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                                                                   EXHIBIT 10.13

                     TOM BROWN, INC. 401(k) RETIREMENT PLAN

The TOM BROWN, INC. 401(k) Retirement Plan ("this Plan") is adopted as of
January 1, 2000, by TOM BROWN, INC., a corporation.

TOM BROWN, INC. provides its employees a means to accumulate voluntary savings
for their retirement years; and

This Plan is adopted to provide:

1.      Name of Plan; Effective Date.

This Plan is known as the TOM BROWN, INC. 401(k) Retirement Plan. This Plan is
effective as of January 1, 2000 and is a restatement of the TOM BROWN, INC. KSOP
effective January 1, 1996.

2.      Definitions.

In this Plan:

        2.1 "Anniversary Date" is the last day of a Plan Year.

        2.2 "Code" is the Internal Revenue Code of 1986, as amended, and its
        Regulations.

        2.3 "Committee" is the Committee in Section 14.

        2.4 "Company" is TOM BROWN, INC.. Any corporation a member of a
        controlled group of corporations with TOM BROWN, INC. or an affiliate
        may also sponsor this Plan if such corporation is designated by TOM
        BROWN, INC. as a sponsoring employer and such corporation agrees to this
        Plan.

        2.5 "Compensation" is all of each Participant's W-2 earnings, but
        excluding taxable fringe benefits (such as car allowances and moving
        expenses). Compensation includes only that Compensation actually paid to
        the Participant during the Plan Year.

        Notwithstanding the above, Compensation includes any amount contributed
        by TOM BROWN, INC. to a salary reduction agreement not includible in the
        gross income of the Employee by Code Section 125, Code Section 401(k),
        Code Section 402(e)(3), Code Section 402(h) or Code Section 403(b).

        The annual Compensation of each Participant does not exceed $150,000, as
        adjusted for increases in the cost of living in Code Section
        401(a)(17)(B). The cost-of-living adjustment in effect for a calendar
        year applies to any period, not exceeding 12 months, for which
        compensation is determined (determination period) beginning in such
        calendar year. If a determination period is less than 12 months,

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        the annual compensation limit is multiplied by a fraction, the numerator
        of which is the number of months in the determination period, and the
        denominator of which is 12.

        2.6 "Computation Period" is the 12-consecutive month period beginning
        with the Employee's Employment Beginning Date (or, if applicable, his
        Re-Employment Beginning Date) and the succeeding 12-consecutive month
        periods beginning on the anniversaries of that beginning date.

        2.7 "Disability" is a Participant's physical or mental condition from
        bodily injury, disease or mental disorder that renders him incapable of
        continuing any gainful occupation and constitutes total disability by a
        medically determinable physical or mental impairment expected to result
        in death or to be of long, continued and indefinite duration. A licensed
        physician chosen by the Committee determines a Participant's disability.

        2.8 "Employee" is any person employed by TOM BROWN, INC. or a sponsoring
        employer. Employee also includes any Leased Employee deemed to be an
        Employee by Code Section 414(n) or Code Section 414(o) but only to the
        extent necessary to meet the requirements of Code Section 414(n)(3).
        "Employee" excludes:

               A.     Individuals hired on a temporary basis and not expected to
               complete at least 1,000 Hours of Service during the applicable
               Computation Period;

               B.     Individuals whose employment is governed by a collective
               bargaining agreement between TOM BROWN, INC. and employee
               representatives by which retirement benefits were the subject of
               good faith bargaining; and

               C.     Non-resident aliens who receive no earned income (in Code
               Section 911(d)(2)) from TOM BROWN, INC. constituting income from
               sources within the United States (in Code Section 861(a)(3)).

        2.9 "Employment Beginning Date" is the date the Employee first performs
        an Hour of Service for TOM BROWN, INC.. "Re-Employment Beginning Date"
        is the date an Employee who was previously employed by the Employer but
        whose employment terminated from a One-Year Break in Service first
        completes an Hour of Service for TOM BROWN, INC. after the last
        applicable Computation Period he incurred a One-Year Break in Service.

        2.10 "Fund" or "Funds" is the investment fund or funds established and
        maintained by the Trustee for this Plan by subsection 8.1.

        2.11 "Highly Compensated Employee" is any Employee who (A) was a 5%
        owner (in Code Section 416(I)(1)) of TOM BROWN, INC. at any time during
        the current or the preceding Plan Year, or (B) for the preceding Plan
        Year,

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               A.     had Compensation in excess of $80,000 (as adjusted by the
               Secretary by Code Section 415(d), with a base period of the
               calendar quarter ending September 30, 1996), and

               B.     if TOM BROWN, INC. elects, was in the top-paid group of
               Employees for such preceding year. An Employee is in the top-paid
               group of Employees for any year if such Employee is in the group
               of the top 20% of the Employees when ranked on the basis of
               Compensation paid during such year.

               A former employee is treated as a highly compensated employee if:
               (A) such Employee was a highly compensated employee when such
               Employee separated from Service, or (B) such Employee was a
               highly compensated employee at any time after age 55.

               The determination of who is a highly compensated employee,
               including the determinations of the number and identity of
               Employees in the top-paid group, is made by Code Section 414(q).

               For this subsection, the term "Compensation" means compensation
               in Code Section 415(c)(3).

        2.12 "Hour of Service" is each hour an Employee is directly or
        indirectly paid, or entitled to payment, by TOM BROWN, INC. for the
        performance of duties (credited for the computation period in which the
        duties were performed), each hour for which back pay, irrespective of
        mitigation of damages, is either awarded or agreed to by TOM BROWN, INC.
        (credited for the computation period to which the award or agreement
        pertains), and each hour for which an Employee is directly or indirectly
        paid, or entitled to payment, by TOM BROWN, INC. for reasons (such as
        vacation, sickness, disability, holidays, paid layoff and similar paid
        periods of nonworking time) other than the performance of duties
        (credited for the computation period in which such period of nonworking
        time first occurs). For an Employee who is absent from work for any
        period for -

               A. the pregnancy of the Employee;

               B. the birth of a child of the Employee;

               C. for the placement of a child with the Employee for the
               adoption of such child by such Employee, or

               D. for the caring for such child for a period beginning
               immediately following such birth or placement,

               solely to determine whether a One-Year Break in Service occurs,
               such Employee is credited with the Hours of Service which
               otherwise is credited to such Employee but for such absence.

               If the Plan Administrator is unable to determine the Hours of
               Service for such

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               an absence, the Employee is credited with 8 Hours of Service for
               each normal workday of such absence.

               No credit for Hours of Service are granted for an absence
               described in this subsection if the Employee does not timely
               provide information required by the Plan Administrator to
               reasonably establish whether the Employee was absent from work
               for a reason in this subsection and to establish the number of
               days for which there was such an absence.

               Hours of Service credited by this subsection are credited only in
               the Plan Year in which the absence from work begins (if the
               Employee is prevented from incurring a One-Year Break in Service
               in such year solely because the Employee is credited with Hours
               of Service by this subsection), or in any other case, in the
               immediately following Plan Year.

               No more than 501 Hours of Service are credited to an Employee for
               any single continuous period the Employee performs no duties. In
               addition, the rules in Labor Reg ss. 2530.200b-2(b) and Labor Reg
               ss. 2530.200b-2(c) apply to determine Hours of Service.

               An Hour of Service for any member of a controlled group of
               corporations or any member of an affiliated service group (Code
               Section 414(b), Code Section 414(m) or Code Section 414(o)) of
               which TOM BROWN, INC. is a member, or for an unincorporated trade
               or business in common control with TOM BROWN, INC. (in Code
               Section 414(c)) or any other entity required to be aggregated
               with TOM BROWN, INC. by Code Section 414(o) are credited as an
               Hour of Service with TOM BROWN, INC..

        2.13 "Income" is the income allocable to "excess contributions" or
        "excess aggregate contributions" in subsection 7.2 below, for the Plan
        Year in which such excess contribution is made. The amount of income
        attributable to such excess contributions is determined by the Committee
        in a reasonable and consistent manner. Income does not include income
        allocable to excess contributions for the Plan Year the excess
        contribution is returned to the Participant.

        2.14 "Non-Highly Compensated Employee" is an Employee who is not a
        Highly Compensated Employee.

        2.15 "Normal Retirement Age" is age 65.

        2.16 "One-Year Break in Service" is a Computation Period in which the
        Employee completes 500 or less Hours of Service.

        2.17 "Participating Employee" and "Participant" is any Employee of Tom
        Brown, Inc. eligible to participate in TOM BROWN, INC. contributions.
        "Beneficiary" is a person who becomes eligible to participate and for
        whom an account is maintained by the Trustee, but who ceases to be an
        Employee of TOM BROWN, INC., or a person entitled to benefits in this
        Plan as beneficiary of a deceased Participating

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        Employee or as beneficiary of a deceased Beneficiary.

        2.18 "this Plan" is the TOM BROWN, INC. 401(k) Retirement Plan, as
        amended.

        2.19 "Plan Year" is the calendar year.

        2.20 "Pooled Investment Account" is an account established by an
        administrative services agreement between TOM BROWN, INC. and Trustee.

        2.21 "Qualified Non-Elective Contribution" is TOM BROWN, INC.'S
        contributions made by subsection 7.2. Such contributions are a Salary
        Reduction Contribution and are used to satisfy the "Actual Deferral
        Percentage" tests. In addition, TOM BROWN, INC.'S contributions made for
        subsection 7.2 used to satisfy the "Actual Contribution Percentage"
        tests are Qualified Non-Elective Contributions and subject to subsection
        5.1A. and Section 6.

        2.22 "Service" is employment with TOM BROWN, INC. including leaves of
        absence authorized by TOM BROWN, INC. (such as a temporary absence
        authorized by TOM BROWN, INC. for vacation, sickness, injury,
        disability, layoff, or jury duty) and service in the armed forces of the
        United States, beginning while he is an Employee, if he returns to the
        employment of TOM BROWN, INC. at the end of such authorized absence, or
        within the applicable period specified in the Military Selective Service
        Act of 1967, and its amendments, after release from such service with
        the armed forces.

        In calculating the number of a Participant's Vesting Years of Service
        and length of participation in this Plan, such period of absence or
        service with the armed forces subsequent to becoming a Participant, are
        counted. However, no Contributions are made during such periods of
        absence or service with the armed forces. TOM BROWN, INC.'S leave of
        absence policy is applied in a uniform and non-discriminatory manner for
        all Participants in similar circumstances.

        Any period of Service as a sole proprietor or partner of a predecessor
        business organization prior to becoming an Employee is taken into
        consideration as Service for this Plan.

        2.23 "Trust" is the TOM BROWN, INC. 401(k) Retirement Plan Trust entered
        into between TOM BROWN, INC. and the Trustee.

        2.24 "Trustee" is the Trustee or Trustees appointed from time to time by
        TOM BROWN, INC. to accept contributions, administer the assets of the
        Trust, and otherwise to act by this Plan and the Trust.

        2.25 "Valuation Date" is any day that the New York Stock Exchange is
        open for business or any other date chosen by the Committee.

        2.26 "Vesting Year of Service" is the completion of at least 1,000 Hours
        of Service

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        during the applicable Computation Period.

        An individual's entire Service is counted in computing his Vesting Years
        of Service even if the individual is not in a class of employees
        qualifying such individual as an "Employee" in subsection 2.9.

        To determine a Participant's vested interest at his resumption of
        Service after a One-Year Break in Service, a Vesting Year of Service is
        determined the same as a Vesting Year of Service for Participants with
        no prior Service, except the applicable Computation Period for measuring
        his Vesting Years of Service following such break begins on the
        Participant's Re-Employment Beginning Date instead of on his Employment
        Beginning Date.

        2.27 Number; Gender. Where necessary or appropriate, the singular
        includes the plural, the plural includes the singular, the masculine
        includes the feminine and neuter, the feminine includes the masculine
        and neuter, and the neuter includes the masculine and feminine.

3.      Purpose.

This Plan is created to enable eligible TOM BROWN, INC. Employees to defer a
portion of their compensation until retirement and to potentially share in any
TOM BROWN, INC. discretionary contributions. Except by Section 26. below, no
part of the principal or income of this Plan is paid to or reinvested in TOM
BROWN, INC., or used for any purpose other than the exclusive benefit of such
Employees and their Beneficiaries.

All discretionary acts taken by TOM BROWN, INC., Plan Administrator or Committee
are uniform in their nature and application to all persons similarly situated,
and no discretionary acts are taken which are discriminatory by the Code or the
Employee Retirement Income Security Act of 1974, for employees' profit-sharing
trusts, as amended.

4.      Plan Entry Requirements.

Each Employee of TOM BROWN, INC. shall enter the Plan and become a Participant
immediately upon employment. An Employee who meets the entry requirements may
elect not to participate in this Plan by giving TOM BROWN, INC. written notice
of his or her election not to be included as a Participant. Such election
remains in effect until the Employee gives TOM BROWN, INC. written notice of his
or her election to become a Participant.

An Employee who meet the eligibility requirements but who has incurs a One-Year
Break in Service is eligible to re-enter this Plan on the first day of the
calendar month after his return. If an Employee who is not a member of an
eligible class of employees becomes a member of an eligible class, such employee
participates immediately if such Employee satisfies the minimum age requirement
and would have otherwise previously become a Participant.

If a temporary employee who was not expected to complete 1,000 Hours of Service
in a

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Computation Period actually completes 1,000 Hours of Service during an
applicable Computation Period, he is deemed an Employee in an eligible class as
of the first day of the applicable Computation Period in which he first
completes 1,000 Hours of Service (or, if later, his attainment of age 18). If
the eligibility of any person to participate in the Plan is disputed, the
decision of the Committee for such eligibility is controlling. To enable the
Committee to make such determination, all information available to TOM BROWN,
INC. required by the Committee shall be made available to the Committee.

5.      Contributions.

Subject to subsections 5.3 and 5.4 below, contributions to this Plan are made as
follows:

        5.1 Salary Reduction Contributions. Each Participant may elect to enter
        into a salary reduction agreement with TOM BROWN, INC. to accept a
        reduction in salary from TOM BROWN, INC. (such reduction not to be less
        than 2% nor greater than 15% of the Participant's Compensation for any
        Plan Year).

        For such agreement, TOM BROWN, INC. makes a salary reduction
        contribution to the Participant's Salary Reduction Contribution Account
        for the Participant for such Plan Year in an amount equal to the total
        amount by which the Participant's Compensation from TOM BROWN, INC. is
        reduced during the Plan Year by the salary reduction agreement. TOM
        BROWN, INC. Contributions for a given Plan Year for salary reduction
        agreements are deposited with the Trustee within a reasonable amount of
        time, not more than 90 days after the date such funds are withheld from
        the Participant's salary.

        Salary reduction contributions are governed by the following:

               A.     Amounts credited to a Participant's Salary Reduction
               Account are 100% vested and nonforfeitable at all times.

               B.     Amounts credited to a Participant's Salary Reduction
               Account are considered a contribution made by TOM BROWN, INC. for
               subsections 8.8, 8.9 and 19.2.

               C.     A salary reduction agreement may provide for a reduction
               in salary by means of reducing the Participant's payroll on a
               periodic basis or the agreement may provide for lump sum
               reductions for any compensation payments in such amounts that do
               not cause the limitations of Section 7. and subsections 8.8, or
               8.9 to be exceeded.

               D.     A salary reduction agreement for reductions to a
               Participant's periodic payroll may be cancelled at any time by a
               Participant by giving TOM BROWN, INC. a written notice,
               specifying the effective date of the cancellation. A Participant
               may change the rate of his salary reduction at such times, and
               with such frequency, as determined by the Committee.

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               E.     TOM BROWN, INC. may refrain from making contributions to
               this Plan, for the salary reduction agreement entered into by the
               Participant, if TOM BROWN, INC. determines that such action is
               necessary to insure that the Participant's annual additions for
               any Plan Year do not exceed the limitations of subsections 8.8 or
               8.9, or to insure that the Actual Deferral Percentage Test in
               Section 7. is met for such Plan Year. TOM BROWN, INC. may pay to
               the Participant the amount that otherwise would have been paid
               prior to the Participant's election to reduce his salary, rather
               than as a contribution made for a salary reduction agreement.

               F.     The maximum salary reduction is $7,000 (or such higher
               amount in Code Section 402(g)) by all plans maintained by TOM
               BROWN, INC. for any Employee's taxable year.

        5.2 Matching Company Contributions. During the Plan Year, TOM BROWN,
        INC. contributes on behalf of each Participant who enters into a salary
        reduction agreement, any discretionary "periodic" TOM BROWN, INC.
        Matching Contribution is announced by the TOM BROWN, INC. Board.

        The periodic TOM BROWN, INC. Matching Contribution, if any, is
        determined by TOM BROWN, INC. and announced to all Participants. The
        resolution sets forth the amount of the periodic TOM BROWN, INC.
        Matching Contribution expressed as a percentage of the amount of each
        Participant's Salary Reduction Contribution. Further, the resolution may
        limit the amount of a Participant's Salary Reduction Contribution
        eligible for a periodic TOM BROWN, INC. Matching Contribution, by
        limiting the Salary Reduction Contribution expressed as a fixed dollar
        amount or as a percentage of the Participant's Compensation. The
        periodic TOM BROWN, INC. Matching Contribution is deposited for each
        deposit of Salary Reduction Contributions at the end of each quarter.

        In addition, TOM BROWN, INC. may contribute to the Plan on behalf of
        each Participant who is eligible to share in "year-end" TOM BROWN, INC.
        Matching Contributions, a discretionary year-end TOM BROWN, INC.
        Matching Contribution. The TOM BROWN, INC. Matching Contribution is
        expressed as a fixed dollar amount or as a percentage of the amount of
        each Participant's Salary Reduction Contribution. Further, the
        resolution may limit the amount of a Participant's Salary Reduction
        Contribution eligible for the year-end TOM BROWN, INC. Matching
        Contribution, by limiting the Salary Reduction Contribution expressed as
        a fixed dollar amount or as a percentage of the Participant's
        Compensation.

        5.3 Discretionary TOM BROWN, INC. Contributions. By the time for filing
        its federal income tax return (including extensions thereof) for its
        current taxable year and for each succeeding taxable year, TOM BROWN,
        INC. may contribute to this Plan, as its contribution for the Plan Year
        ending within or co-terminous with such taxable year of TOM BROWN, INC.,
        to be held in trust, administered and distributed by the terms of this
        Plan, an amount or amounts TOM BROWN, INC., in its sole discretion
        determines. TOM BROWN, INC. may contribute such amount or amounts at any
        time;

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        and it may make such contribution in 2 or more installments.

        TOM BROWN, INC. determines and communicates to the Trustee for each Plan
        Year either (i) the amount in dollars to be contributed for such year,
        or (ii) a formula by which such amount may be determined. These
        contributions are totally in TOM BROWN, INC.'s discretion as to amount,
        timing and form, and they need not be limited to TOM BROWN, INC.'s
        profits. Nothing in this Plan entitles any Trustee, Participating
        Employee or Beneficiary to inquire into or demand the right to inspect
        TOM BROWN, INC.'s books or records.

        5.4 Rollover Contributions. An Employee, whether or not he would
        otherwise be a Participant in the Plan, may contribute a "Rollover
        Contribution" to this Plan by delivery of such contribution to the
        Trustee if such Employee submits a written certification that such
        contribution qualifies as a Rollover Contribution.

