan in  accordance  with  elective  deferral
          agreements between Eligible Employees and the Employer.

          Elective  deferral  agreements shall be made,  changed,  or terminated
          according to the provisions of the EMPLOYER  CONTRIBUTIONS  SECTION of
          Article III.

          Elective  Deferral  Contributions  shall be 100% vested and subject to
          the  distribution  restrictions  of Code Section 401(k) when made. See
          the WHEN BENEFITS START SECTION of Article V.
                                       10
<page>
          Eligibility Service means an Employee's Period of Service. Eligibility
          Service shall be measured from his Employment Commencement Date to his
          most recent  Severance Date.  Eligibility  Service shall be reduced by
          any  Period  of  Severance  that  occurred  prior to his  most  recent
          Severance Date,  unless such Period of Severance is included under the
          service spanning rule below. This period of Eligibility  Service shall
          be expressed as months (on the basis that 30 days equal one month).

          However, Eligibility Service is modified as follows:

          Service with a Predecessor  Employer  which did not maintain this Plan
          included:

               An Employee's  service with a Predecessor  Employer which did not
               maintain  this  Plan  shall  be  included  as  service  with  the
               Employer.   This  service  excludes  service  performed  while  a
               proprietor or partner.

          Period of Military Duty included:

               A Period of Military  Duty shall be included as service  with the
               Employer to the extent it has not already been credited.

          Period of Severance included (service spanning rule):

               A Period of  Severance  shall be deemed to be a Period of Service
               under either of the following conditions:

          (a)  the Period of Severance immediately follows a period during which
               an Employee is not absent from work and ends within 12 months; or

          (b)  the Period of Severance immediately follows a period during which
               an  Employee  is  absent  from  work for any  reason  other  than
               quitting,  being  discharged,  or  retiring  (such  as a leave of
               absence or layoff)  and ends  within 12 months of the date he was
               first absent.

          Controlled Group service included:

               An  Employee's  service with a member firm of a Controlled  Group
               while  both  that  firm  and the  Employer  were  members  of the
               Controlled Group shall be included as service with the Employer.

          Eligible Employee means any common law employee of the Employer who is
          customarily   employed  in  the  United  States.  The  term  "Eligible
          Employee" does not include:

               (1)  Employees  covered  by a  collective  bargaining  agreement.
                    Employees  included  in a unit of  employees  covered  by an
                    agreement  which  the  Secretary  of  Labor  finds  to  be a
                    collective  bargaining  agreement  between the  Employer and
                    employee  representatives  (within  the  meaning  of Section
                    7701(a)(46)   of  the  Code)  if  there  is  evidence   that
                    retirement   benefits   were  the   subject  of  good  faith
                    bargaining  and  the  terms  of  the  collective  bargaining
                    agreement do not specifically  provide for  participation in
                    the Plan.

               (2)  Nonresident  aliens.  Employees who are  nonresident  aliens
                    (within  the meaning of Section  7701(b)(1)(B)  of the Code)
                    and who  received  no earned  income  (within the meaning of

                                       11
<page>

                    Section  911(d)(2)  of the  Code)  form the  Employer  which
                    constitutes  income from  sources  within the United  States
                    (within the meaning of Section 861(a)(3) of the Code).

               (3)  Leased employees. Any leased employees within the meaning of
                    Section 414(n)(2) of the Code.

               (4)  Contract  workers.  A worker who has  signed an  independent
                    contractor  agreement or other  personal  services  contract
                    with the Employer  stating that he or she is not eligible to
                    participate in the Plan.

               (5)  Workers  treated as independent  contractors.  A worker that
                    the Employer treats as an independent contractor.

               (6)  Workers  not treated as common law  employees.  A worker who
                    the  company  does not  treat  as its  common  law  employee
                    pursuant to an  agreement  between the  Employer and another
                    person,  regardless  of  whether  he or she is a common  law
                    employee of the Employer.

               The purpose of  paragraphs  (4),  (5), and (6) is to exclude from
               participation  in the Plan all persons who may actually be common
               law  employees  of the  Employer,  but who are not paid as though
               they are common law employees,  regardless of the reason they are
               excluded from the Employer's  payroll,  and regardless of whether
               that classification is correct.

               If the  Employer  reclassifies  an  individual  as a  common  law
               employee,  he or she may be an  Eligible  Employee  prospectively
               from the effective  date of the  reclassification  only, and then
               only if he or she otherwise satisfies the requirements of Section
               2.01.

               If an individual  not  classified by the Employer as a common law
               employee is  retroactively  reclassified as a common law employee
               by any governmental or regulatory authority,  the individual will
               nonetheless  be deemed to have become an Eligible  Employee  only
               prospectively  on the  event  of the  reclassification  (and  not
               retroactively  to the date on  which he or she was  found to have
               first become a common law employee  for any other  purpose),  and
               then only if he or she otherwise  satisfies the  requirements  of
               Section 2.01.

               Eligible  Retirement Plan means an individual  retirement account
               described  in  Code  Section  408(a),  an  individual  retirement
               annuity  described  in  Code  Section  408(b),  an  annuity  plan
               described in Code Section 403(a) or a qualified  trust  described
               in Code Section 401(a),  that accepts the Distributee's  Eligible
               Rollover  Distribution.  However,  in  the  case  of an  Eligible
               Rollover  Distribution  to  the  surviving  spouse,  an  Eligible
               Retirement Plan is an individual retirement account or individual
               retirement annuity.

               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:
               (i) 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;  (ii) any  distribution  to the extent such
               distribution is required under Code Section 401(a)(9);  (iii) any
               hardship     distribution     described     in    Code    Section
               401(k)(2)(B)(i)(IV)  received after  December 31, 1998;  (iv) the
               portion of any other  distribution(s)  that is not  includible in
               gross income (determined  without regard to the exclusion for net
               unrealized appreciation with respect to employer securities); and
               (v) any other  distribution(s)  that is  reasonably  expected  to
               total less than $200 during a year.

                                       12
<page>
               Employee  means an individual  who is employed by the Employer or
               any other  employer  required to be aggregated  with the Employer
               under Code Sections 414(b),  (c), (m), or (o). A Controlled Group
               member is required to be aggregated with the Employer.

               The term  Employee  shall  include any  Self-employed  Individual
               treated as an employee of any employer described in the preceding
               paragraph  as  provided  in  Code  Section  401(c)(1).  The  term
               Employee shall also include any Leased  Employee  deemed to be an
               employee of any employer described in the preceding  paragraph as
               provided in Code Section 414(n) or (o).

               Employer   means,   except  for  purposes  of  the   CONTRIBUTION
               LIMITATION  SECTION of Article  III, the Primary  Employer.  This
               will  also  include  any  successor  corporation  or  firm of the
               Employer   which  shall,   by  written   agreement,   assume  the
               obligations  of  this  Plan  or any  Predecessor  Employer  which
               maintained this Plan.

               Employer Contributions means

                  Elective Deferral Contributions
                  Matching Contributions
                  Discretionary Contributions

               as set out in Article III and contributions  made by the Employer
               to fund  this  Plan in  accordance  with  the  provisions  of the
               MODIFICATION OF  CONTRIBUTIONS  SECTION of Article XI, unless the
               context clearly indicates only specific contributions are meant.

               Employment  Commencement  Date means the date an  Employee  first
               performs an Hour-of-Service.

               Entry Date means the date an Employee first enters the Plan as an
               Active Participant. See the ACTIVE PARTICIPANT SECTION of Article
               II.

               ERISA means the Employee  Retirement Income Security Act of 1974,
               as amended.

               Fiscal Year means the Primary  Employer's  taxable year. The last
               day of the Fiscal Year is December 31.

               Forfeiture  means the part,  if any, of a  Participant's  Account
               that is forfeited. See the FORFEITURES SECTION of Article III.

               Forfeiture  Date  means,  as  to  a  Participant,  the  date  the
               Participant incurs five consecutive Vesting Breaks in Service.

               Highly Compensated Employee means any Employee who:

               (a)  was a  5-percent  owner at any time  during  the year or the
                    preceding year, or

               (b)  for the preceding year had compensation from the Employer in
                    excess of $80,000 and, if the Employer so elects, was in the
                    top-paid group for the preceding year. The $80,000 amount is
                    adjusted  at the same  time and in the same  manner as under
                    Code  Section  415(d),  except  that the base  period is the
                    calendar quarter ending September 30, 1996.

                                       13
<page>
               For this  purpose  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. If the
               Employer makes a calendar year data election,  the look-back year
               shall be the calendar year beginning with or within the look-back
               year.  The Plan may not use such  election to  determine  whether
               Employees are Highly Compensated  Employees on account of being a
               5-percent owner.

               In determining who is a Highly Compensated  Employee the Employer
               does not make a top-paid group election.  In determining who is a
               Highly Compensated Employee the Employer does not make a calendar
               year data election.

               Calendar year data elections and top-paid group  elections,  once
               made,  apply  for all  subsequent  years  unless  changed  by the
               Employer. If the Employer makes one election, the Employer is not
               required  to make the  other.  If both  elections  are made,  the
               look-back  year in  determining  the  top-paid  group must be the
               calendar year beginning with or within the look-back year.  These
               elections must apply  consistently to the determination  years of
               all plans  maintained by the Employer which  reference the highly
               compensated employee definition in Code Section 414(q), except as
               provided in Internal Revenue Service Notice 97-45 (or superseding
               guidance).   The  consistency   requirement  will  not  apply  to
               determination  years  beginning  with or within the 1997 calendar
               year, and for  determination  years beginning on or after January
               1,  1998  and  before  January  1,  2000,   satisfaction  of  the
               consistency  requirement  is  determined  without  regard  to any
               nonretirement plans of the Employer.

               The determination of who is 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  Income Tax  Regulations  and Internal  Revenue Service
               Notice 97-45.

               In  determining  whether  an  Employee  is a  Highly  Compensated
               Employee for years  beginning  in 1997,  the  amendments  to Code
               Section  414(q) stated above are treated as having been in effect
               for years beginning in 1996.

               The  determination  of  who  is a  Highly  Compensated  Employee,
               including  the  determinations  of the  number  and  identity  of
               Employees  in  the  top-paid  group,  the  compensation  that  is
               considered,  and the identity of the 5-percent  owners,  shall be
               made in accordance  with Code Section 414(q) and the  regulations
               thereunder.

               Hour-of-Service means, for an Employee, each hour for which he is
               paid,  or  entitled  to payment,  for  performing  duties for the
               Employer.

               Hours-of-Service  shall be credited for employment with any other
               employer  required to be aggregated  with the Employer under Code
               Sections 414(b),  (c), (m) or (o) and the regulations  thereunder
               for purposes of eligibility and vesting.  Hours-of-Service  shall
               also be credited for any individual who is considered an employee
               for purposes of this Plan pursuant to Code Section 414(n) or Code
               Section 414(o) and the regulations thereunder.

               Hour-of-Service  means,  for the elapsed time method of crediting
               service in this Plan, each hour for which an Employee is paid, or
               entitled  to payment,  for  performing  duties for the  Employer.
               Hour-of-Service  means, for the hours method of crediting service
               in this Plan, the following:
                                       14
<page>

               (a)  Each hour for which an  Employee  is paid,  or  entitled  to
                    payment,  for performing  duties for the Employer during the
                    applicable computation period.

               (b)  Each hour for which an  Employee  is paid,  or  entitled  to
                    payment,  by the  Employer  because  of a period  of time in
                    which no duties are performed  (irrespective  of whether the
                    employment  relationship  has  terminated)  due to vacation,
                    holiday, illness, incapacity (including disability), layoff,
                    jury   duty,    military   duty   or   leave   of   absence.
                    Notwithstanding    the   preceding    provisions   of   this
                    subparagraph (b), no credit will be given to the Employee:

                    (1)  for  more   than  501   Hours-of-Service   under   this
                         subparagraph  (b)  because  of  any  single  continuous
                         period  in  which  the  Employee   performs  no  duties
                         (whether  or  not  such  period   occurs  in  a  single
                         computation period); or

                    (2)  for  an  Hour-of-Service  for  which  the  Employee  is
                         directly or  indirectly  paid,  or entitled to payment,
                         because of a period in which no duties are performed if
                         such  payment  is made or due  under a plan  maintained
                         solely for the  purpose of  complying  with  applicable
                         worker's or  workmen's  compensation,  or  unemployment
                         compensation, or disability insurance laws; or

                    (3)  for  an  Hour-of-Service  for a  payment  which  solely
                         reimburses   the  Employee  for  medical  or  medically
                         related expenses incurred by him.

               For purposes of this  subparagraph (b), a payment shall be deemed
               to be made by, or due from the  Employer,  regardless  of whether
               such  payment is made by, or due from the  Employer,  directly or
               indirectly  through,  among others,  a trust fund or insurer,  to
               which the Employer contributes or pays premiums and regardless of
               whether  contributions  made or due to the trust fund, insurer or
               other entity are for the benefit of  particular  employees or are
               on behalf of a group of employees in the aggregate.

               (c)  Each hour for which back pay,  irrespective of mitigation of
                    damages, is either awarded or agreed to by the Employer. The
                    same  Hours-of-Service  shall  not be  credited  both  under
                    subparagraph  (a) or subparagraph (b) above (as the case may
                    be)  and  under  this   subparagraph   (c).   Crediting   of
                    Hours-of-Service  for back pay  awarded  or  agreed  to with
                    respect to periods  described in subparagraph (b) above will
                    be   subject   to  the   limitations   set   forth  in  that
                    subparagraph.

               The  crediting of  Hours-of-Service  above shall be applied under
               the rules of  paragraphs  (b) and (c) of the  Department of Labor
               Regulation 2530.200b-2 (including any interpretations or opinions
               implementing  such rules);  which rules, by this  reference,  are
               specifically incorporated in full within this Plan. The reference
               to  paragraph  (b)  applies to the special  rule for  determining
               hours of service for reasons other than the performance of duties
               such as payments  calculated (or not  calculated) on the basis of
               units of time and the rule against double  credit.  The reference
               to paragraph  (c) applies to the crediting of hours of service to
               computation periods.

               Hours-of-Service  shall be credited for employment with any other
               employer  required to be aggregated  with the Employer under Code
               Sections 414(b), (c), (m), or (o) and the regulations  thereunder
               for purposes of eligibility and vesting.  Hours-of-Service  shall
               also be credited for any individual who is considered an employee
               for purposes of this Plan pursuant to Code Section  414(n) or (o)
               and the regulations thereunder.
                                       15
<page>
               Solely for purposes of  determining  whether a one-year  break in
               service has occurred for eligibility or vesting purposes,  during
               a  Parental  Absence  an  Employee  shall  be  credited  with the
               Hours-of-Service   which   otherwise  would  normally  have  been
               credited to the Employee but for such absence,  or in any case in
               which such hours cannot be determined, eight Hours-of-Service per
               day of such absence.  The  Hours-of-Service  credited  under this
               paragraph  shall be credited in the  computation  period in which
               the absence  begins if the  crediting  is  necessary to prevent a
               break in service in that period;  or in all other  cases,  in the
               following computation period.

               Inactive Participant means a former Active Participant who has an
               Account. See the INACTIVE PARTICIPANT SECTION of Article II.

               Insurer  means  Principal  Life  Insurance  Company and any other
               insurance  company or  companies  named by the Trustee or Primary
               Employer.

               Investment  Fund means the total of Plan  assets,  excluding  the
               guaranteed benefit policy portion of any Annuity Contract. All or
               a portion of these assets may be held under the Trust Agreement.

               The Investment  Fund shall be valued at current fair market value
               as  of  the  Valuation   Date.  The  valuation  shall  take  into
               consideration  investment  earnings  credited,  expenses charged,
               payments  made,  and  changes in the values of the assets held in
               the Investment Fund.

               The   Investment   Fund  shall  be  allocated  at  all  times  to
               Participants, except as otherwise expressly provided in the Plan.
               The Account of a Participant  shall be credited with its share of
               the  gains  and  losses of the  Investment  Fund.  That part of a
               Participant's  Account  invested in a funding  arrangement  which
               establishes one or more accounts or investment  vehicles for such
               Participant  thereunder  shall be credited  with the gain or loss
               from  such  accounts  or  investment  vehicles.  The  part  of  a
               Participant's   Account   which  is  invested  in  other  funding
               arrangements shall be credited with a proportionate  share of the
               gain or loss of such  investments.  The share shall be determined
               by multiplying the gain or loss of the investment by the ratio of
               the part of the  Participant's  Account  invested in such funding
               arrangement to the total of the Investment  Fund invested in such
               funding arrangement.

               Investment  Manager means any fiduciary  (other than a trustee or
               Named Fiduciary)

               (a)  who has the power to  manage,  acquire,  or  dispose  of any
                    assets of the Plan;

               (b)  who (i) is  registered  as an  investment  adviser under the
                    Investment  Advisers Act of 1940;  (ii) is not registered as
                    an investment  adviser under such Act by reason of paragraph
                    (1) of section  203A(a)  of such Act,  is  registered  as an
                    investment  adviser under the laws of the state (referred to
                    in such  paragraph  (1)) in which it maintains its principal
                    office and place of business, and, at the time it last filed
                    the  registration  form most recently  filed by it with such
                    state in order to maintain its  registration  under the laws
                    of such  state,  also  filed a copy of such  form  with  the
                    Secretary of Labor, (iii) is a bank, as defined in that Act;
                    or  (iv)  is  an  insurance  company  qualified  to  perform
                    services  described in subparagraph (a) above under the laws
                    of more than one state; and

               (c)  who has  acknowledged  in  writing  being a  fiduciary  with
                    respect to the Plan.
                                       16
<page>
               Late  Retirement  Date means the first day of any month  which is
               after  the date a  Participant's  Normal  Retirement  Date and on
               which  retirement  benefits begin. If a Participant  continues to
               work for the Employer after his Normal  Retirement Date, his Late
               Retirement  Date shall be the earliest  first day of the month on
               or after the date he ceases to be an  Employee.  An  earlier or a
               later Retirement Date may apply if the Participant so elects.  An
               earlier  Retirement  Date may apply if the  Participant is age 70
               1/2. See the WHEN BENEFITS START SECTION of Article V.

               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 Code Section 414(n)(6)) 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 by
               the  leasing  organization  to  a  Leased  Employee,   which  are
               attributable  to service  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:

               (a)  such  employee is covered by a money  purchase  pension plan
                    providing (i) a nonintegrated  employer contribution rate of
                    at least 10  percent  of  compensation,  as  defined in Code
                    Section   415(c)(3),   but  including  amounts   contributed
                    pursuant  to  a  salary   reduction   agreement   which  are
                    excludible  from the  employee's  gross  income  under  Code
                    Sections  125,  402(e)(3),  402(h)(1)(B),  or  403(b),  (ii)
                    immediate  participation,   and  (iii)  full  and  immediate
                    vesting, and

               (b)  Leased  Employees do not constitute  more than 20 percent of
                    the recipient's nonhighly compensated work force.

               Loan Administrator means the person(s) or position(s)  authorized
               to administer the Participant loan program.

               The Loan Administrator is JULIE LAFOREST OR GAIL YAMONACO.

               Matching  Contributions  means contributions made by the Employer
               to  fund  this  Plan  which  are  contingent  on a  Participant's
               Elective Deferral  Contributions.  See the EMPLOYER CONTRIBUTIONS
               SECTION of Article III.

               Monthly  Date  means  each  Yearly  Date and the same day of each
               following  month  during the Plan Year  beginning  on such Yearly
               Date.

               Named Fiduciary means the person or persons who have authority to
               control and manage the operation and administration of the Plan.

               The Named Fiduciary is the Employer.

               Nonhighly  Compensated Employee means an Employee of the Employer
               who is not a Highly Compensated Employee.

               Nonvested  Account means the excess,  if any, of a  Participant's
               Account over his Vested Account.

                                       17

<PAGE>

               Normal Form means a single life annuity with installment refund.

               Normal  Retirement  Age means the age at which the  Participant's
               normal  retirement  benefit  becomes  nonforfeitable  if he is an
               Employee. A Participant's Normal Retirement Age is 65.

               Normal  Retirement Date means the earliest first day of the month
               on  or  after  the  date  the  Participant   reaches  his  Normal
               Retirement  Age.  Unless  otherwise  provided  in  this  Plan,  a
               Participant's  retirement benefits shall begin on a Participant's
               Normal Retirement Date if he has ceased to be an Employee on such
               date  and has a Vested  Account.  Even if the  Participant  is an
               Employee on his Normal Retirement Date, he may choose to have his
               retirement  benefit  begin on such  date.  See the WHEN  BENEFITS
               START SECTION of Article V.

               Owner-employee means a Self-employed  Individual who, in the case
               of a  sole  proprietorship,  owns  the  entire  interest  in  the
               unincorporated   trade  or  business   for  which  this  Plan  is
               established.  If this Plan is established  for a partnership,  an
               Owner-employee  means a  Self-employed  Individual  who owns more
               than 10  percent  of  either  the  capital  interest  or  profits
               interest in such partnership.

               Parental Absence means an Employee's absence from work:

               (a)  by reason of pregnancy of the Employee,

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

               (c)  by reason of the  placement  of a child with the Employee in
                    connection with 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.

               Participant  means  either an Active  Participant  or an Inactive
               Participant.

               Participant  Contributions  means Voluntary  Contributions as set
               out in Article III.

               Period of Military Duty means, for an Employee

               (a)  who  served as a member of the  armed  forces of the  United
                    States, and

               (b)  who  was  reemployed  by the  Employer  at a time  when  the
                    Employee  had a right to  reemployment  in  accordance  with
                    seniority  rights as protected  under Chapter 43 of Title 38
                    of the U. S. Code,

               the period of time from the date the  Employee  was first  absent
               from active work for the Employer  because of such  military duty
               to the date the Employee was reemployed.

               Period  of  Service  means  a  period  of  time  beginning  on an
               Employee's   Employment   Commencement   Date   or   Reemployment
               Commencement Date (whichever applies) and ending on his Severance
               Date.

               Period  of  Severance  means a  period  of time  beginning  on an
               Employee's  Severance  Date  and  ending  on the  date  he  again
               performs an Hour-of-Service.

                                       18
<PAGE>

               A one-year  Period of Severance means a Period of Severance of 12
               consecutive months.

               Solely for purposes of determining  whether a one-year  Period of
               Severance has occurred for eligibility or vesting  purposes,  the
               consecutive 12-month period beginning on the first anniversary of
               the first  date of a  Parental  Absence  shall not be a  one-year
               Period of Severance.

               Plan  means the  401(k)  plan of the  Employer  set forth in this
               document, including any later amendments to it.

               Plan Administrator means the person or persons who administer the
               Plan.

               The Plan Administrator is the Employer.

               Plan  Fund  means  the  total  of the  Investment  Fund  and  the
               guaranteed  benefit policy portion of any Annuity  Contract.  The
               Investment Fund shall be valued as stated in its definition.  The
               guaranteed  benefit policy portion of any Annuity  Contract shall
               be  determined  in  accordance  with  the  terms  of the  Annuity
               Contract and, to the extent that such Annuity Contract  allocates
               contract  values to  Participants,  allocated to  Participants in
               accordance  with its terms.  The total value of all amounts  held
               under  the Plan  Fund  shall  equal  the  value of the  aggregate
               Participants' Accounts under the Plan.

               Plan Year means a period beginning on a Yearly Date and ending on
               the day before the next Yearly Date.

               Predecessor  Employer means a firm of which the Employer was once
               a part (e.g., due to a spinoff or change of corporate  status) or
               a  firm  absorbed  by  the  Employer   because  of  a  merger  or
               acquisition (stock or asset, including a division or an operation
               of such company).

               Primary Employer means First Niagara Financial Group, Inc.

               Qualified Joint and Survivor Annuity means, for a Participant who
               has  a  spouse,  an  immediate  survivorship  life  annuity  with
               installment refund, where the survivorship  percentage is 50% and
               the Contingent  Annuitant is the  Participant's  spouse. A former
               spouse will be treated as the spouse to the extent provided under
               a qualified domestic relations order as described in Code Section
               414(p).

               The  amount of  benefit  payable  under the  Qualified  Joint and
               Survivor  Annuity  shall be the  amount of  benefit  which may be
               provided by the Participant's Vested Account.

               Qualified  Preretirement  Survivor  Annuity  means a single  life
               annuity with  installment  refund payable to the surviving spouse
               of a  Participant  who dies before his Annuity  Starting  Date. A
               former  spouse  will be  treated as the  surviving  spouse to the
               extent  provided under a qualified  domestic  relations  order as
               described in Code Section 414(p).

               Qualifying Employer Securities means any security which is issued
               by the  Employer or any  Controlled  Group member and which meets
               the  requirements  of  Code  Section  409(l)  and  ERISA  Section
               407(d)(5).  This shall also include any securities that satisfied
               the  requirements  of the definition  when these  securities were
               assigned to the Plan.

                                       19
<PAGE>

               Qualifying Employer Securities Fund means that part of the assets
               of the Trust Fund that are  designated  to be held  primarily  or
               exclusively in Qualifying  Employer Securities for the purpose of
               providing benefits for Participants.

               Reemployment  Commencement  Date means the date an Employee first
               performs an Hour-of-Service following a Period of Severance.

               Reentry Date means the date a former Active Participant  reenters
               the Plan. See the ACTIVE PARTICIPANT SECTION of Article II.

               Retirement  Date means the date a  retirement  benefit will begin
               and is a  Participant's  Normal or Late  Retirement  Date, as the
               case may be.

               Rollover Contributions means the Rollover Contributions which are
               made by an Eligible Employee or an Inactive Participant according
               to  the  provisions  of the  ROLLOVER  CONTRIBUTIONS  SECTION  of
               Article III.

               Self-employed  Individual means, with respect to any Fiscal Year,
               an  individual  who has Earned Income for the Fiscal Year (or who
               would have  Earned  Income but for the fact the trade or business
               for which this Plan is  established  did not have net profits for
               such Fiscal Year).