        For this subsection 5.3 or 5.4, for an amount to qualify for
        contribution by an Employee as a Rollover Contribution, it must:

               A.     represent a distribution to such Employee from a plan
               qualified by Code Section 401, and not paid to him:

                      (1)    as a required minimum distribution by Code Section
                      401(a)(9), or

                      (2)    as one of a series of substantially equal periodic
                      payments made on the life expectancy of the Employee (or
                      joint life expectancy of the Employee and a designated
                      beneficiary) or over a specified period of 10 years or
                      more; or

               B.     represent the balance to his credit of a conduit
               Individual Retirement Account or similar account or annuity,
               unless such balance is derived in any part from a previous
               rollover of a partial qualified plan contribution; and (in either
               the case of compliance with subparagraph A. above or this
               subparagraph B.); and

               C.     be contributed to this Plan within 60 days following
               distribution of such amount to the Employee.
               An amount does not qualify as a Rollover Contribution if it
               includes any amount which the Employee contributed to a Code
               Section 401 plan.

               A Rollover Contribution is considered as a part of the account of
               the contributing Employee in this Plan, is fully vested and
               nonforfeitable, and is accounted for separately from TOM BROWN,
               INC. contributions.

               A Participant may also arrange for the direct transfer of his
               benefit from a Code Section 401 plan to this Plan. For accounting
               and record keeping, transfer contributions are identical to
               Rollover Contributions.

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               Contributions, benefits and service credit for qualified military
               service are provided by Code Section 414(u).

60      Withdrawals.

        6.1 Age 59-1/2. A Participant age 59-1/2 may withdraw all or any portion
        of his Salary Reduction Contribution Account and/or his Rollover Account
        by notifying the Committee of his election to make such a withdrawal.
        Further, a Participant age 59-1/2 and satisfying the requirements for
        full 100% vesting may withdraw all or any portion of his

        Matching TOM BROWN, INC. Contribution Account and/or his] TOM BROWN,
        INC. Discretionary Contribution Account by notifying the Committee of
        his election to make such a withdrawal. Distribution may be made to the
        electing Participant, but only if the spousal consent in subsection 10.6
        is satisfied.

        6.2 Hardship. If a Participant not more than age 59-1/2 has a serious
        financial hardship, such Participant may withdraw a portion of his
        Salary Reduction Contribution Account and/or Rollover Account. Hardship
        distributions are made from the Salary Reduction Contribution Account,
        if available, and then from the Rollover Account. Whether a serious
        financial hardship exists is based on all relevant facts and
        circumstances. A need is not disqualified because it was reasonably
        foreseeable or voluntarily incurred. Withdrawal by this subsection 6.2
        is authorized only if the distribution is for:

               A.     Medical expenses in Code Section 213(d) incurred by the
               Participant, his spouse, or any of his dependents (in Code
               Section 152);

               B.     The purchase (excluding mortgage payments) of a principal
               residence for the Participant;

               C.     Payment of tuition and related educational fees for the
               next 12 months of post-secondary education for the Participant,
               his spouse, children, or dependents; or

               D.     The need to prevent the eviction of the Participant from
               his principal residence or foreclosure on the mortgage of the
               Participant's principal residence.

        6.3 Conditions for Hardship Distribution. No distribution is made by
        subsection 6.2 unless the Committee, based upon the Participant's
        representation and other facts known to the Committee, determines that
        the following conditions are satisfied:

               A. The distribution is not in excess of the amount of the
               immediate and heavy financial need of the Participant; and

               B. The Participant has obtained all distributions, other than
               hardship

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               distributions, and all nontaxable loans currently available by
               TOM BROWN, INC. maintained plans.

        6.4 Available Other Resources. No distribution is made by subsection 6.2
        unless the Committee determines, based upon all relevant facts and
        circumstances, that the amount to be distributed is not in excess of the
        amount required to relieve the financial need and that such need cannot
        be satisfied from other resources reasonably available to the
        Participant. The Participant's resources are deemed to include those
        assets of his spouse and minor children that are reasonably available to
        the Participant. A distribution may be treated as necessary to satisfy a
        financial need if the Committee relies on the Participant's
        representation that the need cannot be relieved:

               A.     Through reimbursement or compensation by insurance or
               otherwise;

               B.     By reasonable liquidation of the Participant's assets, to
               the extent such liquidation would not itself cause an immediate
               and heavy financial need;

               C.     By stopping of Salary Reduction Contributions and
               voluntary Employee contributions, if available, to this Plan; or

               D.     By other distributions or loans from this Plan, if
               available, or any other qualified retirement plan, or by
               borrowing from commercial sources on reasonable commercial terms.

               Any Participant who elects a hardship distribution by subsection
               6.2 may not enter into a salary reduction agreement for any
               Compensation received during the one-year period beginning with
               the date of such hardship distribution.

70      Special Nondiscrimination Testing.

        7.1 Actual Deferral Percentage Tests. For each Plan Year the Plan shall
        satisfy one of the following tests:

               A.     The "Actual Deferral Percentage" for the Highly
               Compensated Employee group is not more than the "Actual Deferral
               Percentage" of the Non-Highly Compensated Employee group
               multiplied by 1.25, or

               B.     The excess of the "Actual Deferral Percentage" for the
               Highly Compensated Employee group over the "Actual Deferral
               Percentage" for the Non-Highly Compensated Employee group is not
               more than two percentage points. Additionally, the "Actual
               Deferral Percentage" for the Highly Compensated Employee group
               does not exceed the "Actual Deferral Percentage" for the
               Non-Highly Compensated Employee group multiplied by 2. Code
               Section 401(k)(3) and Reg ss. 1.401(k)-1(b) are incorporated
               herein by reference.

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               "Actual Deferral Percentage" means, for the Highly Compensated
               Employee group and Non-Highly Compensated Employee group for a
               Plan Year, the average of the ratios, calculated separately for
               each Participant in such group, of the amount of Salary Reduction
               Contributions allocated to each Participant's Salary Reduction
               Contribution Account for such Plan Year to such Participant's
               Compensation for such Plan Year.

               In performing the nondiscrimination testing, the Actual Deferral
               Percentage for the Highly Compensated Employee group is
               determined for the current Plan Year, and the Actual Deferral
               Percentage for the Non-Highly Compensated Employee group is
               determined for the current Plan Year. For the first Plan Year (if
               this Plan is not a successor plan), the amount taken into account
               as the Actual Deferral Percentage for the Non-Highly Compensated
               Employee group for the current Plan Year is 3% or, at TOM BROWN,
               INC.'S election, the Actual Deferral Percentage for the first
               Plan Year. The actual deferral ratio for each Participant and the
               "Actual Deferral Percentage" for each group are calculated to the
               nearest one-hundredth of one percent.

               A Highly Compensated Employee and a Non-Highly Compensated
               Employee include any Employee eligible to make a Salary Reduction
               Contribution, whether or not such deferral election is made or
               suspended.

               For this subsection and Code Section 401(a)(4), Code Section
               410(b) and Code Section 401(k), if two or more plans which
               include cash or deferred arrangements are considered one plan for
               Code Section 410(a)(4) or Code Section 410(b) (other than Code
               Section 410(b)(2)(A)(ii)), the cash or deferred arrangements
               included in such plans are treated as one arrangement. In
               addition, two or more cash or deferred arrangements may be
               considered as a single arrangement to determine whether or not
               such arrangements are treated as one arrangement and as one plan
               for this subsection and Code Section 401(a)(4), Code Section
               410(b) and Code Section 401(k). Plans may be aggregated by this
               subsection only if they have the same plan year.

               An employee stock ownership plan in Code Section 4975(e)(7) may
               not be combined with this Plan to determine whether the employee
               stock ownership plan or this Plan satisfies this subsection, Code
               Section 401(a)(4), Code Section 410(b) and Code Section 401(k).

               If a Highly Compensated Employee is a Participant in two or more
               cash or deferred arrangements of TOM BROWN, INC., all such cash
               or deferred arrangements are treated as one cash or deferred
               arrangement to determine the actual deferral ratio for such
               Highly Compensated Employee. However, if the cash or deferred
               arrangements have different Plan Years, this paragraph is applied
               by treating all cash or deferred arrangements ending with or
               within the same calendar year as a single arrangement.

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 12 of 41
<PAGE>   13

        7.2 Actual Contribution Percentage Tests. For each Plan Year, this Plan
        shall satisfy one of the following tests:

               A.     The "Actual Contribution Percentage" for the Highly
               Compensated Employee group is not more than the "Actual
               Contribution Percentage" of the Non-Highly Compensated Employee
               group multiplied by 1.25, or

               B.     The excess of the "Actual Contribution Percentage" for the
               Highly Compensated Employee group over the "Actual Contribution
               Percentage" for the Non-Highly Compensated Employee group is not
               more than two percentage points. Additionally, the "Actual
               Contribution Percentage" for the Highly Compensated Employee
               group does not exceed the "Actual Contribution Percentage" for
               the Non-Highly Compensated Employee group multiplied by 2.

               However, to prevent the multiple use of the alternative method
               (2) described in this subsection and Code Section 401(m)(9)(A),
               any Highly Compensated Employee eligible to make Salary Reduction
               Contributions or to receive Matching TOM BROWN, INC.
               Contributions by this Plan has his actual contribution ratio
               reduced by Reg Section 1.401(m)-2. Code Section 401(m) and Reg
               Section 1.401(m)-1(b) and Reg Section 1.401(m)-2 are incorporated
               here by reference.

               "Actual Contribution Percentage" for a Plan Year is, for the
               Highly Compensated Employee group and the Non-Highly Compensated
               Employee group, the same as Actual Deferral Percentage in
               subsection 7.1, but substituting "Matching TOM BROWN, INC.
               Contributions" for "Salary Reduction Contributions."

               In performing the nondiscrimination testing required by this
               subsecton 7.2, the Actual Contribution Percentage for the Highly
               Compensated Employee group is determined for the current Plan
               Year, and the Actual contribution Percentage for the Non-Highly
               Compensated Employee group is determined for the current Plan
               Year. For the first Plan Year (if this Plan is not a successor
               plan), the amount taken into account as the Actual Contribution
               Percentage for the Non-Highly Compensated Employee group for the
               prior Plan Year is 3% or, at the Employer's election, the Actual
               Contribution Percentage for that first Plan Year.

               To determine the "Actual Contribution Percentage" and the amount
               of Excess Aggregate Contributions pursuant to subsection 7.2,
               only TOM BROWN, INC.

               Matching Contributions contributed to this Plan prior to the end
               of the succeeding Plan Year are considered.

               C.     Adjustment to Actual Deferral Percentage Tests. If the
               initial allocations of the Salary Reduction Contributions do not
               satisfy one of the

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 13 of 41
<PAGE>   14

               tests set forth in subsection 7.1, TOM BROWN, INC. shall correct
               for Excess Contributions (i.e., Salary Reduction Contributions in
               excess of the limits established by the tests set forth in
               subsection 7.1) by either or a combination of the options forth
               below:

                      (3)    On or before the 15th day of the 3rd month after
                      the end of each Plan Year, the Highly Compensated Employee
                      with the highest Salary Reduction Contributions for that
                      Plan Year shall have his portion of Excess Contributions
                      distributed to him until one of the tests set forth in
                      subsection 7.1 is satisfied, or until his Salary Reduction
                      Contributions for that Plan Year equal the Salary
                      Reduction Contributions for that Plan Year of the Highly
                      Compensated Employee having the second highest Salary
                      Reduction Contributions for that Plan Year. This process
                      continues until all Excess Contributions are distributed.

                      For each Highly Compensated Employee, the amount of Excess
                      Contributions is equal to the Salary Reduction
                      Contributions for such Highly Compensated Employee
                      (determined prior to the application of this paragraph)
                      minus the amount determined by multiplying the Highly
                      Compensated Employee's actual deferral ratio (determined
                      after application of this paragraph) by his Compensation.
                      However, to determine the amount of Excess Contributions
                      to be distributed for an affected Highly Compensated
                      Employee, such amount is reduced by any Salary Reduction
                      Contributions previously distributed to such affected
                      Highly Compensated Employee for his taxable year ending
                      with or within such Plan Year.

                      If the distribution of Excess Contributions is made, the
                      test provided in Code Section 401(k)(3) is deemed to be
                      met regardless of whether the test provided in subsection
                      7.1, if recalculated after distribution of the Excess
                      Contributions, satisfies Code Section 401(k)(3). For Code
                      Section 401(m)(9), if a corrective distribution of Excess
                      Contributions is made, or a recharacterization occurs, the
                      Actual Deferral Percentage for Highly Compensated
                      Employees is deemed to be the largest amount permitted by
                      Code Section 401(k)(3).

                      For the distribution of Excess Contributions as described
                      above, such distribution:

                             (a) may be postponed but not later than the close
                             of the succeeding Plan Year;

                             (b) is adjusted for Income; and

                             (c) is designated by TOM BROWN, INC. as a
                             distribution of Excess Contributions (and Income).

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 14 of 41
<PAGE>   15

               D.     Within 12 months after the end of the Plan Year, TOM
               BROWN, INC. shall make a special Qualified Non-Elective
               Contribution for participating Non-Highly Compensated Employees
               sufficient to satisfy one of the tests in subsection 7.1. Such
               contribution shall be allocated to the Participant's Salary
               Reduction Contribution Account of each Non-Highly Compensated
               Employee in the same proportion that each participating
               Non-Highly Compensated Employee's Compensation for the year bears
               to the total Compensation of all participating Non-Highly
               Compensated Employees.

               E.     Safe Harbor Nondiscrimination Rules. Notwithstanding
               subsection 7.1, for Plan Years beginning after 1998, the test in
               Code Section 401(k)(3) is met if this Plan meets both the Notice
               Requirement and the Contribution Requirements. The Notice
               Requirement is met if each Employee eligible to participate in
               this Plan is, within a reasonable period before any Plan Year,
               given written notice of the Employee's rights and obligations by
               this Plan. The notice must be sufficiently accurate and
               comprehensive to apprise the Employee of such rights and
               obligations, and be written in a manner to be understood by the
               average Employee eligible to participate.

               The Contribution Requirements are met if (i) the Matching
               Contribution Requirement is met, or (ii) TOM BROWN, INC. is
               required to make a nonelective contribution of at least 3% of an
               Employee's Compensation to a defined compensation plan on behalf
               of each Non-Highly Compensated Employee who is eligible to
               participate in this Plan whether or not such Employee makes a
               Salary Reduction Contribution. The Matching Contribution
               Requirement is met if TOM BROWN, INC. makes Matching
               Contributions for each Non-Highly Compensated Employee equal to
               100% of the Salary Reduction Contribution of the Employee to the
               extent such Salary Reduction Contributions does not exceed 3% of
               the Employee's Compensation, and 50% of the Salary Reduction
               Contribution to the extent that such Salary Reduction
               Contribution exceeds 3% of Compensation, but does not exceed 5%
               of Compensation. The rate of Matching Contributions for Highly
               Compensated Employees cannot be greater than the rate of Matching
               Contributions for Non-Highly Compensated Employees at any rate of
               Salary Reduction Contributions. If the rate of Matching
               Contribution is not equal to the percentage required by the
               Matching Contribution Requirement, this Plan will nevertheless
               meet the Matching Contribution Requirement if the rate of
               Matching Contributions does not increase as an Employee's rate of
               Salary Reduction Contributions increases, and the aggregate
               amount of Matching Contributions at such rate is equal to or
               greater than the aggregate amount of Matching Contributions which
               would be made if Matching Contributions were made on the basis of
               the percentages specified above.

               F.     Adjustment to Actual Contribution Percentage Tests. If the
               "Actual Contribution Percentage" for the Highly Compensated
               Employee group exceeds the "Actual Contribution Percentage" for
               the Non-Highly Compensated Employee group by subsection 7.2, the
               Administrator (on or before the 15th day of the 3rd month
               following the end of the Plan Year, but

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 15 of 41
<PAGE>   16

               not later than the close of the following Plan Year) directs the
               Trustee to distribute to the Highly Compensated Employee with the
               highest Matching TOM BROWN, INC. Contributions for that Plan
               Year, his portion of Excess Aggregate Contributions (i.e.,
               Matching TOM BROWN, INC. Contributions in excess of the limits
               established by the tests in subsection 7.2) and Income allocable
               to such contributions or, if forfeitable, forfeit such non-Vested
               Excess Aggregate Contributions attributable to Matching TOM
               BROWN, INC. Contributions (and Income allocable to such
               Forfeitures) until his Matching TOM BROWN, INC. Contributions for
               that Plan Year equal the Matching TOM BROWN, INC. Contributions
               for that Plan Year of the Highly Compensated Employee having the
               second highest Matching TOM BROWN, INC. Contributions for that
               Plan Year. This process continues until all Excess Aggregate
               Contributions are distributed.

               Any distribution and/or Forfeiture of less than the entire amount
               of Excess Aggregate Contributions (and Income) is treated as a
               pro rata distribution and/or Forfeiture of Excess Aggregate
               Contributions and Income. Distribution of Excess Aggregate
               Contributions are designated by TOM BROWN, INC. as a distribution
               of Excess Aggregate Contributions (and Income). Forfeitures of
               Excess Aggregate Contributions are treated by subsection 9.4.
               However, no such Forfeiture may be allocated to a Highly
               Compensated Employee whose contributions are reduced by this
               subparagraph.

               Excess Aggregate Contributions are treated as TOM BROWN, INC.
               contributions for Code Section 404 and Code Section 415 even if
               distributed from this Plan.

               For each Highly Compensated Employee, the amount of Excess
               Aggregate Contributions is equal to the Matching TOM BROWN, INC.
               Contributions made by subsection 5.2 (determined prior to the
               application of this paragraph) minus the amount determined by
               multiplying the Highly Compensated Employee's actual contribution
               ratio (determined after application of this paragraph) by his
               Gross Compensation. The actual contribution ratio is rounded to
               the nearest one-hundredth of one percent. The amount of Excess
               Contribution for any Highly Compensated Employee shall not exceed
               the amount of Matching TOM BROWN, INC. Contributions made by
               subsection 5.2 for such Highly Compensated Employee for such Plan
               Year.

               If the distribution of Excess Aggregate Contributions is made,
               the test in Code Section 401(m)(2) is deemed to be met regardless
               of whether the test in subsection 7.2, if recalculated after
               distribution of the Excess Aggregate Contributions, would satisfy
               Code Section 401(m)(2). For Code Section 401(m)(9), if a
               corrective distribution of Excess Aggregate Contributions is
               made, the Actual Contribution Percentage for Highly Compensated
               Employees is deemed to be the largest amount permitted by Code
               Section 401(m)(2).

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 16 of 41
<PAGE>   17

               G.     Safe Harbor Nondiscrimination Rules. This subparagraph
                      applies for Plan years beginning after 1998.

                      (4) Salary Reduction Contribution Safe Harbor.
                      Notwithstanding subsection 7.1, the test in Code Section
                      401(k)(3) is met if the Plan meets both the Notice
                      Requirement and the Contribution Requirements.

                      The Notice Requirement is met if each Employee eligible to
                      participate in the Plan is, within a reasonable period
                      before any Plan Year, given written notice of the
                      Employee's rights and obligations in this Plan. The notice
                      must be sufficiently accurate and comprehensive to apprise
                      the Employee of such rights and obligations, and be
                      written in a manner calculated to be understood by the
                      average Employee eligible to participate.

                      The Contribution Requirements are met if (i) the Matching
                      Contribution Requirement is met or (ii) TOM BROWN, INC. is
                      required to make a nonelective contribution of at least 3%
                      of an Employee's Compensation to a defined compensation
                      plan for each Non-Highly Compensated Employee eligible to
                      participate in this Plan whether or not such Employee
                      makes a Salary Reduction Contribution. The Matching
                      Contribution Requirement is met if TOM BROWN, INC. makes
                      Matching Contributions for each Non-Highly Compensated
                      Employee in an amount equal to 100% of the Salary
                      Reduction Contribution of the Employee to the extent such
                      Salary Reduction Contributions do not exceed 3% of the
                      Employee's Compensation, and 50% of the Salary Reduction
                      Contribution to the extent that such Salary Reduction
                      Contribution exceeds 3% of Compensation, but does not
                      exceed 5% of Compensation. The rate of Matching
                      Contributions for Highly Compensated Employees cannot be
                      greater than the rate of Matching Contributions for
                      Non-Highly Compensated Employees at any rate of Salary
                      Reduction Contributions. If the rate of Matching
                      Contribution is not equal to the percentage required by
                      the Matching Contribution Requirement, this Plan will
                      nevertheless meet the Matching Contribution Requirement if
                      the rate of Matching Contributions does not increase as an
                      Employee's rate of Salary Reduction Contributions
                      increases, and the aggregate amount of Matching
                      Contributions at such rate is equal to or greater than the
                      aggregate amount of Matching Contributions which would be
                      made if Matching Contributions were made on the basis of
                      such percentages.

                      (5) Matching TOM BROWN, INC. Contribution Safe Harbor.
                      Notwithstanding the terms of subsection 7.2, the test in
                      Code Section 401(m)(2) is met if this Plan meets the
                      Notice Requirement and the Contribution Requirements
                      described in subparagraph (1) above, and the Special
                      Limitation on Matching Contributions.

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 17 of 41
<PAGE>   18

                      The Special Limitation on Matching Contributions is met if
                      (i) Matching Contributions for any Employee may not be
                      made for an Employee's Salary Reduction Contributions in
                      excess of 6% of the Employee's Compensation, (ii) the rate
                      of Employer Matching Contributions does not increase as
                      the rate of an Employee's Salary Reduction Contributions
                      increases, and (iii) the Matching Contribution for any
                      Highly Compensated Employee at any rate of Employee
                      contribution or rate of Salary Reduction Contribution is
                      not greater than that for a Non-Highly Compensated
                      Employee.

8.      Selection of Investments; Employee Accounts and Allocation of Benefits.

        8.3 Establishment of Investment Funds. For each Plan Year, the Committee
        may designate and describe 1 or more investment funds available for the
        allocation of Participants' accounts. Subject to Section 13., the
        Trustee has the responsibility to decide the allocation of contributions
        made to the available Funds. TOM BROWN, INC. may delegate this
        responsibility to each Participant in a consistent and nondiscriminatory
        manner. If TOM BROWN, INC. so delegates the investment responsibility to
        Participants, each Participating Employee has the opportunity to
        designate how his account is allocated among the available Funds, by
        subsection 8.2.

        8.4 Selections. The designation by a Participant of the allocation of
        his account among the available investment funds may be made from time
        to time, with such frequency and by such procedures as established by
        the Committee and applied in a uniform nondiscriminatory manner. Any
        such procedure is communicated to the Participants and designed to
        permit the Participants to exercise control over the assets in their
        respective accounts in Code Section 404(c) of the Employee Retirement
        Income Security Act. If and to the extent that a Participant does not
        designate an allocation of his account by this subsection 8.2, the
        Committee selects a Fund or Funds to which such amount is allocated.
        Otherwise, the Committee instructs the Trustee to allocate and invest
        the assets of the Trust by the Participant's selections.

        If and to the extent that the account of a Participant or Beneficiary is
        directed by this subsection 8.2, no person who is otherwise a fiduciary
        is liable to the directing Participant or Beneficiary for any particular
        loss, for failure to diversify assets, or otherwise in such directed
        investment. No investment is directed by a Participant or Beneficiary,
        nor made by the Trustee even if so directed, which directly or
        indirectly inures to the benefit of TOM BROWN, INC. or which constitutes
        a prohibited transaction.

        8.5 Separate Records. The Trustee maintains a separate account in the
        name of each Participating Employee and each Beneficiary having a share
        in the Trust. Separate records are kept of:

               A.     the portion of each Participating Employee's share or
               account from

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 18 of 41
<PAGE>   19

               TOM BROWN, INC. contributions for a salary reduction agreement
               (such amounts to be recorded in a "Salary Reduction Contribution
               Account");

               B. the portion of each Participating Employee's share or account
               from Matching TOM BROWN, INC. Contributions intended to
               supplement amounts contributed by a salary reduction agreement
               (such amount to be recorded in a "Matching TOM BROWN, INC.
               Contribution Account");

               C.     the portion of each Participating Employee's share or
               account from TOM BROWN, INC.'s Discretionary Contributions (such
               amounts to be recorded in a "TOM BROWN, INC. Discretionary
               Contribution Account").

               D.     the portion of each Participating Employee's share or
               account from the Participating Employee's Rollover Contribution
               (such amount to be recorded in a "Rollover Contribution
               Account").

        References to the "share" or "account" of a Participating Employee, the
        word "share" or "account" where the context so permits, are deemed to
        refer severally to the Salary Reduction Contribution Account,

        TOM BROWN, INC. Discretionary Contribution Account, and the Rollover
        Contribution Account, each such account being adjusted for income and
        expense credited or charged as hereinafter described.

        8.6 Allocation of Income and Expenses. As of each Valuation Date, all
        income of this Plan for the period since the preceding Valuation Date is
        credited to, and all losses and expenses of this Plan for such period
        are charged to, the various Accounts maintained by the Trustee for the
        Participating Employees and Beneficiaries. Such credits and charges are
        made in proportion to the value of the respective Participating Employee
        and Beneficiary Accounts as of the preceding Valuation Date (after
        recording all credits and charges otherwise made based on Account
        balances as of the preceding Valuation Date). Further, the Trustee may
        adjust in a nondiscriminatory and consistent manner the credits and
        charges otherwise made based on Account balances as of the preceding
        Valuation Date to take into account inter-Fund transfers, periodic
        contributions for Participants, repayments of Participant loans or
        borrowing by Participants, Rollover contributions, or any other
        transactions occurring since the preceding Valuation Date.

        Any loan extended by the Trustee to a Participant pursuant to Section 11
        is deemed, for allocation of income, as an earmarked investment made for
        such Participant's benefit. All interest or other earnings attributable
        to such loan is allocated and credited exclusively to the account of the
        Participant to whom such loan was made.

        8.7 Revaluation of Assets. As of each Valuation Date, the Trustee
        revalues the various Accounts maintained by the Trustee for the
        Participating Employees and Beneficiaries, so that such Employee and
        Beneficiary Accounts reflect any increase

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 19 of 41
<PAGE>   20

        or decrease in fair market value of the assets of the Trust as of such
        date. Any such increase or decrease in market value is apportioned in
        the same manner that income, expenses, and losses are to be apportioned
        by the provisions of this Section 8.

        8.8 Unit Accounting. Notwithstanding the accounting procedures described
        in subsections 8.4 and 8.5, the Committee may, for administrative
        purposes, instruct the Trustee to establish unit values for one or more
        Funds (or any portion thereof) and maintain the accounts setting forth
        each Participant's interest in such Fund (or any portion thereof) in
        terms of such units, all by such rules and procedures as the Committee
        deems to be fair, equitable and administratively practicable. Any Pooled
        Investment Service Agreement so designed and adopted, is incorporated by
        reference. If unit accounting is established for any Fund (or any
        portion thereof) the value of a Participant's interest in such Fund at
        any time is an amount equal to the then value of a unit in such Fund (or
        any portion thereof) multiplied by the number of units then credited to
        the Participant.

        8.9 Allocation of Contributions. There is credited to the Salary
        Reduction Contribution Account of each Participant, from TOM BROWN,
        INC.'S current contribution, an amount equal to the amount set forth in
        the salary reduction agreement in effect with such Participant.

        At the end of each quarter, there is credited to the Matching TOM BROWN,
        INC. Contribution Account of each Participant who makes Salary Reduction
        Contributions, an amount equal to the periodic TOM BROWN, INC. Matching
        Contribution.

        As of the Anniversary Date ending each Plan Year for which Tom Brown,
        Inc. makes a year-end TOM BROWN, INC. Matching Contribution, there is
        credited to the Matching TOM BROWN, INC. Contribution Account of each
        Participant who entered into a salary reduction agreement for such year.

        As of the Anniversary Date ending each Plan Year for which TOM BROWN,
        INC. makes a Discretionary contribution, there is credited to the Tom
        Brown, Inc. Discretionary Account of each Participating Employee, an
        amount which bears the same ratio to the total of TOM BROWN, INC.'s
        Profit-Sharing Contribution as such Employee's Compensation for such
        year bears to the aggregate of the Compensation of all Participating
        Employees for such year.

        For a Participating Employee entitled to have credited to his account a
        portion of a TOM BROWN, INC. Discretionary contribution for such year
        but whose employment is terminated after the close of such year and
        before such contribution is made to this Plan and such credit effected,
        such credit is effected as though such Employee's employment does not
        terminate.

        In addition, from time to time there is credited to the Rollover
        Contribution Account of each Employee the amounts contributed by him to
        this Plan which is a Rollover

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 20 of 41
<PAGE>   21

        Contribution.

        8.10 Limitation on Annual Additions. If the Participant does not
        participate in, and has never participated in another qualified plan
        maintained by TOM BROWN, INC. that has an annual addition as defined in
        subparagraph 8.10A., the amount of annual additions credited to the
        Participant's account for any limitation year does not exceed the lesser
        of the maximum permissible amount or any other limitation contained in
        this Plan. If the TOM BROWN, INC. contribution that would otherwise be
        contributed or allocated to the Participant's account causes the annual
        additions for the limitation year to exceed the maximum permissible
        amount, the amount contributed or allocated is reduced so that the
        annual additions for the limitation year equal the maximum permissible
        amount.

        Prior to determining the Participant's actual Compensation for the
        limitation year, TOM BROWN, INC. may determine the maximum permissible
        amount for a Participant on a reasonable estimate of the Participant's
        Compensation for the limitation year, uniformly determined for all
        Participants similarly situated. As soon as administratively feasible
        after the end of the limitation year, the maximum permissible amount for
        the limitation year is determined on the basis of the Participant's
        actual Compensation for the limitation year. If as a result of
        forfeitures or as a result of exceeding the maximum permissible amount
        there is an excess amount, the excess will be disposed of as follows:

               A.     Any contributions by a salary reduction agreement, to the
               extent they reduce the excess amount, are returned to the
               Participant;

               B.     If after the application of subparagraph A. an excess
               amount still exists, and the Participant is a Participant in this
               Plan at the end of the limitation year, the excess amount in the
               Participant's account is used to reduce TOM BROWN, INC.
               contributions (including any allocation of forfeitures) for such
               Participant in the next limitation year, and each succeeding
               limitation year if necessary;

               C.     If after the application of subparagraph A. an excess
               amount still exists, and the Participant is not a Participant in
               this Plan at the end of a limitation year, the excess amount is
               held unallocated in a suspense account. The suspense account is
               applied to reduce TOM BROWN, INC. contributions for all remaining
               Participants in the next limitation year, and each succeeding
               limitation year if necessary; and

               D.     If a suspense account is in existence at any time during a
               limitation year by this subsection, it does not participate in
               the allocation of this Plan's investment gains and losses. If a
               suspense account is in existence at any time during a particular
               limitation year, all amounts in the suspense account are
               allocated and reallocated to Participants' accounts before any
               TOM BROWN, INC. or Employee contributions are made to this Plan
               for that limitation year. Excess amounts are not distributed to
               Participants or former

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 21 of 41
<PAGE>   22

        Participants.

        8.11 Combination With Other Plans. This subsection applies if, in
        addition to this Plan, the Participant is a Participant in another
        qualified defined contribution plan maintained by TOM BROWN, INC., a
        welfare benefit fund (in Code Section 419(e)) maintained by TOM BROWN,
        INC., or an individual medical account (in Code Section 415(1)(2)),
        maintained by TOM BROWN, INC., which provides an annual addition in
        subsection 8.10F., during any limitation year.

        The annual additions credited to a Participant's account by this Plan
        for any such limitation year do not exceed the maximum permissible
        amount reduced by the annual additions credited to a Participant's
        account by the other plans and welfare benefit funds for the same
        limitation year. If the annual additions for the Participant in other
        defined contribution plans and welfare benefit funds maintained by TOM
        BROWN, INC. are less than the maximum permissible amount and TOM BROWN,
        INC. contribution that would otherwise be contributed or allocated to
        the Participant's account by this Plan causes the annual additions for
        the limitation year to exceed this limitation, the amount contributed or
        allocated is reduced so that the annual additions by all such plans and
        funds for the limitation year equal the maximum permissible amount. If
        the annual additions for the Participant by such other defined
        contribution plans and welfare benefit funds in the aggregate are equal
        to or greater than the maximum permissible amount, no amount is
        contributed or allocated to the Participant's account by this Plan for
        the limitation year.

        Prior to determining the Participant's actual compensation for the
        limitation year, TOM BROWN, INC. may determine the maximum permissible
        amount for a Participant as described in subsection 8.8. As soon as is
        administratively feasible after the end of the limitation year, the
        maximum permissible amount for the limitation year is determined on the
        basis of the Participant's actual Compensation for the limitation year.
        If forfeitures, or the excess over the maximum permissible amount, cause
        a Participant's annual additions in this Plan and such other plans cause
        an excess amount for a limitation year, the excess amount is deemed to
        consist of the annual additions last allocated, except annual additions
        attributable to a welfare benefit fund or individual medical account are
        deemed allocated first regardless of the actual allocation date. If an
        excess amount is allocated to a Participant on an allocation date of
        this Plan which coincides with an allocation date of another plan, the
        excess amount attributed to this Plan is the product of:

               A.     the total excess amount allocated as of such date, times

               B.     the ratio of (i) the annual additions allocated to the
               Participant for the limitation year as of such date by this Plan
               to (ii) the total annual additions allocated to the Participant
               for the limitation year as of such date by this and all the other
               qualified defined contribution plans.

               Any excess amount attributed to this Plan is disposed by
               subsection 8.8.

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 22 of 41
<PAGE>   23

               For limitation years beginning before 2000, if TOM BROWN, INC.
               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 shall not exceed 1.0 in any limitation
               year. The annual additions credited to the Participant's account
               by this Plan for any limitation year are reduced or limited by
               the Trustee in a uniform and nondiscriminatory manner to effect
               the foregoing limitation.

        8.12   Code Section 415 Definitions.

               A.     Annual additions are the sum of the following amounts
               credited to a Participant's account for the limitation year:

                      (6) Employer contributions,

                      (7) Employee contributions, and

                      (8) forfeitures.

               Any excess amount applied by subsections 8.8 or 8.9 in the
               limitation year to reduce TOM BROWN, INC. contributions are
               considered annual additions for such limitation year.

               B.     Compensation. A Participant's wages, salaries, and fees
               for professional services and other amounts received for personal
               services actually rendered in the employment with TOM BROWN, INC.
               (including, but not limited to, commissions paid salesmen,
               compensation for services on the basis of a percentage of
               profits, commissions on insurance premiums, tips and bonuses),
               and including any elective deferral (in Code Section 402(g)(3)),
               and any amount contributed or deferred by TOM BROWN, INC. at the
               election of the Employee and not includible in the gross income
               of the Employee by Code Section 125 or Code Section 457, but
               excluding the following:

                      (9) Any distributions from a plan of deferred
                      compensation;

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

                      (11) Amounts realized from the sale, exchange or other
                      disposition of stock acquired by a qualified stock option;
                      and

                      (12) Other amounts which received special tax benefits, or
                      contributions made by TOM BROWN, INC. (whether or not by a
                      salary reduction agreement) towards the purchase of an
                      annuity described in Code Section 403(b) (whether or not
                      the amounts are actually excludible from the gross income
                      of the Employee).

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 23 of 41
<PAGE>   24

               For applying the limitations of this Section, Compensation for a
               limitation year is the Compensation actually paid or includible
               in gross income during such limitation year.

               Notwithstanding the preceding sentence, Compensation for a
               Participant in a defined contribution plan who is Disabled is the
               Compensation such Participant would have received for the
               limitation year if the Participant had been paid at the rate of
               Compensation paid immediately before becoming Disabled; such
               imputed Compensation for the Disabled Participant may be taken
               into account only if the Participant is not a Highly Compensated
               Employee and contributions made on behalf of such Participant are
               nonforfeitable when made.

               C.     Defined benefit fraction is a fraction, the numerator of
               which is the sum of the Participant's projected annual benefits
               by all the defined benefit plans (whether or not terminated)
               maintained by TOM BROWN, INC., and the denominator of which is
               the lesser of 125% of the dollar limitation determined for the
               limitation year by Code Section 415(b) and Code Section 415(d) or
               140% of the highest average compensation, including any
               adjustments by Code Section 415(b).

               D.     Defined contribution dollar limitation is $30,000.

               E.     Defined contribution fraction is a fraction, the numerator
               of which is the sum of the annual additions to the Participant's
               account by all the defined contribution plans (whether or not
               terminated) maintained by TOM BROWN, INC. 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 TOM BROWN, INC., and the annual
               additions attributable to all welfare benefit funds (in Code
               Section 419(e)), and individual medical accounts (in Code Section
               415(1)(2)), maintained by TOM BROWN, INC.), and the denominator
               of which is the sum of the maximum aggregate amounts for the
               current and all prior limitation Years of Service with TOM BROWN,
               INC. (regardless of whether a defined contribution plan was
               maintained by TOM BROWN, INC.). The maximum aggregate amount in
               any limitation year is the lesser of 125% of the dollar
               limitation in Code Section 415(b) and Code Section 415(d) in
               effect by Code Section 415(c)(1)(A) or 35% of the Participant's
               Compensation for such year.

               F.     Employer. Subparagraphs 8.8, 8.9 and 8.10 apply to TOM
               BROWN, INC., and all members of a controlled group of
               corporations (in Code Section 414(b) as modified by Code Section
               415(h)), all commonly controlled trades or businesses (in Code
               Section 414(c) as modified by Code Section 415(h)) or affiliated
               service groups (in Code Section 414(m)) of which TOM BROWN, INC.
               is a part, and any other entity required to be aggregated with
               TOM

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 24 of 41
<PAGE>   25

               BROWN, INC. by Code Section 414(o).

               G.     Excess amount is the excess of the Participant's annual
               additions for the limitation year over the maximum permissible
               amount.

               H.     Highest average compensation is the average compensation
               for the 3 consecutive Years of Service with TOM BROWN, INC. that
               produces the highest average.

               I.     Limitation year is a calendar year, or the 12-consecutive
               month period elected by TOM BROWN, INC..

               J.     Maximum permissible amount. The maximum annual addition
               that may be contributed or allocated to a Participant's account
               by this Plan for any limitation year shall not exceed the lesser
               of:

                      (13  the defined contribution dollar limitation, or

                      (14  25% of the Participant's Compensation for the
                      limitation year.

               The Compensation limitation referred to in (2) does not apply to
               any contribution for medical benefits (in Code Section 401(h) or
               Code Section 419A(f)(2)) otherwise treated as an annual addition
               by Code Section 415(l)(1) or Code Section 419A(d)(2).

               If a short limitation year is created by an amendment changing
               the limitation year to a different 12-consecutive month period,
               the maximum permissible amount does not exceed the defined
               contribution dollar limitation multiplied by the following
               fraction:

                             Number of months in the short limitation year
                             ---------------------------------------------
                                                 12

               K.     Projected Annual Benefit is 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 is entitled by this Plan assuming:

                      (1  the Participant continues employment until Normal
                      Retirement Age by 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 by the Plan remains constant for all
                      future limitation years.

9.      Retirement and Severance.

        9.1 Normal Retirement, Etc. When a Participant reaches the Normal
        Retirement

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 25 of 41
<PAGE>   26

        Age of 65, such Participant's account is fully vested and
        nonforfeitable. If the employment of a Participating Employee terminates
        at any time from the death or Disability of such Participating Employee,
        such Participant's account is fully vested and nonforfeitable from and
        after the date of termination of employment. Payment of benefits by this
        Plan to or on behalf of such Participant is made by Section 10.

        9.2 Vested Benefits; Termination of Employment. The portion of a
        Participating Employee's share in this Plan allocated to the Salary
        Reduction Contribution Account and the Rollover Contribution Account is
        at all times fully and immediately vested in such Employee. This
        portion, together with the vested portion of TOM BROWN, INC.
        Discretionary Contribution Account, determined by the schedule set forth
        below, depending upon such Participant's Vesting Years of Service
        completed to the date of termination of employment is paid to or on
        behalf of such Participant as provided by this Plan.