               Severance Date means the earlier of:

               (a)  the date on which an Employee  quits,  retires,  dies, or is
                    discharged, or

               (b)  the  first  anniversary  of the  date an  Employee  begins a
                    one-year  absence from service (with or without  pay).  This
                    absence may be the result of any  combination  of  vacation,
                    holiday, sickness, disability, leave of absence or layoff.

               Solely to determine  whether a one-year  Period of Severance  has
               occurred for eligibility or vesting  purposes for an Employee who
               is absent from service beyond the first  anniversary of the first
               day  of  a  Parental  Absence,   Severance  Date  is  the  second
               anniversary of the first day of the Parental Absence.  The period
               between  the first and second  anniversaries  of the first day of
               the  Parental  Absence  is not a Period of  Service  and is not a
               Period of Severance.

               Totally and  Permanently  Disabled  means that a  Participant  is
               disabled,  as a result of sickness or injury,  to the extent that
               he  is  prevented  from  engaging  in  any  substantial   gainful
               activity,  and is eligible for and receives a disability  benefit
               under Title II of the Federal Social Security Act.

               Trust  Agreement  means an agreement of trust between the Primary
               Employer and Trustee  established  for the purpose of holding and
               distributing the Trust Fund under the provisions of the Plan. The
               Trust  Agreement  may  provide for the  investment  of all or any
               portion of the Trust Fund in the Annuity Contract.

               Trust Fund means the total funds held under the Trust Agreement.

               Trustee means the party or parties named in the Trust  Agreement.
               The term  Trustee as it is used in this Plan is deemed to include
               the plural unless the context  clearly  indicates the singular is
               meant.

                                       20
<PAGE>

               Valuation Date means the date on which the value of the assets of
               the  Investment  Fund is  determined.  The value of each  Account
               which is  maintained  under this Plan shall be  determined on the
               Valuation  Date. In each Plan Year,  the Valuation  Date shall be
               the last  day of the Plan  Year.  At the  discretion  of the Plan
               Administrator,  Trustee or Insurer (whichever applies), assets of
               the Investment  Fund may be valued more  frequently.  These dates
               shall also be Valuation Dates.

               Vested Account means the vested part of a Participant's  Account.
               The Participant's Vested Account is determined as follows.

               If the  Participant's  Vesting  Percentage  is 100%,  his  Vested
               Account equals his Account.

               If the  Participant's  Vesting  Percentage is less than 100%, his
               Vested Account equals the sum of (a) and (b) below:

               (a)  The part of the  Participant's  Account  that  results  from
                    Employer  Contributions  made before a prior Forfeiture Date
                    and all other  Contributions  which  were 100%  vested  when
                    made.

               (b)  The  balance of the  Participant's  Account in excess of the
                    amount in (a) above multiplied by his Vesting Percentage.

               If  the  Participant  has  withdrawn  any  part  of  his  Account
               resulting  from  Employer  Contributions,  other  than the vested
               Employer   Contributions   included  in  (a)  above,  the  amount
               determined  under this  subparagraph (b) shall be equal to P(AB +
               D) - D as defined below:

               P    The Participant's Vesting Percentage.

               AB   The  balance of the  Participant's  Account in excess of the
                    amount in (a) above.

               D    The  amount  of  the  withdrawal   resulting  from  Employer
                    Contributions,  other than the vested Employer Contributions
                    included in (a) above.

               The Participant's Vested Account is nonforfeitable.

               Vesting  Break in Service means a Vesting  Computation  Period in
               which an Employee is credited with 500 or fewer Hours-of-Service.
               An Employee  incurs a Vesting Break in Service on the last day of
               a Vesting  Computation  Period in which he has a Vesting Break in
               Service.

               Vesting  Computation  Period means a consecutive  12-month period
               ending on the last day of each Plan Year, including corresponding
               consecutive 12-month periods before January 1, 1990.

               Vesting  Percentage  means the  percentage  used to determine the
               nonforfeitable portion of a Participant's Account attributable to
               Employer Contributions which were not 100% vested when made.

               Any  Eligible  Employee  who  becomes a  Participant  on or after
               January 1, 2001,  shall use the Vesting  Percentage  shown in the
               following  schedule  opposite  the  number of whole  years of his
               Vesting Service.

                                       21
<PAGE>

                  VESTING SERVICE                               VESTING
                      (whole years)                           PERCENTAGE

                  Less than 2                                      0
                      2                                           20
                      3                                           40
                      4                                           60
                      5                                           80
                  6 or more                                      100

               The Vesting Percentage for a Participant who is an Employee on or
               after the date he reaches  Normal  Retirement  Age shall be 100%.
               The Vesting  Percentage  for a Participant  who is an Employee on
               the date he becomes  Totally  and  Permanently  Disabled  or dies
               shall be 100%.

               If  the  schedule  used  to  determine  a  Participant's  Vesting
               Percentage  is  changed,  the new  schedule  shall not apply to a
               Participant  unless he is credited with an  Hour-of-Service on or
               after the date of the change and the Participant's nonforfeitable
               percentage  on the  day  before  the  date of the  change  is not
               reduced  under  this  Plan.  The  amendment   provisions  of  the
               AMENDMENTS   SECTION  of  Article  X  regarding  changes  in  the
               computation of the Vesting Percentage shall apply.

               The Vesting  Percentage  for a Participant  who was a Participant
               under the Plan on December 31,  2000,  shall not be less than his
               Vesting Percentage would have been had the provisions of the Plan
               continued unchanged.

               Vesting  Service  means  one year of  service  for  each  Vesting
               Computation Period in which an Employee is credited with at least
               1,000 Hours-of-Service.

               However, Vesting Service is modified as follows:

               Service with a Predecessor  Employer  which did not maintain this
               Plan included:

                    An Employee's service with a Predecessor  Employer which did
                    not maintain this Plan shall be included as service with the
                    Employer.  This service excludes  service  performed while a
                    proprietor or partner.

               Period of Military Duty included:

                    A Period of Military  Duty shall be included as service with
                    the Employer to the extent it has not already been credited.
                    For purposes of crediting Hours-of-Service during the Period
                    of  Military  Duty,  an  Hour-of-Service  shall be  credited
                    (without regard to the 501  Hour-of-Service  limitation) for
                    each hour an Employee  would normally have been scheduled to
                    work for the Employer during such period.

               Controlled Group service included:

                    An  Employee's  service  with a member firm of a  Controlled
                    Group while both that firm and the Employer  were members of
                    the  Controlled  Group shall be included as service with the
                    Employer.

                                       22
<PAGE>

               Voluntary Contributions means contributions by a Participant that
               are not required as a condition of employment,  of participation,
               or  for   obtaining   additional   benefits   from  the  Employer
               contributions.  See the VOLUNTARY  CONTRIBUTIONS  BY PARTICIPANTS
               SECTION of Article III.

               Yearly  Date  means  January  1,  1990,  and the same day of each
               following year.

               Years of Service means an Employee's Vesting Service disregarding
               any modifications which exclude service.

                                       23
<PAGE>

                                   ARTICLE II

                                  PARTICIPATION

SECTION 2.01--ACTIVE PARTICIPANT.

     (a)  An Employee  shall first become an Active  Participant  (begin  active
          participation in the Plan) on the earliest Monthly Date on which he is
          an Eligible Employee and has met both of the eligibility  requirements
          set forth below. This date is his Entry Date.

          (1)  He has completed  three months of Eligibility  Service before his
               Entry Date.

          (2)  He is age 21 or older.

          Each Employee who was an Active Participant under the Plan on December
          31, 1996, shall continue to be an Active Participant if he is still an
          Eligible  Employee  on January  1, 1997,  and his Entry Date shall not
          change.

          If service  with a  Predecessor  Employer is counted  for  purposes of
          Eligibility  Service,  an Employee shall be credited with such service
          on the  date he  becomes  an  Employee  and  shall  become  an  Active
          Participant  on the  earliest  Monthly Date on which he is an Eligible
          Employee and has met all of the eligibility  requirements  above. This
          date is his Entry Date.

          If a  person  has  been an  Eligible  Employee  who has met all of the
          eligibility requirements above, but is not an Eligible Employee on the
          date which would have been his Entry Date,  he shall  become an Active
          Participant  on the date he again becomes an Eligible  Employee.  This
          date is his Entry Date.

          In the event an Employee  who is not an Eligible  Employee  becomes an
          Eligible  Employee,  such  Eligible  Employee  shall  become an Active
          Participant  immediately  if such Eligible  Employee has satisfied the
          eligibility  requirements  above and would have  otherwise  previously
          become an Active  Participant  had he met the  definition  of Eligible
          Employee. This date is his Entry Date.

     (b)  An  Inactive  Participant  shall  again  become an Active  Participant
          (resume  active  participation  in the  Plan)  on the  date  he  again
          performs an Hour-of-Service as an Eligible Employee.  This date is his
          Reentry Date.

          Upon again  becoming  an Active  Participant,  he shall cease to be an
          Inactive Participant.

     (c)  A former Participant shall again become an Active Participant  (resume
          active  participation  in the Plan) on the date he again  performs  an
          Hour-of-Service  as an  Eligible  Employee.  This date is his  Reentry
          Date.

     There shall be no duplication of benefits for a Participant under this Plan
because of more than one period as an Active Participant.

                                       24

<PAGE>

SECTION 2.02--INACTIVE PARTICIPANT.

     An Active  Participant shall become an Inactive  Participant (stop accruing
benefits under the Plan) on the earlier of the following:

     (a)  the date the Participant ceases to be an Eligible Employee, or

     (b)  the effective  date of complete  termination of the Plan under Article
          VIII.

     An Employee or former  Employee who was an Inactive  Participant  under the
Plan on December  31,  1996,  shall  continue to be an Inactive  Participant  on
January 1, 1997.  Eligibility for any benefits  payable to the Participant or on
his behalf and the amount of the benefits  shall be determined  according to the
provisions of the prior document, unless otherwise stated in this document.

SECTION 2.03--CESSATION OF PARTICIPATION.

     A Participant  shall cease to be a Participant  on the date he is no longer
an Eligible Employee and his Account is zero.

SECTION 2.04--ADOPTING EMPLOYERS - SINGLE PLAN.

     Each of the Controlled Group members listed below is an Adopting  Employer.
Each Adopting Employer listed below participates with the Employer in this Plan.
An  Adopting  Employer's  agreement  to  participate  in this  Plan  shall be in
writing.

     The Employer has the right to amend the Plan. An Adopting Employer does not
have the right to amend the Plan.

     If the  Adopting  Employer  did not  maintain  its plan  before its date of
adoption  specified  below, its date of adoption shall be the Entry Date for any
of its Employees who have met the requirements in the ACTIVE PARTICIPANT SECTION
of Article II as of that date.  Service with and  Compensation  from an Adopting
Employer shall be included as service with and  Compensation  from the Employer.
Transfer of employment,  without interruption,  between an Adopting Employer and
another   Adopting   Employer  or  the  Employer  shall  not  be  considered  an
interruption of service.  The Employer's  Fiscal Year defined in the DEFINITIONS
SECTION of Article I shall be the Fiscal Year used in interpreting this Plan for
Adopting Employers.

     Contributions   made  by  an   Adopting   Employer   shall  be  treated  as
Contributions made by the Employer. Forfeitures arising from those Contributions
shall be used for the benefit of all Participants.

     An  employer  shall  not  be an  Adopting  Employer  if it  ceases  to be a
Controlled Group member. Such an employer may continue a retirement plan for its
Employees  in the form of a  separate  document.  This Plan  shall be amended to
delete a former Adopting Employer from the list below.

     If (i) an employer ceases to be an Adopting Employer or the Plan is amended
to delete an Adopting  Employer and (ii) the Adopting Employer does not continue
a retirement  plan for the benefit of its  Employees,  partial  termination  may
result and the provisions of Article VIII shall apply.

                                       25

<PAGE>

                               ADOPTING EMPLOYERS

NAME                                                       DATE OF ADOPTION

FIRST NIAGARA BANK                                         January 1, 1990

FIRST NIAGARA SECURITIES, INC.                             January 1, 1998

FIRST NIAGARA REALTY, INC.                                 January 1, 1998

FIRST NIAGARA FUNDING, INC.                                January 1, 1998

FIRST NIAGARA FINANCIAL SERVICES, INC.                     January 1, 1998

EMPIRE NATIONAL LEASING, INC.                              January 1, 2000

NIAGARA INVESTMENT ADVISORS, INC.                             June 1, 2000

WARREN-HOFFMAN & ASSOCIATES, INC.                          January 1, 2001

NOVA HEALTHCARE ADMINISTRATORS, INC.                       January 1, 2001

CORTLAND SAVINGS BANK                                      January 1, 2001

CAYUGA BANK                                                January 1, 2001

CAYUGA FINANCIAL SERVICES                                  January 1, 2001

ALLIED CLAIM SERVICES, INC.                                January 1, 2001

                                       26
<PAGE>

                                   ARTICLE III

                                  CONTRIBUTIONS

SECTION 3.01--EMPLOYER CONTRIBUTIONS.

     Employer   Contributions  shall  be  made  without  regard  to  current  or
accumulated net income, earnings or profits of the Employer. Notwithstanding the
foregoing, the Plan shall continue to be designed to qualify as a profit sharing
plan for purposes of Code Sections 401(a), 402, 412, and 417. Such Contributions
shall be equal to the Employer Contributions as described below:

     (a)  The amount of each Elective  Deferral  Contribution  for a Participant
          shall  be equal to a  portion  of  Compensation  as  specified  in the
          elective   deferral   agreement.   An  Employee  who  is  eligible  to
          participate in the Plan may file an elective  deferral  agreement with
          the Employer.  The Participant  shall modify or terminate the elective
          deferral  agreement by filing a new elective deferral  agreement.  The
          elective  deferral  agreement may not be made  retroactively and shall
          remain in effect until modified or terminated.

          The elective  deferral  agreement to start or modify Elective Deferral
          Contributions  shall be  effective  on the  first day of the first pay
          period following the pay period in which the Participant's  Entry Date
          (Reentry  Date,  if  applicable)  or any  following  date occurs.  The
          elective deferral agreement must be entered into on or before the date
          it is effective.

          The   elective   deferral   agreement   to  stop   Elective   Deferral
          Contributions  may be entered into on any date. Such elective deferral
          agreement  shall  be  effective  on the  first  day of the pay  period
          following the pay period in which the elective  deferral  agreement is
          entered into.

          Elective   Deferral   Contributions   cannot   be  more  than  15%  of
          Compensation.

          Elective   Deferral   Contributions   are  fully  (100%)   vested  and
          nonforfeitable.

     (b)  The Employer shall make Matching  Contributions  in an amount equal to
          75%   of   Elective   Deferral   Contributions.    Elective   Deferral
          Contributions which are over 6% of Compensation won't be matched.

          Matching  Contributions  are  calculated  based on  Elective  Deferral
          Contributions   and   Compensation   for  the  pay  period.   Matching
          Contributions are made for all persons who were Active Participants at
          any time during that pay period.

          Matching Contributions for a person shall not be more than 4.5% of his
          Compensation for the Plan Year.

          Matching Contributions are subject to the Vesting Percentage. However,
          if you were a Participant under this Plan, the Iroquois Bancorp,  Inc.
          401(k) Savings Plan, or the Iroquois Bancorp, Inc. Money Purchase Plan
          on December 31, 2000,  your  Matching  Contributions  are fully (100%)
          vested and nonforfeitable.

                                       27

<PAGE>

     (c)  Discretionary  Contributions  may be made  for  each  Plan  Year in an
          amount determined by the Employer.

          Discretionary  Contributions  are subject to the  Vesting  Percentage.
          However,  if you were a  Participant  under  this Plan,  the  Iroquois
          Bancorp, Inc. 401(k) Savings Plan, or the Iroquois Bancorp, Inc. Money
          Purchase Plan on December 31, 2000, your  Discretionary  Contributions
          are fully (100%) vested and nonforfeitable.

     No Participant shall be permitted to have Elective Deferral  Contributions,
as defined in the EXCESS AMOUNTS SECTION of this article,  made under this Plan,
or any other qualified plan maintained by the Employer, during any taxable year,
in excess of the dollar limitation contained in Code Section 402(g) in effect at
the beginning of such taxable year.

     An elective  deferral  agreement  (or change  thereto) must be made in such
manner  and in  accordance  with  such  rules  as  the  Employer  may  prescribe
(including  by  means  of  voice  response  or  other  electronic  system  under
circumstances the Employer permits) and may not be made retroactively.

     Employer  Contributions  are allocated  according to the  provisions of the
ALLOCATION SECTION of this article.

     A portion of the Plan assets resulting from Employer Contributions (but not
more than the  original  amount of those  Contributions)  may be returned if the
Employer  Contributions  are made  because of a mistake of fact or are more than
the amount  deductible under Code Section 404 (excluding any amount which is not
deductible  because  the Plan is  disqualified).  The  amount  involved  must be
returned  to  the  Employer   within  one  year  after  the  date  the  Employer
Contributions  are  made by  mistake  of  fact  or the  date  the  deduction  is
disallowed,  whichever  applies.  Except as provided  under this  paragraph  and
Article VIII,  the assets of the Plan shall never be used for the benefit of the
Employer  and are  held for the  exclusive  purpose  of  providing  benefits  to
Participants and their  Beneficiaries and for defraying  reasonable  expenses of
administering the Plan.

SECTION 3.01A--VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS.

     As of January 1, 2001, any Voluntary  Contributions for Active Participants
under  the   Warren-Hoffman   &  Associates  Inc.  401(k)  Profit  Sharing  plan
transferred  into this Plan.  No new Voluntary  Contributions  may be made under
this Plan.

     The  part  of  the   Participant's   Account   resulting   from   Voluntary
Contributions is fully (100%) vested and nonforfeitable at all times.

SECTION 3.01B--ROLLOVER CONTRIBUTIONS.

     A Rollover  Contribution may be made by an Eligible Employee or an Inactive
Participant if the following conditions are met:

     (a)  The Contribution is of amounts  distributed from a plan that satisfies
          the requirements of Code Section 401(a) or from a "conduit" individual
          retirement account described in Code Section 408(d)(3)(A). In the case
          of an  Inactive  Participant,  the  Contribution  must be of an amount
          distributed  from  another  plan  of  the  Employer,  or a  plan  of a
          Controlled  Group  member,  that  satisfies the  requirements  of Code
          Section 401(a).

                                       28
<PAGE>

     (b)  The Contribution is of amounts that the Code permits to be transferred
          to a plan that meets the requirements of Code Section 401(a).

     (c)  The  Contribution  is made in the form of a direct rollover under Code
          Section  401(a)(31) or is a rollover made under 402(c) or 408(d)(3)(A)
          within 60 days after the  Eligible  Employee or  Inactive  Participant
          receives the distribution.

     (d)  The  Eligible  Employee or  Inactive  Participant  furnishes  evidence
          satisfactory  to the Plan  Administrator  that the  proposed  rollover
          meets conditions (a), (b), and (c) above.

     A  Rollover  Contribution  shall be  allowed  in cash only and must be made
according to procedures set up by the Plan Administrator.

     If the  Eligible  Employee is not an Active  Participant  when the Rollover
Contribution  is made, he shall be deemed to be an Active  Participant  only for
the  purpose  of  investment  and  distribution  of the  Rollover  Contribution.
Employer  Contributions  shall  not be made  for or  allocated  to the  Eligible
Employee  until  the time he meets all of the  requirements  to become an Active
Participant.

     Rollover  Contributions  made  by  an  Eligible  Employee  or  an  Inactive
Participant  shall be credited  to his  Account.  The part of the  Participant's
Account  resulting  from  Rollover  Contributions  is fully  (100%)  vested  and
nonforfeitable  at all times. A separate  accounting  record shall be maintained
for  that  part  of  his   Rollover   Contributions   consisting   of  voluntary
contributions  which  were  deducted  from the  Participant's  gross  income for
Federal income tax purposes.

SECTION 3.02--FORFEITURES.

     The Nonvested Account of a Participant shall be forfeited as of the earlier
of the following:

     (a)  the date the Participant  dies (if prior to such date he had ceased to
          be an Employee), or

     (b)  the Participant's Forfeiture Date.

All or a portion of a Participant's  Nonvested Account shall be forfeited before
such  earlier date if,  after he ceases to be an  Employee,  he receives,  or is
deemed to receive, a distribution of his entire Vested Account or a distribution
of his Vested Account  derived from Employer  Contributions  which were not 100%
vested when made, under the RETIREMENT BENEFITS SECTION of Article V, the VESTED
BENEFITS  SECTION of Article V, or the SMALL  AMOUNTS  SECTION of Article X. The
forfeiture shall occur as of the date the Participant  receives, or is deemed to
receive, the distribution.  If a Participant  receives, or is deemed to receive,
his entire Vested Account, his entire Nonvested Account shall be forfeited. If a
Participant  receives  a  distribution  of  his  Vested  Account  from  Employer
Contributions  which were not 100%  vested  when made,  but less than his entire
Vested  Account from such  Contributions,  the amount to be  forfeited  shall be
determined by multiplying  his Nonvested  Account from such  Contributions  by a
fraction.  The  numerator  of the  fraction  is the  amount of the  distribution
derived from Employer Contributions which were not 100% vested when made and the
denominator  of the  fraction is his entire  Vested  Account  derived  from such
Contributions on the date of distribution.

     A Forfeiture  shall also occur as provided in the EXCESS AMOUNTS SECTION of
this article.

                                       29
<PAGE>

     Forfeitures  shall be  determined  at least  once  during  each Plan  Year.
Forfeitures  may first be used to pay  administrative  expenses.  Forfeitures of
Matching  Contributions which relate to excess amounts as provided in the EXCESS
AMOUNTS SECTION of this article,  which have not been used to pay administrative
expenses,  shall be applied to reduce the earliest Employer  Contributions  made
after the Forfeitures are determined.  Any other Forfeitures which have not been
used to pay  administrative  expenses  shall be applied  to reduce the  earliest
Employer  Contributions  made after the Forfeitures  are determined.  Upon their
application to reduce Employer Contributions,  Forfeitures shall be deemed to be
Employer Contributions.

     If a  Participant  again  becomes an Eligible  Employee  after  receiving a
distribution  which  caused  all  or a  portion  of  his  Vested  Account  to be
forfeited, he shall have the right to repay to the Plan the entire amount of the
distribution he received  (excluding any amount of such  distribution  resulting
from Contributions which were 100% vested when made). The repayment must be made
in a single sum (repayment in installments is not permitted)  before the earlier
of the date five years after the date he again  becomes an Eligible  Employee or
the end of the first period of five consecutive  Vesting Breaks in Service which
begin after the date of the distribution.

     If the Participant makes the repayment above, the Plan Administrator  shall
restore  to his  Account  an amount  equal to his  Nonvested  Account  which was
forfeited on the date of  distribution,  unadjusted for any investment  gains or
losses.  If no amount is to be repaid because the Participant was deemed to have
received a distribution,  or only received a distribution of Contributions which
were 100%  vested when made,  and he again  performs  an  Hour-of-Service  as an
Eligible  Employee within the repayment  period,  the Plan  Administrator  shall
restore the Participant's  Account as if he had made a required repayment on the
date he performed such Hour-of-Service. Restoration of the Participant's Account
shall include  restoration of all Code Section 411(d)(6) protected benefits with
respect to that restored Account,  according to applicable Treasury regulations.
Provided,  however,  the Plan  Administrator  shall not  restore  the  Nonvested
Account if (i) a Forfeiture Date has occurred after the date of the distribution
and on or before  the date of  repayment  and (ii) that  Forfeiture  Date  would
result in a  complete  forfeiture  of the amount  the Plan  Administrator  would
otherwise restore.

     The Plan Administrator shall restore the Participant's Account by the close
of the Plan Year following the Plan Year in which repayment is made. Permissible
sources for the  restoration  of the  Participant's  Account are  Forfeitures or
special Employer  Contributions.  Such special Employer  Contributions  shall be
made without regard to profits. The repaid and restored amounts are not included
in the Participant's Annual Additions, as defined in the CONTRIBUTION LIMITATION
SECTION of this article.

SECTION 3.03--ALLOCATION.

     A person  meets the  allocation  requirements  of this  section if he is an
Active  Participant  on the  last day of the  Plan  Year and has at least  1,000
Hours-of-Service  during  the latest  Accrual  Computation  Period  ending on or
before that date.

     An Employee's  service with a Predecessor  Employer  which did not maintain
this Plan shall be  included  as service  with the  Employer  for the purpose of
determining his Hours-of-Service to be eligible for an allocation.  This service
excludes service performed while a proprietor or partner.

     Elective Deferral Contributions shall be allocated to Participants for whom
such  Contributions  are made under the EMPLOYER  CONTRIBUTIONS  SECTION of this
article.  Such  Contributions  shall be allocated  when made and credited to the
Participant's Account.

                                       30
<PAGE>

     Matching  Contributions  shall be  allocated  to the  persons for whom such
Contributions are made under the EMPLOYER CONTRIBUTIONS SECTION of this article.
Such  Contributions  shall be  allocated  when made and credited to the person's
Account.

     Discretionary  Contributions  shall be  allocated as of the last day of the
Plan Year using Annual  Compensation  for the Plan Year. The amount allocated to
such person shall be determined as follows:

STEP  ONE:  This  step one  shall  only  apply  in years in which  the Plan is a
Top-heavy  Plan,  as defined in the  DEFINITIONS  SECTION of Article XI, and the
minimum contribution under the MODIFICATION OF CONTRIBUTIONS  SECTION of Article
XI is not being provided by other  contributions to this Plan or another plan of
the Employer.

The  allocation  in this  step one  shall  be made to each  person  meeting  the
allocation  requirements  of this  section  and each person who is entitled to a
minimum contribution under the MODIFICATION OF CONTRIBUTIONS  SECTION of Article
XI. Each such person's  allocation shall be an amount equal to the Discretionary
Contributions  multiplied by the ratio of such person's  Annual  Compensation to
the total Annual Compensation of all such persons.  Such amount shall not exceed
3% of such person's Annual Compensation.  The allocation for any person who does
not meet the  allocation  requirements  of this section  shall be limited to the
amount necessary to fund the minimum contribution.

STEP TWO: The  allocation in this step two shall be made to each person  meeting
the allocation requirements of this section. Each such person's allocation shall
be equal to any amount  remaining after the allocation in step one multiplied by
the ratio of such person's Annual  Compensation to the total Annual Compensation
of all such persons.

This amount shall be credited to the person's Account.

     If Leased  Employees are Eligible  Employees,  in determining the amount of
Employer  Contributions  allocated  to  a  person  who  is  a  Leased  Employee,
contributions  provided by the leasing  organization  which are  attributable to
services  such Leased  Employee  performs for the  Employer  shall be treated as
provided by the Employer. Those contributions shall not be duplicated under this
Plan.

SECTION 3.04--CONTRIBUTION LIMITATION.

     (a)  Definitions.   For  the  purpose  of  determining   the   contribution
          limitation set forth in this section, the following terms are defined.

          Annual Additions means the sum of the following  amounts credited to a
          Participant's account for the Limitation Year:

          (1)  employer contributions;

          (2)  employee contributions; and

          (3)  forfeitures.

          Annual Additions to a defined contribution plan shall also include the
          following:

                                       31
<PAGE>

          (4)  amounts allocated, after March 31, 1984, to an individual medical
               account, as defined in Code Section 415(l)(2),  which are part of
               a pension or annuity plan maintained by the Employer,

          (5)  amounts derived from contributions paid or accrued after December
               31, 1985,  in taxable  years  ending  after such date,  which are
               attributable to  post-retirement  medical benefits,  allocated to
               the  separate  account  of a key  employee,  as  defined  in Code
               Section  419A(d)(3),  under a welfare benefit fund, as defined in
               Code Section 419(e), maintained by the Employer; and

          (6)  allocations under a simplified employee pension.

          For this  purpose,  any Excess  Amount  applied under (e) below in the
          Limitation Year to reduce Employer  Contributions  shall be considered
          Annual Additions for such Limitation Year.

          Compensation  means wages within the meaning of Code  Section  3401(a)
          for  the  purposes  of  income  tax  withholding  at  the  source  but
          determined  without  regard to any rules that  limit the  remuneration
          included in wages based on the nature or location of employment or the
          services  performed (such as the exception for  agricultural  labor in
          Code Section 3401(a)(2)).

          For any  Self-employed  Individual,  Compensation  shall  mean  Earned
          Income.

          For purposes of applying the limitations of this section, Compensation
          for a  Limitation  Year  is the  Compensation  actually  paid  or made
          available in gross income during such Limitation Year.

          For Limitation  Years  beginning after December 31, 1997, for purposes
          of applying the limitations of this section, Compensation paid or made
          available  during such  Limitation  Year shall  include  any  elective
          deferral (as defined in Code Section 402(g)(3)),  and any amount which
          is  contributed  or  deferred by the  Employer at the  election of the
          Employee  and  which is not  includible  in the  gross  income  of the
          Employee by reason of Code Section 125, 132(f)(4), or 457.

          Defined Benefit Plan Fraction means a fraction, the numerator of which
          is the sum of the  Participant's  Projected  Annual Benefits under all
          the defined  benefit plans (whether or not  terminated)  maintained by
          the Employer,  and the  denominator  of which is the lesser of (i) 125
          percent of the dollar  limitation  determined for the Limitation  Year
          under Code  Sections  415(b)(1)(A)  and (d) or (ii) 140 percent of the
          Highest Average  Compensation,  including any  adjustments  under Code
          Section 415(b)(5).

          Notwithstanding  the above, if the Participant was a participant as of
          the first day of the first  Limitation  Year beginning  after December
          31,  1986,  in one or more defined  benefit  plans  maintained  by the
          Employer  which were in existence on May 6, 1986,  the  denominator of
          this  fraction  will not be less  than 125  percent  of the sum of the
          annual  benefits under such plans which the Participant had accrued as
          of the close of the last Limitation  Year beginning  before January 1,
          1987, disregarding any changes in the terms and conditions of the plan
          after May 5, 1986. The preceding  sentence applies only if the defined
          benefit  plans  individually  and  in  the  aggregate   satisfied  the
          requirements  of Code Section 415 for all Limitation  Years  beginning
          before January 1, 1987.

                                       32
<PAGE>

          Defined  Contribution  Dollar  Limitation  means, for Limitation Years
          beginning  after  December 31, 1994,  $30,000,  as adjusted under Code
          Section 415(d).

          Defined Contribution Plan Fraction means a fraction,  the numerator of
          which is the sum of the Annual Additions to the Participant's  account
          under all the defined  contribution  plans (whether or not terminated)
          maintained  by the Employer  for the current and all prior  Limitation
          Years   (including   the   Annual   Additions   attributable   to  the
          Participant's  nondeductible  employee  contributions  to all  defined
          benefit plans, whether or not terminated,  maintained by the Employer,
          and the Annual  Additions  attributable  to all welfare benefit funds,
          individual  medical  accounts,   and  simplified   employee  pensions,
          maintained by the Employer),  and the  denominator of which is the sum
          of the  maximum  aggregated  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 (i) 125
          percent of the dollar limitation under Code Section 415(c)(1)(A) after
          adjustment  under  Code  Section  415(d)  or  (ii) 35  percent  of the
          Participant's Compensation for such year.

          If the  Employee was a  participant  as of the end of the first day of
          the first Limitation Year beginning after December 31, 1986, in one or
          more defined  contribution plans maintained by the Employer which were
          in existence on May 6, 1986,  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 (i) the excess of the
          sum of the  fractions  over 1.0  times  (ii) 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 end of the last  Limitation Year beginning
          before January 1, 1987, and  disregarding any changes in the terms and
          conditions  of the plan  made  after May 5,  1986,  but using the Code
          Section  415  limitation  applicable  to  the  first  Limitation  Year
          beginning on or after January 1, 1987.

          The Annual Addition for any Limitation  Year beginning  before January
          1, 1987,  shall not be recomputed to treat all employee  contributions
          as Annual Additions.

          Employer  means the employer that adopts this Plan, and all members of
          a controlled  group of corporations (as defined in Code Section 414(b)
          as modified by Code Section 415(h)), all commonly controlled trades or
          businesses  (as  defined in Code  Section  415(c) as  modified by Code
          Section  415(h)) or  affiliated  service  groups  (as  defined in Code
          Section  414(m)) of which the  adopting  employer  is a part,  and any
          other entity required to be aggregated  with the employer  pursuant to
          regulations under Code Section 414(o).

          Excess Amount means the excess of the  Participant's  Annual Additions
          for the Limitation Year over the Maximum Permissible Amount.

          Highest Average  Compensation  means the average  Compensation for the
          three  consecutive  Limitation  Years while he was an Employee (actual
          consecutive  Limitation  Years while he was an  Employee,  if employed
          less than three years) that produces the highest average.

          Limitation  Year means the  consecutive  12-month period ending on the
          last  day of  each  Plan  Year,  including  corresponding  consecutive
          12-month  periods before  January 1, 1990. If the  Limitation  Year is
          other than the calendar year, execution of this Plan (or any amendment
          to this

                                       33
<PAGE>

          Plan changing the Limitation Year) constitutes the Employer's adoption
          of  a  written  resolution   electing  the  Limitation  Year.  If  the
          Limitation Year is amended to a different consecutive 12-month period,
          the new  Limitation  Year must begin on a date  within the  Limitation
          Year in which the amendment is made.

          Maximum  Permissible Amount means the maximum Annual Addition that may
          be contributed or allocated to a Participant's  Account under the Plan
          for any Limitation Year. This amount shall not exceed the lesser of:

          (1)  The Defined Contribution Dollar Limitation, or

          (2)  25 percent of the  Participant's  Compensation for the Limitation
               Year.

          The compensation  limitation referred to in (2) shall not apply to any
          contribution  for medical benefits (within the meaning of Code Section
          401(h) or 419A(f)(2)) which is otherwise treated as an Annual Addition
          under Code Section 415(l)(1) or 419A(d)(2).

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

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

          Projected Annual Benefit means the annual retirement benefit (adjusted
          to an actuarially  equivalent straight life annuity if such benefit is
          expressed  in a form other than a straight  life  annuity or qualified
          joint and survivor annuity) to which the Participant would be entitled
          under the terms of the plan assuming:

          (1)  the Participant will continue  employment until normal retirement
               age under the plan (or current age, if later), and

          (2)  the  Participant's  Compensation for the current  Limitation Year
               and all other relevant  factors used to determine  benefits under
               the Plan will remain constant for all future Limitation Years.

     (b)  If the Participant does not participate in, and has never participated
          in,  another  qualified  plan  maintained by the Employer or a welfare
          benefit  fund,  as defined in Code Section  419(e),  maintained by the
          Employer, or an individual medical account, as defined in Code Section
          415(l)(2),  maintained  by  the  Employer,  or a  simplified  employee
          pension,  as  defined  in  Code  Section  408(k),  maintained  by  the
          Employer,  which  provides  an Annual  Addition,  the amount of Annual
          Additions which may be credited to the  Participant's  Account for any
          Limitation Year shall not exceed the lesser of the Maximum Permissible
          Amount or any other limitation contained in this Plan. If the Employer
          Contribution  that would  otherwise be contributed or allocated to the
          Participant's  Account  would  cause  the  Annual  Additions  for  the
          Limitation Year to exceed the Maximum  Permissible  Amount, the amount
          contributed or allocated shall be reduced so that the Annual Additions
          for the Limitation Year will equal the Maximum Permissible Amount.

                                       34
<PAGE>

               (c)  Prior to determining the Participant's  actual  Compensation
                    for the  Limitation  Year,  the Employer may  determine  the
                    Maximum Permissible Amount for a Participant on the basis of
                    a reasonable  estimation of the  Participant's  Compensation
                    for  the  Limitation  Year,  uniformly  determined  for  all
                    Participants similarly situated.

               (d)  As soon as is administratively feasible after the end of the
                    Limitation  Year,  the  Maximum  Permissible  Amount for the
                    Limitation  Year  will be  determined  on the  basis  of the
                    Participant's actual Compensation for the Limitation Year.

               (e)  If  a  reasonable   error  in  estimating  a   Participant's
                    Compensation  for the Limitation Year, a reasonable error in
                    determining  the amount of  elective  deferrals  (within the
                    meaning  of Code  Section  402(g)(3))  that may be made with
                    respect to any  individual  under the limits of Code Section
                    415, or under other facts and  circumstances  allowed by the
                    Internal  Revenue  Service,  there is an Excess Amount,  the
                    excess will be disposed of as follows:

                    (1)  Any Elective  Deferral  Contributions  that are not the
                         basis for  Matching  Contributions  (plus  attributable
                         earnings),  to the extent they would  reduce the Excess
                         Amount, will be distributed to the Participant.

                    (2)  If after the  application of (1) above an Excess Amount
                         still exists, any Elective Deferral  Contributions that
                         are  the  basis  for   Matching   Contributions   (plus
                         attributable earnings), to the extent they would reduce
                         the  Excess   Amount,   will  be   distributed  to  the
                         Participant. Concurrently with the distribution of such
                         Elective   Deferral    Contributions,    any   Matching
                         Contributions  which  relate to any  Elective  Deferral
                         Contributions distributed in the preceding sentence, to
                         the extent  such  application  would  reduce the Excess
                         Amount,  will  be  applied  as  provided  in (3) or (4)
                         below:

                    (3)  If after the  application of (2) above an Excess Amount
                         still  exists,  and the  Participant  is covered by the
                         Plan  at the end of the  Limitation  Year,  the  Excess
                         Amount  in the  Participant's  Account  will be used to
                         reduce Employer  Contributions  for such Participant in
                         the  next   Limitation   Year,   and  each   succeeding
                         Limitation Year if necessary.

                    (4)  If after the  application of (2) above an Excess Amount
                         still exists, and the Participant is not covered by the
                         Plan  at the end of the  Limitation  Year,  the  Excess
                         Amount will be held unallocated in a suspense  account.
                         The suspense  account will be applied to reduce  future
                         Employer  Contributions for all remaining  Participants
                         in  the  next  Limitation  Year,  and  each  succeeding
                         Limitation Year if necessary.

                    (5)  If a  suspense  account  is in  existence  at any  time
                         during a Limitation  Year pursuant to this (e), it will
                         participate  in the  allocation of investment  gains or
                         losses.  If a suspense  account is in  existence at any
                         time during a particular  Limitation  Year, all amounts
                         in  the  suspense   account   must  be  allocated   and
                         reallocated  to   Participant's   Accounts  before  any
                         Employer Contributions may be made to the Plan for that
                         Limitation  Year.  Excess  Amounts  held in a  suspense
                         account  may  not be  distributed  to  Participants  or
                         former Participants.

               (f)  This  (f)  applies  if,  in  addition  to  this  Plan,   the
                    Participant  is  covered  under  another  qualified  defined
                    contribution  plan  maintained  by the  Employer,  a welfare
                    benefit fund maintained by the

                                       35
<PAGE>

                    Employer,  an individual  medical account  maintained by the
                    Employer, or a simplified employee pension maintained by the
                    Employer  which  provides  an  Annual  Addition  during  any
                    Limitation  Year. The aggregate  Annual  Additions under all
                    such qualified defined  contribution plans,  welfare benefit
                    funds,  individual medical accounts, and simplified employee
                    pensions for the Limitation Year will not exceed the Maximum
                    Permissible  Amount.  Any reduction  necessary shall be made
                    first to the profit  sharing  plans,  then to all other such
                    qualified  defined  contribution  plans and welfare  benefit
                    funds,  individual medical accounts, and simplified employee
                    pensions  and, if  necessary,  by reducing  first those that
                    were most  recently  allocated.  Welfare  benefit  funds and
                    individual  medical accounts shall be deemed to be allocated
                    first. However, Elective Deferral Contributions shall be the
                    last  contributions  reduced before the welfare benefit fund
                    or individual medical account is reduced.

               (g)  If the  Employer  maintains,  or at any time  maintained,  a
                    qualified  defined  benefit plan covering any Participant in
                    this Plan, the sum of the Participant's Defined Benefit Plan
                    Fraction and Defined  Contribution  Plan  Fraction  will not
                    exceed 1.0 in any  Limitation  Year.  The  Projected  Annual
                    Benefit shall be limited first. If the Participant's  annual
                    benefit(s) equal his Projected  Annual Benefit,  as limited,
                    then Annual  Additions to the defined  contribution  plan(s)
                    shall be limited  to the extent  needed to reduce the sum to
                    1.0 in the same  manner in which the  Annual  Additions  are
                    limited  to  meet  the  Maximum   Permissible  Amount.  This
                    subparagraph  shall cease to apply effective as of the first
                    Limitation Year beginning on or after January 1, 2000.

SECTION 3.05--EXCESS AMOUNTS.

(a)  Definitions.  For the purposes of this  section,  the  following  terms are
     defined:

     ACP means the  average  (expressed  as a  percentage)  of the  Contribution
     Percentages of the Eligible Participants in a group.

     ADP  means  the  average  (expressed  as  a  percentage)  of  the  Deferral
     Percentages of the Eligible Participants in a group.

     Aggregate Limit means the greater of:

     (1)  The sum of:

          (i)  125  percent  of  the  greater  of  the  ADP  of  the   Nonhighly
               Compensated  Employees  for the prior Plan Year or the ACP of the
               Nonhighly  Compensated  Employees  under the plan subject to Code
               Section  401(m)  for the Plan Year  beginning  with or within the
               prior Plan Year of the cash or deferred arrangement, and

          (ii) the lesser of 200  percent  or 2 percent  plus the lesser of such
               ADP or ACP.

     (2)  The sum of:

          (i)  125 percent of the lesser of the ADP of the Nonhighly Compensated
               Employees  for the prior  Plan  Year or the ACP of the  Nonhighly
               Compensated  Employees  under the plan  subject  to Code  Section
               401(m) for the Plan Year  beginning with or within the prior Plan
               Year of the cash or deferred arrangement, and

                                       36
<PAGE>

          (ii) the lesser of 200  percent or 2 percent  plus the greater of such
               ADP or ACP.

     If the Employer has elected to use the current  testing  method,  then,  in
     calculating  the Aggregate  Limit for a particular Plan Year, the Nonhighly
     Compensated Employees' ADP and ACP for that Plan Year, instead of the prior
     Plan Year, is used.

     Contribution  Percentage means the ratio (expressed as a percentage) of the
     Eligible  Participant's  Contribution  Percentage  Amounts to the  Eligible
     Participant's  Compensation  for the Plan Year (whether or not the Eligible
     Participant  was an Eligible  Participant  for the entire  Plan  Year).  In
     modification  of  the  foregoing,  Compensation  shall  be  limited  to the
     Compensation  received  while  an  Eligible  Participant.  For an  Eligible
     Participant for whom such Contribution Percentage Amounts for the Plan Year
     are zero, the percentage is zero.

     Contribution   Percentage   Amounts  means  the  sum  of  the   Participant
     Contributions and Matching  Contributions  (that are not Qualified Matching
     Contributions  taken into  account for purposes of the ADP Test) made under
     the Plan on behalf of the  Eligible  Participant  for the Plan  Year.  Such
     Contribution  Percentage  Amounts shall not include Matching  Contributions
     that are forfeited  either to correct  Excess  Aggregate  Contributions  or
     because  the  Contributions  to  which  they  relate  are  Excess  Elective
     Deferrals, Excess Contributions,  or Excess Aggregate Contributions.  Under
     such rules as the Secretary of the Treasury shall prescribe, in determining
     the  Contribution  Percentage  the Employer may elect to include  Qualified
     Nonelective  Contributions under this Plan which were not used in computing
     the  Deferral  Percentage.  The  Employer  may also  elect to use  Elective
     Deferral Contributions in computing the Contribution  Percentage so long as
     the ADP Test is met before the Elective Deferral  Contributions are used in
     the ACP Test and  continues  to be met  following  the  exclusion  of those
     Elective Deferral Contributions that are used to meet the ACP Test.

     Deferral Percentage means the ratio (expressed as a percentage) of Elective
     Deferral   Contributions   under  this  Plan  on  behalf  of  the  Eligible
     Participant  for the Plan Year to the Eligible  Participant's  Compensation
     for the Plan Year (whether or not the Eligible  Participant was an Eligible
     Participant  for the entire Plan Year).  In  modification of the foregoing,
     Compensation  shall  be  limited  to the  Compensation  received  while  an
     Eligible Participant. The Elective Deferral Contributions used to determine
     the Deferral Percentage shall include Excess Elective Deferrals (other than
     Excess  Elective  Deferrals of Nonhighly  Compensated  Employees that arise
     solely from  Elective  Deferral  Contributions  made under this Plan or any
     other  plans of the  Employer  or a  Controlled  Group  member),  but shall
     exclude  Elective  Deferral  Contributions  that are used in computing  the
     Contribution  Percentage  (provided the ADP Test is satisfied both with and
     without  exclusion of these Elective  Deferral  Contributions).  Under such
     rules as the Secretary of the Treasury  shall  prescribe,  the Employer may
     elect to include Qualified Nonelective Contributions and Qualified Matching
     Contributions under this Plan in computing the Deferral Percentage.  For an
     Eligible Participant for whom such contributions on his behalf for the Plan
     Year are zero, the percentage is zero.

     Elective Deferral  Contributions means any employer contributions made to a
     plan at the election of a participant,  in lieu of cash  compensation,  and
     shall include  contributions made pursuant to a salary reduction  agreement
     or  other  deferral  mechanism.   With  respect  to  any  taxable  year,  a
     participant's  Elective Deferral  Contributions are the sum of all employer
     contributions made on behalf of such participant pursuant to an election to
     defer under any qualified cash or deferred

                                       37
<PAGE>

     arrangement   described  in  Code  Section  401(k),  any  salary  reduction
     simplified  employee pension plan described in Code Section 408(k)(6),  any
     SIMPLE IRA plan  described in Code Section  408(p),  any eligible  deferred
     compensation  plan under Code Section 457,  any plan  described  under Code
     Section  501(c)(18),  and any  employer  contributions  made on behalf of a
     participant  for the  purchase of an annuity  contract  under Code  Section
     403(b)  pursuant  to  a  salary  reduction  agreement.   Elective  Deferral
     Contributions  shall not  include any  deferrals  properly  distributed  as
     excess annual additions.

     Eligible  Participant  means,  for  purposes of  determining  the  Deferral
     Percentage,  any  Employee  who is  otherwise  entitled  to  make  Elective
     Deferral  Contributions  under  the  terms of the  Plan for the Plan  Year.
     Eligible  Participant  means,  for purposes of determining the Contribution
     Percentage,  any  Employee  who  is  eligible  (i) to  make  a  Participant
     Contribution or an Elective  Deferral  Contribution  (if the Employer takes
     such  contributions  into account in the  calculation  of the  Contribution
     Percentage),   or  (ii)  to  receive  a  Matching  Contribution  (including
     forfeitures)  or  a  Qualified  Matching  Contribution.  If  a  Participant
     Contribution is required as a condition of  participation  in the Plan, any
     Employee who would be a Participant  in the Plan if such Employee made such
     a  contribution  shall be treated as an Eligible  Participant  on behalf of
     whom no Participant Contributions are made.

     Excess Aggregate  Contributions  means,  with respect to any Plan Year, the
     excess of:

     (1)  The aggregate  Contribution  Percentage  Amounts taken into account in
          computing the numerator of the Contribution  Percentage  actually made
          on behalf of Highly Compensated Employees for such Plan Year, over

     (2)  The maximum Contribution  Percentage Amounts permitted by the ACP Test
          (determined by hypothetically reducing contributions made on behalf of
          Highly   Compensated   Employees   in  order  of  their   Contribution
          Percentages beginning with the highest of such percentages).

     Such  determination  shall be made after first determining  Excess Elective
     Deferrals and then determining Excess Contributions.

     Excess Contributions means, with respect to any Plan Year, the excess of:

     (1)  The aggregate  amount of employer  contributions  actually  taken into
          account in computing  the Deferral  Percentage  of Highly  Compensated
          Employees for such Plan Year, over

     (2)  The maximum  amount of such  contributions  permitted  by the ADP Test
          (determined by hypothetically reducing contributions made on behalf of
          Highly Compensated Employees in the order of the Deferral Percentages,
          beginning with the highest of such percentages).

     Such  determination  shall be made after first determining  Excess Elective
     Deferrals.

     Excess Elective Deferrals means those Elective Deferral  Contributions that
     are includible in a Participant's gross income under Code Section 402(g) to
     the extent such Participant's Elective Deferral Contributions for a taxable
     year exceed the dollar limitation under such Code section.  Excess Elective
     Deferrals  shall  be  treated  as  Annual  Additions,  as  defined  in  the
     CONTRIBUTION

                                       38
<PAGE>

     LIMITATION SECTION of this article, under the Plan, unless such amounts are
     distributed  no later than the first  April 15  following  the close of the
     Participant's taxable year.

     Matching  Contributions  means employer  contributions  made to this or any
     other defined contribution plan, or to a contract described in Code Section
     403(b), on behalf of a participant on account of a Participant Contribution
     made  by  such  participant,  or on  account  of a  participant's  Elective
     Deferral  Contributions,  under  a plan  maintained  by the  Employer  or a
     Controlled Group member.

     Participant  Contributions  means  contributions  made to the plan by or on
     behalf of a participant that are included in the participant's gross income
     in the year in which made and that are maintained  under a separate account
     to which the earnings and losses are allocated.

     Qualified Matching  Contributions  means Matching  Contributions  which are
     subject to the distribution and  nonforfeitability  requirements under Code
     Section 401(k) when made.

     Qualified Nonelective Contributions means any employer contributions (other
     than Matching  Contributions)  which an employee may not elect to have paid
     to him in cash  instead  of being  contributed  to the plan and  which  are
     subject to the distribution and  nonforfeitability  requirements under Code
     Section 401(k) when made.

(b)  Excess Elective Deferrals. A Participant may assign to this Plan any Excess
     Elective  Deferrals  made  during  a  taxable  year of the  Participant  by
     notifying  the  Plan  Administrator  in  writing  on or  before  the  first
     following  March 1 of the amount of the  Excess  Elective  Deferrals  to be
     assigned  to  the  Plan.  A  Participant  is  deemed  to  notify  the  Plan
     Administrator  of any Excess  Elective  Deferrals that arise by taking into
     account only those Elective  Deferral  Contributions  made to this Plan and
     any  other  plan  of  the  Employer  or  a  Controlled  Group  member.  The
     Participant's  claim for Excess Elective  Deferrals shall be accompanied by
     the   Participant's   written  statement  that  if  such  amounts  are  not
     distributed,  such Excess Elective  Deferrals will exceed the limit imposed
     on the  Participant  by Code  Section  402(g)  for the  year in  which  the
     deferral  occurred.  The Excess  Elective  Deferrals  assigned to this Plan
     cannot exceed the Elective Deferral Contributions allocated under this Plan
     for such taxable year.

          Notwithstanding  any other provisions of the Plan,  Elective  Deferral
          Contributions  in an amount  equal to the  Excess  Elective  Deferrals
          assigned  to this Plan,  plus any income and minus any loss  allocable
          thereto,   shall  be  distributed  no  later  than  April  15  to  any
          Participant to whose Account Excess  Elective  Deferrals were assigned
          for the preceding  year and who claims Excess  Elective  Deferrals for
          such taxable year.

          The Excess  Elective  Deferrals  shall be adjusted for income or loss.
          The income or loss allocable to such Excess  Elective  Deferrals shall
          be equal to the income or loss allocable to the Participant's Elective
          Deferral  Contributions  for the  taxable  year in  which  the  excess
          occurred  multiplied  by a fraction.  The numerator of the fraction is
          the Excess Elective Deferrals.  The denominator of the fraction is the
          closing balance without regard to any income or loss occurring  during
          such  taxable  year  (as  of the  end of  such  taxable  year)  of the
          Participant's Account resulting from Elective Deferral Contributions.