        The vesting schedule applicable to a Participant's TOM BROWN, INC.
        Discretionary Contribution Account shall be as follows:

                                                          Vested
        Vesting Years of Service                          Percentage

        Less than 2 years                                 20%
        2 or more, but less than 3                        40%
        3 or more, but less than 4                        60%
        4 or more, but less than 5                        80%
        5 years or more                                   100%

        Any amount not vested by the foregoing vesting schedule constitutes a
        Forfeiture as of the date of termination of employment, and applied by
        subsection 9.4.

        For a terminated Participating Employee who incurs 5 consecutive
        One-Year Breaks in Service, Vesting Years of Service after such break
        are not taken into account to determine the vested percentage of his
        account accrued prior to such 5 consecutive One-Year Breaks in Service.

        For a Participating Employee whose interest in this Plan is distributed
        on termination of participation and is not repaid by subsection 9.3
        below, any Service after the distribution date does not increase the
        amount of the Participant's non-forfeitable benefit in this Plan as
        computed at the time of distribution. Separate accounts for the
        pre-break and post-break portions of such person's interest in this Plan
        are maintained, if and to the extent necessary to properly reflect this
        subsection.

        9.3 Restoration of Vesting Service and Forfeited Amounts. Any amount
        forfeited by subsection 9.2 is restored to the credit of a former
        Participant who previously terminated employment by:

               A.     A former Participant resumes employment with TOM BROWN,
               INC. and becomes eligible to re-enter the Plan by subsection 9.2
               before having

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 26 of 41
<PAGE>   27

               received a distribution from this Plan; or

               B.     A former Participant who received a distribution from this
               Plan resumes employment with TOM BROWN, INC. and becomes eligible
               to re-enter this Plan by subsection 9.2 before incurring 5
               consecutive One-Year Breaks in Service, and repays to this Plan
               the full amount of the distribution previously received
               (unadjusted by any later gains or losses). Such repayment must be
               made before the Anniversary Date ending the Plan Year within
               which the Participant incurs a 5th consecutive One-Year Break in
               Service.

        If a restoration of previously forfeited amounts occurs because of the
        circumstance in subparagraph A., the prior amount of forfeiture is
        restored with adjustment for any subsequent gains or losses, as
        determined by the Committee. If a restoration of previously forfeited
        amounts occurs because of the circumstance described in subparagraph B.,
        the prior amount of forfeiture is restored without adjustment for any
        subsequent gains or losses. If a Participant terminates employment with
        TOM BROWN, INC. at a time when his vested account balance is zero, he is
        deemed to receive a distribution of his vested account balance and
        treated as a former Participant in subparagraph B. On re-entry into this
        Plan, such a Participant has his previously forfeited amount restored
        without adjustment for any subsequent gains or losses.

        Funds needed in any Plan Year to reinstate the amount previously
        forfeited by a re-employed Participant are provided first by Forfeitures
        occurring during that Plan Year, and second, if necessary, by TOM BROWN,
        INC. by a separate Plan contribution.

        If a previously forfeited amount is later restored by this subsection,
        upon a subsequent termination of employment, the Participant's vested
        interest is determined by the foregoing vesting schedule as if no
        previous separation from service occurs.

        9.4 Treatment of Forfeitures. The nonvested portion of a Participant's
        account by the Plan is a Forfeiture. Any such Forfeiture for a TOM
        BROWN, INC. Discretionary Contribution Account is reallocated to the
        accounts of those persons who, on the Anniversary Date ending the Plan
        Year during which the Forfeiture occurs are eligible to participate in
        TOM BROWN, INC. Discretionary contributions for such Plan Year, and is
        allocated as TOM BROWN, INC. Discretionary contributions to this Plan
        are allocated by subsection 8.7.

        Any such Forfeiture of a Participant's Matching TOM BROWN, INC.
        Contribution Account is used to reduce the Company's Matching TOM BROWN,
        INC. Contributions to this Plan, and are not used to increase the
        benefits of the Participants and Beneficiaries.

10.     Distribution of Benefits.

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 27 of 41
<PAGE>   28

        10.1 Normal Form of Payment. The normal form of distribution of benefits
        by this Plan to an unmarried Participant who retires or whose employment
        with TOM BROWN, INC. is otherwise terminated is a single life annuity.

        The normal form of distribution of benefits by this Plan to a married
        Participant who retires or whose employment with TOM BROWN, INC. is
        otherwise terminated, is a qualified Joint and Survivor Annuity. The
        Qualified Joint and Survivor Annuity consists of an immediate annuity
        for the life of the Participating Employee, with a survivor annuity for
        the life of his or her spouse which is equal to 50% of the amount of the
        annuity payable during the joint lives of the Participating Employee and
        the spouse, and which is the actuarial equivalent of a single annuity
        for the life of the Participating Employee. Payment of the normal form
        of benefit begins as of the first day of the month after the
        Participant's attainment of Normal Retirement Age, unless subsection
        10.5 applies, when case distribution is immediate in the form of a cash
        lump sum. Notwithstanding the foregoing, the Participant may elect to
        have such annuity distributed as soon as administratively feasible after
        termination of employment, if the Participant and the Participant's
        spouse consent to the distribution. If there is an effective waiver of
        the Qualified Joint and Survivor Annuity form of payment, by subsection
        10.6, the amount payable to the Participating Employee (or his or her
        Beneficiary) is paid by subsection 10.2.

        10.2 Alternative Form of Payment. If there is an effective waiver of the
        normal form of payment of benefits by subsection 10.1, a Participant's
        benefit is paid in a cash lump sum or any annuity form of payment
        available to Participants by subsection 10.2. A Participant who
        terminates employment after attaining Normal Retirement Age receives or
        begins to receive his benefit within 60 days after the Anniversary Date
        after his termination of employment. A Participant who terminates
        employment prior to his attaining Normal Retirement Age has the option
        to receive, at his or her election, a distribution of his or her entire
        benefit to begin as soon as administratively feasible after the
        Participant's termination of employment with TOM BROWN, INC..

        10.3 Other Rules for Beginning and Duration of Benefits. The entire
        interest in this Plan of any Participating Employee must be, or begin to
        be, distributed before the required beginning date. For a Participant
        who is not a 5% owner, the required beginning date is the April 1 of the
        calendar year following the later of (i) the calendar year the
        Participant attains age 70-1/2, or (ii) the calendar year the
        Participant retires.

        The required beginning date for a Participant who is a 5% owner (in Code
        Section 416(i)) is April 1 of the calendar year following the calendar
        year the Participant attains age 70-1/2.

        Benefits are distributed over a period not to exceed the life of the
        Participant, the life of the Participant and his designated Beneficiary,
        the life expectancy of the Participating Employee, or the joint life
        expectancy of the Participating Employee and his designated Beneficiary.
        If the Participant's entire interest is to be distributed

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 28 of 41
<PAGE>   29

        in a form other than a lump sum, the amount to be distributed each year
        must be at least equal in amount to the quotient obtained by dividing
        the Participant's entire interest by the lesser of (i) the applicable
        life expectancy (ii) if the Participant's spouse is not the designated
        Beneficiary, the applicable divisor from the table set forth in Q&A-4 of
        Prop Reg ss. 1.401(a)(9)-2. For this computation, the life expectancy of
        the Participant may be recalculated no more frequently than annually,
        but the life expectancy of a nonspouse Beneficiary may not be
        recalculated. Payments shall not be delayed in violation of Code Section
        401(a)(14).

        10.4 Death Benefits; Beneficiary Designation; Distribution of Death
        Benefits. If a Participant dies, his accrued benefit is paid in full as
        soon as practicable to his surviving spouse, as his Beneficiary.
        Distribution is made as an immediate single life annuity unless the
        surviving spouse otherwise elects to receive payment in the form of a
        single cash lump sum. Notwithstanding the foregoing, however, a
        Participant may designate a Beneficiary other than the Participant's
        spouse if (1) the spouse has waived his or her right to be the
        Participant's Beneficiary by this subsection 10.4; or (2) the
        Participant has no spouse; or (3) the spouse cannot be located.

        The designation of a Beneficiary, other than a spouse, is made on a form
        satisfactory to TOM BROWN, INC.. A Participant may at any time revoke
        his designation of a Beneficiary or change his Beneficiary by filing
        written notice of such revocation or change with TOM BROWN, INC..
        However, the Participant's spouse must again consent in writing to any
        such change or revocation. Any consent by the Participant's spouse to
        waive any rights to the death benefit must be in writing, must
        acknowledge the effect of such waiver, and be witnessed by a Plan
        representative or a notary public. If no valid designation of
        Beneficiary exists at the Participant's death, and the Participant has
        no surviving spouse, the death benefit is payable to his estate.

        If payments are made to a non-spouse Beneficiary, because of a
        Participant's death (or the death of a Participant's spouse), the entire
        interest of the Participant is distributed to such Beneficiary within 5
        years after such death.

        10.5 Small Distributions. Notwithstanding the normal form of payment of
        benefits as a Qualified Joint and Survivor Annuity, and the distribution
        of death benefits as a single life annuity to the Participating
        Employee's surviving spouse, the Trustee makes distribution of the
        present value of such annuity (or other benefit available by the Plan)
        in cash if the value of such annuity or other benefit does not exceed,
        nor has ever exceeded, $5,000.

        10.6 Waiver of Form of Benefit; Notification. A Participant may, during
        the Applicable Election Period, (i) elect to waive the Qualified Joint
        and Survivor Annuity form of benefit, and (ii) elect an alternate
        Beneficiary. A Participant may revoke any such election any number of
        times within the Applicable Election Period. Such elections do not take
        effect unless (i) the spouse of the Participant consents in writing to
        such election, and the spouse's consent acknowledges the effect of such

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 29 of 41
<PAGE>   30

        election and is witnessed by a Plan representative or a notary public,
        or (ii) it is established to the satisfaction of a Plan representative
        that such consent may not be obtained because there is no spouse,
        because the spouse cannot be located, or because of such other
        circumstances as are prescribed by regulations of the Secretary of
        Treasury. Any consent by a spouse (or establishment that the consent of
        a spouse may not be obtained) is effective only for such spouse and is
        limited to a specific alternate Beneficiary (or a form of benefits)
        unless such consent expressly permits designations by the Participant
        without any requirement of further consent by the spouse. Without such a
        provision, any new waiver or change of Beneficiary requires a new
        spousal consent. For this subsection, the term "Applicable Election
        Period" is the 90-day period ending on the Annuity Starting Date.

        This Plan provides to each Participating Employee a written explanation
        of the following:

               A.     the terms and conditions of the Qualified Joint and
               Survivor Annuity;

               B.     the Participant's right to make, and the effect of, an
               election to waive the Qualified Joint and Survivor Annuity form
               of benefit;

               C.     the rights of the Participant's spouse for such election;
               and

               D.     the right to make, and the effect of, a revocation of such
               election.

        The written explanation of the Qualified Joint and Survivor Annuity is
        provided no less than 30 days and no more than 90 days prior to the
        Annuity Starting Date. However, the written explanation may be provided
        after the Annuity Starting Date. The 90-day applicable election period
        to waive the Qualified Joint and Survivor Annuity does not end before
        the 30th day after the date such explanation is provided. The Secretary
        of the Treasury may, by regulations, limit the period of time by which
        the Annuity Starting Date precedes the provision of the written
        explanation other than by providing that the Annuity Starting Date may
        not be earlier than termination of employment.

        A Participant may elect (with any applicable spousal consent) to waive
        any requirement that the written explanation be provided at least 30
        days before the Annuity Starting Date (or to waive the 30-day
        requirement by the above paragraph) if the distribution begins more than
        7 days after such explanation is provided.

        10.7 Segregated Accounts. Amounts credited to the accounts of
        Participants whose employment has terminated or Beneficiaries not paid
        out may be held with other assets of this Plan or may be held separately
        from the assets held for the benefit of other Participating Employees.
        If so segregated, the Trustee invests such segregated accounts in
        savings accounts, certificates of deposit, Treasury bills, bonds, or
        similar interest-bearing investments, as instructed by the Committee,
        regardless of the investment policy adopted for the balance of the Trust
        assets. In so doing, the Committee shall not discriminate in favor of
        one or some retired Employees or Beneficiaries as against one or some
        other retired Employees or

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 30 of 41
<PAGE>   31

        Beneficiaries. Each such payee is credited or charged with appropriate
        adjustments for earnings, losses, and revaluations of the segregated
        amount being held for his benefit; all such adjustments are made as of
        each Anniversary Date as adjustments to other assets of this Plan.
        Nothing in this subsection, however, entitles such payee to share in any
        TOM BROWN, INC. contributions to this Plan he would not otherwise be
        entitled to share by this Plan.

        10.8 Location of Participant or Beneficiary Unknown. If all, or any
        portion, of the distribution payable to a Participant or his Beneficiary
        at the expiration of 5 years after it is payable, remains unpaid solely
        for the inability of the Committee, after sending a registered letter,
        return receipt requested, to the last known address, and after further
        diligent effort, to ascertain the whereabouts of such Participant or his
        Beneficiary, the amount so distributable is reallocated in the same
        manner as Forfeitures are allocated by subsection 9.4. If a Participant
        or Beneficiary is located subsequent to his benefit being reallocated,
        such benefit is restored.

        10.9 Special Distribution Rules Applicable to Qualified Domestic
        Relations Order. If all, or any portion of the amounts credited to the
        accounts of a Participant are required to be paid to an alternate payee
        by any Qualified Domestic Relations Order ("QDRO"), as that term is
        defined in Section 12, the Committee instructs the Trustee to distribute
        to such designated alternate payee all amounts required by the QDRO
        whether or not the Participant is entitled to a distribution of his
        account by virtue of termination of employment or attainment of
        retirement age. The alternate payee of the QDRO has the option to
        receive, at his or her election, the entire amount required by the QDRO
        in the form of a cash lump sum as soon as administratively feasible
        after the Committee's receipt and verification of the QDRO.

        10.10 Direct Rollovers. A distributee may elect, at the time and in the
        manner prescribed by the Committee, to have any portion of an eligible
        rollover distribution paid directly to an eligible retirement plan
        specified by the distributee in a direct rollover.

        For this subsection 10.10:

               A.     Eligible rollover distribution is any distribution of all
               or any portion of the balance to the credit of the distributee,
               except an eligible rollover distribution does not include: any
               distribution that is one of a series of substantially equal
               periodic payments (not less frequently than annually) made for
               the life (or life expectancy) of the distributee or the joint
               lives (or joint life expectancies) of the distributee and the
               distributee's designated beneficiary, or for 10 years or more;
               any distribution required by Code Section 401(a)(9); and the
               portion of any distribution not includible in gross income
               (without the exclusion of net unrealized appreciation with
               respect to employer securities).

               B.     Eligible retirement plan is an individual retirement
               account in Code Section 408(a), an individual retirement annuity
               in Code Section 408(b), an annuity plan in Code Section 403(a),
               or a qualified trust in Code Section

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 31 of 41
<PAGE>   32

               401(a), that accepts the distributee's eligible rollover
               distribution. However, for an eligible rollover distribution to
               the surviving spouse, an eligible retirement plan is an
               individual retirement account or individual retirement annuity.

               C.     Distributee includes 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 by a qualified domestic relations
               order, in Code Section 414(p) are distributees for the interest
               of the spouse or former spouse.

               D.     Direct rollover is a payment by this Plan to the eligible
               retirement plan specified by the distributee.

11.     Loans to Participating Employees.

The Committee, in its discretion, may authorize a loan to a Participant who is a
party in interest, within ERISA ss. 3(14), upon receipt of a written request
from the Participant. The total amount of any such loan (when added to the
outstanding balance of all other loans to the Participant by the Plan or any
other qualified plan of the Employer) cannot exceed the lesser of $50,000 or 50%
of the value of the Participant's vested Account Balance. The $50,000 limitation
is reduced by the excess, if any, of the highest outstanding balance of loans
from the Plan during the one-year period ending on the day before such loan is
made over the outstanding balance of loans from the Plan on the date that such
loan is made.

A Participant can have only one outstanding loan and payments must be made by
payroll deduction.

A request by a Participant for a loan is made in writing to the Committee and
specifies the amount of the loan, and the account(s) of the Participant from
which the loan is to be made. The terms and conditions on which the Committee
approves loans by this Plan are applied on a reasonably equivalent basis for all
Participants. If a Participant's request for a loan is approved by the
Committee, the Committee arranges for the distribution of the specified amount
in a single sum payment of cash to the Participant.

Loans are made on such terms and subject to such limitations as the Committee
prescribes, provided any such loan is evidenced by a written promissory note,
bears a reasonable rate of interest on the unpaid principal, is adequately
secured, and will be repaid by the Participant over a period not to exceed 5
years, unless the loan is for the purpose of acquiring a dwelling unit used or
to be used within a reasonable time as the principal residence of the
Participant. The interest rate charged on a loan must be at least equivalent to
the prevailing interest rate charged by persons in the business of lending money
for loans which would be made by similar circumstances. Loan repayments are
suspended while a Participant is performing service in the Uniformed Services by
Code Section 414(i)(4).

Any loan to a Participant is secured by the pledge of 50% of the Participant's
right, title, and interest in his Account. The pledge will be evidenced by the
execution of a promissory

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TOM BROWN, INC. 401(k) Retirement Plan                             Page 32 of 41
<PAGE>   33

note by the Participant.

The Committee has the sole responsibility to ensure that a Participant timely
makes all scheduled loan repayments. Repayment is paid to the Trust, and is to
be accompanied by written instructions from the Committee identifying the
Participant on whose behalf the loan repayment is being made. Each loan is
amortized on a substantially level basis, with payments at least quarterly over
the term of the loan. A loan may be prepaid without penalty at any time.

If the Participant's employment with TOM BROWN, INC. terminates or there is a
default by a Participant on a loan repayment, all remaining principal payments
on the loan are immediately due and payable. The Committee is authorized (to the
extent permitted by law) to take any and all actions necessary and appropriate
to enforce collection of an unpaid loan. However, on a default, foreclosure on
the note and attachment of security does not occur until a distributable event
occurs by this Plan. A default is deemed to have occurred if any loan payment is
not made within 90 days of when the payment is due by the Participant.

On a Participant's retirement or death or on a Participant's termination of
employment or earlier distribution, the unpaid balance of any loan, including
any unpaid interest, is deducted from any payment or distribution from this Plan
to which the Participant or his designated Beneficiary are entitled and the
vested interest in the account is correspondingly reduced.

The Committee issues written loan guidelines, which forms part of this Plan,
describing the procedures and conditions for making loans, and may revise the
guidelines at any time, and for any reason.

A Participant must obtain the consent of his or her spouse, if any, to use of
the account balance 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 is to be so secured. The consent must be in writing, must
acknowledge the effect of the loan, and must be witnessed by a plan
representative or notary public. Such consent is binding for the consenting
spouse or any subsequent spouse for that loan. A new consent is required if the
account balance is used for renegotiation, extension, renewal, or other revision
of the loan.

12.     Spendthrift Clause.

The rights of a Participant or Beneficiary to receive payments or benefits from
this Plan are not subject to alienation or assignment, and are not subject to
anticipation, encumbrance or claims of creditors. Notwithstanding the foregoing,
this Plan shall pay benefits by the terms of any Qualified Domestic Relations
Order, if such Order (i) does not require this Plan to provide any type or form
of benefits, or any option not otherwise provided, (ii) does not require this
Plan to provide increased benefits, and (iii) does not require the payment of
benefits to an alternate payee required to be paid to another alternate payee by
another order previously determined to be a Qualified Domestic Relations Order.
A "Domestic Relations Order" is any judgment, decree or order (including
approval of a property

================================================================================
TOM BROWN, INC. 401(k) Retirement Plan                             Page 33 of 41
<PAGE>   34

settlement agreement) which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse, child, or other
dependent of a Participant and is made pursuant to a state domestic relations
law. "Qualified Domestic Relations Order" is a Domestic Relations Order which
creates or recognizes the existence of an alternate payee's right to, or assigns
to an alternate payee the right to, receive all or a portion of the benefits
payable with respect to a Participant by this Plan and which clearly specifies
(i) the name and the last known mailing address of the Participant and each
alternate payee covered by the Order, (ii) the amount or percentage of the
Participant's benefits to be paid by this Plan to each such alternate payee, or
the manner in which such amount or percentage is to be determined, (iii) the
number of payments or period to which such Order applies, and (iv) each plan to
which such Order applies. A distribution by the estate of a deceased Participant
or Beneficiary to an heir or legatee of a right to receive payments is not
deemed an alienation, assignment or anticipation for this Section 12.

13.     Administration of Plan Trust.

The Committee and TOM BROWN, INC. administer this Plan for the benefit of all
Participating Employees and Beneficiaries, without discrimination in favor of
one or some Participating Employees or Beneficiaries as against one or some
other Participating Employees or Beneficiaries.

Whenever action is required by TOM BROWN, INC. or the Committee, it may be taken
by any individual designated as agent for the purpose. TOM BROWN, INC. or the
Committee notify the Trustee of any change of agent.

14.     Administrative Committee.

The Committee is a body appointed by TOM BROWN, INC. and, subject to the terms
of this Plan, has general supervision of the administration of this Plan.

The members of the Committee elect from their number a chairman and appoint a
secretary who need not be a member of the Committee. They may appoint any person
or persons to have such duties in connection with administration of this Plan as
the Committee may from time to time provide. The Committee may appoint from
their number such subcommittees with such powers as the Committee determines,
and may authorize one or more of their number, any person or persons having
duties for administration of this Plan or any agent to execute or deliver any
instrument or make any payment on their behalf, except a request for funds from
or a direction for, the payment or application of funds by the Insurance Company
shall be signed by at least one member of the Committee. The Committee may
retain such legal counsel and accountants, who may or may not be in the employ
of TOM BROWN, INC., actuaries, and such clerical services as it may require in
carrying out this Plan.

The Committee holds meetings upon such notice, at such time or times, and at
such place or places as it may determine. A majority of the members of the
Committee at the time in office constitutes a quorum for the transaction of
business at all meetings. All resolutions or other actions taken by the
Committee are by a vote of a majority of the members, if they act without a
meeting.

================================================================================
TOM BROWN, INC. 401(k) Retirement Plan                             Page 34 of 41
<PAGE>   35

The Committee may from time to time establish rules for the administration of
this Plan. Except as otherwise herein expressly provided, the Committee has the
exclusive right to interpret this Plan and to decide any matters arising
hereunder in the administration and operation of this Plan. It shall endeavor to
act by general rules so as not to discriminate in favor of any person.

The members of the Committee are free from all liability, joint or several, for
their acts as members of such Committee, except to the extent that they may have
been guilty of misconduct, or except to the extent otherwise required by the
Employee Retirement Income Security Act of 1974.

The members of the Committee serve without compensation for their services. All
reasonable and necessary costs, expenses and liabilities incurred by the
Committee in the supervision of the administration of this Plan and the Group
contract shall be paid by TOM BROWN, INC. separate and apart from the
Contributions to this Plan.

The Committee and its individual members are indemnified by TOM BROWN, INC. and
not from this Plan against any and all liabilities arising by reason of any act
or failure to act made in good faith pursuant to this Plan, including expenses
reasonably incurred in the defense of any claim.

15.     Allocation of Responsibilities.

        15.1 Administrative Responsibilities. The Committee is the Named
        Fiduciary which has the authority to control and manage the operation
        and administration of the Plan. TOM BROWN, INC. shall make such rules,
        regulations, interpretations, and shall take such other actions to
        administer the Plan as TOM BROWN, INC. may deem appropriate. In
        administering the Plan, TOM BROWN, INC. acts in a nondiscriminatory
        manner for Plan Participants and Beneficiaries, and at all times
        discharges its duties for this Plan by applicable fiduciary standards.

        15.2 Management of Plan Assets. TOM BROWN, INC. is the Named Fiduciary
        for control and management of this Plan's assets only to the extent that
        it (i) appoints one or more Trustees to hold the assets of the Plan in
        trust, (ii) appoints one or more Investment Managers for any Plan assets
        and enters into an investment management agreement with each Investment
        Manager it appoints, and (iii) exercises its authority to direct the
        sale, investment or reinvestment of Plan assets. TOM BROWN, INC. is
        responsible for diversifying the investments of this Plan only if it
        directs investments, and the Trustee and the Investment Managers, if
        any, are responsible for diversifying the specific investments in
        accounts by their management.

        15.3 Trustee and Investment Managers. The Trustee has the exclusive
        authority and discretion to control and manage the assets of this Plan,
        and is the Named Fiduciary for such control and management, except to
        the extent that TOM BROWN,

================================================================================
TOM BROWN, INC. 401(k) Retirement Plan                             Page 35 of 41
<PAGE>   36

        INC. exercises its authority to direct investment of this Plan's assets,
        or the authority to manage such assets is allocated by TOM BROWN, INC.
        to one or more Investment Managers. Each Investment Manager appointed by
        TOM BROWN, INC. has the authority to manage, including the power to
        acquire and dispose of, such assets of this Plan assigned to it by TOM
        BROWN, INC..

        15.4 Delegation of Fiduciary Responsibilities. Except as otherwise
        expressly stated herein, TOM BROWN, INC. does not allocate or delegate
        to any other person any of its duties and responsibilities. The duties
        and responsibilities of TOM BROWN, INC. are carried out by TOM BROWN,
        INC.'S Directors and officers, acting on behalf of and in the name of
        TOM BROWN, INC. in their capacities as such, and not as individual
        fiduciaries. TOM BROWN, INC. is specifically prohibited from designating
        any Director or officer of TOM BROWN, INC. as a fiduciary and from
        allocating or delegating to any such person any of the fiduciary
        responsibilities of TOM BROWN, INC..

16.     Amendments.

TOM BROWN, INC. reserves the right by action of its Board of Directors to amend
this Plan at any time without the consent of the Trustee, but no such amendment
shall cause or permit any portion of the principal or income of the Trust to
revert to or become the property of or be used for the benefit of TOM BROWN,
INC.. Any amendment necessary to bring this Trust into conformity with
government laws or regulations in order to qualify this Plan and Trust for tax
exemption may be made retroactively. No amendment to this Plan may be made which
results in a cutback of vested rights or rights to accrued benefits by Code
Section 411(a)(10)(A) or Code Section 411(d)(6). If the vesting schedule, if
any, in this Plan is amended, each Participant with at least 3 Years of Service
may elect to have his accrued benefit determined by the vesting schedule in
effect prior to the amendment.

17.     Termination of Contributions.

TOM BROWN, INC. establishes this Plan intending and expecting to make its
contributions. If TOM BROWN, INC. decides it is impossible or inadvisable to
continue to make its contributions, TOM BROWN, INC. has the right to terminate
its contributions.

If there is a complete termination of contributions by TOM BROWN, INC., with or
without formal action by TOM BROWN, INC., this Plan remains in force until
terminated. Any provision requiring forfeiture of a Participating Employee's
share (the shares of each Participating Employee become fully vested in such
Participant, regardless of the length of his employment or his participation, on
such termination of contributions); and all of the assets in this Plan on the
date specified in such resolutions shall be held, administered by the Committee
and distributed by the Trustee as provided herein.

18.     Merger or Consolidation of Plan, Transfer of Plan Assets.

If this Plan is merged or consolidated with, or its assets and liabilities
transferred to any other plan, each Participant and Beneficiary in this Plan is
entitled, after the merger,

================================================================================
TOM BROWN, INC. 401(k) Retirement Plan                             Page 36 of 41
<PAGE>   37

consolidation or transfer, to a benefit equal to or greater than the benefit to
which he would have been entitled by this Plan, immediately prior to such
merger, consolidation or transfer, as if the Plan had terminated at such time.

19.     Top-Heavy Provisions.

        19.1 Determination of Top-Heavy Status. As of each determination date,
        the Committee computes the aggregate amounts allocated to the accounts
        of all "key employees" of TOM BROWN, INC..

        The term "key employee" is any Employee, former Employee, or beneficiary
        thereof who, at any time during the Plan Year or any of the 4 preceding
        Plan Years, is or was (i) an officer of TOM BROWN, INC. with an annual
        Compensation greater than 50% of the dollar limitation then in effect in
        Code Section 415(b)(1)(A), (ii) 1 of the 10 Employees having an annual
        Compensation greater than the dollar limitation then in effect in Code
        Section 415(c)(1)(A) and owning (or considered as owning in Code Section
        318) the largest interests in TOM BROWN, INC., (iii) a 5% owner of TOM
        BROWN, INC. or (iv) a 1% owner of TOM BROWN, INC. with annual
        Compensation from TOM BROWN, INC. in excess of $150,000. To determine
        percentage ownership in the foregoing sentence, Code Section
        416(i)(1)(B) applies and Code Sections 414(b), 414(c), and Sec. 414(m)
        do not apply.

        If the aggregate amount allocated to the accounts of all key employees
        exceeds 60% of the aggregate amount allocated to the accounts of all
        Participants, this Plan is deemed to be top-heavy for the Plan Year next
        following such Anniversary Date (and for the initial Plan Year, for the
        Plan Year ending with such Anniversary Date). To determine the aggregate
        amounts allocated to the accounts of Participants, there is added any
        amount of TOM BROWN, INC. contributions required for the Plan Year
        ending on the determination date (unless this Plan is not subject to the
        minimum funding in Code Section 412). The present value of accrued
        benefits is determined by the interest and mortality rates specified in
        the defined benefit plan. The account balances attributable to a
        Participant who has not performed any services for TOM BROWN, INC. at
        any time during the five-year period ending on any determination date
        are disregarded. To make the above determination, (i) all other
        qualified plans of TOM BROWN, INC. in which a key employee is a
        participant, (ii) all other plans which enable this Plan or plans
        described in (i) above to meet the requirements of Code Section
        401(a)(4) or Code Section 410, and (iii) all other qualified plans which
        may have been terminated but which were maintained by the Employer
        within the five-year period ending on the determination date. There
        shall also be considered any distributions made to any Participant
        within a five-year period ending on the determination date.

        At the option of the Committee, any other qualified plans maintained by
        TOM BROWN, INC. may be included in the group of plans to determine the
        top-heavy status of this Plan, if the group of plans continues to meet
        the requirements of Code Section 401(a)(4) and Code Section 410 with
        such plans as are added at the option of TOM BROWN, INC. being taken
        into account. If any plans of TOM BROWN, INC. are

================================================================================
TOM BROWN, INC. 401(k) Retirement Plan                             Page 37 of 41
<PAGE>   38

        aggregated with this Plan as described in the preceding sentence, this
        Plan is deemed to be top-heavy only if the aggregate present value of
        accrued benefits of key employees in the aggregated group of plans
        exceeds 60% of the aggregate present value of accrued benefits of all
        employees in the aggregated group of plans. To determine present value
        of accrued benefits, the rules of Code Section 416(g) apply. Accrued
        benefits are determined by the method used for accrual purposes for all
        plans of TOM BROWN, INC., or if there is no such method, by the slowest
        accrual rate permitted by Code Section 411(b)(1)(C). The determination
        date is the last day of the preceding Plan Year. However, for the first
        Plan Year the determination date is the last day of that year.

        To determine whether or not an Employee is a key employee,
        "Compensation" is compensation in Code Section 415(c)(3), but including
        Salary Reduction Contributions to this Plan.

        19.2 Minimum Allocations. For each Plan Year that this Plan is
        top-heavy, there shall be allocated to the account of each Participant
        who is not a key employee and who is employed by TOM BROWN, INC. on the
        last day of the Plan Year, irrespective of whether he has completed
        1,000 Hours of Service with TOM BROWN, INC. during the Plan Year, an
        amount not less than 3% of each such Participant's W-2 Compensation
        (without taking into account Social Security and similar contributions
        and benefits). If the TOM BROWN, INC. contribution for any Plan Year
        (including Salary Reduction Contributions) is less than 3% of the W-2
        Compensation of the key employee for whom such contribution percentage
        is the highest, the amount allocable to each nonkey employee shall be
        such lesser percentage. If TOM BROWN, INC. maintains both a defined
        contribution plan and a defined benefit plan with a nonkey employee who
        participates, or could participate in both plans, there is allocated to
        the account of each Participant who otherwise would be entitled to
        receive a minimum allocation as described above an amount not less than
        5% of such Participant's W-2 Compensation (but without taking into
        account Social Security and similar contributions and benefits). For
        this subsection, all defined contribution plans of TOM BROWN, INC. are
        aggregated to satisfy the percentage rules if the aggregate contribution
        made to all defined contribution plans equals 5% of any nonkey
        Participant's W-2 Compensation.

        19.3 Effect on Code Section 415 Limitations. If TOM BROWN, INC.
        maintains both a defined contribution plan and a defined benefit plan
        with a Participant who participates, or could participate, in both
        plans, for computing the defined contribution fraction and defined
        benefit fraction described in subparagraph 8.J. hereunder, the dollar
        limitation of Code Section 415(b)(1)(A) and Code Section 415(c)(1)(A)
        are multiplied by 1.0 in lieu of 1.25, unless:

               A.     the defined contribution plan allocates to the account of
               each Participant who is not a key employee not less than 7-1/2%
               of each such Participant's W-2 Compensation (without taking into
               account Social Security and similar contributions and benefits);
               and

================================================================================
TOM BROWN, INC. 401(k) Retirement Plan                             Page 38 of 41
<PAGE>   39

               B.     the plan would not be top-heavy if 90% were substituted
               for 60% in subparagraph A. above.

20.     Expenses of Administration.

The Trustee's compensation is fixed by agreement with TOM BROWN, INC.; however,
no person compensated as an Employee of TOM BROWN, INC. shall be compensated as
Trustee. TOM BROWN, INC. intends to pay, in addition to the contributions
provided for, any expenses of administering the Trust, including the Trustee's
compensation, if any, except that any investment counsel fees incurred by the
Trust, and any expenses directly related to particular transactions involving
purchases or sales of property by the Trust or the production or collection of
income, such as transfer taxes, brokers' commissions, etc., are paid by the
Trustee from the assets of the Trust.

21.     Rights of Participants.

Participating in this Plan and Trust does not give any Participant any right to
be retained in the service of TOM BROWN, INC. or any right or claim to any
benefits unless such benefits accrue by this Plan.

22.     Claims Procedure.

Claims for benefits by this Plan may be filed with the Committee on forms
supplied by it. Written notice of the disposition of a claim is furnished to the
claimant within 90 days after the application is filed. If the claim is denied,
the reasons for the denial are specifically set forth in the notice in language
calculated to be understood by the claimant, pertinent provisions of the Plan
are cited, and, where appropriate, an explanation as to how the claimant can
perfect the claim is provided. In addition, the claimant is furnished an
explanation of this Plan's claims review procedure, as described below.

Any Employee or Beneficiary denied a benefit is entitled to request the
Committee to give further consideration to his claim by filing with the
Committee (on a form which may be obtained from the Committee) a request for a
hearing. Such request, together with a written statement of the reasons why the
claimant believes his claim should be allowed, shall be filed with the Committee
no later than 60 days after receipt of the written notification furnished by the
Committee for the claim. The Committee shall conduct a hearing within the next
60 days, at which the claimant may be represented by an attorney or any other
representative of his choosing and at which the claimant has an opportunity to
submit written and oral evidence and arguments in support of his claim. At the
hearing (or prior thereto upon 5 business days written notice to the Committee)
the claimant or his representative has an opportunity to review all documents in
the possession of the Committee pertinent to the claim at issue and its
disallowance.

Either the claimant or the Committee may have a court reporter attend the
hearing and record the proceedings. A complete written transcript of the
proceedings shall be furnished to both parties by the court reporter. The full
expense of any such court reporter and such transcripts are borne by the party
causing the court reporter to attend the hearing.

================================================================================
TOM BROWN, INC. 401(k) Retirement Plan                             Page 39 of 41
<PAGE>   40

A final decision as to the allowance of the claim shall be made by the Committee
within 60 days of receipt of the appeal (unless there is an extension of 60 days
due to special circumstances, if the delay and the special circumstances
occasioning it are communicated to the claimant within the 60 day period). Such
communication shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions.

23.     Construction.

This Plan shall be construed so as to qualify as a tax-free employees'
profit-sharing plan, contributions to which by TOM BROWN, INC. are deductible
from its taxable income.

24.     Defense of Plan.

TOM BROWN, INC. has the right to defend the position of this Plan as a qualified
profit-sharing plan, in Code Section 401(a).

25.     Governing Law.

This Plan is executed and delivered in the State of Texas and is to be construed
and regulated by the laws of the State of Texas.

26.     Mistaken Contributions, Etc.

The assets of this Plan shall not inure to the benefit of TOM BROWN, INC., and
shall be held for the exclusive purposes of providing benefits to Participants
and Beneficiaries and defraying reasonable expenses of administering the Plan.

Notwithstanding the foregoing sentence:

               A.     If a contribution is made by TOM BROWN, INC. by a mistake
               of fact, such contribution may be returned, at the discretion of
               TOM BROWN, INC., within 1 year after payment of such
               contribution.

               B.     All contributions to this Plan are conditioned on initial
               qualification of this Plan by Code Section 401. If this Plan does
               not so qualify for any Plan Year for which a contribution is
               made, such contribution may be returned, at the discretion of TOM
               BROWN, INC., within 1 year after the date of denial of initial
               qualification of this Plan if the application for qualification
               is made by the time prescribed by law for filing the Employer's
               tax return for the taxable year this Plan is adopted, or such
               later date as the Secretary of the Treasury may prescribe.

               C.     All contributions to this Plan are conditioned upon their
               deductibility, for Federal income tax purposes, by Code Section
               404. If and to the extent that such deduction is disallowed, TOM
               BROWN, INC.'S contribution (to the extent disallowed) may be
               returned, at the discretion of TOM BROWN, INC.,

================================================================================
TOM BROWN, INC. 401(k) Retirement Plan                             Page 40 of 41
<PAGE>   41

               within 1 year after the disallowance of the deduction.

        Earnings on such TOM BROWN, INC. contributions are not returned to TOM
        BROWN, INC., but losses on such contributions reduce the amount to be
        returned. Notwithstanding the foregoing, if this Plan does not initially
        qualify by Code Section 401, the entire assets of this Plan may be
        returned to TOM BROWN, INC..

27.     Plan Administrator; Legal Agent.

The Committee serves as the Plan Administrator and is the legal agent for
service of process on this Plan, to be served at the following address:

        TOM BROWN, INC. 401(k) Retirement Plan Committee
        c/o TOM BROWN, INC.
        508 West Wall, Suite 500
        Midland, Texas 79702

This Plan is executed by TOM BROWN, INC. on February , 2000, effective as of
January 1, 2000.

                                            TOM BROWN, INC.