                                       39
<PAGE>

          Any Matching  Contributions  which were based on the Elective Deferral
          Contributions which are distributed as Excess Elective Deferrals, plus
          any income and minus any loss allocable thereto, shall be forfeited.

     (c)  ADP  Test.  As of the end of each  Plan  Year  after  Excess  Elective
          Deferrals  have been  determined,  the Plan must satisfy the ADP Test.
          The ADP Test shall be satisfied  using the prior year testing  method,
          unless the  Employer  has  elected  to use the  current  year  testing
          method.

          (1)  Prior Year Testing  Method.  The ADP for a Plan Year for Eligible
               Participants who are Highly  Compensated  Employees for each Plan
               Year and the prior year's ADP for Eligible  Participants who were
               Nonhighly  Compensated  Employees  for the  prior  Plan Year must
               satisfy one of the following tests:

               (i)  The ADP for a Plan Year for  Eligible  Participants  who are
                    Highly  Compensated  Employees  for the Plan Year  shall not
                    exceed the prior  year's ADP for Eligible  Participants  who
                    were Nonhighly Compensated Employees for the prior Plan Year
                    multiplied by 1.25; or

               (ii) The ADP for a Plan Year for  Eligible  Participants  who are
                    Highly Compensated Employees for the Plan Year:

                    A.   shall not  exceed  the prior  year's  ADP for  Eligible
                         Participants who were Nonhighly  Compensated  Employees
                         for the prior Plan Year multiplied by 2, and

                    B.   the difference between such ADPs is not more than 2.

                    If this is not a successor plan, for the first Plan Year the
                    Plan  permits  any  Participant  to make  Elective  Deferral
                    Contributions,  for  purposes of the  foregoing  tests,  the
                    prior year's Nonhighly Compensated Employees' ADP shall be 3
                    percent,  unless the  Employer  has  elected to use the Plan
                    Year's ADP for these Eligible Participants.

          (2)  Current Year Testing Method. The ADP for a Plan Year for Eligible
               Participants who are Highly  Compensated  Employees for each Plan
               Year  and the ADP for  Eligible  Participants  who are  Nonhighly
               Compensated  Employees  for the Plan Year must satisfy one of the
               following tests:

               (i)  The ADP for a Plan Year for  Eligible  Participants  who are
                    Highly  Compensated  Employees  for the Plan Year  shall not
                    exceed the ADP for Eligible  Participants  who are Nonhighly
                    Compensated  Employees for the Plan Year multiplied by 1.25;
                    or

               (ii) The ADP for a Plan Year for  Eligible  Participants  who are
                    Highly Compensated Employees for the Plan Year:

                    A.   shall not exceed the ADP for Eligible  Participants who
                         are Nonhighly  Compensated  Employees for the Plan Year
                         multiplied by 2, and

                    B.   the difference between such ADP's is not more than 2.

                                       40
<PAGE>

                         If the  Employer has elected  to  use  the current year
                         testing method,  that election cannot be changed unless
                         (i) the Plan has been using the  current  year  testing
                         method  for the preceding  five Plan Years, or if less,
                         the  number  of  Plan   Years  the  Plan   has  been in
                         existence;  or (ii) the Plan otherwise meets one of the
                         conditions specified in Internal Revenue Service Notice
                         98-1 (or  superseding  guidance) for  changing from the
                         current year testing method.

                    A  Participant  is  a  Highly  Compensated  Employee  for  a
                    particular  Plan Year if he meets the definition of a Highly
                    Compensated   Employee   in  effect   for  that  Plan  Year.
                    Similarly, a Participant is a Nonhighly Compensated Employee
                    for  a  particular  Plan  Year  if  he  does  not  meet  the
                    definition  of a Highly  Compensated  Employee in effect for
                    that Plan Year.

                    The Deferral Percentage for any Eligible  Participant who is
                    a Highly  Compensated  Employee for the Plan Year and who is
                    eligible  to  have  Elective  Deferral   Contributions  (and
                    Qualified  Nonelective  Contributions or Qualified  Matching
                    Contributions,  or both,  if  treated as  Elective  Deferral
                    Contributions for purposes of the ADP Test) allocated to his
                    account  under two or more  arrangements  described  in Code
                    Section  401(k)  that are  maintained  by the  Employer or a
                    Controlled  Group  member  shall  be  determined  as if such
                    Elective Deferral  Contributions  (and, if applicable,  such
                    Qualified  Nonelective  Contributions or Qualified  Matching
                    Contributions,   or   both)   were   made   under  a  single
                    arrangement.  If a Highly Compensated Employee  participates
                    in two or  more  cash or  deferred  arrangements  that  have
                    different  plan  years,  all cash or  deferred  arrangements
                    ending  with or  within  the  same  calendar  year  shall be
                    treated   as   a   single    arrangement.    The   foregoing
                    notwithstanding,  certain plans shall be treated as separate
                    if mandatorily  disaggregated  under the regulations of Code
                    Section 401(k). If the Employer elects to apply Code Section
                    410(b)(4)(B)  to satisfy the  requirements  of Code  Section
                    410(b),  the  Employer may elect to do a single ADP Test for
                    the mandatorily disaggregated plans for Plan Years beginning
                    after  December  31, 1998 in  accordance  with Code  Section
                    401(k) and the regulations thereunder.

                    In the event this Plan  satisfies the  requirements  of Code
                    Section 401(k), 401(a)(4), or 410(b) only if aggregated with
                    one or  more  other  plans,  or if one or more  other  plans
                    satisfy  the  requirements  of such  Code  sections  only if
                    aggregated  with  this  Plan,  then  this  section  shall be
                    applied by determining the Deferral  Percentage of Employees
                    as if all such plans were a single plan. Any  adjustments to
                    the  Nonhighly  Compensated  Employee ADP for the prior year
                    shall be made in accordance  with Internal  Revenue  Service
                    Notice 98-1 (or superseding  guidance),  unless the Employer
                    has elected to use the current  year testing  method.  Plans
                    may be  aggregated  in order to satisfy Code Section  401(k)
                    only if they  have  the  same  plan  year  and use the  same
                    testing method for the ADP Test.

                    For   purposes   of  the   ADP   Test,   Elective   Deferral
                    Contributions,   Qualified  Nonelective  Contributions,  and
                    Qualified Matching Contributions must be made before the end
                    of the 12-month period  immediately  following the Plan Year
                    to which the contributions relate.

                    The  Employer   shall   maintain   records   sufficient   to
                    demonstrate  satisfaction  of the ADP Test and the amount of
                    Qualified  Nonelective  Contributions or Qualified  Matching
                    Contributions, or both, used in such test.

                                       41
<PAGE>

                    If the Plan  Administrator  should determine during the Plan
                    Year  that  the  ADP  Test  is  not  being  met,   the  Plan
                    Administrator  may  limit  the  amount  of  future  Elective
                    Deferral Contributions of the Highly Compensated Employees.

                    Notwithstanding  any other  provisions of this Plan,  Excess
                    Contributions,  plus any income and minus any loss allocable
                    thereto,  shall be distributed no later than the last day of
                    each Plan Year to Participants to whose Accounts such Excess
                    Contributions  were  allocated for the preceding  Plan Year.
                    Excess Contributions are allocated to the Highly Compensated
                    Employees with the largest amounts of employer contributions
                    taken into account in calculating  the ADP Test for the year
                    in  which  the  excess  arose,  beginning  with  the  Highly
                    Compensated   Employee  with  the  largest  amount  of  such
                    employer  contributions  and continuing in descending  order
                    until all of the Excess  Contributions  have been allocated.
                    For purposes of the preceding sentence, the "largest amount"
                    is   determined    after    distribution   of   any   Excess
                    Contributions.  If such excess amounts are distributed  more
                    than 2 1/2  months  after  the last day of the Plan  Year in
                    which such excess  amounts  arose,  a 10 percent  excise tax
                    shall be imposed on the employer  maintaining  the plan with
                    respect to such amounts.

                    Excess  Contributions  shall be treated as Annual Additions,
                    as defined in the  CONTRIBUTION  LIMITATION  SECTION of this
                    article.

                    The Excess  Contributions  shall be  adjusted  for income or
                    loss.   The  income  or  loss   allocable   to  such  Excess
                    Contributions  allocated to each Participant  shall be equal
                    to  the  income  or  loss  allocable  to  the  Participant's
                    Elective   Deferral   Contributions   (and,  if  applicable,
                    Qualified  Nonelective  Contributions or Qualified  Matching
                    Contributions,  or  both)  for the Plan  Year in  which  the
                    excess occurred  multiplied by a fraction.  The numerator of
                    the fraction is the Excess Contributions. The denominator of
                    the fraction is the closing  balance  without  regard to any
                    income or loss  occurring  during  such Plan Year (as of the
                    end  of  such  Plan  Year)  of  the  Participant's   Account
                    resulting   from  Elective   Deferral   Contributions   (and
                    Qualified  Nonelective  Contributions or Qualified  Matching
                    Contributions,  or both, if such  contributions are included
                    in the ADP Test).

                    Excess  Contributions  allocated to a  Participant  shall be
                    distributed from the  Participant's  Account  resulting from
                    Elective    Deferral    Contributions.    If   such   Excess
                    Contributions   exceed  the  balance  in  the  Participant's
                    Account resulting from Elective Deferral Contributions,  the
                    balance shall be distributed from the Participant's  Account
                    resulting  from   Qualified   Matching   Contributions   (if
                    applicable)   and   Qualified   Nonelective   Contributions,
                    respectively.

                    Any Matching  Contributions which were based on the Elective
                    Deferral  Contributions  which  are  distributed  as  Excess
                    Contributions,  plus any income and minus any loss allocable
                    thereto, shall be forfeited.

     (d)  ACP Test.  As of the end of each Plan Year,  the Plan must satisfy the
          ACP Test. The ACP Test shall be satisfied using the prior year testing
          method,  unless  the  Employer  has  elected to use the  current  year
          testing method.

          (1)  Prior Year Testing  Method.  The ACP for a Plan Year for Eligible
               Participants who are Highly  Compensated  Employees for each Plan
               Year and the prior year's ACP for Eligible
                                       42
<PAGE>

          Participants  who were Nonhighly  Compensated  Employees for the prior
          Plan Year must satisfy one of the following tests:

               (i)  The ACP for the Plan Year for Eligible  Participants who are
                    Highly  Compensated  Employees  for the Plan Year  shall not
                    exceed the prior  year's ACP for Eligible  Participants  who
                    were Nonhighly Compensated Employees for the prior Plan Year
                    multiplied by 1.25; or

               (ii) The ACP for a Plan Year for  Eligible  Participants  who are
                    Highly Compensated Employees for the Plan Year:

                    A.   shall not  exceed  the prior  year's  ACP for  Eligible
                         Participants who were Nonhighly  Compensated  Employees
                         for the prior Plan Year multiplied by 2, and

                    B.   the difference between such ACPs is not more than 2.

                    If this is not a successor plan, for the first Plan Year the
                    Plan   permits   any   Participant   to   make   Participant
                    Contributions, provides for Matching Contributions, or both,
                    for  purposes  of the  foregoing  tests,  the  prior  year's
                    Nonhighly  Compensated  Employees'  ACP shall be 3  percent,
                    unless the  Employer  has elected to use the Plan Year's ACP
                    for these Eligible Participants.

          (2)  Current Year Testing Method. The ACP for a Plan Year for Eligible
               Participants who are Highly  Compensated  Employees for each Plan
               Year  and the ACP for  Eligible  Participants  who are  Nonhighly
               Compensated  Employees  for the Plan Year must satisfy one of the
               following tests:

               (i)  The ACP for a Plan Year for  Eligible  Participants  who are
                    Highly  Compensated  Employees  for the Plan Year  shall not
                    exceed the ACP for Eligible  Participants  who are Nonhighly
                    Compensated  Employees for the Plan Year multiplied by 1.25;
                    or

               (ii) The ACP for a Plan Year for  Eligible  Participants  who are
                    Highly Compensated Employees for the Plan Year:

                    A.   shall not exceed the ACP for Eligible  Participants who
                         are Nonhighly  Compensated  Employees for the Plan Year
                         multiplied by 2, and

                    B.   the difference between such ACPs is not more than 2.

                    If the  Employer has elected to use the current year testing
                    method,  that election cannot be changed unless (i) the Plan
                    has been  using the  current  year  testing  method  for the
                    preceding  five Plan Years,  or if less,  the number of Plan
                    Years  the  Plan  has  been in  existence;  or (ii) the Plan
                    otherwise meets one of the conditions  specified in Internal
                    Revenue  Service Notice 98-1 (or  superseding  guidance) for
                    changing from the current year testing method.

          A Participant is a Highly  Compensated  Employee for a particular Plan
          Year if he meets the  definition of a Highly  Compensated  Employee in
          effect for that Plan Year. Similarly, a Participant

                                       43
<PAGE>

          is a Nonhighly  Compensated  Employee for a particular Plan Year if he
          does not meet the  definition  of a  Highly  Compensated  Employee  in
          effect for that Plan Year.

          Multiple Use. If one or more Highly Compensated  Employees participate
          in both a cash or deferred  arrangement  and a plan subject to the ACP
          Test maintained by the Employer or a Controlled Group member,  and the
          sum of the ADP and ACP of those Highly  Compensated  Employees subject
          to  either  or both  tests  exceeds  the  Aggregate  Limit,  then  the
          Contribution Percentage of those Highly Compensated Employees who also
          participate in a cash or deferred  arrangement  will be reduced in the
          manner described below for allocating  Excess Aggregate  Contributions
          so that the limit is not  exceeded.  The amount by which  each  Highly
          Compensated  Employee's  Contribution  Percentage  is reduced shall be
          treated as an Excess  Aggregate  Contribution.  The ADP and ACP of the
          Highly  Compensated  Employees are  determined  after any  corrections
          required  to meet the ADP Test and ACP Test and are  deemed  to be the
          maximum  permitted  under such tests for the Plan Year.  Multiple  use
          does not  occur if  either  the ADP or ACP of the  Highly  Compensated
          Employees  does  not  exceed  1.25  multiplied  by the  ADP  and  ACP,
          respectively, of the Nonhighly Compensated Employees.

          The  Contribution  Percentage  for any Eligible  Participant  who is a
          Highly  Compensated  Employee for the Plan Year and who is eligible to
          have  Contribution  Percentage  Amounts allocated to his account under
          two or more plans  described  in Code Section  401(a) or  arrangements
          described in Code Section  401(k) that are  maintained by the Employer
          or a Controlled  Group member shall be  determined  as if the total of
          such  Contribution  Percentage  Amounts was made under each plan. If a
          Highly  Compensated  Employee  participates  in two or  more  cash  or
          deferred  arrangements  that have  different  plan years,  all cash or
          deferred  arrangements  ending with or within the same  calendar  year
          shall   be   treated   as  a   single   arrangement.   The   foregoing
          notwithstanding,  certain  plans  shall  be  treated  as  separate  if
          mandatorily  disaggregated  under  the  regulations  of  Code  Section
          401(m).  If the Employer elects to apply Code Section  410(b)(4)(B) to
          satisfy the  requirements  of Code  Section  410(b),  the Employer may
          elect to do a single ACP Test for the mandatorily  disaggregated plans
          for Plan Years  beginning  after December 31, 1998 in accordance  with
          Code Section 401(m) and the regulations thereunder.

          In the event this Plan  satisfies  the  requirements  of Code  Section
          401(m), 401(a)(4), or 410(b) only if aggregated with one or more other
          plans, or if one or more other plans satisfy the  requirements of such
          Code  sections only if  aggregated  with this Plan,  then this section
          shall  be  applied  by  determining  the  Contribution  Percentage  of
          Employees as if all such plans were a single plan. Any  adjustments to
          the  Nonhighly  Compensated  Employee  ACP for the prior year shall be
          made in  accordance  with  Internal  Revenue  Service  Notice 98-1 (or
          superseding  guidance),  unless the  Employer  has  elected to use the
          current  year  testing  method.  Plans may be  aggregated  in order to
          satisfy Code  Section  401(m) only if they have the same plan year and
          use the same testing method for the ACP Test.

          For purposes of the ACP Test, Participant Contributions are considered
          to have been made in the Plan Year in which  contributed  to the Plan.
          Matching Contributions and Qualified Nonelective Contributions will be
          considered to have been made for a Plan Year if made no later than the
          end of the 12-month period beginning on the day after the close of the
          Plan Year.

                                       44
<PAGE>

          The  Employer  shall  maintain   records   sufficient  to  demonstrate
          satisfaction  of the ACP Test and the amount of Qualified  Nonelective
          Contributions or Qualified  Matching  Contributions,  or both, used in
          such test.

          Notwithstanding  any other  provisions of this Plan,  Excess Aggregate
          Contributions,  plus any income and minus any loss allocable  thereto,
          shall be forfeited, if not vested, or distributed, if vested, no later
          than the last day of each Plan Year to  Participants to whose Accounts
          such Excess Aggregate  Contributions  were allocated for the preceding
          Plan Year. Excess Aggregate  Contributions are allocated to the Highly
          Compensated Employees with the largest Contribution Percentage Amounts
          taken into account in  calculating  the ACP Test for the year in which
          the excess arose,  beginning with the Highly Compensated Employee with
          the  largest  amount  of  such  Contribution  Percentage  Amounts  and
          continuing  in  descending  order  until all of the  Excess  Aggregate
          Contributions  have been  allocated.  For  purposes  of the  preceding
          sentence, the "largest amount" is determined after distribution of any
          Excess Aggregate Contributions. If such Excess Aggregate Contributions
          are distributed  more than 2 1/2 months after the last day of the Plan
          Year in which such excess amounts arose, a 10 percent excise tax shall
          be imposed on the employer  maintaining  the plan with respect to such
          amounts.

          Excess Aggregate  Contributions  shall be treated as Annual Additions,
          as defined in the CONTRIBUTION LIMITATION SECTION of this article.

          The Excess  Aggregate  Contributions  shall be adjusted  for income or
          loss.  The  income  or  loss   allocable  to  such  Excess   Aggregate
          Contributions  allocated  to each  Participant  shall  be equal to the
          income or loss allocable to the Participant's  Contribution Percentage
          Amounts for the Plan Year in which the excess occurred multiplied by a
          fraction.  The  numerator  of the  fraction  is the  Excess  Aggregate
          Contributions.  The denominator of the fraction is the closing balance
          without regard to any income or loss  occurring  during such Plan Year
          (as of  the  end of  such  Plan  Year)  of the  Participant's  Account
          resulting from Contribution Percentage Amounts.

          Excess  Aggregate  Contributions  allocated to a Participant  shall be
          distributed from the Participant's  Account resulting from Participant
          Contributions  that are not required as a condition of  employment  or
          participation  or for  obtaining  additional  benefits  from  Employer
          Contributions.  If such  Excess  Aggregate  Contributions  exceed  the
          balance in the Participant's Account resulting from such Participant's
          Contributions,  the balance  shall be  forfeited,  if not  vested,  or
          distributed,  if vested,  on a pro-rata  basis from the  Participant's
          Account resulting from Contribution Percentage Amounts.

     (e)  Employer  Elections.  The Employer has not made an election to use the
          current year testing method.

                                       45
<PAGE>

                                   ARTICLE IV

                           INVESTMENT OF CONTRIBUTIONS

SECTION 4.01--INVESTMENT AND TIMING OF CONTRIBUTIONS.

     The handling of  Contributions  is governed by the  provisions of the Trust
Agreement,  the Annuity Contract, and any other funding arrangement in which the
Plan Fund is or may be held or  invested.  To the extent  permitted by the Trust
Agreement,  Annuity Contract,  or other funding  arrangement,  the parties named
below shall direct the Contributions to the guaranteed benefit policy portion of
the Annuity Contract,  any of the investment options available under the Annuity
Contract,  or any of the investment vehicles available under the Trust Agreement
and may  request  the  transfer of amounts  resulting  from those  Contributions
between  such  investment  options and  investment  vehicles or the  transfer of
amounts  between the guaranteed  benefit policy portion of the Annuity  Contract
and such  investment  options and  investment  vehicles.  A Participant  may not
direct  the  Trustee  or  Insurer  to  invest  the   Participant's   Account  in
collectibles.  Collectibles mean any work of art, rug or antique,  metal or gem,
stamp or coin, alcoholic beverage, or other tangible personal property specified
by the  Secretary  of the  Treasury.  However,  for tax  years  beginning  after
December  31,  1997,  certain  coins and  bullion as  provided  in Code  Section
408(m)(3) shall not be considered collectibles. To the extent that a Participant
who has  investment  direction  fails  to give  timely  direction,  the  Primary
Employer shall direct the investment of his Account. If the Primary Employer has
investment  direction,  such Account shall be invested ratably in the guaranteed
benefit policy portion of the Annuity Contract, the investment options available
under the Annuity Contract, or the investment vehicles available under the Trust
Agreement  in the same manner as the Accounts of all other  Participants  who do
not direct  their  investments.  The  Primary  Employer  shall  have  investment
direction  for amounts  which have not been  allocated to  Participants.  To the
extent an investment is no longer  available,  the Primary  Employer may require
that  amounts   currently  held  in  such  investment  be  reinvested  in  other
investments.

     At least annually,  the Named Fiduciary shall review all pertinent Employee
information  and Plan data in order to establish the funding  policy of the Plan
and to determine appropriate methods of carrying out the Plan's objectives.  The
Named  Fiduciary  shall  inform the  Trustee and any  Investment  Manager of the
Plan's short-term and long-term  financial needs so the investment policy can be
coordinated with the Plan's financial requirements.

     (a)  Employer Contributions other than Elective Deferral Contributions: The
          Participant shall direct the investment of such Employer Contributions
          and transfer of amounts resulting from those Contributions.

     (b)  Elective  Deferral  Contributions:  The  Participant  shall direct the
          investment of Elective Deferral  Contributions and transfer of amounts
          resulting from those Contributions.

     (c)  Participant Contributions: The Participant shall direct the investment
          of Participant  Contributions  and transfer of amounts  resulting from
          those Contributions.

     (d)  Rollover Contributions: The Participant shall direct the investment of
          Rollover  Contributions  and transfer of amounts  resulting from those
          Contributions.

                                       46
<PAGE>

     However,  the  Named  Fiduciary  may  delegate  to the  Investment  Manager
investment  discretion  for  Contributions  and amounts which are not subject to
Participant direction.

     The  Employer  shall pay to the  Insurer  or  Trustee  as  applicable,  the
Elective Deferral Contributions for each Plan Year not later than the end of the
12-month period immediately following the Plan Year for which they are deemed to
be paid.

     All  Contributions  are  forwarded  by the  Employer  to the  Trustee to be
deposited in the Trust Fund or to the Insurer to be deposited  under the Annuity
Contract,  as applicable.  Contributions  that are  accumulated  through payroll
deduction shall be paid to the Trustee,  Insurer, as applicable,  by the earlier
of (i) the  date  the  Contributions  can  reasonably  be  segregated  from  the
Employer's  assets,  or (ii) the 15th  business day of the month  following  the
month in which the  Contributions  would otherwise have been paid in cash to the
Participant.

SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.

     All or  some  portion  of the  Participant's  Account  may be  invested  in
Qualifying  Employer  Securities.  Once an investment in the Qualifying Employer
Securities  Fund is made  available  to  Participants,  it shall  continue to be
available unless the Plan is amended to disallow such available  investment.  In
the  absence  of an  election  to  invest  in  Qualifying  Employer  Securities,
Participants  shall be deemed to have  elected to have their  Accounts  invested
wholly in other  investment  options of the Investment Fund. Once an election is
made, it shall be considered to continue until a new election is made.

     For  purposes of  determining  the annual  valuation  of the Plan,  and for
reporting to  Participants  and regulatory  authorities,  the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to the
last day of the  Plan  Year.  The  fair  market  value  of  Qualifying  Employer
Securities  shall be determined on such Valuation Date. The prices of Qualifying
Employer  Securities as of the date of the transaction  shall apply for purposes
of valuing  distributions and other  transactions of the Plan to the extent such
value is  representative  of the fair  market  value of such  securities  in the
opinion of the Plan Administrator.  The value of a Participant's Account held in
the Qualifying Employer Securities Fund may be expressed in units.

     If the Qualifying  Employer  Securities are not publicly  traded,  or if an
extremely thin market exists for such  securities so that  reasonable  valuation
may not be obtained from the market place,  then such  securities must be valued
at least  annually by an independent  appraiser who is not  associated  with the
Employer,  the Plan  Administrator,  the Trustee,  or any person  related to any
fiduciary  under the Plan. The  independent  appraiser may be associated  with a
person who is merely a contract  administrator with respect to the Plan, but who
exercises no discretionary authority and is not a plan fiduciary.

     If there is a public market for Qualifying  Employer Securities of the type
held by the  Plan,  then  the  Plan  Administrator  may use as the  value of the
securities  the price at which  such  securities  trade in such  market.  If the
Qualifying  Employer  Securities  do not trade on the relevant  date,  or if the
market is very thin on such date,  then the Plan  Administrator  may use for the
valuation  the next  preceding  trading  day on which  the  trading  prices  are
representative of the fair market value of such securities in the opinion of the
Plan Administrator.

     Cash  dividends  payable on the  Qualifying  Employer  Securities  shall be
reinvested in additional shares of such securities.  In the event of any cash or
stock  dividend or any stock split,  such dividend or split shall be credited to
the Accounts  based on the number of shares of  Qualifying  Employer  Securities
credited to each Account as of the payable date of such dividend or split.

                                       47
<PAGE>

     All purchases of Qualifying  Employer  Securities shall be made at a price,
or prices,  which, in the judgment of the Plan Administrator,  do not exceed the
fair market value of such securities.