                                            By: ____________________________
                                                  B. JACK REED, Vice-President
                                                  Human Relations

================================================================================
TOM BROWN, INC. 401(k) Retirement Plan                             Page 41 of 41<PAGE>   1
                                                                   EXHIBIT 10.14

                         INWEST PENSION MANAGEMENT, INC.
                               REGIONAL PROTOTYPE
                            DEFINED CONTRIBUTION PLAN
                             BASIC PLAN DOCUMENT #02
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                         <C>
SECTION 1.   PARTICIPATION....................................................3

     1.1      Participation...................................................3
     1.2      Years of Service and Break in Service - Participation...........3
     1.3      Participation Effective Date....................................4
     DEFINITIONS..............................................................5
     1.4      Service.........................................................5
     1.5      Employee........................................................6
     1.6      "Collective Bargaining Agreement................................7
     1.7      Employer........................................................7
     1.8      "This Plan".....................................................7

SECTION 2.   CONTRIBUTIONS....................................................8
     2.1      Contributions to this Plan......................................8
     2.2      Profit-Sharing and Profit-Sharing 401(k) - Non-Integrated
              Contribution Allocation.........................................8
     2.3      Permitted disparity.............................................8
     2.4      Allocation Limitations.........................................11
     2.5      Employee Contributions.........................................14
     2.6      Vesting........................................................15
     2.7      Top Heavy Allocation...........................................18
     2.8      Elective Deferrals.............................................20
     2.9      Excess Elective Deferrals......................................20
     2.10     Distribution of Excess Elective Deferrals......................20
     2.11     Actual Deferral Percentage Test................................20
     2.12     Distribution of Excess Contributions...........................22
     2.13     Recharacterization.............................................23
     2.14     Matching Contributions.........................................23
     2.15     Limitations on Employee Contributions and Matching
              Contributions..................................................24
     2.16     Distribution of Excess Aggregate Contributions.................27
     2.17     Qualified Non-Elective Contributions...........................27
     2.18     Forfeitures of Excess Aggregate Contributions..................28
     2.19     Nonforfeitability and Vesting..................................28
     DEFINITIONS.............................................................28
     2.20     Compensation...................................................28
     2.21     Maximum Annual Additions.......................................33
     2.22     Top-Heavy......................................................35
     2.23     Elective Deferrals.............................................39
     2.24     Contribution Percentage........................................40
</TABLE>

<PAGE>   2

<TABLE>
<S>                                                                         <C>
SECTION 3.   BENEFITS........................................................41
     3.1      Benefiting.....................................................41
     3.2      Joint and survivor annuity and preretirement survivor
              annuity........................................................42
     3.3      Restrictions on immediate distributions........................46
     3.4      When benefits begin............................................48
     3.5      Early retirement benefit.......................................48
     3.6      Nontransferability of annuities................................48
     3.7      Conflicts with annuity contracts...............................48
     3.8      Timing and modes of distribution...............................48
     3.9      Direct Rollovers...............................................53
     3.10     Life insurance.................................................53
     3.11     Loans to Participants..........................................54
     3.12     Distribution Requirements......................................56
     3.13     Hardship Distribution..........................................57
     3.14     Reinstatement of benefit.......................................58
     DEFINITIONS.............................................................58
     3.15     Joint and Survivor and Pre-retirement Survivor Annuities.......58
     3.16     Minimum Distribution...........................................61
     3.17     Rollovers......................................................64

SECTION 4.   OTHER...........................................................65
     4.1      Annual valuation of assets; allocation of trust net earnings
              and losses.....................................................65
     4.2      Treatment of insurance dividends or credits....................65
     4.3      Directed investments...........................................65
     4.4      Participating Employer.........................................66
     4.5      Amendment by Employer..........................................66
     4.6      Plan merger - maintenance of benefits..........................66
     4.7      Inalienability of benefits.....................................66
     4.8      Exclusive benefit..............................................66
     4.9      Failure to qualify.............................................67
     4.10     Disqualification of plan.......................................67
     4.11     Administrator..................................................67
     4.12     Allocation of Responsibility Among Fiduciaries.................70
     4.13     Management of Trust............................................71
     4.14     Accounting; Distributions......................................73
     4.15     Replacement/Removal of Trustee.................................74
     4.16     Miscellaneous..................................................75
     4.17     Trustee, Named Fiduciary.......................................76
</TABLE>

                                       2
<PAGE>   3

                         INWEST PENSION MANAGEMENT, INC.
                               REGIONAL PROTOTYPE
                            DEFINED CONTRIBUTION PLAN
                             BASIC PLAN DOCUMENT #02

An EMPLOYER who executes an ADOPTION AGREEMENT, subject to approval by the
TRUSTEE and InWest Pension Management, Inc., creates THIS PLAN for its
EMPLOYEES.

Defined terms are ITALICIZED; definitions are in the ADOPTION AGREEMENT and at
the end of each SECTION.

"Section" and "subsection" refer to the Sections and subsections in THIS PLAN.

THIS PLAN is effective on the EFFECTIVE DATE selected in the ADOPTION AGREEMENT
and is applied on a uniform and consistent basis.

The purpose of THIS PLAN is to provide benefits of a qualified retirement plan
in CODE SECTION 401(a).

                                                        SECTION 1. PARTICIPATION
===============================================================================

1.1      PARTICIPATION

An EMPLOYEE who meets the eligibility, minimum age and SERVICE requirements
selected in the ADOPTION AGREEMENT participates in THIS PLAN.

1.2      YEARS OF SERVICE AND BREAK IN SERVICE - PARTICIPATION

To determine YEARS OF SERVICE (see 1.4(c)) and BREAKS IN SERVICE (see 1.4 (d))
for eligibility, the initial eligibility computation period is the
12-consecutive month period beginning on the date the EMPLOYEE first performs an
HOUR OF SERVICE (employment beginning date).

Succeeding 12-consecutive month periods begin with the first PLAN YEAR which
begins on or prior to the first anniversary of the EMPLOYEE'S employment
beginning date regardless of whether the Employee is credited with 1,000 HOURS
OF SERVICE during the initial eligibility computation period.

YEARS OF SERVICE and BREAKS IN SERVICE are measured by the PLAN YEAR.

All YEARS OF SERVICE are counted toward eligibility except the following:

                                       3
<PAGE>   4

         (a)      If the EMPLOYER elects in the Adoption Agreement, an EMPLOYEE
                  who has a 1-year BREAK IN SERVICE before satisfying THIS
                  PLAN'S requirement for eligibility, SERVICE before such break
                  will not be taken into account, otherwise, for a PARTICIPANT
                  who does not have any nonforfeitable right to his ACCOUNT
                  balance derived from EMPLOYER CONTRIBUTIONS, YEARS OF SERVICE
                  before a period of consecutive 1-year BREAKS IN SERVICE will
                  not be taken into account in computing eligibility SERVICE if
                  the number of consecutive 1-year BREAKS IN SERVICE in such
                  period equals or exceeds the greater of 5 or the aggregate
                  number of YEARS OF SERVICE. Such aggregate number of YEARS OF
                  SERVICE will not include any YEARS OF SERVICE disregarded by
                  the preceding sentence from prior BREAKS IN SERVICE.

         (b)      A PARTICIPANT whose YEARS OF SERVICE are disregarded by the
                  preceding paragraph is treated as a new EMPLOYEE for
                  eligibility purposes. A PARTICIPANT'S YEARS OF SERVICE not
                  disregarded by the preceding paragraph continues to
                  participate in THIS PLAN, or, if terminated, participates
                  immediately upon reemployment.

ELIGIBILITY BREAK IN SERVICE - 1-YEAR HOLDOUT

For any PARTICIPANT who has a 1-year BREAK IN SERVICE, years of eligibility
SERVICE before such break will not be taken into account until the EMPLOYEE
completes a YEAR OF SERVICE after returning to employment.

Such YEAR OF SERVICE is measured by the 12-consecutive month period beginning on
an EMPLOYEE'S reemployment beginning date and, if necessary, subsequent
12-consecutive month periods beginning on anniversaries of the reemployment
beginning date.

Such YEAR OF SERVICE is measured by the 12-consecutive month period beginning on
an EMPLOYEE'S reemployment beginning date and, if necessary, PLAN YEARS
beginning with the PLAN YEAR which includes the first anniversary of the
reemployment beginning date. The reemployment beginning date is the first day on
which the EMPLOYEE is credited with an HOUR OF SERVICE for the performance of
duties after the first eligibility computation period in which the EMPLOYEE
incurs a 1-year BREAK IN SERVICE.

If a PARTICIPANT completes a YEAR OF SERVICE by this provision, his/her
participation is reinstated as of the reemployment beginning date.

1.3      PARTICIPATION EFFECTIVE DATE

If a PARTICIPANT who is not a member of an eligible class of EMPLOYEES and
becomes ineligible to participate but has not incurred a BREAK IN SERVICE, such
EMPLOYEE participates immediately upon returning to an eligible class of
EMPLOYEES. If such PARTICIPANT incurs a BREAK IN SERVICE, eligibility is
determined by the BREAK IN SERVICE rules.

                                       4
<PAGE>   5

If an EMPLOYEE who is not a member of an eligible class of EMPLOYEES becomes a
member of an eligible class, such EMPLOYEE participates immediately if such
EMPLOYEE satisfies the minimum age and SERVICE requirements and would otherwise
previously be a PARTICIPANT.

DEFINITIONS

The following are definitions for this SECTION and THIS PLAN.

1.4      SERVICE

         (a)      "SERVICE" is employment with the EMPLOYER.

         (b)      "HOUR OF SERVICE" is:

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

                  (2)      Each hour for which an EMPLOYEE is paid, or entitled
                           to payment, by the EMPLOYER for a period of time
                           during which no duties are performed (irrespective of
                           whether the employment relationship has terminated)
                           due to vacation, holiday, illness, incapacity
                           (including disability), layoff, jury duty, military
                           duty or leave of absence. No more than 501 HOURS OF
                           SERVICE will be credited under this paragraph for any
                           single continuous period (whether or not such period
                           occurs in a single computation period). Hours in this
                           paragraph will be calculated and credited by Section
                           2530.200b-2 of the DOL REGULATIONS; and

                  (3)      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 are not
                           credited both by paragraph (1) or paragraph (2), as
                           the case may be, and by this paragraph (3). These
                           hours are credited to the EMPLOYEE for the
                           computation period or periods to which the award or
                           agreement pertains rather than the computation period
                           in which the award, agreement or payment is made.

HOURS OF SERVICE are credited for employment with other members of an affiliated
service group (in CODE SECTION 414(m)), a controlled group of corporations (in
CODE SECTION 414(b)), or a group of trades or businesses under common control
(in CODE SECTION 414(c)) of which the EMPLOYER is a member, and any other entity
required to be aggregated with the EMPLOYER by CODE SECTION 414(o).

HOURS OF SERVICE are also credited for any individual considered an EMPLOYEE by
CODE SECTION 414(n) or 414(o).

                                       5
<PAGE>   6

Solely to determine whether a BREAK IN SERVICE, for participation and vesting
purposes has occurred in a computation period, an individual who is absent from
work for maternity or paternity reasons receives credit for the HOURS OF SERVICE
which would otherwise be credited to such individual but for such absence, or in
any case in which such hours cannot be determined, 8 HOURS OF SERVICE per day of
such absence. For this paragraph, an absence from work for maternity or
paternity reasons means an absence (i) for the pregnancy of the individual, (ii)
for a birth of a child of the individual, (iii) for the placement of a child
with the individual in the adoption of such child by such individual, or (iv)
for caring for such child for a period beginning immediately following such
birth or placement. The HOURS OF SERVICE credited by this paragraph are credited
(v) in the computation period in which the absence begins if the crediting is
necessary to prevent a BREAK IN SERVICE in that period or (vi) in all other
cases, in the following computation period.

         (c)      "YEAR OF SERVICE" is a PLAN YEAR after the initial eligibility
                  period (computation period) during which the EMPLOYEE
                  completes at least 1,000 HOURS OF SERVICE.

         (d)      "BREAK IN SERVICE" is a PLAN YEAR (computation period) during
                  which the PARTICIPANT completes less than 501 HOURS OF
                  SERVICE.

         (e)      Predecessor Employer Service.

                  If the EMPLOYER maintains the plan of a predecessor employer,
                  SERVICE with such employer will be treated as SERVICE for the
                  EMPLOYER.

1.5      EMPLOYEE

         (a)      "EMPLOYEE" is any employee of the EMPLOYER or of any other
                  employer required to be aggregated with the EMPLOYER by CODE
                  SECTIONS 414(b), (c), (m) or (o).

                  EMPLOYEE also includes any LEASED EMPLOYEE deemed to be an
                  employee of any employer in the previous paragraph by CODE
                  SECTIONS 414(n) or (o).

         (b)      "LEASED EMPLOYEE" is any person (other than an employee of the
                  recipient) who by 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 by CODE SECTION 414(n)(6)) on a substantially full
                  time basis for a period of at least 1 year, and such services
                  are performed under primary direction or control by the
                  recipient. Contributions or benefits provided a LEASED
                  EMPLOYEE by the leasing organization which are attributable to
                  services performed for the recipient employer are treated as
                  provided by the recipient employer.

                  A LEASED EMPLOYEE is not considered an employee of the
                  recipient if: (i) such employee is covered by a money purchase
                  pension plan providing: (1) a

                                       6
<PAGE>   7

                  nonintegrated employer contribution rate of at least 10% of
                  compensation, as defined in CODE SECTION 415(c)(3), but
                  including amounts contributed by a salary reduction agreement
                  which are excludable from the employee's gross income by CODE
                  SECTIONS 125, 402(e)(3), 402(h)(1)(B) or 403(b), (2) immediate
                  participation, and (3) full and immediate vesting; and (ii)
                  LEASED EMPLOYEES do not constitute more than 20% of the
                  recipient's nonhighly compensated work force.

1.6      "COLLECTIVE BARGAINING AGREEMENT" is an agreement which the Secretary
         of Labor finds to be a Collective Bargaining Agreement between EMPLOYEE
         representatives and 1 or more Employers, if there is evidence that
         retirement benefits were the subject of good faith bargaining and if
         less than 2% of the EMPLOYEES of the EMPLOYER who are covered by such
         agreement are professionals in REGULATIONS 1.410(b)-9.

          "NON-RESIDENT ALIEN" is an EMPLOYEE who is a non-resident alien
         (within the meaning of CODE SECTION 7701(b)(1)(B)) and who receives no
         earned income (within the meaning of CODE SECTION 911(d)(2)) from the
         EMPLOYER which constitutes income from sources within the United States
         (within the meaning of CODE SECTION 861(a)(3)).

1.7      EMPLOYER

         (a)      "EMPLOYER" is the employer in the Adoption Agreement that
                  adopts THIS PLAN.

         (b)      "AFFILIATED EMPLOYER" is any corporation which is a member of
                  a controlled group of corporations (by CODE SECTION 414(b))
                  including the EMPLOYER; any trade or business (whether or not
                  incorporated) under common control (by CODE SECTION 414(c))
                  with the EMPLOYER; any organization (whether or not
                  incorporated) which is a member of an affiliated service group
                  (by CODE SECTION 414(m)) including the EMPLOYER; and any other
                  entity required to be aggregated with the EMPLOYER by CODE
                  SECTION 414(o) REGULATIONS.

         (c)      "PARTICIPATING EMPLOYER" is a Participating Employer in
                  subsection 4.4.

1.8      "THIS PLAN"

         (a)      is this instrument and the ADOPTION AGREEMENT.

         (b)      "ADOPTION AGREEMENT" is the separate instrument the EMPLOYER
                  executes, accepted by the TRUSTEE and InWest Pension
                  Management, Inc., which contains the EMPLOYER'S elections.

                                       7
<PAGE>   8
                                                      SECTION 2.   CONTRIBUTIONS
================================================================================

2.1      CONTRIBUTIONS TO THIS PLAN

CONTRIBUTIONS to THIS PLAN are as the EMPLOYER elects in the ADOPTION AGREEMENT.

EMPLOYER CONTRIBUTIONS are EMPLOYEE ELECTIVE DEFERRALS, QUALIFIED NON-ELECTIVE
CONTRIBUTIONS, QUALIFIED MATCHING CONTRIBUTIONS, MATCHING CONTRIBUTIONS, and
NON-ELECTIVE EMPLOYER CONTRIBUTIONS; all other CONTRIBUTIONS are EMPLOYEE
CONTRIBUTIONS.

A PARTICIPANT'S accrued benefit derived from EMPLOYEE ELECTIVE DEFERRALS,
QUALIFIED NON-ELECTIVE CONTRIBUTIONS, EMPLOYEE CONTRIBUTIONS and QUALIFIED
MATCHING CONTRIBUTIONS is nonforfeitable. Separate accounts for EMPLOYEE
ELECTIVE DEFERRALS, QUALIFIED NON-ELECTIVE CONTRIBUTIONS, EMPLOYEE
CONTRIBUTIONS, MATCHING CONTRIBUTIONS, NON-ELECTIVE EMPLOYER CONTRIBUTIONS and
QUALIFIED MATCHING CONTRIBUTIONS are maintained for each PARTICIPANT. Each
ACCOUNT is credited with the applicable CONTRIBUTIONS and earnings thereon.

2.2      PROFIT-SHARING AND PROFIT-SHARING 401(K) - NON-INTEGRATED CONTRIBUTION
ALLOCATION

Unless otherwise elected by the EMPLOYER in the ADOPTION AGREEMENT, EMPLOYER
PROFIT-SHARING CONTRIBUTIONS and EMPLOYER NON-ELECTIVE CONTRIBUTIONS are
allocated to each PARTICIPANT who either completes more than 500 HOURS OF
SERVICE during the PLAN YEAR or who is employed on the last day of the PLAN YEAR
in the ratio that such PARTICIPANT'S COMPENSATION bears to all PARTICIPANTS'
total COMPENSATION for the PLAN YEAR.

2.3      PERMITTED DISPARITY

FOR PROFIT-SHARING AND PROFIT-SHARING 401(K) PLANS:

Subject to the overall permitted disparity limits, EMPLOYER PROFIT-SHARING
CONTRIBUTIONS, EMPLOYER NON-ELECTIVE CONTRIBUTIONS and FORFEITURES for the PLAN
YEAR, unless otherwise elected by the EMPLOYER in the ADOPTION AGREEMENT, are
allocated to each PARTICIPANT'S ACCOUNT who either completes more than 500 HOURS
OF SERVICE during the PLAN YEAR or who is employed on the last day of the PLAN
YEAR as follows:

         (a)      For Profit-Sharing Plans:

                  (1)      CONTRIBUTIONS and FORFEITURES are allocated to each
                           PARTICIPANT'S Account in the ratio that each
                           PARTICIPANT'S total COMPENSATION bears to all
                           PARTICIPANTS' total COMPENSATION, but not in excess
                           of 3% of each PARTICIPANT'S total COMPENSATION.

                                       8
<PAGE>   9

                  (2)      Any CONTRIBUTIONS and FORFEITURES remaining after the
                           allocation in (a)(1) are allocated to each
                           PARTICIPANT'S ACCOUNT in the ratio that each
                           PARTICIPANT'S COMPENSATION for the PLAN YEAR in
                           excess of the INTEGRATION LEVEL bears to the excess
                           COMPENSATION of all PARTICIPANTS, but not in excess
                           of 3% of each PARTICIPANT'S COMPENSATION in excess of
                           the INTEGRATION LEVEL. For this (a)(2), any
                           PARTICIPANT who has exceeded the cumulative permitted
                           disparity limit described below, such PARTICIPANT'S
                           total COMPENSATION for the PLAN YEAR will be taken
                           into account.

                  (3)      Any CONTRIBUTIONS and FORFEITURES remaining after the
                           allocation in (a)(2) are allocated to each
                           PARTICIPANT'S ACCOUNT in the ratio that the sum of
                           each PARTICIPANT'S total COMPENSATION and
                           COMPENSATION in excess of the INTEGRATION LEVEL bears
                           to the sum of all PARTICIPANTS' total COMPENSATION
                           and COMPENSATION in excess of the INTEGRATION LEVEL,
                           but not in excess of the MAXIMUM PROFIT-SHARING
                           DISPARITY RATE. For this (a)(3), for any PARTICIPANT
                           who has exceeded the cumulative permitted disparity
                           limit described below, 2 times such PARTICIPANT'S
                           total COMPENSATION for the PLAN YEAR is taken into
                           account.