     In the event that the Trustee acquires  Qualifying  Employer  Securities by
purchase from a "disqualified  person" as defined in Code Section  4975(e)(2) or
from a "party-in-interest"  as defined in ERISA Section 3(14), the terms of such
purchase  shall  contain  the  provision  that  in the  event  there  is a final
determination by the Internal Revenue Service, the Department of Labor, or court
of competent  jurisdiction  that the fair market value of such  securities as of
the date of purchase was less than the purchase price paid by the Trustee,  then
the seller shall pay or  transfer,  as the case may be, to the Trustee an amount
of cash or  shares  of  Qualifying  Employer  Securities  equal  in value to the
difference  between the  purchase  price and such fair market value for all such
shares. In the event that cash or shares of Qualifying  Employer  Securities are
paid or transferred to the Trustee under this provision,  such securities  shall
be  valued  at their  fair  market  value as of the date of such  purchase,  and
interest at a  reasonable  rate from the date of purchase to the date of payment
or transfer shall be paid by the seller on the amount of cash paid.

     The Plan Administrator may direct the Trustee to sell, resell, or otherwise
dispose of Qualifying Employer Securities to any person, including the Employer,
provided that any such sales to any  disqualified  person or  party-in-interest,
including the Employer,  will be made at not less than the fair market value and
no commission will be charged.  Any such sale shall be made in conformance  with
ERISA Section 408(e).

     The Employer is responsible for compliance  with any applicable  Federal or
state  securities law with respect to all aspects of the Plan. If the Qualifying
Employer  Securities  or interest in this Plan are required to be  registered in
order  to  permit  investment  in the  Qualifying  Employer  Securities  Fund as
provided in this section,  then such  investment will not be effective until the
later  of the  effective  date of the  Plan or the  date  such  registration  or
qualification is effective. The Employer, at its own expense, will take or cause
to be taken any and all such  actions  as may be  necessary  or  appropriate  to
effect such registration or qualification.  Further,  if the Trustee is directed
to  dispose  of any  Qualifying  Employer  Securities  held under the Plan under
circumstances  which require  registration  or  qualification  of the securities
under  applicable  Federal or state  securities laws, then the Employer will, at
its own  expense,  take or cause to be taken  any and all such  action as may be
necessary or  appropriate  to effect such  registration  or  qualification.  The
Employer is responsible for all compliance  requirements under Section 16 of the
Securities Act.

                                       48
<PAGE>

                                    ARTICLE V

                                    BENEFITS

SECTION 5.01--RETIREMENT BENEFITS.

     On a Participant's Retirement Date, his Vested Account shall be distributed
to him according to the  distribution  of benefits  provisions of Article VI and
the provisions of the SMALL AMOUNTS SECTION of Article X.

SECTION 5.02--DEATH BENEFITS.

     If a Participant  dies before his Annuity Starting Date, his Vested Account
shall be distributed  according to the  distribution  of benefits  provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article X.

SECTION 5.03--VESTED BENEFITS.

     If an Inactive  Participant's Vested Account is not payable under the SMALL
AMOUNTS  SECTION of Article X, he may elect,  but is not required,  to receive a
distribution  of his  Vested  Account  after he  ceases to be an  Employee.  The
Participant's  election shall be subject to his spouse's  consent as provided in
the  ELECTION  PROCEDURES  SECTION  of  Article  VI. A  distribution  under this
paragraph  shall  be a  retirement  benefit  and  shall  be  distributed  to the
Participant according to the distribution of benefits provisions of Article VI.

     A Participant may not elect to receive a distribution  under the provisions
of this section after he again becomes an Employee until he subsequently  ceases
to be an Employee and meets the requirements of this section.

     If an Inactive Participant does not receive an earlier  distribution,  upon
his Retirement Date or death, his Vested Account shall be distributed  according
to the  provisions  of the  RETIREMENT  BENEFITS  SECTION or the DEATH  BENEFITS
SECTION of Article V.

     The Nonvested  Account of an Inactive  Participant  who has ceased to be an
Employee  shall  remain a part of his  Account  until it  becomes a  Forfeiture.
However,  if he again  becomes an Employee so that his  Vesting  Percentage  can
increase, the Nonvested Account may become a part of his Vested Account.

SECTION 5.04--WHEN BENEFITS START.

     (a)  Unless  otherwise  elected,  benefits  shall begin before the 60th day
          following  the close of the Plan Year in which the  latest  date below
          occurs:

          (1)  The date the  Participant  attains  age 65 (or Normal  Retirement
               Age, if earlier).

          (2)  The 10th anniversary of the Participant's Entry Date.

                                       49
<PAGE>

          (3)  The date the Participant ceases to be an Employee.

               Notwithstanding  the foregoing,  the failure of a Participant and
               spouse  to  consent  to  a   distribution   while  a  benefit  is
               immediately  distributable,  within the  meaning of the  ELECTION
               PROCEDURES  SECTION  of  Article  VI,  shall be  deemed  to be an
               election  to defer the start of  benefits  sufficient  to satisfy
               this section.

               The  Participant  may elect to have his benefits  begin after the
               latest date for beginning  benefits  described above,  subject to
               the following  provisions of this section.  The Participant shall
               make the election in writing.  Such  election must be made before
               his  Normal  Retirement  Date  or the  date  he  ceases  to be an
               Employee,  if  later.  The  election  must  describe  the form of
               distribution  and the date benefits will begin.  The  Participant
               shall  not  elect  a date  for  beginning  benefits  or a form of
               distribution  that would result in a benefit payable when he dies
               which  would  be more  than  incidental  within  the  meaning  of
               governmental regulations.

               Benefits shall begin on an earlier date if otherwise  provided in
               the Plan.  For  example,  the  Participant's  Retirement  Date or
               Required Beginning Date, as defined in the DEFINITIONS SECTION of
               Article VII.

     (b)  The Participant's  Vested Account which results from Elective Deferral
          Contributions  may  not  be  distributed  to a  Participant  or to his
          Beneficiary (or Beneficiaries) in accordance with the Participant's or
          Beneficiary's (or  Beneficiaries')  election,  earlier than separation
          from  service,   death,  or  disability.   Such  amount  may  also  be
          distributed upon:

          (1)  Termination of the Plan, as permitted in Article VIII.

          (2)  The   disposition   by  the  Employer,   if  the  Employer  is  a
               corporation,  to an unrelated corporation of substantially all of
               the assets, within the meaning of Code Section 409(d)(2), used in
               a trade or business of the Employer if the Employer  continues to
               maintain the Plan after the disposition, but only with respect to
               Employees who continue employment with the corporation  acquiring
               such assets.

          (3)  The   disposition   by  the  Employer,   if  the  Employer  is  a
               corporation, to an unrelated entity of the Employer's interest in
               a subsidiary,  within the meaning of Code Section  409(d)(3),  if
               the  Employer  continues  to  maintain  the  Plan,  but only with
               respect  to   Employees   who  continue   employment   with  such
               subsidiary.

          (4)  The hardship of the  Participant  as permitted in the  WITHDRAWAL
               BENEFITS SECTION of this article.

          All  distributions  that  may be made  pursuant  to one or more of the
          foregoing  distributable events will be a retirement benefit and shall
          be distributed to the  Participant  according to the  distribution  of
          benefit provisions of Article VI. In addition,  distributions that are
          triggered by (1), (2) and (3) above must be made in a lump sum. A lump
          sum shall include a distribution of an annuity contract.

                                       50
<PAGE>

SECTION 5.05--WITHDRAWAL BENEFITS.

     A Participant  may withdraw any part of his Vested  Account  resulting from
Voluntary Contributions.

A Participant may make such a withdrawal at any time.

     A  Participant  may withdraw any part of his Vested  Account  which results
from the following Contributions

         Elective Deferral Contributions
         Matching Contributions
         Discretionary Contributions
         Rollover Contributions

in the  event  of  hardship  due  to an  immediate  and  heavy  financial  need.
Withdrawals  from the  Participant's  Account  resulting from Elective  Deferral
Contributions  shall be  limited  to the  amount of the  Participant's  Elective
Deferral  Contributions.  The portion of the  Participant's  Account held in the
Qualifying Employer Securities Fund may be redeemed for purposes of a withdrawal
only  after the  amount  held in other  investment  options  has been  depleted.
Immediate and heavy financial need shall be limited to: (i) expenses incurred or
necessary  for  medical  care,   described  in  Code  Section  213(d),   of  the
Participant,  the Participant's spouse, or any dependents of the Participant (as
defined in Code Section 152); (ii) purchase  (excluding  mortgage payments) of a
principal  residence  for the  Participant;  (iii)  payment of tuition,  related
educational  fees,  and room and  board  expenses,  for the  next 12  months  of
post-secondary   education  for  the  Participant,   his  spouse,  children,  or
dependents;  (iv) the need to prevent the eviction of the  Participant  from his
principal  residence  or  foreclosure  on  the  mortgage  of  the  Participant's
principal  residence;  or (v) any  other  distribution  which is  deemed  by the
Commissioner  of Internal  Revenue to be made on account of immediate  and heavy
financial need as provided in Treasury regulations.

     No  withdrawal  shall be allowed  which is not  necessary  to satisfy  such
immediate and heavy financial need.  Such withdrawal  shall be deemed  necessary
only if all of the following  requirements  are met: (i) the distribution is not
in excess of the amount of the immediate  and heavy  financial  need  (including
amounts necessary to pay any Federal,  state, or local income taxes or penalties
reasonably  anticipated to result from the  distribution);  (ii) the Participant
has obtained  all  distributions,  other than  hardship  distributions,  and all
nontaxable loans currently available under all plans maintained by the Employer;
(iii) the Plan, and all other plans maintained by the Employer, provide that the
Participant's  elective  contributions  and  participant  contributions  will be
suspended for at least 12 months after receipt of the hardship distribution; and
(iv) the Plan, and all other plans maintained by the Employer,  provide that the
Participant may not make elective  contributions for the  Participant's  taxable
year  immediately  following  the taxable year of the hardship  distribution  in
excess of the  applicable  limit under Code Section 402(g) for such next taxable
year  less the  amount  of such  Participant's  elective  contributions  for the
taxable  year of the  hardship  distribution.  The Plan  will  suspend  elective
contributions  and  participant  contributions  for 12 months and limit elective
deferrals as provided in the preceding  sentence.  A Participant shall not cease
to be an  Eligible  Participant,  as defined in the  EXCESS  AMOUNTS  SECTION of
Article  III,   merely  because  his  elective   contributions   or  participant
contributions are suspended.

     A request for  withdrawal  shall be made in such  manner and in  accordance
with such rules as the Employer will  prescribe  for this purpose  (including by
means of voice  response  or other  electronic  means  under  circumstances  the
Employer  permits).  Withdrawals  shall be a  retirement  benefit  and  shall be
distributed  to the

                                       51
<PAGE>
Participant  according to the distribution of benefits provisions of Article VI.
A forfeiture shall not occur solely as a result of a withdrawal.

SECTION 5.06--LOANS TO PARTICIPANTS.

     Loans  shall  be  made  available  to  all  Participants  on  a  reasonably
equivalent basis. For purposes of this section,  and unless otherwise specified,
Participant means any Participant or Beneficiary who is a  party-in-interest  as
defined in ERISA. Loans shall not be made to Highly Compensated  Employees in an
amount greater than the amount made available to other Participants.

     No loans will be made to any  shareholder-employee  or Owner-employee.  For
purposes  of this  requirement,  a  shareholder-employee  means an  employee  or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section  318(a)(1)),  on any day
during  the  taxable  year of  such  corporation,  more  than 5  percent  of the
outstanding stock of the corporation.

     A loan to a Participant shall be a  Participant-directed  investment of his
Account.  The  portion  of the  Participant's  Account  held  in the  Qualifying
Employer  Securities  Fund may be redeemed for purposes of a loan only after the
amount held in other investment  options has been depleted.  The loan is a Trust
Fund  investment but no Account other than the borrowing  Participant's  Account
shall  share  in the  interest  paid on the  loan or bear  any  expense  or loss
incurred because of the loan.

     The number of  outstanding  loans shall be limited to one. No more than one
loan shall be approved for any Participant in any 12-month  period.  The minimum
amount of any loan shall be $1,000.

     Loans must be adequately secured and bear a reasonable rate of interest.

     The  amount of the loan shall not exceed  the  maximum  amount  that may be
treated as a loan under Code Section 72(p) (rather than a  distribution)  to the
Participant and shall be equal to the lesser of (a) or (b) below:

     (a)  $50,000,  reduced by the  highest  outstanding  loan  balance of loans
          during the  one-year  period  ending on the day before the new loan is
          made.

     (b)  The greater of (1) or (2), reduced by (3) below:

          (1)  One-half of the Participant's Vested Account.

          (2)  $10,000.

          (3)  Any outstanding loan balance on the date the new loan is made.

For purposes of this maximum,  a  Participant's  Vested Account does not include
any accumulated  deductible employee  contributions,  as defined in Code Section
72(o)(5)(B),  and all  qualified  employer  plans,  as defined  in Code  Section
72(p)(4),  of the Employer and any  Controlled  Group member shall be treated as
one plan.

     The foregoing notwithstanding,  the amount of such loan shall not exceed 50
percent of the amount of the Participant's  Vested Account. For purposes of this
maximum,  a  Participant's  Vested  Account  does not  include  any  accumulated
deductible employee contributions, as defined in Code Section 72(o)(5)(B).

                                       52
<PAGE>

     No collateral other than a portion of the Participant's  Vested Account (as
limited above) shall be accepted.  The Loan Administrator shall determine if the
collateral is adequate for the amount of the loan requested.

     A Participant must obtain the consent of his spouse,  if any, to the use of
the Vested Account as security for the loan.  Spousal  consent shall be obtained
no earlier  than the  beginning  of the 90-day  period  that ends on the date on
which the loan to be so secured is made.  The consent  must be in writing,  must
acknowledge   the  effect  of  the  loan,  and  must  be  witnessed  by  a  plan
representative or a notary public. Such consent shall thereafter be binding with
respect to the consenting  spouse or any subsequent  spouse with respect to that
loan.  A new  consent  shall  be  required  if the  Vested  Account  is used for
collateral  upon  renegotiation,  extension,  renewal,  or other revision of the
loan.  No  consent  shall  be  required  if  subparagraph  (d) of  the  ELECTION
PROCEDURES SECTION of Article VI applies.

     If a valid spousal  consent has been obtained in accordance with the above,
or spousal consent is not required, then, notwithstanding any other provision of
this Plan,  the portion of the  Participant's  Vested Account used as a security
interest  held by the Plan by reason of a loan  outstanding  to the  Participant
shall be taken into account for purposes of determining the amount of the Vested
Account  payable  at the  time of the  death  or  distribution,  but only if the
reduction is used as repayment of the loan.  If spousal  consent is required and
less than 100 percent of the Participant's  Vested Account  (determined  without
regard to the preceding  sentence) is payable to the surviving spouse,  then the
Vested  Account  shall be adjusted by first  reducing the Vested  Account by the
amount of the security used as repayment of the loan, and then  determining  the
benefit payable to the surviving spouse.

     Each loan shall bear a reasonable  fixed rate of interest to be  determined
by  the  Loan  Administrator.   In  determining  the  interest  rate,  the  Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial  lenders for loans of comparable risk on similar terms and
for  similar  durations,  so  that  the  interest  will  provide  for  a  return
commensurate with rates currently  charged by commercial  lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate among
Participants  in the matter of interest  rates;  but loans  granted at different
times  may  bear  different  interest  rates  in  accordance  with  the  current
appropriate standards.

     The loan shall by its terms require that repayment (principal and interest)
be amortized in level  payments,  not less  frequently  than  quarterly,  over a
period not extending  beyond five years from the date of the loan. The period of
repayment for any loan shall be arrived at by mutual agreement  between the Loan
Administrator and the Participant.

     The Participant  shall make an application for a loan in such manner and in
accordance  with such rules as the  Employer  shall  prescribe  for this purpose
(including  by  means  of  voice  response  or  other   electronic  means  under
circumstances the Employer permits). The application must specify the amount and
duration requested.

     Information  contained  in the  application  for the  loan  concerning  the
income,  liabilities,  and  assets  of the  Participant  will  be  evaluated  to
determine whether there is a reasonable expectation that the Participant will be
able  to  satisfy  payments  on  the  loan  as  due.   Additionally,   the  Loan
Administrator will pursue any appropriate further investigations  concerning the
creditworthiness  and credit history of the  Participant to determine  whether a
loan should be approved.

     Each loan shall be fully documented in the form of a promissory note signed
by the  Participant  for the face  amount of the loan,  together  with  interest
determined as specified above.

                                       53
<PAGE>

     There will be an  assignment of collateral to the Plan executed at the time
the loan is made.

     In those cases where  repayment  through  payroll  deduction is  available,
installments are so payable, and a payroll deduction agreement shall be executed
by the  Participant  at the  time the loan is  made.  Loan  repayments  that are
accumulated  through  payroll  deduction  shall  be paid to the  Trustee  by the
earlier of (i) the date the loan  repayments can  reasonably be segregated  from
the Employer's  assets, or (ii) the 15th business day of the month following the
month in which  such  amounts  would  otherwise  have  been  paid in cash to the
Participant.

     Where payroll deduction is not available, payments in cash are to be timely
made. Any payment that is not by payroll  deduction shall be made payable to the
Employer or the Trustee,  as specified in the promissory  note, and delivered to
the Loan Administrator,  including prepayments,  service fees and penalties,  if
any, and other amounts due under the note. The Loan Administrator  shall deposit
such amounts into the Plan as soon as  administratively  practicable  after they
are  received,  but in no event  later than the 15th  business  day of the month
after they are received.

     The promissory note may provide for reasonable  late payment  penalties and
service fees. Any penalties or service fees shall be applied to all Participants
in a nondiscriminatory  manner. If the promissory note so provides, such amounts
may be assessed and collected from the Account of the Participant as part of the
loan balance.

     Each  loan may be paid  prior  to  maturity,  in part or in  full,  without
penalty or service fee, except as may be set out in the promissory note.

     The Plan shall  suspend loan  payments for a period not  exceeding one year
during which an approved  unpaid  leave of absence  occurs other than a military
leave of absence. The Loan Administrator shall provide the Participant a written
explanation of the effect of the suspension of payments upon his loan.

     If a Participant  separates from service (or takes a leave of absence) from
the  Employer  because  of  service  in the  military  and  does not  receive  a
distribution of his Vested  Account,  the Plan shall suspend loan payments until
the  Participant's  completion  of military  service or until the  Participant's
fifth anniversary of commencement of military service,  if earlier, as permitted
under Code Section 414(u). The Loan Administrator  shall provide the Participant
a written explanation of the effect of his military service upon his loan.

     If any payment of principal and interest,  or any portion thereof,  remains
unpaid  for more than 90 days  after  due,  the loan  shall be in  default.  For
purposes of Code Section 72(p), the Participant  shall then be treated as having
received a deemed  distribution  regardless  of  whether or not a  distributable
event has occurred.

     Upon default,  the Plan has the right to pursue any remedy available by law
to satisfy the amount due, along with accrued  interest,  including the right to
enforce its claim against the security  pledged and execute upon the  collateral
as allowed by law. The entire  principal  balance  whether or not otherwise then
due,  along with  accrued  interest,  shall become  immediately  due and payable
without  demand or notice,  and subject to  collection  or  satisfaction  by any
lawful means, including  specifically,  but not limited to, the right to enforce
the claim  against the security  pledged and to execute upon the  collateral  as
allowed by law.

     In the event of default, foreclosure on the note and attachment of security
or use of amounts pledged to satisfy the amount then due shall not occur until a
distributable event occurs in accordance with the Plan, and

                                       54
<PAGE>

shall not occur to an extent  greater  than the amount then  available  upon any
distributable event which has occurred under the Plan.

     All reasonable costs and expenses,  including but not limited to attorney's
fees,  incurred by the Plan in connection  with any default or in any proceeding
to  enforce  any  provision  of a  promissory  note  or  instrument  by  which a
promissory  note  for a  Participant  loan is  secured,  shall be  assessed  and
collected from the Account of the Participant as part of the loan balance.

     If payroll  deduction is being utilized,  in the event that a Participant's
available  payroll  deduction  amounts in any given  month are  insufficient  to
satisfy  the total  amount due,  there will be an  increase in the amount  taken
subsequently,  sufficient  to make up the amount that is then due. If any amount
remains past due more than 90 days, the entire principal amount,  whether or not
otherwise  then due,  along with interest then accrued and any other amount then
due under the promissory note, shall become due and payable, as above.

     If no distributable  event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the  outstanding  loan, this will not occur until the time,
or in excess of the extent to which,  a  distributable  event  occurs  under the
Plan.  An  outstanding  loan will become due and payable in full 60 days after a
Participant ceases to be an Employee and a party-in-interest as defined in ERISA
or after complete termination of the Plan.

SECTION 5.07--DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS.

     The Plan specifically  permits  distributions to an Alternate Payee under a
qualified  domestic  relations order as defined in Code Section  414(p),  at any
time,  irrespective  of  whether  the  Participant  has  attained  his  earliest
retirement  age,  as  defined  in  Code  Section  414(p),   under  the  Plan.  A
distribution  to an  Alternate  Payee  before the  Participant  has attained his
earliest   retirement  age  is  available  only  if  the  order  specifies  that
distribution  shall be made prior to the earliest  retirement  age or allows the
Alternate Payee to elect a distribution prior to the earliest retirement age.

     Nothing  in  this  section  shall  permit  a   Participant   to  receive  a
distribution  at a time  otherwise  not  permitted  under  the Plan nor shall it
permit the Alternate  Payee to receive a form of payment not permitted under the
Plan.

     The  benefit  payable  to an  Alternate  Payee  shall  be  subject  to  the
provisions of the SMALL AMOUNTS SECTION of Article X if the value of the benefit
does not exceed $5,000 ($3,500 for Plan Years beginning before August 6, 1997).

     The Plan Administrator shall establish  reasonable  procedures to determine
the qualified status of a domestic  relations  order.  Upon receiving a domestic
relations  order, the Plan  Administrator  shall promptly notify the Participant
and the Alternate  Payee named in the order,  in writing,  of the receipt of the
order and the Plan's  procedures  for  determining  the qualified  status of the
order. Within a reasonable period of time after receiving the domestic relations
order, the Plan Administrator  shall determine the qualified status of the order
and shall notify the  Participant and each Alternate  Payee, in writing,  of its
determination.  The Plan Administrator shall provide notice under this paragraph
by mailing to the  individual's  address  specified  in the  domestic  relations
order, or in a manner consistent with Department of Labor regulations.  The Plan
Administrator  may treat as qualified any domestic  relations order entered into
before  January  1,  1985,   irrespective   of  whether  it  satisfies  all  the
requirements described in Code Section 414(p).

                                       55
<PAGE>

     If any portion of the  Participant's  Vested  Account is payable during the
period the Plan  Administrator  is making  its  determination  of the  qualified
status of the domestic  relations order, a separate  accounting shall be made of
the  amount  payable.  If the  Plan  Administrator  determines  the  order  is a
qualified  domestic  relations  order  within 18 months of the date  amounts are
first  payable  following  receipt of the order,  the payable  amounts  shall be
distributed in accordance  with the order.  If the Plan  Administrator  does not
make its  determination of the qualified status of the order within the 18-month
determination period, the payable amounts shall be distributed in the manner the
Plan  would  distribute  if the order did not  exist and the order  shall  apply
prospectively  if  the  Plan  Administrator  later  determines  the  order  is a
qualified domestic relations order.

     The Plan shall make payments or  distributions  required under this section
by separate  benefit  checks or other  separate  distribution  to the  Alternate
Payee(s).

                                       56
<PAGE>

                                   ARTICLE VI

                            DISTRIBUTION OF BENEFITS

SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.

     Unless an  optional  form of benefit is  selected  pursuant  to a qualified
election within the election period (see the ELECTION PROCEDURES SECTION of this
article), the automatic form of benefit payable to or on behalf of a Participant
is determined as follows:

     (a)  Retirement  Benefits.  The automatic form of retirement  benefit for a
          Participant  who does not die before his Annuity  Starting  Date shall
          be:

          (1)  The Qualified  Joint and Survivor  Annuity for a Participant  who
               has a spouse.

          (2)  The Normal Form for a Participant who does not have a spouse.

     (b)  Death Benefits.  The automatic form of death benefit for a Participant
          who dies before his Annuity Starting Date shall be:

          (1)  A Qualified  Preretirement Survivor Annuity for a Participant who
               has a spouse to whom he has been continuously  married throughout
               the one-year  period ending on the date of his death.  The spouse
               may elect to start  receiving  the death benefit on any first day
               of the month on or after the Participant dies and by the date the
               Participant would have been age 70 1/2. If the spouse dies before
               benefits start, the Participant's  Vested Account,  determined as
               of the date of the spouse's death,  shall be paid to the spouse's
               Beneficiary.

          (2)  A  single-sum  payment  to the  Participant's  Beneficiary  for a
               Participant  who  does not have a  spouse  who is  entitled  to a
               Qualified Preretirement Survivor Annuity.

          Before  a death  benefit  will be paid on  account  of the  death of a
          Participant  who does not have a spouse who is entitled to a Qualified
          Preretirement   Survivor  Annuity,  it  must  be  established  to  the
          satisfaction of a plan  representative  that the Participant  does not
          have such a spouse.

SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION.

     (a)  Retirement Benefits. The optional forms of retirement benefit shall be
          the following: (i) a straight life annuity; (ii) single life annuities
          with certain periods of 5, 10 or 15 years; (iii) a single life annuity
          with  installment   refund;  (iv)  survivorship  life  annuities  with
          installment  refund and  survivorship  percentages  of 50%, 66 2/3% or
          100%; (v) fixed period  annuities for any period of whole months which
          is not less  than 60 and  does not  exceed  the  Life  Expectancy,  as
          defined in Article VII, of the  Participant  where the Life Expectancy
          is not recalculated;  and (vi) a full flexibility option. A single sum
          payment is also  available.  That portion of a  Participant's  Account
          which  is held  in the  Qualifying  Employer  Securities  Fund  may be
          distributed in kind.

          The full flexibility option is an optional form of benefit under which
          the Participant  receives a distribution each calendar year, beginning
          with the calendar year in which his Annuity Starting

                                       57
<PAGE>

          Date occurs.  The  Participant  may elect the amount to be distributed
          each year (not less than  $1,000).  The  amount  payable  in his first
          Distribution  Calendar  Year,  as defined in Article VII, must satisfy
          the minimum  distribution  requirements  of Article VII for such year.
          Distributions  for later  Distribution  Calendar  Years, as defined in
          Article VII,  must satisfy the minimum  distribution  requirements  of
          Article VII for such years. If the Participant's Annuity Starting Date
          does not occur until his second Distribution Calendar Year, as defined
          in Article  VII,  the amount  payable  for such year must  satisfy the
          minimum  distribution  requirements  of Article VII for both the first
          and second Distribution Calendar Years, as defined in Article VII.

          If the Plan is amended to  eliminate  or restrict an optional  form of
          distribution and the Plan provides a single sum distribution form that
          is otherwise identical to the optional form of distribution eliminated
          or restricted,  the amendment shall not apply to any distribution with
          an Annuity Starting Date earlier than the first day of the second Plan
          Year following the Plan Year in which the amendment is adopted.

          Election  of an  optional  form is subject to the  qualified  election
          provisions of the ELECTION  PROCEDURES SECTION of this article and the
          distribution requirements of Article VII.

          Any annuity contract  distributed shall be nontransferable.  The terms
          of any annuity  contract  purchased and  distributed  by the Plan to a
          Participant or spouse shall comply with the requirements of this Plan.

     (b)  Death  Benefits.  The optional forms of death benefit are a single-sum
          payment  and any  annuity  that  is an  optional  form  of  retirement
          benefit.  However,  the full flexibility option shall not be available
          if the Beneficiary is not the spouse of the deceased Participant.

          Election  of an  optional  form is subject to the  qualified  election
          provisions of the ELECTION  PROCEDURES SECTION of this article and the
          distribution requirements of Article VII.

SECTION 6.03--ELECTION PROCEDURES.

     The Participant,  Beneficiary, or spouse shall make any election under this
section in writing.  The Plan  Administrator  may  require  such  individual  to
complete and sign any necessary  documents as to the  provisions to be made. Any
election  permitted  under (a) and (b) below  shall be subject to the  qualified
election provisions of (c) below.

     (a)  Retirement  Benefits.  A  Participant  may  elect his  Beneficiary  or
          Contingent  Annuitant  and  may  elect  to  have  retirement  benefits
          distributed  under any of the  optional  forms of  retirement  benefit
          available  in the  OPTIONAL  FORMS  OF  DISTRIBUTION  SECTION  of this
          article.

     (b)  Death Benefits.  A Participant may elect his Beneficiary and may elect
          to have death benefits  distributed under any of the optional forms of
          death benefit available in the OPTIONAL FORMS OF DISTRIBUTION  SECTION
          of this article.

          If the  Participant  has not elected an optional form of  distribution
          for the death benefit payable to his Beneficiary, the Beneficiary may,
          for his own benefit, elect the form of distribution, in like manner as
          a Participant.

                                       58
<PAGE>

          The Participant may waive the Qualified Preretirement Survivor Annuity
          by naming someone other than his spouse as Beneficiary.

          In lieu of the Qualified  Preretirement  Survivor Annuity described in
          the  AUTOMATIC  FORMS OF  DISTRIBUTION  SECTION of this  article,  the
          spouse may, for his own  benefit,  waive the  Qualified  Preretirement
          Survivor Annuity by electing to have the benefit distributed under any
          of the optional forms of death benefit available in the OPTIONAL FORMS
          OF DISTRIBUTION SECTION of this article.

     (c)  Qualified Election. The Participant, Beneficiary or spouse may make an
          election  at any time during the  election  period.  The  Participant,
          Beneficiary,  or spouse may revoke  the  election  made (or make a new
          election)  at any time and any  number of times  during  the  election
          period.  An  election  is  effective  only  if it  meets  the  consent
          requirements below.

          (1)  Election Period for Retirement  Benefits.  The election period as
               to retirement benefits is the 90-day period ending on the Annuity
               Starting  Date.  An  election  to waive the  Qualified  Joint and
               Survivor  Annuity may not be made before the date the Participant
               is provided with the notice of the ability to waive the Qualified
               Joint and  Survivor  Annuity.  If the  Participant  elects a full
               flexibility option, he may revoke his election at any time before
               his first Distribution  Calendar Year, as defined in Article VII.
               When he elects to have benefits begin again,  he shall have a new
               Annuity  Starting Date. His election  period for this election is
               the 90-day  period  ending on the Annuity  Starting  Date for the
               optional form of retirement benefit elected.

          (2)  Election  Period for Death  Benefits.  A Participant  may make an
               election as to death  benefits  at any time  before he dies.  The
               spouse's  election period begins on the date the Participant dies
               and ends on the date benefits begin. The  Beneficiary's  election
               period  begins on the date the  Participant  dies and ends on the
               date benefits begin.

               An election to waive the Qualified Preretirement Survivor Annuity
               may not be made by the Participant before the date he is provided
               with  the  notice  of  the   ability   to  waive  the   Qualified
               Preretirement Survivor Annuity. A Participant's election to waive
               the Qualified Preretirement Survivor Annuity which is made before
               the first day of the Plan Year in which he  reaches  age 35 shall
               become  invalid on such date.  An election  made by a Participant
               after he ceases to be an Employee will not become  invalid on the
               first  day of the  Plan  Year in  which  he  reaches  age 35 with
               respect to death benefits from that part of his Account resulting
               from Contributions made before he ceased to be an Employee.

          (3)  Consent to Election.  If the Participant's Vested Account exceeds
               $5,000 ($3,500 for Plan Years  beginning  before August 6, 1997),
               any  benefit  which  is (i)  immediately  distributable  or  (ii)
               payable  in a form  other  than a  Qualified  Joint and  Survivor
               Annuity or a Qualified  Preretirement Survivor Annuity,  requires
               the consent of the Participant and the  Participant's  spouse (or
               where  either  the  Participant  or  the  spouse  has  died,  the
               survivor).   Such   consent   shall  also  be   required  if  the
               Participant's   Vested   Account   at  the  time  of  any   prior
               distribution  exceeded  $5,000  ($3,500 for Plan Years  beginning
               before August 6, 1997). The rule in the preceding  sentence shall
               not apply effective October 17, 2000. However, consent will still
               be  required if the  Participant  had  previously  had an Annuity
               Starting Date with respect to any portion of such Vested Account.

                                       59
<PAGE>

               The consent of the  Participant  or spouse to a benefit  which is
               immediately  distributable  must not be made  before the date the
               Participant  or spouse is provided with the notice of the ability
               to defer the distribution. Such consent shall be made in writing.

               The  consent  shall  not be made  more  than 90 days  before  the
               Annuity  Starting  Date.  Spousal  consent is not  required for a
               benefit which is immediately  distributable  in a Qualified Joint
               and  Survivor  Annuity.  Furthermore,  if spousal  consent is not
               required  because the Participant is electing an optional form of
               retirement  benefit  that is not a life  annuity  pursuant to (d)
               below, only the Participant need consent to the distribution of a
               benefit payable in a form that is not a life annuity and which is
               immediately distributable. Neither the consent of the Participant
               nor the Participant's spouse shall be required to the extent that
               a distribution  is required to satisfy Code Section  401(a)(9) or
               Code Section 415.

               In addition,  upon termination of this Plan, if the Plan does not
               offer an annuity option  (purchased from a commercial  provider),
               and if the  Employer  (or any entity  within the same  Controlled
               Group) does not maintain another defined contribution plan (other
               than an employee stock  ownership plan as defined in Code Section
               4975(e)(7)),  the Participant's Account balance will, without the
               Participant's   consent,   be  distributed  to  the  Participant.
               However, if any entity within the same Controlled Group maintains
               another defined  contribution  plan (other than an employee stock
               ownership  plan as defined in Code Section  4975(e)(7))  then the
               Participant's   Account   will  be   transferred,   without   the
               Participant's  consent, to the other plan if the Participant does
               not consent to an immediate distribution.

               A benefit is immediately distributable if any part of the benefit
               could be distributed  to the  Participant  (or surviving  spouse)
               before the  Participant  attains  (or would have  attained if not
               deceased) the older of Normal Retirement Age or age 62.

               If the Qualified Joint and Survivor Annuity is waived, the spouse
               has the right to limit consent only to a specific  Beneficiary or
               a specific form of benefit. The spouse can relinquish one or both
               such rights.  Such consent shall be made in writing.  The consent
               shall not be made more than 90 days before the  Annuity  Starting
               Date. If the Qualified  Preretirement Survivor Annuity is waived,
               the  spouse  has the right to limit  consent  only to a  specific
               Beneficiary.  Such  consent  shall be in  writing.  The  spouse's
               consent  shall be  witnessed by a plan  representative  or notary
               public.  The spouse's  consent must acknowledge the effect of the
               election,  including  that  the  spouse  had the  right  to limit
               consent  only to a specific  Beneficiary  or a  specific  form of
               benefit,  if applicable,  and that the  relinquishment  of one or
               both such rights was voluntary.  Unless the consent of the spouse
               expressly  permits  designations  by the  Participant  without  a
               requirement  of  further  consent  by the  spouse,  the  spouse's
               consent  must be limited to the form of benefit,  if  applicable,
               and the Beneficiary (including any Contingent  Annuitant),  class
               of  Beneficiaries,   or  contingent   Beneficiary  named  in  the
               election.

               Spousal  consent is not  required,  however,  if the  Participant
               establishes to the satisfaction of the plan  representative  that
               the consent of the spouse cannot be obtained  because there is no
               spouse or the spouse cannot be located.  A spouse's consent under
               this  paragraph  shall  not be valid  with  respect  to any other
               spouse.  A Participant  may revoke a prior  election  without the
               consent  of the  spouse.  Any new  election  will  require  a new
               spousal  consent,  unless the  consent  of the  spouse  expressly
               permits such election by the Participant  without further consent
               by the  spouse.  A  spouse's  consent  may be revoked at any time
               within the Participant's election period.
                                       60
<page>
     (d)  Special Rule for Profit Sharing Plans.  This  subparagraph (d) applies
          if the Plan is not a direct or indirect  transferee after December 31,
          1984, of a defined  benefit plan,  money  purchase plan target benefit
          plan, stock bonus plan, or profit sharing plan which is subject to the
          survivor annuity  requirements of Code Sections 401(a)(11) and 417. If
          the above  condition  is met,  spousal  consent  is not  required  for
          electing an optional  form of  retirement  benefit  that is not a life
          annuity. If such condition is not met, such consent requirements shall
          be operative.

SECTION 6.04--NOTICE REQUIREMENTS.

     (a)  Optional  Forms of  Retirement  Benefit  and Right to Defer.  The Plan
          Administrator  shall furnish to the Participant and the  Participant's
          spouse a  written  explanation  of the  optional  forms of  retirement
          benefit in the OPTIONAL FORMS OF DISTRIBUTION SECTION of this article,
          including the material  features and relative values of these options,
          in a manner that would satisfy the notice requirements of Code Section
          417(a)(3)  and the  right  of the  Participant  and the  Participant's
          spouse  to  defer   distribution   until  the  benefit  is  no  longer
          immediately distributable.

          The Plan  Administrator  shall  furnish the written  explanation  by a
          method reasonably calculated to reach the attention of the Participant
          and the Participant's spouse no less than 30 days, and no more than 90
          days, before the Annuity Starting Date.

          The  Participant  (and  spouse,  if  applicable)  may waive the 30-day
          election period if the  distribution of the elected form of retirement
          benefit begins more than 7 days after the Plan Administrator  provides
          the Participant  (and spouse,  if applicable) the written  explanation
          provided that: (i) the Participant has been provided with  information
          that clearly  indicates that the  Participant  has at least 30 days to
          consider the decision of whether or not to elect a distribution  and a
          particular  distribution  option, (ii) the Participant is permitted to
          revoke  any  affirmative  distribution  election  at least  until  the
          Annuity  Starting  Date  or,  if  later,  at  any  time  prior  to the
          expiration  of  the  7-day  period  that  begins  the  day  after  the
          explanation  is  provided  to the  Participant,  and (iii) the Annuity
          Starting  Date is a date after the date that the  written  explanation
          was provided to the Participant.

     (b)  Qualified Joint and Survivor  Annuity.  The Plan  Administrator  shall
          furnish to the Participant a written explanation of the following: the
          terms and conditions of the Qualified Joint and Survivor Annuity;  the
          Participant's  right to make,  and the effect of, an election to waive
          the  Qualified  Joint  and  Survivor   Annuity;   the  rights  of  the
          Participant's  spouse;  and the right to revoke  an  election  and the
          effect of such a revocation.

          The Plan  Administrator  shall  furnish the written  explanation  by a
          method reasonably calculated to reach the attention of the Participant
          no less than 30 days,  and no more than 90 days,  before  the  Annuity
          Starting Date.

          The  Participant  (and  spouse,  if  applicable)  may waive the 30-day
          election period if the  distribution of the elected form of retirement
          benefit begins more than 7 days after the Plan Administrator  provides
          the Participant  (and spouse,  if applicable) the written  explanation
          provided that: (i) the Participant has been provided with  information
          that clearly  indicates that the  Participant  has at least 30 days to
          consider whether to waive the Qualified Joint and Survivor Annuity and
          elect

                                       61
<PAGE>

          (with spousal  consent,  if applicable) a form of  distribution  other
          than a Qualified Joint and Survivor  Annuity,  (ii) the Participant is
          permitted  to revoke any  affirmative  distribution  election at least
          until the Annuity Starting Date or, if later, at any time prior to the
          expiration  of  the  7-day  period  that  begins  the  day  after  the
          explanation of the Qualified Joint and Survivor Annuity is provided to
          the  Participant,  and (iii) the Annuity Starting Date is a date after
          the date that the written explanation was provided to the Participant.

          After the written  explanation  is given,  a Participant or spouse may
          make  a  written  request  for  additional  information.  The  written
          explanation must be personally  delivered or mailed (first class mail,
          postage  prepaid) to the Participant or spouse within 30 days from the
          date of the written request.  The Plan  Administrator does not need to
          comply with more than one such request by a Participant or spouse.

          The Plan Administrator's  explanation shall be written in nontechnical
          language and will explain the terms and  conditions  of the  Qualified
          Joint  and  Survivor   Annuity  and  the  financial  effect  upon  the
          Participant's  benefit (in terms of dollars  per  benefit  payment) of
          electing  not to have  benefits  distributed  in  accordance  with the
          Qualified Joint and Survivor Annuity.

     (c)  Qualified Preretirement Survivor Annuity. The Plan Administrator shall
          furnish to the Participant a written explanation of the following: the
          terms and conditions of the Qualified  Preretirement Survivor Annuity;
          the  Participant's  right to make,  and the effect of, an  election to
          waive the Qualified  Preretirement Survivor Annuity; the rights of the
          Participant's  spouse;  and the right to revoke  an  election  and the
          effect of such a revocation.

          The Plan  Administrator  shall  furnish the written  explanation  by a
          method reasonably calculated to reach the attention of the Participant
          within the applicable  period. The applicable period for a Participant
          is whichever of the following periods ends last:

          (1)  the period  beginning  one year  before  the date the  individual
               becomes a Participant and ending one year after such date; or

          (2)  the period  beginning one year before the date the  Participant's
               spouse is first  entitled to a Qualified  Preretirement  Survivor
               Annuity and ending one year after such date.

          If such notice is given before the period beginning with the first day
          of the Plan Year in which the  Participant  attains  age 32 and ending
          with the close of the Plan Year  preceding  the Plan Year in which the
          Participant attains age 35, an additional notice shall be given within
          such  period.  If a  Participant  ceases  to  be  an  Employee  before
          attaining  age 35, an  additional  notice  shall be given  within  the
          period  beginning one year before the date he ceases to be an Employee
          and ending one year after such date.

          After the written  explanation  is given,  a Participant or spouse may
          make  a  written  request  for  additional  information.  The  written
          explanation must be personally  delivered or mailed (first class mail,
          postage  prepaid) to the Participant or spouse within 30 days from the
          date of the written request.  The Plan  Administrator does not need to
          comply with more than one such request by a Participant or spouse.

                                       62
<PAGE>

          The Plan Administrator's  explanation shall be written in nontechnical
          language and will explain the terms and  conditions  of the  Qualified
          Preretirement  Survivor  Annuity  and the  financial  effect  upon the
          spouse's benefit (in terms of dollars per benefit payment) of electing
          not to have  benefits  distributed  in  accordance  with the Qualified
          Preretirement Survivor Annuity.

                                       63
<PAGE>

                                   ARTICLE VII

                            DISTRIBUTION REQUIREMENTS

SECTION 7.01--APPLICATION.

     The optional forms of  distribution  are only those provided in Article VI.
An optional  form of  distribution  shall not be  permitted  unless it meets the
requirements  of this  article.  The  timing of any  distribution  must meet the
requirements of this article.

SECTION 7.02--DEFINITIONS.

     For purposes of this article, the following terms are defined:

     Applicable  Life  Expectancy  means  Life  Expectancy  (or  Joint  and Last
     Survivor  Expectancy)  calculated using the attained age of the Participant
     (or  Designated   Beneficiary)  as  of  the  Participant's  (or  Designated
     Beneficiary's)  birthday in the applicable calendar year reduced by one for
     each  calendar year which has elapsed  since the date Life  Expectancy  was
     first calculated. If Life Expectancy is being recalculated,  the Applicable
     Life  Expectancy  shall  be  the  Life  Expectancy  so  recalculated.   The
     applicable calendar year shall be the first Distribution Calendar Year, and
     if Life Expectancy is being recalculated, such succeeding calendar year.

     Designated  Beneficiary  means  the  individual  who is  designated  as the
     beneficiary  under the Plan in accordance  with Code Section  401(a)(9) and
     the regulations thereunder.

     Distribution  Calendar  Year  means a  calendar  year for  which a  minimum
     distribution  is  required.   For   distributions   beginning   before  the
     Participant's  death, the first Distribution  Calendar Year is the calendar
     year   immediately   preceding  the  calendar   year  which   contains  the
     Participant's  Required  Beginning Date. For distributions  beginning after
     the  Participant's  death,  the  first  Distribution  Calendar  Year is the
     calendar year in which  distributions are required to begin pursuant to (e)
     of the DISTRIBUTION REQUIREMENTS SECTION of this article.

     5-percent  Owner means a 5-percent  owner as defined in Code Section 416. A
     Participant is treated as a 5-percent Owner for purposes of this article if
     such  Participant  is a  5-percent  Owner at any time  during the Plan Year
     ending with or within the calendar  year in which such owner attains age 70
     1/2.

     In addition,  a Participant is treated as a 5-percent Owner for purposes of
     this article if such Participant  becomes a 5-percent Owner in a later Plan
     Year. Such  Participant's  Required  Beginning Date shall not be later than
     the April 1 of the calendar year  following the calendar year in which such
     later Plan Year ends.

     Once distributions have begun to a 5-percent Owner under this article, they
     must continue to be  distributed,  even if the  Participant  ceases to be a
     5-percent Owner in a subsequent year.

     Joint and Last Survivor Expectancy means joint and last survivor expectancy
     computed using the expected return  multiples in Table VI of section 1.72-9
     of the Income Tax Regulations.
                                       64
<page>

     Unless otherwise  elected by the Participant by the time  distributions are
     required to begin, life expectancies shall be recalculated  annually.  Such
     election shall be irrevocable as to the  Participant and shall apply to all
     subsequent years. The life expectancy of a nonspouse Beneficiary may not be
     recalculated.

     Life Expectancy  means life  expectancy  computed using the expected return
     multiples in Table V of section 1.72-9 of the Income Tax Regulations.

     Unless  otherwise  elected by the  Participant  (or spouse,  in the case of
     distributions  described in  (e)(2)(ii)  of the  DISTRIBUTION  REQUIREMENTS
     SECTION of this article) by the time  distributions  are required to begin,
     life  expectancy  shall be  recalculated  annually.  Such election shall be
     irrevocable  as to the  Participant  (or  spouse)  and  shall  apply to all
     subsequent years. The life expectancy of a nonspouse Beneficiary may not be
     recalculated.

     Participant's Benefit means:

     (a)  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  or
          forfeitures  allocated  to the Account  balance as of the dates in the
          valuation  calendar  year after the  Valuation  Date and  decreased by
          distributions  made in the valuation calendar year after the Valuation
          Date.

     (b)  Exception for Second  Distribution  Calendar Year. For purposes of (a)
          above,  if any  portion  of the  minimum  distribution  for the  first
          Distribution Calendar Year is made in the second Distribution Calendar
          Year on or before  the  Required  Beginning  Date,  the  amount of the
          minimum  distribution  made in the second  Distribution  Calendar Year
          shall be treated as if it had been made in the  immediately  preceding
          Distribution Calendar Year.

     Required  Beginning Date means, for a Participant who is a 5-percent Owner,
     the April 1 of the calendar  year  following  the calendar year in which he
     attains age 70 1/2.

     Required  Beginning Date means,  for any Participant who is not a 5-percent
     Owner, the April 1 of the calendar year following the later of the calendar
     year in  which  he  attains  age 70 1/2 or the  calendar  year in  which he
     retires.

     The  preretirement  age 70 1/2 distribution  option is only eliminated with
     respect to  Participants  who reach age 70 1/2 in or after a calendar  year
     that begins after the later of December 31, 1998,  or the adoption  date of
     the amendment which eliminated such option.  The  preretirement  age 70 1/2
     distribution is an optional form of benefit under which benefits payable in
     a particular  distribution  form (including any  modifications  that may be
     elected after benefits begin) begin at a time during the period that begins
     on or after January 1 of the calendar year in which the Participant attains
     age 70 1/2 and ends April 1 of the immediately following calendar year.

     The options  available for  Participants  who are not 5-percent  Owners and
     attained age 70 1/2 in calendar  years before the calendar year that begins
     after the later of December 31, 1998, or the adoption date of the amendment
     which eliminated the  preretirement  age 70 1/2  distribution  shall be the
     following.  Any such  Participant  attaining age 70 1/2 in years after 1995
     may elect by April 1 of the calendar  year  following  the calendar year in
     which he attained age 70 1/2 (or by December 31,

                                       65
<PAGE>

     1997 in the case of a  Participant  attaining  age 70 1/2 in 1996) to defer
     distributions  until the calendar year following the calendar year in which
     he retires.  Any such  Participant  attaining  age 70 1/2 in years prior to
     1997 may elect to stop distributions  which are not purchased annuities and
     recommence by the April 1 of the calendar year  following the year in which
     he retires. There shall be a new Annuity Starting Date upon recommencement.

SECTION 7.03--DISTRIBUTION REQUIREMENTS.

     (a)  General Rules.

          (1)  Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article
               VI, joint and survivor annuity requirements,  the requirements of
               this article shall apply to any  distribution  of a Participant's
               interest  and  shall  take  precedence   over  any   inconsistent
               provisions  of  this  Plan.  Unless  otherwise   specified,   the
               provisions  of this  article  apply to calendar  years  beginning
               after December 31, 1984.

          (2)  All distributions required under this article shall be determined
               and made in accordance with the proposed  regulations  under Code
               Section 401(a)(9),  including the minimum distribution incidental
               benefit  requirement  of section  1.401(a)(9)-2  of the  proposed
               regulations.

          (3)  With  respect  to  distributions  under the Plan made on or after
               June 14, 2001, for calendar  years  beginning on or after January
               1,   2001,   the  Plan  will  apply  the   minimum   distribution
               requirements  of Code Section  401(a)(9) in  accordance  with the
               regulations  under Code Section  401(a)(9)  that were proposed on
               January 17, 2001 (the 2001 Proposed Regulations), notwithstanding
               any provision of the Plan to the contrary. If the total amount of
               required  minimum  distributions  made to a Participant  for 2001
               prior to June 14,  2001,  are equal to or greater than the amount
               of  required  minimum  distributions  determined  under  the 2001
               Proposed  Regulations,   then  no  additional  distributions  are
               required for such  Participant for 2001 on or after such date. If
               the total  amount of  required  minimum  distributions  made to a
               Participant  for 2001 prior to June 14,  2001,  are less than the
               amount determined under the 2001 Proposed  Regulations,  then the
               amount of  required  minimum  distributions  for 2001 on or after
               such date will be determined so that the total amount of required
               minimum distributions for 2001 is the amount determined under the
               2001 Proposed  Regulations.  These  provisions  shall continue in
               effect  until  the  last  calendar  year  beginning   before  the
               effective date of final  regulations under Code Section 401(a)(9)
               or such other date as may be published  by the  Internal  Revenue
               Service.

     (b)  Required  Beginning Date. The entire interest of a Participant must be
          distributed or begin to be distributed no later than the Participant's
          Required Beginning Date.

     (c)  Limits on Distribution  Periods. As of the first Distribution Calendar
          Year,  distributions,  if not made in a single  sum,  may only be made
          over one of the following periods (or combination thereof):

          (1)  the life of the Participant,

          (2)  the life of the Participant and a Designated Beneficiary,

                                       66
<PAGE>

          (3)  a period certain not extending  beyond the Life Expectancy of the
               Participant, or

          (4)  a period certain not extending beyond the Joint and Last Survivor
               Expectancy of the Participant and a Designated Beneficiary.

     (d)  Determination   of  Amount  to  be  Distributed   Each  Year.  If  the
          Participant's  interest  is to be  distributed  in other than a single
          sum, the following minimum  distribution rules shall apply on or after
          the Required Beginning Date:

          (1)  Individual Account.