                  (4)      Any remaining EMPLOYER CONTRIBUTIONS or FORFEITURES
                           are allocated to each PARTICIPANT'S ACCOUNT in the
                           ratio that each PARTICIPANT'S total COMPENSATION for
                           the PLAN YEAR bears to all PARTICIPANTS' total
                           COMPENSATION for that year.

         (b)      For Money Purchase Plans:

                  CONTRIBUTIONS and FORFEITURES are allocated to each
                  PARTICIPANT'S ACCOUNT in the percentage of the PARTICIPANT'S
                  COMPENSATION elected by the EMPLOYER in the ADOPTION
                  AGREEMENT, up to the INTEGRATION LEVEL plus a Base Percentage
                  specified in the ADOPTION AGREEMENT (not to exceed the Base
                  Percentage by more than the lesser of (i) the Base Percentage,
                  or (ii) the maximum disparity rate of such PARTICIPANT'S
                  COMPENSATION in excess of the INTEGRATION LEVEL.

                  "BASE PERCENTAGE" means the percentage of compensation
                  contributed by the Employer for compensation not in excess of
                  the INTEGRATION LEVEL.

FOR MONEY PURCHASE PLANS:

Subject to the overall permitted disparity limits, the EMPLOYER contributes for
each PARTICIPANT who either completes more than 500 HOURS OF SERVICE during the
PLAN YEAR or who is employed on the last day of the PLAN YEAR an amount equal to
the Base Percentage, (not less than 3%) of each PARTICIPANT'S COMPENSATION for
the PLAN YEAR, up to the INTEGRATION LEVEL plus the Excess Percentage, (not less
than 3%) and not to exceed (i) the Base Percentage or (ii) the money purchase

                                       9
<PAGE>   10

maximum disparity rate of such PARTICIPANT'S COMPENSATION in excess of the
INTEGRATION LEVEL. However, for any PARTICIPANT who exceeds the cumulative
permitted disparity limit, the EMPLOYER contributes for each PARTICIPANT who
either completes more than 500 HOURS OF SERVICE during the PLAN YEAR or is
employed on the last day of the PLAN YEAR an amount equal to the excess
contribution percentage multiplied by the PARTICIPANT'S total COMPENSATION.

OVERALL PERMITTED DISPARITY LIMIT

ANNUAL OVERALL PERMITTED DISPARITY LIMIT:

Notwithstanding the preceding paragraph(s), for any PLAN YEAR THIS PLAN benefits
any PARTICIPANT who benefits under another qualified plan or simplified employee
pension, as defined in CODE Section 408(k), maintained by the EMPLOYER that
provides for permitted disparity (or imputes disparity), the EMPLOYER
contributes for each PARTICIPANT who either completes more than 500 HOURS OF
SERVICE during the PLAN YEAR or who is employed on the last day of the PLAN YEAR
an amount equal to the excess contribution percentage multiplied by the
PARTICIPANT'S total COMPENSATION.

CUMULATIVE PERMITTED DISPARITY LIMIT:

Effective for PLAN YEARS beginning on or after January 1, 1995, the cumulative
permitted disparity limit for a PARTICIPANT is 35 total cumulative permitted
disparity years. Total cumulative permitted years is the number of years
credited to the PARTICIPANT for allocation or accrual purposes by THIS PLAN, any
other qualified plan or simplified employee pension plan (whether or not
terminated) ever maintained by the EMPLOYER. To determine the PARTICIPANT'S
cumulative permitted disparity limit, all years ending in the same calendar year
are treated as the same year. If the PARTICIPANT does not benefit by a defined
benefit or target benefit plan for any year beginning on or after January 1,
1994, the PARTICIPANT has no cumulative disparity limit.

The INTEGRATION LEVEL is the TAXABLE WAGE BASE (TWB) or such lesser amount
elected by the EMPLOYER in the ADOPTION AGREEMENT . The TAXABLE WAGE BASE is the
contribution and benefit base in effect in Section 230 of the Social Security
Act at the beginning of the PLAN YEAR.

COMPENSATION is compensation as defined in 2.20.

The MAXIMUM DISPARITY RATE is equal to the lesser of:

         (a)      A Base Percentage of 2.7% for Profit-Sharing Plans or 5.7% for
                  Money Purchase Plans

         (b)      the applicable percentage determined by the following table:

                                       10
<PAGE>   11

If the INTEGRATION LEVEL ("TWB" means TAXABLE WAGE BASE)  -

<TABLE>
<CAPTION>
                                                      the applicable percentage is:
                                            ------------------------------------------------------------

                                            for Top-Heavy              for NonTop-Heavy   for Money
is more than      but not more than.Profit-Sharing Plans      Profit-Sharing Plans        Purchase Plans
--------------------------------------------------------------------------------------------------------
<S>               <C>                           <C>           <C>                         <C>
   $0                      X*                   2.7%                    5.7%                  5.7%
X*  of TWB            80% of TWB                1.3%                    4.3%                  4.3%
80% of TWB                 Y**                  2.4%                    5.4%                  5.4%
</TABLE>

* X equals the greater of $10,000 or 20% of the TWB.
** Y equals an amount more than 80% of the TWB but less than 100 % of the TWB.

         If the INTEGRATION LEVEL used is equal to the TAXABLE WAGE BASE, the
         applicable percentage is 2.7% for Profit-Sharing Plans and 5.7% for
         Money Purchase Plans.

2.4      ALLOCATION LIMITATIONS

         (a)      If the PARTICIPANT does not participate in, and never
                  participated in (i) another qualified plan, or (ii) a welfare
                  benefit fund (in CODE SECTION 419(e)), or (iii) an individual
                  medical account (in CODE SECTION 415(1)(2)), or (iv) a
                  simplified employee pension (in CODE SECTION 408(k)), which
                  provides an ANNUAL ADDITION, the amount of ANNUAL ADDITIONS
                  which may be credited to the PARTICIPANT'S ACCOUNT for any
                  LIMITATION YEAR does not exceed the lesser of the MAXIMUM
                  PERMISSIBLE AMOUNT or any other limitation in THIS PLAN. If
                  the EMPLOYER CONTRIBUTION that would otherwise be contributed
                  or allocated to the PARTICIPANT'S ACCOUNT causes the ANNUAL
                  ADDITIONS for the LIMITATION YEAR to exceed the MAXIMUM
                  PERMISSIBLE AMOUNT, the amount contributed or allocated is
                  reduced so that the ANNUAL ADDITIONS for the LIMITATION YEAR
                  equal the MAXIMUM PERMISSIBLE AMOUNT.

         (b)      Prior to determining the PARTICIPANT'S actual COMPENSATION for
                  the LIMITATION YEAR, the EMPLOYER may determine the MAXIMUM
                  PERMISSIBLE AMOUNT for a PARTICIPANT on a reasonable estimate
                  of the PARTICIPANT'S COMPENSATION for the LIMITATION YEAR,
                  uniformly determined for all PARTICIPANTS similarly situated.

         (c)      As soon as is administratively feasible after the end of the
                  LIMITATION YEAR, the MAXIMUM PERMISSIBLE AMOUNT for the
                  LIMITATION YEAR is determined on the basis of the
                  PARTICIPANT'S actual COMPENSATION for the LIMITATION YEAR.

         (d)      If by subsection 2.4(c) or as a result of the allocation of
                  FORFEITURES, there is an EXCESS AMOUNT, such excess is
                  disposed of as follows:

                                       11
<PAGE>   12

                  (1)      Any NONDEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS,
                           (plus attributable earnings), to the extent they
                           would reduce the EXCESS AMOUNT, is returned to the
                           PARTICIPANT;

                  (2)      If after the application of (1) an EXCESS AMOUNT
                           still exists, any ELECTIVE DEFERRALS (plus
                           attributable earnings), to the extent they would
                           reduce the excess amount, is distributed to the
                           PARTICIPANT.

                  (3)      If after the application of (2) an EXCESS AMOUNT
                           still exists, and the PARTICIPANT is covered by THIS
                           PLAN at the end of the LIMITATION YEAR, the EXCESS
                           AMOUNT in the PARTICIPANT'S ACCOUNT is used to reduce
                           EMPLOYER CONTRIBUTIONS (including any allocation of
                           FORFEITURES) for such PARTICIPANT in the next
                           LIMITATION YEAR, and each succeeding LIMITATION YEAR
                           if necessary.

                  (4)      If after the application of (2) an EXCESS AMOUNT
                           still exists and the PARTICIPANT is not covered by
                           THIS PLAN at the end of a LIMITATION YEAR, the EXCESS
                           AMOUNT is held unallocated in a suspense account
                           consisting of Plan assets. The suspense account is
                           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 by (4), it does not
                           participate in the allocation of investment gains and
                           losses. If a suspense account is in existence at any
                           time during a particular LIMITATION YEAR, all amounts
                           in the suspense account are allocated and reallocated
                           to PARTICIPANTS' ACCOUNTS before any EMPLOYER or any
                           EMPLOYEE CONTRIBUTIONS are made to THIS PLAN for that
                           LIMITATION YEAR. EXCESS AMOUNTS cannot be distributed
                           to PARTICIPANTS or former PARTICIPANTS.

         (e)      This Section applies if, in addition to THIS PLAN, the
                  PARTICIPANT is covered by (i) another qualified master or
                  prototype defined contribution plan, (ii) a welfare benefit
                  fund, (iii) an individual medical account, or (iv) a
                  simplified employee pension maintained by the EMPLOYER, that
                  provides an ANNUAL ADDITION, during any LIMITATION YEAR.

                  The ANNUAL ADDITIONS which are credited to a PARTICIPANT'S
                  ACCOUNT by THIS PLAN for any such LIMITATION YEAR cannot
                  exceed the MAXIMUM PERMISSIBLE AMOUNT reduced by the ANNUAL
                  ADDITIONS credited to a PARTICIPANT'S ACCOUNT in such other
                  qualified master and prototype defined contribution plans,
                  welfare benefit funds, individual medical accounts, and
                  simplified employee pensions for the same LIMITATION YEAR.

                                       12
<PAGE>   13

                  If the ANNUAL ADDITIONS for the PARTICIPANT in such other
                  qualified master and prototype defined contribution plans,
                  welfare benefit funds, individual medical accounts, and
                  simplified employee pensions maintained by the EMPLOYER are
                  less than the MAXIMUM PERMISSIBLE AMOUNT and the EMPLOYER
                  CONTRIBUTION otherwise contributed or allocated to the
                  PARTICIPANT'S ACCOUNT in THIS PLAN causes the ANNUAL ADDITIONS
                  for the LIMITATION YEAR to exceed this limitation, the amount
                  contributed or allocated is reduced so that the ANNUAL
                  ADDITIONS by all such plans and funds for the LIMITATION YEAR
                  equal the MAXIMUM PERMISSIBLE AMOUNT.

                  If the ANNUAL ADDITIONS for the PARTICIPANT in such other
                  qualified master and prototype defined contribution plans,
                  welfare benefit funds, individual medical accounts, and
                  simplified employee pensions in the aggregate are equal to or
                  greater than the MAXIMUM PERMISSIBLE AMOUNT, no amount is
                  contributed or allocated to the PARTICIPANT'S ACCOUNT for the
                  LIMITATION YEAR.

         (f)      Prior to determining the PARTICIPANT'S actual COMPENSATION for
                  the LIMITATION YEAR, the EMPLOYER may determine the MAXIMUM
                  PERMISSIBLE AMOUNT for a PARTICIPANT in the manner described
                  in (b).

         (g)      As soon as is administratively feasible after the end of the
                  LIMITATION YEAR, the MAXIMUM PERMISSIBLE AMOUNT for the
                  LIMITATION YEAR is determined on the basis of the
                  PARTICIPANT'S actual COMPENSATION for the LIMITATION YEAR.

         (h)      If, by (g) or as a result of the allocation of FORFEITURES, a
                  PARTICIPANT'S ANNUAL ADDITIONS in THIS PLAN and such other
                  plans results in an EXCESS AMOUNT for a LIMITATION YEAR, the
                  EXCESS AMOUNT is deemed to consist of the ANNUAL ADDITIONS
                  last allocated, except that ANNUAL ADDITIONS attributable to a
                  simplified employee pension is deemed to have been allocated
                  first, followed by ANNUAL ADDITIONS to a welfare benefit fund
                  or individual medical account, regardless of the actual
                  allocation date.

         (i)      If an EXCESS AMOUNT is allocated to a PARTICIPANT on an
                  allocation date which coincides with an allocation date of
                  another plan, the EXCESS AMOUNT attributed to THIS PLAN is the
                  product of

                  (1)      the total EXCESS AMOUNT allocated as of such date,
                           times

                  (2)      the ratio of (i) the ANNUAL ADDITIONS allocated to
                           the PARTICIPANT for the LIMITATION YEAR as of such
                           date by THIS PLAN to (ii) the total ANNUAL ADDITIONS
                           allocated to the PARTICIPANT for the LIMITATION YEAR
                           as of such date in this and all the other qualified
                           MASTER OR PROTOTYPE DEFINED CONTRIBUTION PLANS.

                                       13
<PAGE>   14

         (j)      Any EXCESS AMOUNT attributed to THIS PLAN is disposed of as
                  described in (d).

         (k)      If the PARTICIPANT is covered by another qualified defined
                  contribution plan maintained by the EMPLOYER which is not a
                  MASTER OR PROTOTYPE DEFINED CONTRIBUTION PLAN, ANNUAL
                  ADDITIONS which are credited to the PARTICIPANT'S ACCOUNT by
                  THIS PLAN for any LIMITATION YEAR are limited by (e) through
                  (j) as though the other plan were a MASTER OR PROTOTYPE PLAN
                  unless the EMPLOYER provides other limitations in ADOPTION
                  AGREEMENT Section 2.

                  (l) If the EMPLOYER maintains, or at any time maintained, a
                  qualified defined benefit plan (other than paired plan #P-1)
                  covering any PARTICIPANT, the sum of the PARTICIPANT'S DEFINED
                  BENEFIT PLAN FRACTION and DEFINED CONTRIBUTION PLAN FRACTION
                  do not exceed 1.0 in any LIMITATION YEAR. The ANNUAL ADDITIONS
                  which may be credited to the PARTICIPANT'S ACCOUNT by THIS
                  PLAN for any LIMITATION YEAR are limited by ADOPTION AGREEMENT
                  Section 2.

2.5      EMPLOYEE CONTRIBUTIONS

         (a)      Nondeductible Employee Contributions and Matching
                  Contributions.

                  THIS PLAN does not accept NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
                  for PLAN YEARS beginning after the PLAN YEAR in which THIS
                  PLAN is adopted by the EMPLOYER. NONDEDUCTIBLE EMPLOYEE
                  CONTRIBUTIONS for PLAN YEARS beginning after December 31,
                  1986, together with any MATCHING CONTRIBUTIONS, are limited so
                  as to meet the nondiscrimination test of CODE SECTION 401(m).

                  NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS, including transfers from
                  other qualified plans, and earnings thereon are nonforfeitable
                  at all times.

         (b)      Deductible voluntary employee contributions.

                  The ADMINISTRATOR will not accept DEDUCTIBLE EMPLOYEE
                  CONTRIBUTIONS made for a taxable year beginning after December
                  31, 1986. Such contributions made prior to that date are
                  maintained in a separate ACCOUNT which will be nonforfeitable
                  at all times. The ACCOUNT shares in the gains and losses in
                  THIS PLAN as described in 2.6(f). No part of the DEDUCTIBLE
                  VOLUNTARY CONTRIBUTION ACCOUNT is used to purchase life
                  insurance. Subject to subsection 3.2, JOINT AND SURVIVOR
                  ANNUITY requirements (if applicable), a PARTICIPANT may
                  withdraw any part of his/her DEDUCTIBLE VOLUNTARY CONTRIBUTION
                  ACCOUNT by making a written application to the ADMINISTRATOR.

                  No FORFEITURES occur solely as a result of an EMPLOYEE'S
                  withdrawal of EMPLOYEE CONTRIBUTIONS.

                                       14
<PAGE>   15
2.6      VESTING

A PARTICIPANT'S ACCOUNT BALANCE from EMPLOYER CONTRIBUTIONS which are not
otherwise vested shall vest as elected by the EMPLOYER in the ADOPTION
AGREEMENT.

         (a)      Before BREAK IN SERVICE

                  If an EMPLOYEE terminates SERVICE, and the value of the
                  EMPLOYEE'S VESTED ACCOUNT BALANCE is not greater than $5,000
                  (plan years beginning after August 5, 1997) or $3,500 (plan
                  years beginning before August 6, 1997), the EMPLOYEE will
                  receive a distribution of the value of the entire vested
                  portion of such ACCOUNT BALANCE, and the nonvested portion is
                  treated as a FORFEITURE. For this Section, if the value of an
                  EMPLOYEE'S vested ACCOUNT BALANCE is zero, the EMPLOYEE is
                  deemed to receive a distribution of such vested ACCOUNT
                  BALANCE. A PARTICIPANT'S vested ACCOUNT BALANCE does not
                  include accumulated DEDUCTIBLE EMPLOYEE CONTRIBUTIONS in CODE
                  SECTION 72(o)(5)(B) for PLAN YEARS beginning prior to January
                  1, 1989.

                  If an EMPLOYEE terminates SERVICE, and elects, by the
                  requirements of subsection 3.3, to receive the value of the
                  EMPLOYEE'S vested ACCOUNT BALANCE, the nonvested portion is
                  treated as a FORFEITURE. If the EMPLOYEE elects to have
                  distributed less than the entire vested portion of the ACCOUNT
                  BALANCE derived from EMPLOYER CONTRIBUTIONS, the part of the
                  nonvested portion that is treated as a FORFEITURE is the total
                  nonvested portion multiplied by a fraction, the numerator of
                  which is the amount of the distribution attributable to
                  EMPLOYER CONTRIBUTIONS and the denominator of which is the
                  total value of the vested ACCOUNT BALANCE derived from
                  EMPLOYER CONTRIBUTIONS.

                  If an EMPLOYEE receives or is deemed to receive a distribution
                  by this Section and the EMPLOYEE resumes SERVICE, the
                  EMPLOYEE'S ACCOUNT BALANCE derived from EMPLOYER CONTRIBUTIONS
                  is restored to the amount on the date of distribution if the
                  EMPLOYEE repays to THIS PLAN the full amount of the
                  distribution attributable to EMPLOYER CONTRIBUTIONS before the
                  earlier of (i) 5 years after the first date on which the
                  PARTICIPANT is reemployed by the EMPLOYER or (ii) the date the
                  PARTICIPANT incurs 5 consecutive 1-year BREAKS IN SERVICE
                  following the date of the distribution. If an EMPLOYEE is
                  deemed to receive a distribution by this Section and the
                  EMPLOYEE resumes SERVICE before the PARTICIPANT incurs 5
                  consecutive 1-year BREAKS IN SERVICE, on such EMPLOYEE'S
                  reemployment, the EMPLOYEE'S ACCOUNT BALANCE is restored to
                  the amount on the date of such deemed distribution.

                  If a distribution is made at a time when the PARTICIPANT has a
                  nonforfeitable right to less than 100% of the ACCOUNT BALANCE
                  derived from EMPLOYER Contributions and the PARTICIPANT may
                  increase the nonforfeitable percentage in the account:

                                       15
<PAGE>   16

                  (1)      A separate ACCOUNT is established for the
                           PARTICIPANT'S interest in THIS PLAN as of the time of
                           the distribution and

                  (2)      At any relevant time the PARTICIPANT'S nonforfeitable
                           portion of the separate ACCOUNT is equal to an amount
                           ("X") determined by the formula:

                           X equals P(AB plus (R multiplied by D)) minus (R
                           multiplied by D)

                  To apply the formula: P is the nonforfeitable percentage at
                  the relevant time, AB is the ACCOUNT BALANCE at the relevant
                  time, D is the amount of the distribution, and R is the ratio
                  of the ACCOUNT BALANCE at the relevant time to the ACCOUNT
                  BALANCE after distribution.