               (i)  If a Participant's Benefit is to be distributed over

                    A.   a period not  extending  beyond the Life  Expectancy of
                         the  Participant  or the Joint  Life and Last  Survivor
                         Expectancy  of the  Participant  and the  Participant's
                         Designated Beneficiary, or

                    B.   a period not  extending  beyond the Life  Expectancy of
                         the Designated  Beneficiary,

                    the amount required to be distributed for each calendar year
                    beginning with the distributions for the first  Distribution
                    Calendar  Year,  must  be at  least  equal  to the  quotient
                    obtained  by  dividing  the  Participant's  Benefit  by  the
                    Applicable Life Expectancy.

               (ii) For calendar years beginning  before January 1, 1989, if the
                    Participant's spouse is not the Designated Beneficiary,  the
                    method of distribution selected must assure that at least 50
                    percent of the  present  value of the amount  available  for
                    distribution  is paid  within  the  Life  Expectancy  of the
                    Participant.

               (iii)For calendar  years  beginning  after December 31, 1988, the
                    amount  to  be   distributed   each  year,   beginning  with
                    distributions for the first Distribution Calendar Year shall
                    not be less  than the  quotient  obtained  by  dividing  the
                    Participant's Benefit by the lesser of:

                    A.   the Applicable Life Expectancy, or

                    B.   if  the  Participant's  spouse  is not  the  Designated
                         Beneficiary, the applicable divisor determined from the
                         table set forth in Q&A-4 of  section  1.401(a)(9)-2  of
                         the proposed regulations.

                    Distributions  after the death of the  Participant  shall be
                    distributed  using the Applicable  Life Expectancy in (1)(i)
                    above as the  relevant  divisor  without  regard to  section
                    1.401(a)(9)-2 of the proposed regulations.

               (iv) The  minimum  distribution  required  for the  Participant's
                    first  Distribution  Calendar Year must be made on or before
                    the  Participant's  Required  Beginning  Date.  The  minimum
                    distribution for other calendar years, including the minimum
                    distribution for

                                       67
<PAGE>

                    the  Distribution  Calendar Year in which the  Participant's
                    Required  Beginning  Date occurs,  must be made on or before
                    December 31 of that Distribution Calendar Year.

          (2)  Other Forms. If the  Participant's  Benefit is distributed in the
               form  of  an  annuity   purchased  from  an  insurance   company,
               distributions  thereunder  shall be made in  accordance  with the
               requirements   of  Code  Section   401(a)(9)   and  the  proposed
               regulations thereunder.

     (e)  Death Distribution Provisions.

          (1)  Distribution  Beginning  Before Death.  If the  Participant  dies
               after  distribution  of his  interest  has begun,  the  remaining
               portion of such interest will continue to be distributed at least
               as rapidly as under the method of  distribution  being used prior
               to the Participant's death.

          (2)  Distribution Beginning After Death.

               (i)  If the Participant dies before  distribution of his interest
                    begins,  distribution of the  Participant's  entire interest
                    shall be  completed  by  December  31 of the  calendar  year
                    containing the fifth anniversary of the Participant's  death
                    except to the  extent  that an  election  is made to receive
                    distributions in accordance with A or B below:

                    A.   if any portion of the Participant's interest is payable
                         to a Designated Beneficiary,  distributions may be made
                         over the life or over a period certain not greater than
                         the  Life  Expectancy  of  the  Designated  Beneficiary
                         beginning on or before December 31 of the calendar year
                         immediately  following  the calendar  year in which the
                         Participant died;

                    B.   if the  Designated  Beneficiary  is  the  Participant's
                         surviving spouse,  the date  distributions are required
                         to  begin  in  accordance  with A  above  shall  not be
                         earlier than the later of:

                    1.   December 31 of the calendar year immediately  following
                         the calendar year in which the Participant died, or

                    2.   December  31  of  the   calendar   year  in  which  the
                         Participant would have attained age 70 1/2.

               (ii) If the Participant has not made an election pursuant to this
                    (e)(2)  by  the  time  of  his  death,   the   Participant's
                    Designated Beneficiary must elect the method of distribution
                    no later than the earlier of:

                    A.   December 31 of the calendar year in which distributions
                         would be required to begin under this subparagraph, or

                    B.   December 31 of the  calendar  year which  contains  the
                         fifth   anniversary   of  the  date  of  death  of  the
                         Participant.

               (iii)If the Participant has no Designated Beneficiary,  or if the
                    Designated   Beneficiary   does  not   elect  a  method   of
                    distribution,   distribution  of  the  Participant's  entire
                    interest  must be  completed  by December 31 of the calendar
                    year containing the fifth  anniversary of the  Participant's
                    death.
                                       68
<PAGE>

          (3)  For purposes of (e)(2) above, if the surviving  spouse dies after
               the  Participant,  but before payments to such spouse begin,  the
               provisions  of (e)(2) above,  with the exception of  (e)(2)(i)(B)
               therein,  shall be applied as if the  surviving  spouse  were the
               Participant.

          (4)  For  purposes  of  this  (e),  distribution  of  a  Participant's
               interest is  considered  to begin on the  Participant's  Required
               Beginning  Date  (or if  (e)(3)  above  is  applicable,  the date
               distribution  is  required  to  begin  to  the  surviving  spouse
               pursuant  to (e)(2)  above).  If  distribution  in the form of an
               annuity irrevocably begins to the Participant before the Required
               Beginning  Date, the date  distribution is considered to begin is
               the date distribution actually begins.

                                       69
<PAGE>

                                  ARTICLE VIII

                             TERMINATION OF THE PLAN

     The  Employer  expects to continue the Plan  indefinitely  but reserves the
right to terminate the Plan in whole or in part at any time upon giving  written
notice  to all  parties  concerned.  Complete  discontinuance  of  Contributions
constitutes complete termination of the Plan.

     The  Account  of  each  Participant   shall  be  fully  (100%)  vested  and
nonforfeitable as of the effective date of complete termination of the Plan. The
Account of each Participant who is included in the group of Participants  deemed
to be  affected  by the partial  termination  of the Plan shall be fully  (100%)
vested and nonforfeitable as of the effective date of the partial termination of
the Plan.  The  Participant's  Account  shall  continue  to  participate  in the
earnings credited, expenses charged, and any appreciation or depreciation of the
Investment Fund until his Vested Account is distributed.

     A Participant's Account which does not result from the Contributions listed
below may be  distributed  to the  Participant  after the effective  date of the
complete termination of the Plan:

     Elective Deferral Contributions

     A  Participant's   Account   resulting  from  such   Contributions  may  be
distributed  upon  complete  termination  of the Plan,  but only if neither  the
Employer  nor any  Controlled  Group  member  maintain or  establish a successor
defined  contribution  plan  (other  than an employer  stock  ownership  plan as
defined in Code  Section  4975(e)(7),  a  simplified  employee  pension  plan as
defined in Code  Section  408(k) or a SIMPLE IRA plan as defined in Code Section
408(p)) and such  distribution is made in a lump sum. A distribution  under this
article  shall  be  a  retirement  benefit  and  shall  be  distributed  to  the
Participant according to the provisions of Article VI.

     The  Participant's  entire Vested  Account shall be paid in a single sum to
the Participant as of the effective date of complete  termination of the Plan if
(i) the requirements for distribution of Elective Deferral  Contributions in the
above  paragraph are met and (ii) consent of the  Participant is not required in
the ELECTION  PROCEDURES  SECTION of Article VI to distribute a benefit which is
immediately  distributable.  This is a small amounts payment.  The small amounts
payment is in full settlement of all benefits otherwise payable.

     Upon  complete  termination  of the Plan,  no more  Employees  shall become
Participants and no more Contributions shall be made.

     The  assets of this Plan  shall  not be paid to the  Employer  at any time,
except that,  after the  satisfaction  of all  liabilities  under the Plan,  any
assets remaining may be paid to the Employer.  The payment may not be made if it
would contravene any provision of law.

                                       70
<page>
                                   ARTICLE IX

                           ADMINISTRATION OF THE PLAN

SECTION 9.01--ADMINISTRATION.

     Subject to the  provisions  of this  article,  the Plan  Administrator  has
complete control of the  administration of the Plan. The Plan  Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has complete  discretion  to construe or interpret  the  provisions of the Plan,
including ambiguous provisions,  if any, and to determine all questions that may
arise under the Plan,  including all questions  relating to the  eligibility  of
Employees  to  participate  in the Plan and the  amount of  benefit to which any
Participant,  Beneficiary,  spouse or Contingent  Annuitant may become entitled.
The Plan  Administrator's  decisions  upon all  matters  within the scope of its
authority shall be final.

     Unless  otherwise  set  out in the  Plan  or  Annuity  Contract,  the  Plan
Administrator  may delegate  recordkeeping  and other duties which are necessary
for the  administration of the Plan to any person or firm which agrees to accept
such duties. The Plan  Administrator  shall be entitled to rely upon all tables,
valuations,  certificates  and reports  furnished by the  consultant  or actuary
appointed by the Plan  Administrator  and upon all opinions given by any counsel
selected or approved by the Plan Administrator.

     The  Plan   Administrator   shall   receive  all  claims  for  benefits  by
Participants,  former  Participants,   Beneficiaries,  spouses,  and  Contingent
Annuitants.  The Plan  Administrator  shall  determine  all facts  necessary  to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures  to be  followed  by  Claimants  in filing  claims for  benefits,  in
furnishing  and verifying  proofs  necessary to determine  age, and in any other
matters required to administer the Plan.

SECTION 9.02--EXPENSES.

     Expenses  of the Plan,  to the extent that the  Employer  does not pay such
expenses,  may be paid out of the assets of the Plan  provided that such payment
is  consistent  with  ERISA.  Such  expenses  include,  but are not  limited to,
expenses for bonding  required by ERISA;  expenses for  recordkeeping  and other
administrative  services;  fees and expenses of the Trustee or Annuity Contract;
expenses for investment  education  service;  and direct costs that the Employer
incurs with respect to the Plan.

SECTION 9.03--RECORDS.

     All  acts  and  determinations  of the  Plan  Administrator  shall  be duly
recorded.  All these records,  together with other  documents  necessary for the
administration  of the  Plan,  shall be  preserved  in the Plan  Administrator's
custody.

     Writing  (handwriting,  typing,  printing),  photostating,   photographing,
microfilming,  magnetic impulse,  mechanical or electrical  recording,  or other
forms of data compilation shall be acceptable means of keeping records.

                                       71

<PAGE>

SECTION 9.04--INFORMATION AVAILABLE.

     Any  Participant in the Plan or any  Beneficiary  may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Annuity Contract or any other instrument under which the Plan was established or
is operated.  The Plan  Administrator  shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with  governmental  regulations.  These items may be examined
during  reasonable  business hours. Upon the written request of a Participant or
Beneficiary  receiving  benefits  under the Plan, the Plan  Administrator  shall
furnish him with a copy of any of these items. The Plan Administrator may make a
reasonable charge to the requesting person for the copy.

SECTION 9.05--CLAIM AND APPEAL PROCEDURES.

     A Claimant must submit any required  forms and pertinent  information  when
making a claim for benefits under the Plan.

     If a claim for benefits  under the Plan is denied,  the Plan  Administrator
shall provide  adequate  written notice to the Claimant whose claim for benefits
under the Plan has been denied.  The notice must be furnished  within 90 days of
the date that the claim is  received  by the Plan  Administrator.  The  Claimant
shall be  notified  in writing  within  this  initial  90-day  period if special
circumstances  require an  extension of time needed to process the claim and the
date by which the Plan Administrator's  decision is expected to be rendered. The
written  notice  shall be  furnished  no later  than 180 days after the date the
claim was received by the Plan Administrator.

     The Plan  Administrator's  notice to the Claimant  shall specify the reason
for the denial;  specify references to pertinent Plan provisions on which denial
is based;  describe  any  additional  material  and  information  needed for the
Claimant  to  perfect  his claim for  benefits;  explain  why the  material  and
information  is needed;  inform the  Claimant  that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of the
Plan  Administrator's  notice of denial of benefits and that failure to make the
written  appeal  within such  60-day  period  renders  the Plan  Administrator's
determination of such denial final, binding and conclusive.

     If the  Claimant  appeals to the Plan  Administrator,  the Claimant (or his
authorized  representative)  may submit in writing  whatever issues and comments
the  Claimant  (or his  authorized  representative)  feels  are  pertinent.  The
Claimant (or his authorized representative) may review pertinent Plan documents.
The Plan Administrator  shall reexamine all facts related to the appeal and make
a final  determination  as to whether the denial of benefits is justified  under
the  circumstances.  The Plan  Administrator  shall  advise the  Claimant of its
decision  within 60 days of his  written  request  for  review,  unless  special
circumstances  (such as a hearing)  would make  rendering a decision  within the
60-day limit  unfeasible.  The Claimant must be notified within the 60-day limit
if an extension is necessary.  The Plan Administrator shall render a decision on
a claim for  benefits  no later  than 120 days after the  request  for review is
received.

SECTION 9.06--DELEGATION OF AUTHORITY.

     All or any part of the  administrative  duties and  responsibilities  under
this  article  may  be  delegated  by the  Plan  Administrator  to a  retirement
committee.  The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.

                                       72
<PAGE>

SECTION 9.07--EXERCISE OF DISCRETIONARY AUTHORITY.

     The Employer,  Plan  Administrator,  and any other person or entity who has
authority with respect to the management,  administration,  or investment of the
Plan may exercise that authority in its/his full discretion, subject only to the
duties imposed under ERISA. This discretionary  authority  includes,  but is not
limited  to,  the  authority  to make  any and all  factual  determinations  and
interpret all terms and provisions of the Plan  documents  relevant to the issue
under consideration. The exercise of authority will be binding upon all persons;
will be given  deference in all courts of law; and will not be overturned or set
aside by any court of law unless found to be arbitrary and capricious or made in
bad faith.

SECTION 9.08--VOTING AND TENDER OF QUALIFYING EMPLOYER SECURITIES.

     Voting rights with respect to Qualifying Employer Securities will be passed
through  to  Participants.  Participants  will be  allowed  to direct the voting
rights of  Qualifying  Employer  Securities  for any  matter  put to the vote of
shareholders.  Before each meeting of shareholders,  the Employer shall cause to
be sent to each  person with power to control  such voting  rights a copy of any
notice and any other information provided to shareholders and, if applicable,  a
form for instructing the Trustee how to vote at such meeting (or any adjournment
thereof)  the number of full and  fractional  shares  subject  to such  person's
voting  control.  The Trustee may establish a deadline in advance of the meeting
by which such forms must be received in order to be effective.

     Each  Participant  shall be entitled to one vote for each share credited to
his Account.

     If some or all of the  Participants  have not  directed  or have not timely
directed the Trustee on how to vote, then the Trustee shall vote such Qualifying
Employer  Securities  in the same  proportion  as  those  shares  of  Qualifying
Employer Securities for which the Trustee has received proper direction for such
matter.

     Tender rights or exchange offers for Qualifying Employer Securities will be
passed through to Participants. As soon as practicable after the commencement of
a tender or exchange  offer for  Qualifying  Employer  Securities,  the Employer
shall cause each  person  with power to control  the  response to such tender or
exchange  offer to be  advised  in  writing  the  terms  of the  offer  and,  if
applicable,  to be provided  with a form for  instructing  the  Trustee,  or for
revoking such instruction,  to tender or exchange shares of Qualifying  Employer
Securities,  to the extent  permitted under the terms of such offer. In advising
such persons of the terms of the offer, the Employer may include statements from
the board of directors setting forth its position with respect to the offer.

     If some or all of the  Participants  have not  directed  or have not timely
directed  the  Trustee on how to tender,  then the  Trustee  shall  tender  such
Qualifying  Employer  Securities  in the  same  proportion  as those  shares  of
Qualifying  Employer  Securities  for  which the  Trustee  has  received  proper
direction for such matter.

     If the  tender or  exchange  offer is limited so that all of the share that
the Trustee has been directed to tender or exchange cannot be sold or exchanged,
the shares that each  Participant  directed to be tendered or exchanged shall be
deemed to have been  sold or  exchanged  in the same  ratio  that the  number of
shares  actually sold or exchanged  bears to the total number of shares that the
Trustee was directed to tender or exchange.

     The Trustee shall hold the Participant's individual directions with respect
to voting rights or tender  decisions in confidence  and,  except as required by
law,  shall  not  divulge  or  release  such  individual  directions  to  anyone

                                       73
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associated  with the  Employer.  The  Employer may require  verification  of the
Trustee's  compliance  with the  directions  received from  Participants  by any
independent auditor selected by the Employer,  provided that such auditor agrees
to maintain the confidentiality of such individual directions.

     The Employer may develop  procedures to facilitate the exercise of votes or
tender rights,  such as the use of facsimile  transmissions for the Participants
located in physically remote areas.

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                                    ARTICLE X

                               GENERAL PROVISIONS

SECTION 10.01--AMENDMENTS.

     The  Employer  may  amend  this Plan at any time,  including  any  remedial
retroactive  changes  (within the time  specified  by Internal  Revenue  Service
regulations),  to comply with any law or regulation  issued by any  governmental
agency to which the Plan is subject.

     An amendment may not diminish or adversely  affect any accrued  interest or
benefit of Participants or their  Beneficiaries nor allow reversion or diversion
of Plan assets to the Employer at any time,  except as may be required to comply
with any law or regulation  issued by any governmental  agency to which the Plan
is subject.

     No  amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's  accrued benefit.  However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph,  a Plan amendment which has the effect of decreasing
a Participant's  Account with respect to benefits attributable to service before
the amendment shall be treated as reducing an accrued benefit.  Furthermore,  if
the vesting schedule of the Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as of such date) of
such Employee's right to his employer-derived  accrued benefit shall not be less
than his percentage computed under the Plan without regard to such amendment.

     No  amendment  to the Plan shall be  effective  to eliminate or restrict an
optional form of benefit with respect to benefits attributable to service before
the amendment except as provided in the MERGERS AND DIRECT TRANSFERS  SECTION of
this article and below:

     (a)  The  Plan is  amended  to  eliminate  or  restrict  the  ability  of a
          Participant  to  receive  payment  of  his  Account  balance  under  a
          particular  optional form of benefit and the  amendment  satisfies the
          condition in (1) and the Plan satisfies the condition in (2) below:

          (1)  The  amendment  provides a single sum  distribution  form that is
               otherwise identical to the optional form of benefit eliminated or
               restricted.  For  purposes  of this  condition  (1), a single sum
               distribution form is otherwise  identical only if it is identical
               in all respects to the eliminated or restricted  optional form of
               benefit (or would be  identical  except that it provides  greater
               rights to the  Participant)  except with respect to the timing of
               payments after commencement.

          (2)  The Plan  provides  that the  amendment  shall  not  apply to any
               distribution  with an  Annuity  Starting  Date  earlier  than the
               earlier of:

               (i)  the 90th day after the date the  Participant  receiving  the
                    distribution  has been furnished a summary that reflects the
                    amendment and that  satisfies the ERISA  requirements  at 29
                    CFR   2520.104b-3   relating   to  a  summary  of   material
                    modifications, or

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<PAGE>

               (ii) the first day of the  second  Plan Year  following  the Plan
                    Year in which the amendment is adopted.

     (b)  The Plan is amended to eliminate or restrict in-kind distributions and
          the  conditions  in Q & A  2(b)(2)(iii)  in section  1.411(d)-4 of the
          regulations are met.

     If, as a result of an amendment,  an Employer  Contribution is removed that
is not 100% immediately  vested when made, the applicable vesting schedule shall
remain in effect after the date of such  amendment.  The  Participant  shall not
become  immediately  100%  vested  in  such  Contributions  as a  result  of the
elimination of such Contribution  except as otherwise  specifically  provided in
the Plan.

     An amendment  shall not  decrease a  Participant's  vested  interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a change
in  top-heavy  status of the Plan as  provided  in the  MODIFICATION  OF VESTING
REQUIREMENTS  SECTION of Article XI,  changes the  computation of the percentage
used to  determine  that  portion of a  Participant's  Account  attributable  to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant

     (c)  who has  completed  at least  three  Years of  Service on the date the
          election  period  described  below ends (five  Years of Service if the
          Participant does not have at least one  Hour-of-Service in a Plan Year
          beginning after December 31, 1988) and

     (d)  whose  nonforfeitable  percentage will be determined on any date after
          the date of the change

     may  elect,   during  the  election  period,  to  have  the  nonforfeitable
percentage  of his Account that results from Employer  Contributions  determined
without regard to the amendment.  This election may not be revoked. If after the
Plan is changed, the Participant's  nonforfeitable  percentage will at all times
be as great as it would have been if the change had not been made,  no  election
needs to be provided. The election period shall begin no later than the date the
Plan  amendment  is  adopted,  or deemed  adopted in the case of a change in the
top-heavy  status of the Plan,  and end no  earlier  than the 60th day after the
latest  of the date  the  amendment  is  adopted  (deemed  adopted)  or  becomes
effective, or the date the Participant is issued written notice of the amendment
(deemed amendment) by the Employer or the Plan Administrator.

SECTION 10.02--DIRECT ROLLOVERS.

     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.

     Any distributions  made under the SMALL AMOUNTS SECTION of this article (or
which are small amounts payments made under Article VIII at complete termination
of the  Plan)  which  are  Eligible  Rollover  Distributions  and for  which the
Distributee has not elected to either have such  distribution  paid to him or to
an Eligible Retirement Plan shall be paid to the Distributee.

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<PAGE>

SECTION 10.03--MERGERS AND DIRECT TRANSFERS.

     The Plan may not be merged or  consolidated  with,  nor have its  assets or
liabilities  transferred to, any other retirement plan,  unless each Participant
in the plan would (if the plan then  terminated)  receive a benefit  immediately
after the merger,  consolidation,  or transfer which is equal to or greater than
the  benefit the  Participant  would have been  entitled to receive  immediately
before  the  merger,   consolidation,   or  transfer  (if  this  Plan  had  then
terminated).  The Participant's interest in his Account shall also fully vest in
the event of a change in control of the Primary Employer. The Employer may enter
into  merger  agreements  or  direct  transfer  of  assets  agreements  with the
employers under other retirement plans which are qualifiable  under Code Section
401(a),  including an elective  transfer,  and may accept the direct transfer of
plan assets, or may transfer plan assets, as a party to any such agreement.  The
Employer  shall not  consent  to, or be a party to a merger,  consolidation,  or
transfer of assets with a defined  benefit plan if such action would result in a
defined benefit feature being maintained under this Plan.

     Notwithstanding  any provision of the Plan to the  contrary,  to the extent
any optional form of benefit under the Plan permits a distribution  prior to the
Employee's  retirement,  death,  disability,  or severance from employment,  and
prior to plan  termination,  the optional form of benefit is not available  with
respect to benefits attributable to assets (including the post-transfer earnings
thereon)  and  liabilities  that are  transferred,  within  the  meaning of Code
Section 414(l),  to this Plan from a money purchase pension plan qualified under
Code  Section  401(a)  (other than any portion of those  assets and  liabilities
attributable to voluntary employee contributions).

     The Plan may  accept a direct  transfer  of plan  assets  on  behalf  of an
Eligible  Employee.  If the Eligible Employee is not an Active  Participant when
the  transfer is made,  the  Eligible  Employee  shall be deemed to be an Active
Participant  only  for  the  purpose  of  investment  and  distribution  of  the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee, until the time he meets all of the requirements to become
an Active Participant.

     The Plan shall hold, administer, and distribute the transferred assets as a
part of the Plan. The Plan shall maintain a separate  account for the benefit of
the Employee on whose behalf the Plan  accepted the transfer in order to reflect
the value of the transferred assets.

     Unless  a  transfer  of  assets  to the  Plan is an  elective  transfer  as
described below, the Plan shall apply the optional forms of benefit  protections
described in the AMENDMENTS SECTION of this article to all transferred assets.

     A Participant's  protected benefits may be eliminated upon transfer between
qualified defined contribution plans if the conditions in Q&A 3(b)(1) in section
1.411(d)-4 of the  regulations  are met. The transfer must meet all of the other
applicable qualification requirements.

     A Participant's  protected benefits may be eliminated upon transfer between
qualified  plans  (both  defined  benefit  and  defined   contribution)  if  the
conditions  in Q&A 3(c)(1) in section  1.411(d)-4  of the  regulations  are met.
Beginning  January  1,  2002,  if the  Participant  is  eligible  to  receive an
immediate  distribution of his entire nonforfeitable accrued benefit in a single
sum  distribution   that  would  consist   entirely  of  an  eligible   rollover
distribution under Code Section  401(a)(31),  such transfer will be accomplished
as a direct  rollover  under Code Section  401(a)(31).  The rules  applicable to
distributions under the plan would apply to the transfer, but the transfer would
not be  treated as a  distribution  for  purposes  of the  minimum  distribution
requirements of Code Section 401(a)(9).

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<PAGE>

SECTION 10.04--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.

     The obligations of an Insurer shall be governed solely by the provisions of
the Annuity  Contract.  The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Annuity Contract.  Each Annuity
Contract when purchased shall comply with the Plan. See the CONSTRUCTION SECTION
of this article.

     Any issuer or distributor of investment contracts or securities is governed
solely by the terms of its policies, written investment contract,  prospectuses,
security  instruments,  and any other written  agreements  entered into with the
Trustee with regard to such investment contracts or securities.

     Such Insurer,  issuer or  distributor is not a party to the Plan, nor bound
in any way by the Plan provisions. Such parties shall not be required to look to
the  terms  of this  Plan,  nor to  determine  whether  the  Employer,  the Plan
Administrator,  the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.

     Until notice of any  amendment or  termination  of this Plan or a change in
Trustee  has been  received  by the  Insurer at its home  office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming  that the Plan has not been amended or  terminated  and in dealing with
any party acting as Trustee according to the latest  information which they have
received at their home office or principal address.

SECTION 10.05--EMPLOYMENT STATUS.

     Nothing  contained  in this Plan gives an Employee the right to be retained
in the Employer's  employ or to interfere with the Employer's right to discharge
any Employee.

SECTION 10.06--RIGHTS TO PLAN ASSETS.

     An  Employee  shall not have any right to or  interest in any assets of the
Plan upon termination of employment or otherwise except as specifically provided
under this Plan,  and then only to the  extent of the  benefits  payable to such
Employee according to the Plan provisions.

     Any  final  payment  or   distribution   to  a  Participant  or  his  legal
representative or to any Beneficiaries,  spouse or Contingent  Annuitant of such
Participant  under  the Plan  provisions  shall be in full  satisfaction  of all
claims  against  the Plan,  the Named  Fiduciary,  the Plan  Administrator,  the
Insurer, the Trustee, and the Employer arising under or by virtue of the Plan.

SECTION 10.07--BENEFICIARY.

     Each Participant may name a Beneficiary to receive any death benefit (other
than any income  payable to a  Contingent  Annuitant)  that may arise out of his
participation  in the Plan. The Participant may change his Beneficiary from time
to time. Unless a qualified election has been made, for purposes of distributing
any death benefits before the Participant's  Retirement Date, the Beneficiary of
a  Participant  who has a spouse who is entitled  to a  Qualified  Preretirement
Survivor  Annuity  shall  be  the   Participant's   spouse.   The  Participant's
Beneficiary  designation  and any change of Beneficiary  shall be subject to the
provisions  of  the  ELECTION  PROCEDURES  SECTION  of  Article  VI.  It is  the

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<PAGE>

responsibility  of the  Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.

     With the Employer's consent, the Plan Administrator may maintain records of
Beneficiary designations for Participants before their Retirement Dates. In that
event,  the written  designations  made by Participants  shall be filed with the
Plan  Administrator.  If a Participant dies before his Retirement Date, the Plan
Administrator  shall certify to the Insurer the  Beneficiary  designation on its
records for the Participant.

     If there is no Beneficiary  named or surviving when a Participant dies, the
Participant's  Beneficiary shall be the Participant's surviving spouse, or where
there is no surviving spouse, the executor or administrator of the Participant's
estate.

SECTION 10.08--NONALIENATION OF BENEFITS.

     Benefits  payable  under  the Plan are not  subject  to the  claims  of any
creditor of any  Participant,  Beneficiary,  spouse or Contingent  Annuitant.  A
Participant,  Beneficiary,  spouse  or  Contingent  Annuitant  does not have any
rights to alienate, anticipate, commute, pledge, encumber, or assign any of such
benefits,  except in the case of a loan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding  sentences shall also apply to the creation,
assignment,  or recognition of a right to any benefit  payable with respect to a
Participant  according  to a  domestic  relations  order,  unless  such order is
determined by the Plan Administrator to be a qualified domestic relations order,
as defined in Code Section  414(p),  or any  domestic  relations  order  entered
before January 1, 1985. The preceding sentences shall not apply to any offset of
a  Participant's   benefit  provided  under  the  Plan  against  an  amount  the
Participant  is required to pay the Plan with respect to a judgment,  order,  or
decree issued,  or a settlement  entered into, on or after August 5, 1997, which
meets the requirements of Code Sections 401(a)(13)(C) or (D).

SECTION 10.09--CONSTRUCTION.

     The validity of the Plan or any of its  provisions is determined  under and
construed according to Federal law and, to the extent permissible,  according to
the laws of the state in which the Employer has its  principal  office.  In case
any  provision  of this Plan is held  illegal or invalid  for any  reason,  such
determination  shall not affect the remaining  provisions of this Plan,  and the
Plan shall be construed and enforced as if the illegal or invalid  provision had
never been included.

     In the event of any  conflict  between the  provisions  of the Plan and the
terms of any Annuity  Contract  issued  hereunder,  the  provisions  of the Plan
control.

SECTION 10.10--LEGAL ACTIONS.

     No person employed by the Employer, no Participant,  former Participant, or
their Beneficiaries,  or any other person having or claiming to have an interest
in the Plan is entitled to any notice of process.  A final  judgment  entered in
any such action or  proceeding  shall be binding and  conclusive  on all persons
having or claiming to have an interest in the Plan.

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<PAGE>

SECTION 10.11--SMALL AMOUNTS.

     If  consent  of the  Participant  is not  required  for a benefit  which is
immediately  distributable in the ELECTION  PROCEDURES  SECTION of Article VI, a
Participant's  entire  Vested  Account  shall be paid in a single  sum as of the
earliest of his  Retirement  Date, the date he dies, or the date he ceases to be
an  Employee  for  any  other  reason.  For  purposes  of this  section,  if the
Participant's  Vested Account is zero, the  Participant  shall be deemed to have
received a  distribution  of such Vested  Account.  If a Participant  would have
received a  distribution  under the first sentence of this paragraph but for the
fact that the Participant's  consent was needed to distribute a benefit which is
immediately distributable, and if at a later time consent would not be needed to
distribute a benefit which is immediately distributable and such Participant has
not again become an Employee, such Vested Account shall be paid in a single sum.
This is a small amounts payment.

     If a small amounts payment is made as of the date the Participant dies, the
small amounts payment shall be made to the Participant's  Beneficiary (spouse if
the death benefit is payable to the spouse).  If a small amounts payment is made
while the Participant is living,  the small amounts payment shall be made to the
Participant.  The  small  amounts  payment  is in full  settlement  of  benefits
otherwise payable.

     No other small amounts payments shall be made.

SECTION 10.12--WORD USAGE.

     The masculine  gender,  where used in this Plan, shall include the feminine
gender and the  singular  words,  as used in this Plan,  may include the plural,
unless the context indicates otherwise.

     The words in writing and written,  where used in this Plan,  shall  include
any other forms, such as voice response or other electronic system, as permitted
by any governmental agency to which the Plan is subject.

SECTION 10.13--CHANGE IN SERVICE METHOD.

     (a)  Change of Service  Method Under This Plan.  If this Plan is amended to
          change the method of crediting service from the elapsed time method to
          the hours  method for any  purpose  under this  Plan,  the  Employee's
          service shall be equal to the sum of (1), (2), and (3) below:

          (1)  The number of whole  years of service  credited  to the  Employee
               under the Plan as of the date the change is effective.

          (2)  One year of  service  for the  applicable  computation  period in
               which the change is effective if he is credited with the required
               number  of  Hours-of-Service.  If  the  Employer  does  not  have
               sufficient   records   to   determine   the   Employee's   actual
               Hours-of-Service  in that part of the service  period  before the
               effective  date of the  change,  the  Hours-of-Service  shall  be
               determined using an equivalency.  For any month in which he would
               be required to be credited with one Hour-of-Service, the Employee
               shall be deemed for purposes of this section to be credited  with
               190 Hours-of-Service.

          (3)  The Employee's service determined under this Plan using the hours
               method  after  the end of the  computation  period  in which  the
               change in service method was effective.

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<PAGE>

               If this Plan is amended to change the method of crediting service
               from the hours  method to the elapsed time method for any purpose
               under this Plan, the Employee's service shall be equal to the sum
               of (4), (5), and (6) below:

          (4)  The number of whole  years of service  credited  to the  Employee
               under the Plan as of the beginning of the  computation  period in
               which the change in service method is effective.

          (5)  the  greater of (i) the  service  that would be  credited  to the
               Employee  for that entire  computation  period  using the elapsed
               time method or (ii) the service credited to him under the Plan as
               of the date the change is effective.

          (6)  The  Employee's  service  determined  under  this Plan  using the
               elapsed time method after the end of the  applicable  computation
               period in which the change in service method was effective.

     (b)  Transfers Between Plans with Different Service Methods. If an Employee
          has been a participant  in another plan of the Employer which credited
          service under the elapsed time method for any purpose which under this
          Plan is determined using the hours method, then the Employee's service
          shall be equal to the sum of (1), (2), and (3) below:

          (1)  The number of whole  years of service  credited  to the  Employee
               under  the plan as of the date he  became  an  Eligible  Employee
               under this Plan.

          (2)  One year of  service  for the  applicable  computation  period in
               which he became an Eligible  Employee if he is credited  with the
               required  number of  Hours-of-Service.  If the Employer  does not
               have  sufficient  records  to  determine  the  Employee's  actual
               Hours-of-Service  in that part of the service  period  before the
               date he became an Eligible Employee,  the Hours-of-Service  shall
               be  determined  using an  equivalency.  For any month in which he
               would be required to be credited  with one  Hour-of-Service,  the
               Employee  shall be deemed  for  purposes  of this  section  to be
               credited with 190 Hours-of-Service.

          (3)  The Employee's service determined under this Plan using the hours
               method after the end of the computation period in which he became
               an Eligible Employee.

          If an Employee has been a participant  in another plan of the Employer
          which  credited  service  under the hours method for any purpose which
          under this Plan is determined using the elapsed time method,  then the
          Employee's  service  shall be equal  to the sum of (4),  (5),  and (6)
          below:

          (4)  The number of whole  years of service  credited  to the  Employee
               under  the  other  plan as of the  beginning  of the  computation
               period  under that plan in which he became an  Eligible  Employee
               under this Plan.

          (5)  The  greater of (i) the  service  that would be  credited  to the
               Employee  for that entire  computation  period  using the elapsed
               time method or (ii) the  service  credited to him under the other
               plan as of the date he became an  Eligible  Employee  under  this
               Plan.

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<PAGE>

          (6)  The  Employee's  service  determined  under  this Plan  using the
               elapsed time method after the end of the  applicable  computation
               period  under  the  other  plan in which he  became  an  Eligible
               Employee.

     If an Employee has been a participant  in a Controlled  Group member's plan
which  credited  service under a different  method than is used in this Plan, in
order to determine entry and vesting, the provisions in (b) above shall apply as
though the Controlled Group member's plan were a plan of the Employer.

     Any  modification of service  contained in this Plan shall be applicable to
the service determined pursuant to this section.

SECTION 10.14--MILITARY SERVICE.

     Notwithstanding any provision of this Plan to the contrary,  the Plan shall
provide  contributions,  benefits,  and service credit with respect to qualified
military  service in accordance with Code Section 414(u).  Loan repayments shall
be suspended under this Plan as permitted under Code Section 414(u).

                                       82
<PAGE>

                                   ARTICLE XI

                           TOP-HEAVY PLAN REQUIREMENTS

SECTION 11.01--APPLICATION.

     The provisions of this article shall supersede all other  provisions in the
Plan to the contrary.

     For the  purpose  of  applying  the  Top-heavy  Plan  requirements  of this
article,  all members of the Controlled  Group shall be treated as one Employer.
The term  Employer,  as used in this  article,  shall be deemed to  include  all
members of the Controlled Group,  unless the term as used clearly indicates only
the Employer is meant.

     The  accrued  benefit  or  account  of a  participant  which  results  from
deductible  employee  contributions  shall not be included for any purpose under
this article.

     The minimum  vesting and  contribution  provisions of the  MODIFICATION  OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS  SECTIONS of this article
shall not apply to any Employee who is included in a group of Employees  covered
by a collective  bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers, including the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. For this
purpose, the term "employee  representatives"  does not include any organization
more than half of whose  members  are  employees  who are owners,  officers,  or
executives.

SECTION 11.02--DEFINITIONS.

     For purposes of this article the following terms are defined:

     Aggregation Group means:

     (a)  each of the  Employer's  qualified  plans in which a Key Employee is a
          participant  during the Plan Year  containing the  Determination  Date
          (regardless  of whether  the plan was  terminated)  or one of the four
          preceding Plan Years,

     (b)  each of the Employer's  other qualified plans which allows the plan(s)
          described in (a) above to meet the  nondiscrimination  requirement  of
          Code Section  401(a)(4) or the minimum  coverage  requirement  of Code
          Section 410, and

     (c)  any of the Employer's other qualified plans not included in (a) or (b)
          above which the Employer desires to include as part of the Aggregation
          Group. Such a qualified plan shall be included only if the Aggregation
          Group  would  continue  to satisfy the  requirements  of Code  Section
          401(a)(4) and Code Section 410.

     The plans in (a) and (b) above constitute the "required" Aggregation Group.
     The  plans  in  (a),  (b),  and  (c)  above   constitute  the  "permissive"
     Aggregation Group.

                                       83
<page>

     Compensation means  compensation as defined in the CONTRIBUTION  LIMITATION
     SECTION of Article III. For purposes of  determining  who is a Key Employee
     in years beginning before January 1, 1998,  Compensation shall include,  in
     addition to compensation as defined in the CONTRIBUTION  LIMITATION SECTION
     of Article III, elective contributions.  Elective contributions are amounts
     excludible  from the gross income of the Employee  under Code Sections 125,
     402(e)(3), 402(h)(1)(B), or 403(b), and contributed by the Employer, at the
     Employee's  election,  to a Code Section 401(k)  arrangement,  a simplified
     employee  pension,  cafeteria  plan,  or  tax-sheltered  annuity.  Elective
     contributions  also include amounts  deferred under a Code Section 457 plan
     maintained by the Employer.

     Determination  Date means as to any plan,  for any plan year  subsequent to
     the first plan year, the last day of the preceding plan year. For the first
     plan year of the plan, the last day of that year.

     Key Employee means any Employee or former  Employee (and the  Beneficiaries
     of such Employee) who at any time during the determination period was:

     (a)  an officer of the Employer if such  individual's  annual  Compensation
          exceeds  50  percent  of the  dollar  limitation  under  Code  Section
          415(b)(1)(A).

     (b)  an owner (or considered an owner under Code Section 318) of one of the
          ten largest  interests  in the  Employer if such  individual's  annual
          Compensation  exceeds 100 percent of the dollar  limitation under Code
          Section 415(c)(1)(A).

     (c)  a 5-percent owner of the Employer, or

     (d)  a 1-percent owner of the Employer who has annual  Compensation of more
          than $150,000.

     The determination period is the Plan Year containing the Determination Date
     and the four preceding Plan Years.

     The  determination of who is a Key Employee shall be made according to Code
     Section 416(i)(1) and the regulations thereunder.

     Non-key Employee means any Employee who is not a Key Employee.

     Present Value means the present value of a  participant's  accrued  benefit
     under a defined benefit plan. For purposes of establishing Present Value to
     compute the Top-heavy  Ratio, any benefit shall be discounted only for 7.5%
     interest and  mortality  according to the 1971 Group  Annuity  Table (Male)
     without the 7% margin but with projection by Scale E from 1971 to the later
     of (a) 1974,  or (b) the year  determined  by adding  the age to 1920,  and
     wherein for females the male age six years younger is used.

     Top-heavy  Plan means a plan which is top-heavy for any plan year beginning
     after  December  31,  1983.  This  Plan  shall be  top-heavy  if any of the
     following conditions exist:

     (a)  The Top-heavy  Ratio for this Plan exceeds 60 percent and this Plan is
          not part of any required  Aggregation Group or permissive  Aggregation
          Group.

     (b)  This Plan is a part of a required Aggregation Group, but not part of a
          permissive Aggregation Group, and the Top-heavy Ratio for the required
          Aggregation Group exceeds 60 percent.

                                       84
<page>
     (c)  This  Plan is a part of a  required  Aggregation  Group  and part of a
          permissive   Aggregation   Group  and  the  Top-heavy  Ratio  for  the
          permissive Aggregation Group exceeds 60 percent.

Top-heavy Ratio means:

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

     (b)  If the  Employer  maintains  one or more  defined  contribution  plans
          (including  any  simplified  employee  pension  plan) and the Employer
          maintains or has  maintained  one or more defined  benefit plans which
          during the five-year period ending on the Determination Date(s) has or
          has had accrued  benefits,  the  Top-heavy  Ratio for any  required or
          permissive  Aggregation  Group,  as  appropriate,  is a fraction,  the
          numerator  of  which  is the sum of the  account  balances  under  the
          aggregated  defined  contribution  plan or plans of all Key  Employees
          determined  in  accordance  with (a) above,  and the Present  Value of
          accrued  benefits under the aggregated  defined  benefit plan or plans
          for  all  Key  Employees  as of the  Determination  Date(s),  and  the
          denominator  of which is the sum of the  account  balances  under  the
          aggregated  defined  contribution  plan or plans for all participants,
          determined  in  accordance  with (a) above,  and the Present  Value of
          accrued  benefits  under  the  defined  benefit  plan or plans for all
          participants  as of  the  Determination  Date(s),  all  determined  in
          accordance with Code Section 416 and the regulations  thereunder.  The
          accrued  benefits  under a defined  benefit plan in both the numerator
          and   denominator  of  the  Top-heavy  Ratio  are  increased  for  any
          distribution of an accrued benefit made in the five-year period ending
          on the Determination Date.

     (c)  For purposes of (a) and (b) above,  the value of account  balances and
          the Present  Value of accrued  benefits  will be  determined as of the
          most recent Valuation Date that falls within or ends with the 12-month
          period ending on the  Determination  Date,  except as provided in Code
          Section 416 and the  regulations  thereunder  for the first and second
          plan years of a defined benefit plan. The account balances and accrued
          benefits of a participant  (i) who is not a Key Employee but who was a
          Key Employee in a prior year or (ii) who has not been credited with at
          least an hour of service with any employer maintaining the plan at any
          time during the five-year period ending on the Determination Date will
          be disregarded.  The calculation of the Top-heavy Ratio and the extent
          to which  distributions,  rollovers,  and  transfers  are  taken  into
          account  will be made in  accordance  with  Code  Section  416 and the
          regulations thereunder.  Deductible employee contributions will not be
          taken into account for purposes of computing the Top-heavy Ratio. When
          aggregating  plans, the value of account balances and accrued benefits
          will be calculated with reference to the Determination Dates that fall
          within the same calendar year.

                                  85
<page>
          The accrued  benefit of a participant  other than a Key Employee shall
          be determined under (i) the method, if any, that uniformly applies for
          accrual  purposes  under all defined  benefit plans  maintained by the
          Employer,  or (ii) if  there  is no such  method,  as if such  benefit
          accrued not more rapidly than the slowest accrual rate permitted under
          the fractional rule of Code Section 411(b)(1)(C).

SECTION 11.03--MODIFICATION OF VESTING REQUIREMENTS.

     If a Participant's  Vesting Percentage determined under Article I is not at
least as great as his Vesting  Percentage would be if it were determined under a
schedule  permitted in Code Section 416, the following  shall apply.  During any
Plan Year in which  the Plan is a  Top-heavy  Plan,  the  Participant's  Vesting
Percentage  shall be the  greater of the  Vesting  Percentage  determined  under
Article I or the schedule below.

           VESTING SERVICE                           NONFORFEITABLE
             (whole years)                           PERCENTAGE

              Less than 2                                 0
                   2                                     20
                   3                                     40
                   4                                     60
                   5                                     80
               6 or more                                100

     The  schedule  above shall not apply to  Participants  who are not credited
with an  Hour-of-Service  after the Plan first  becomes a  Top-heavy  Plan.  The
Vesting Percentage  determined above applies to the portion of the Participant's
Account  which is  multiplied  by a Vesting  Percentage  to determine his Vested
Account,  including  benefits  accrued before the effective date of Code Section
416 and benefits accrued before this Plan became a Top-heavy Plan.

     If,  in  a  later  Plan  Year,  this  Plan  is  not  a  Top-heavy  Plan,  a
Participant's  Vesting  Percentage  shall  be  determined  under  Article  I.  A
Participant's  Vesting  Percentage  determined  under  either  Article  I or the
schedule  above  shall  never be  reduced  and the  election  procedures  of the
AMENDMENTS  SECTION  of  Article  X shall  apply  when  changing  to or from the
schedule as though the automatic change were the result of an amendment.

     The part of the  Participant's  Vested  Account  resulting from the minimum
contributions  required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
this  article (to the extent  required to be  nonforfeitable  under Code Section
416(b)) may not be forfeited under Code Section 411(a)(3)(B) or (D).

SECTION 11.04--MODIFICATION OF CONTRIBUTIONS.

     During any Plan Year in which this Plan is a Top-heavy  Plan,  the Employer
shall make a minimum  contribution  as of the last day of the Plan Year for each
Non-key Employee who is an Employee on the last day of the Plan Year and who was
an Active  Participant  at any time during the Plan Year. A Non-key  Employee is
not required to have a minimum number of  Hours-of-Service  or minimum amount of
Compensation  in order to be entitled to this  minimum.  A Non-key  Employee who
fails to be an Active Participant merely because his Compensation is less than a
stated  amount or merely  because  of a failure  to make  mandatory  participant

                                  86
<page>

contributions  or,  in the  case of a cash  or  deferred  arrangement,  elective
contributions shall be treated as if he were an Active Participant.  The minimum
is the lesser of (a) or (b) below:

     (a)  3 percent of such person's Compensation for such Plan Year.

     (b)  The "highest  percentage" of Compensation  for such Plan Year at which
          the  Employer's  contributions  are made for or  allocated  to any Key
          Employee.  The highest  percentage shall be determined by dividing the
          Employer  Contributions  made for or  allocated  to each Key  Employee
          during the Plan Year by the amount of his  Compensation  for such Plan
          Year, and selecting the greatest quotient (expressed as a percentage).
          To determine the highest  percentage,  all of the  Employer's  defined
          contribution  plans within the  Aggregation  Group shall be treated as
          one plan.  The  minimum  shall be the amount in (a) above if this Plan
          and a defined benefit plan of the Employer are required to be included
          in the  Aggregation  Group and this Plan  enables the defined  benefit
          plan to meet the requirements of Code Section 401(a)(4) or 410.

          For  purposes of (a) and (b) above,  Compensation  shall be limited by
          Code Section 401(a)(17).

     If the Employer's  contributions and allocations  otherwise  required under
the defined  contribution  plan(s) are at least equal to the minimum  above,  no
additional contribution shall be required. If the Employer's total contributions
and allocations are less than the minimum above,  the Employer shall  contribute
the difference for the Plan Year.

     The  minimum   contribution  applies  to  all  of  the  Employer's  defined
contribution  plans in the  aggregate  which  are  Top-heavy  Plans.  A  minimum
contribution under a profit sharing plan shall be made without regard to whether
or not the Employer has profits.

     If a person who is otherwise  entitled to a minimum  contribution  above is
also covered under another defined  contribution plan of the Employer's which is
a  Top-heavy  Plan  during  that same Plan  Year,  any  additional  contribution
required to meet the minimum above shall be provided in this Plan.

     If a person who is otherwise  entitled to a minimum  contribution  above is
also covered under a defined benefit plan of the Employer's which is a Top-heavy
Plan  during  that same Plan Year,  the  minimum  benefits  for him shall not be
duplicated. The defined benefit plan shall provide an annual benefit for him on,
or adjusted to, a straight life basis equal to the lesser of:

     (c)  2  percent  of his  average  compensation  multiplied  by his years of
          service, or

     (d)  20 percent of his average compensation.

Average compensation and years of service shall have the meaning set forth in
such defined benefit plan for this purpose.

     For purposes of this section, any employer contribution made according to a
salary  reduction or similar  arrangement and employer  contributions  which are
matching  contributions,  as defined in Code Section 401(m),  shall not apply in
determining  if the minimum  contribution  requirement  has been met,  but shall
apply in determining the minimum contribution required.

     The  requirements of this section shall be met without regard to any Social
Security contribution.

                                       87
<PAGE>

SECTION 11.05--MODIFICATION OF CONTRIBUTION LIMITATION.

     If the  provisions  of  subparagraph  (g) of  the  CONTRIBUTION  LIMITATION
SECTION of Article III are applicable for any Limitation  Year during which this
Plan is a Top-heavy Plan, the contribution  limitations  shall be modified.  The
definitions  of Defined  Benefit  Plan  Fraction and Defined  Contribution  Plan
Fraction in the CONTRIBUTION LIMITATION SECTION of Article III shall be modified
by  substituting  "100  percent"  in lieu  of "125  percent."  In  addition,  an
adjustment  shall be made to the  numerator  of the  Defined  Contribution  Plan
Fraction.  The  adjustment  is a  reduction  of that  numerator  similar  to the
modification  of  the  Defined  Contribution  Plan  Fraction  described  in  the
CONTRIBUTION  LIMITATION  SECTION of Article III, and shall be made with respect
to the last Plan Year beginning before January 1, 1984.

     The  modifications in the paragraph above shall not apply with respect to a
Participant so long as employer  contributions,  forfeitures,  or  nondeductible
employee  contributions are not credited to his account under this or any of the
Employer's other defined  contribution plans and benefits do not accrue for such
Participant under the Employer's  defined benefit plan(s),  until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.

     This section shall cease to apply effective as of the first Limitation Year
beginning on or after January 1, 2000.

                                       88
<PAGE>

     By executing this Plan, the Primary Employer  acknowledges having counseled
to the extent  necessary  with  selected  legal and tax advisors  regarding  the
Plan's legal and tax implications.

Executed this               day of
              -------------        ---------------------------------------------

                                            FIRST NIAGARA FINANCIAL GROUP, INC.

                                            By:
                                                  ------------------------------
                                                  Title

                                                  Defined Contribution Plan 8.0

     The Adopting  Employer  must agree to  participate  in or adopt the Plan in
writing. If this has not already been done, it may be done by signing below.

                                            FIRST NIAGARA BANK

                                            By:
                                                  ------------------------------
                                                  Title

                                                  Date

                                            FIRST NIAGARA REALTY, INC.

                                            By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                       89
<PAGE>

                                            FIRST NIAGARA FUNDING, INC.

                                            By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                            EMPIRE NATIONAL LEASING, INC.

                                           By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                            NIAGARA INVESTMENT ADVISORS, INC.

                                             By:
                                                  ------------------------------
                                                  Title
                                                  Date
                                       90
<PAGE>

                                            WARREN HOFFMAN & ASSOCIATES, INC.

                                              By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                            NOVA HEALTHCARE ADMINISTRATORS, INC.

                                           By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                            CORTLAND SAVINGS BANK

                                              By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                       91
<PAGE>

                                          FIRST NIAGARA FINANCIAL SERVICES, INC.

                                         By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                            CAYUGA BANK

                                             By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                            CAYUGA FINANCIAL SERVICES

                                              By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                       92
<PAGE>

                                            ALLIED CLAIM SERVICES, INC.

                                             By:
                                                  ------------------------------
                                                  Title
                                                  Date

                                       93

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