         (b)      Vesting Computation Period

                  To compute an EMPLOYEE'S nonforfeitable right to his/her
                  ACCOUNT BALANCE derived from EMPLOYER CONTRIBUTIONS, YEARS OF
                  SERVICE and BREAKS IN SERVICE are measured by the PLAN YEAR.

         (c)      Normal Retirement Age.

                  Notwithstanding the vesting schedule elected by the EMPLOYER
                  in ADOPTION Agreement Section 2, an EMPLOYEE'S right to his or
                  her ACCOUNT BALANCE is nonforfeitable on his or her NORMAL
                  RETIREMENT AGE.

         (d)      One Year Hold-out.

                  If a PARTICIPANT incurs a 1-year BREAK IN SERVICE, YEARS OF
                  SERVICE before such break are not taken into account until the
                  PARTICIPANT completes a YEAR OF Service after such break in
                  SERVICE.

         (e)      Rule of parity.

                  For a PARTICIPANT with 5 or more consecutive 1-year BREAKS IN
                  SERVICE, the PARTICIPANT'S pre-break SERVICE counts in vesting
                  of the EMPLOYER-derived accrued benefit only if either:

                  (1)      such PARTICIPANT has any nonforfeitable interest in
                           the accrued benefit attributable to EMPLOYER
                           CONTRIBUTIONS at separation from SERVICE or

                  (2)      on returning to SERVICE the number of consecutive
                           1-year BREAKS IN SERVICE is less than the number of
                           YEARS OF SERVICE.

                                       16
<PAGE>   17

         f)       Pre-break and Post-break Account

                  For a PARTICIPANT with 5 consecutive 1-year BREAKS IN SERVICE,
                  all YEARS OF SERVICE after such BREAKS IN SERVICE are
                  disregarded for vesting the Employer-derived ACCOUNT BALANCE
                  that accrues before such breaks, but both pre-break and
                  post-break SERVICE count for vesting the EMPLOYER-derived
                  ACCOUNT BALANCE that accrues after such breaks. Both ACCOUNTS
                  will share in the earnings and losses of the TRUST.

                  For a PARTICIPANT without 5 consecutive 1-year BREAKS IN
                  SERVICE, both the pre-break and post-break SERVICE count in
                  vesting both the pre-break and post-break EMPLOYER-derived
                  ACCOUNT BALANCE.

                  For a PARTICIPANT with 5 or more consecutive 1-year BREAKS IN
                  SERVICE all SERVICE after such BREAKS IN SERVICE are
                  disregarded for vesting the EMPLOYER-derived ACCOUNT BALANCE
                  that accrued before such BREAKS IN SERVICE. Such PARTICIPANT'S
                  pre-break SERVICE count in vesting the post-break
                  EMPLOYER-derived ACCOUNT Balance only if either:

                  (1)      such PARTICIPANT has any nonforfeitable interest in
                           the ACCOUNT BALANCE attributable to EMPLOYER
                           CONTRIBUTIONS at the time of separation from SERVICE
                           or --

                  (2)      upon returning to SERVICE the number of consecutive
                           1-year BREAKS IN SERVICE is less than the number of
                           YEARS OF SERVICE.

         (g)      Vesting Schedule Amendment

                  If THIS PLAN'S vesting schedule is amended or THIS PLAN is
                  amended in any way that directly or indirectly affects the
                  computation of the PARTICIPANT'S nonforfeitable percentage or
                  if THIS PLAN is deemed amended by an automatic change to or
                  from a TOP-HEAVY vesting schedule, each PARTICIPANT with at
                  least 3 YEARS OF SERVICE may elect, within a reasonable period
                  after the adoption of the amendment or change, to have the
                  nonforfeitable percentage computed by THIS PLAN without such
                  amendment or change. For PARTICIPANTS without at least 1 HOUR
                  OF SERVICE in any PLAN YEAR beginning after December 31, 1988,
                  the preceding sentence is applied by substituting "5 YEARS OF
                  SERVICE" for "3 YEARS OF SERVICE" where such language appears.

                  The period during which the election may be made shall begin
                  with the date the amendment is adopted or deemed to be made
                  and ends on the latest of:

                  (1)      60 days after the amendment is adopted;
                  (2)      60 days after the amendment becomes effective; or

                                       17
<PAGE>   18

                  (3)      60 days after the PARTICIPANT is issued written
                           notice of the amendment by the EMPLOYER or
                           ADMINISTRATOR.

                  No amendment is effective if it decreases a PARTICIPANT'S
                  ACCRUED BENEFIT. Notwithstanding the preceding sentence, a
                  PARTICIPANT'S ACCOUNT BALANCE may be reduced as permitted by
                  CODE SECTION 412(c)(8). For this paragraph, a plan amendment
                  which decreases a PARTICIPANT'S ACCOUNT BALANCE or eliminates
                  an optional form of benefit, as to benefits attributable to
                  SERVICE before the amendment, is treated as reducing an
                  ACCRUED BENEFIT. Furthermore, if the vesting schedule of a
                  plan is amended, for 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 EMPLOYER-derived ACCRUED
                  BENEFIT is not less than the percentage computed by THIS PLAN
                  without such amendment.

                  If THIS PLAN is or becomes TOP-HEAVY in any PLAN YEAR
                  beginning after December 31, 1983, the provisions of 2.7(d)
                  supersede any conflicting provisions in THIS PLAN or the
                  ADOPTION AGREEMENT.

         (h)      Plan Termination.

                  On THIS PLAN'S termination or partial termination, the ACCOUNT
                  BALANCE of each affected PARTICIPANT is nonforfeitable.

         (i)      Contribution Discontinuance.

                  On THIS PLAN'S complete discontinuance of CONTRIBUTIONS, the
                  ACCOUNT BALANCE of each affected PARTICIPANT is
                  nonforfeitable.

2.7      TOP HEAVY ALLOCATION

         (a)      No Employer defined benefit plan.

                  The EMPLOYER shall not maintain THIS PLAN at any time when the
                  EMPLOYER maintains a defined benefit plan.

         (b)      Minimum allocation.

                                       18
<PAGE>   19

                  (1)      When THIS PLAN is TOP-HEAVY and except as otherwise
                           provided in (2) below, the EMPLOYER CONTRIBUTIONS and
                           FORFEITURES allocated to any PARTICIPANT who is not a
                           KEY EMPLOYEE are not less than the lesser of 3% of
                           such PARTICIPANT'S COMPENSATION or if the EMPLOYER
                           has no defined benefit plan which designates THIS
                           PLAN to satisfy CODE SECTION 401, the largest
                           percentage of EMPLOYER CONTRIBUTIONS and FORFEITURES,
                           as a percentage of KEY EMPLOYEE'S COMPENSATION, as
                           limited by CODE SECTION 401(a)(17), allocated to any
                           KEY EMPLOYEE for that year. The minimum allocation is
                           determined without any Social Security contribution.
                           The minimum allocation is made even though, under
                           other plan provisions, the PARTICIPANT is not
                           otherwise entitled to receive an allocation, or
                           receives a lesser allocation for the year because the
                           PARTICIPANT does not (i) complete 500 HOURS OF
                           SERVICE (or any equivalent provided in THIS PLAN),
                           (ii) make MANDATORY EMPLOYEE CONTRIBUTIONS to THIS
                           PLAN or (iii) have a certain amount of Compensation
                           less than a stated amount.

                  (2)      The provision in (1) does not apply to any
                           PARTICIPANT to the extent the PARTICIPANT is covered
                           by any other plan or plans of the EMPLOYER and the
                           EMPLOYER provides in ADOPTION AGREEMENT that the
                           minimum allocation or benefit requirement applicable
                           to TOP-HEAVY plans is met in the other plan or plans.

         (c)      Nonforfeitability of minimum allocation.

                  The minimum allocation required (to the extent required to be
                  nonforfeitable in CODE SECTION 416(b)) is not forfeited by
                  CODE SECTION 411(a)(3)(B) or 411(a)(3)(D).

         (d)      Minimum vesting schedules.

                  For any PLAN YEAR in which THIS PLAN is TOP-HEAVY, 1 of the
                  minimum vesting schedules as elected by the EMPLOYER in the
                  ADOPTION AGREEMENT automatically applies to THIS PLAN. The
                  minimum vesting schedule applies to all benefits in CODE
                  SECTION 411(a)(7) except those attributable to EMPLOYEE
                  CONTRIBUTIONS, including benefits accrued before the effective
                  date of CODE SECTION 416 and benefits accrued before THIS PLAN
                  became TOP-HEAVY. No decrease in a PARTICIPANT'S
                  nonforfeitable percentage occurs if THIS PLAN'S status as
                  TOP-HEAVY changes for any PLAN YEAR. However, this paragraph
                  does not apply to the ACCOUNT BALANCES of any EMPLOYEE who
                  does not have an HOUR OF SERVICE after THIS PLAN initially
                  becomes TOP-HEAVY and such EMPLOYEE'S ACCOUNT BALANCE
                  attributable to EMPLOYER CONTRIBUTIONS and FORFEITURES are
                  determined without this paragraph.

         (e)      The EMPLOYER may elect in the ADOPTION AGREEMENT how paired
                  plans will satisfy the Code Section 416 minimum benefit.

                                       19
<PAGE>   20

         (f)      For this subsection, COMPENSATION has the meaning in
                  subsection 2.20(g).

2.8      ELECTIVE DEFERRALS

A PARTICIPANT may elect to have his/her COMPENSATION reduced as elected by the
EMPLOYER in the ADOPTION AGREEMENT.

2.9      EXCESS ELECTIVE DEFERRALS

No PARTICIPANT is permitted to have ELECTIVE DEFERRALS made to THIS PLAN, or any
other qualified plan maintained by the EMPLOYER, during any taxable year, in
excess of the dollar limitation in CODE SECTION 402(g) in effect at the
beginning of such taxable year.

2.10     DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS

A PARTICIPANT may assign to THIS PLAN any EXCESS ELECTIVE DEFERRALS made during
the PARTICIPANT'S taxable year by notifying the ADMINISTRATOR on or before the
date specified in the ADOPTION AGREEMENT of the amount of the EXCESS ELECTIVE
DEFERRALS to be assigned to THIS PLAN. A Participant is deemed to notify the
ADMINISTRATOR of any EXCESS ELECTIVE DEFERRALS from taking into account only
those ELECTIVE DEFERRALS made to THIS PLAN and any other plans of the EMPLOYER.

Notwithstanding any other provision, EXCESS ELECTIVE DEFERRALS, plus any income
and minus any loss allocable thereto, are distributed no later than April 15 to
the PARTICIPANT to whose ACCOUNT EXCESS ELECTIVE DEFERRALS are assigned for the
preceding year and who claims EXCESS ELECTIVE DEFERRALS for such taxable year.

EXCESS ELECTIVE DEFERRALS are adjusted for any income or loss up to the date of
distribution. The income or loss allocable to EXCESS ELECTIVE DEFERRALS is the
sum of: (i) income or loss allocable to the PARTICIPANT'S ELECTIVE DEFERRAL
ACCOUNT for the taxable year multiplied by a fraction, the numerator of which is
such PARTICIPANT'S EXCESS ELECTIVE DEFERRALS for the year and the denominator is
the PARTICIPANT'S ACCOUNT BALANCE attributable to ELECTIVE DEFERRALS without any
income or loss occurring during such taxable year and (ii) 10% of the amount
determined by (i) multiplied by the number of whole calendar months between the
end of the PARTICIPANT'S taxable year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of such month.

2.11     ACTUAL DEFERRAL PERCENTAGE TEST

PRIOR YEAR TESTING

         (a)      The ACTUAL DEFERRAL PERCENTAGE ("ADP") for a PLAN YEAR for
                  PARTICIPANTS who are HIGHLY COMPENSATED EMPLOYEES for each
                  PLAN YEAR and the prior year's ADP for PARTICIPANTS who were
                  NON-HIGHLY COMPENSATED EMPLOYEES for the prior PLAN YEAR
                  satisfies 1 of the following (the "ADP TEST"):

                                       20
<PAGE>   21

                  (1)      The ADP for a PLAN YEAR for PARTICIPANTS who are
                           HIGHLY COMPENSATED EMPLOYEES for the PLAN YEAR does
                           not exceed the prior year's ADP for PARTICIPANTS who
                           were NON-HIGHLY COMPENSATED EMPLOYEES for the prior
                           PLAN YEAR multiplied by 1.25; or

                  (2)      The ADP for a PLAN YEAR for PARTICIPANTS who are
                           HIGHLY COMPENSATED EMPLOYEES for the PLAN YEAR does
                           not exceed the prior year's ADP for PARTICIPANTS who
                           were NON-HIGHLY COMPENSATED EMPLOYEES for the prior
                           PLAN YEAR multiplied by 2.0, provided the ADP for
                           PARTICIPANTS who are HIGHLY COMPENSATED EMPLOYEES
                           does not exceed the ADP for PARTICIPANTS who were
                           NON-HIGHLY COMPENSATED EMPLOYEES in the prior PLAN
                           YEAR by more than 2 percentage points.

                           For the first PLAN YEAR, THIS PLAN permits any
                           PARTICIPANT to make ELECTIVE DEFERRALS and this is
                           not a successor plan, for the foregoing tests, the
                           prior year's NON-HIGHLY COMPENSATED EMPLOYEES' ADP
                           shall be 3% unless the EMPLOYER has elected to use
                           the PLAN YEAR'S ADP for these PARTICIPANTS.

CURRENT YEAR TESTING

         If elected by the EMPLOYER, the ADP TESTS in (1) and (2), above, will
         be applied by comparing the current PLAN YEAR'S ADP for PARTICIPANTS
         who are HIGHLY COMPENSATED Employees with the current PLAN YEAR'S ADP
         for PARTICIPANTS who are NON-HIGHLY COMPENSATED EMPLOYEES. Once made,
         this election can only be undone if THIS PLAN meets the requirements
         for changing to prior year testing set forth in Notice 98-1 (or
         superseding guidance).

         (b)      A PARTICIPANT is a HIGHLY COMPENSATED EMPLOYEE for a
                  particular PLAN YEAR if he or she meets the definition of a
                  HIGHLY COMPENSATED EMPLOYEE in effect for that PLAN YEAR.
                  Similarly, a PARTICIPANT is a NON-HIGHLY COMPENSATED EMPLOYEE
                  for a particular PLAN YEAR if he or she does not meet the
                  definition of a HIGHLY COMPENSATED EMPLOYEE in effect for that
                  PLAN YEAR.

         (c)      The ADP for any PARTICIPANT who is a HIGHLY COMPENSATED
                  EMPLOYEE for the PLAN YEAR and who is eligible to have
                  ELECTIVE DEFERRALS (and QUALIFIED NON-ELECTIVE CONTRIBUTIONS
                  or QUALIFIED MATCHING CONTRIBUTIONS, or both, if treated as
                  ELECTIVE DEFERRALS for the ADP test) allocated to his or her
                  accounts under 2 or more arrangements described in CODE
                  SECTION 401(k), maintained by the EMPLOYER are determined as
                  if such ELECTIVE DEFERRALS (and, if applicable, such QUALIFIED
                  NON-ELECTIVE CONTRIBUTIONS or QUALIFIED MATCHING
                  CONTRIBUTIONS, or both) were made by 1 arrangement. If a
                  HIGHLY COMPENSATED EMPLOYEE participates in 2 or more cash

                                       21
<PAGE>   22

                  or deferred arrangements having different PLAN YEARS, all cash
                  or deferred arrangements ending with or within the same
                  calendar year are treated as 1 arrangement. Notwithstanding
                  the foregoing, certain plans are treated as separate if
                  mandatorily disaggregated by CODE SECTION 401(k) REGULATIONS.

         (d)      If THIS PLAN satisfies the requirements of CODE SECTIONS
                  401(k), 401(a)(4), or 410(b) only if aggregated with 1 or more
                  other plans, or if 1 or more other plans satisfy the
                  requirements of such CODE SECTIONS only if aggregated with
                  THIS PLAN, this subsection applies by determining the ADP of
                  EMPLOYEES as if all such plans were 1 plan. Any adjustments to
                  the NON-HIGHLY COMPENSATED EMPLOYEE ADP for the prior year
                  will be according to Notice 98-1 and any superseding guidance,
                  unless the EMPLOYER has elected in the ADOPTION AGREEMENT 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 ADP testing method.

         (e)      To determine the ADP TEST, EMPLOYEE ELECTIVE DEFERRALS,
                  QUALIFIED NON-ELECTIVE CONTRIBUTIONS and QUALIFIED MATCHING
                  CONTRIBUTIONS are made before the end of the 12-month period
                  immediately following the PLAN YEAR to which such
                  contributions relate.

         (f)      The EMPLOYER maintains records sufficient to demonstrate
                  satisfaction of the ADP TEST and the amount of QUALIFIED
                  NON-ELECTIVE CONTRIBUTIONS or QUALIFIED MATCHING
                  CONTRIBUTIONS, or both, used in such test.

2.12     DISTRIBUTION OF EXCESS CONTRIBUTIONS

Notwithstanding any other provision, EXCESS CONTRIBUTIONS, plus any income and
minus any loss allocable thereto, are distributed no later than the last day of
each PLAN YEAR to the 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 the EXCESS CONTRIBUTIONS have been allocated. For the preceding
sentence, the "largest amount" is determined after distribution of any EXCESS
CONTRIBUTIONS.

If such excess amounts are distributed more than 2 " months after the last day
of the PLAN YEAR in which such excess amounts arose, a 10% excise tax is imposed
on the EMPLOYER as to such amounts.

EXCESS CONTRIBUTIONS (including the amounts recharacterized) are treated as
ANNUAL ADDITIONS to THIS PLAN.

                                       22
<PAGE>   23

EXCESS CONTRIBUTIONS are adjusted for any income or loss up to the date of
distribution. The income or loss allocable to EXCESS CONTRIBUTIONS allocated to
each PARTICIPANT is the sum of: (i) income or loss allocable to the
PARTICIPANT'S ELECTIVE DEFERRAL ACCOUNT (and, if applicable, the QUALIFIED
NON-ELECTIVE CONTRIBUTION ACCOUNT or the QUALIFIED MATCHING CONTRIBUTIONS
ACCOUNT or both) for the PLAN YEAR multiplied by a fraction, the numerator of
which is such PARTICIPANT'S EXCESS CONTRIBUTIONS for the year and the
denominator is the PARTICIPANT'S ACCOUNT BALANCE attributable to ELECTIVE
DEFERRALS (and QUALIFIED NON-ELECTIVE CONTRIBUTIONS or QUALIFIED MATCHING
CONTRIBUTIONS, or both, if any of such contributions are included in the ADP
TEST) without regard to any income or loss occurring during such PLAN YEAR; and
(ii) 10% of the amount determined in (i) multiplied by the number of whole
calendar months between the end of the PLAN YEAR and the date of distribution,
counting the month of distribution if distribution occurs after the 15th of such
month.

EXCESS CONTRIBUTIONS are distributed from the PARTICIPANT'S ELECTIVE DEFERRAL
ACCOUNT, and QUALIFIED MATCHING CONTRIBUTION ACCOUNT (if applicable) in
proportion to the PARTICIPANT'S ELECTIVE DEFERRALS and QUALIFIED MATCHING
CONTRIBUTIONS (to the extent used in the ADP test) for the PLAN YEAR. EXCESS
CONTRIBUTIONS are distributed from the PARTICIPANT'S QUALIFIED NON-ELECTIVE
CONTRIBUTION ACCOUNT only to the extent that such EXCESS CONTRIBUTIONS exceed
the balance in the PARTICIPANT'S ELECTIVE DEFERRAL ACCOUNT and QUALIFIED
MATCHING CONTRIBUTION ACCOUNT.

2.13     RECHARACTERIZATION

A PARTICIPANT may recharacterize his or her EXCESS CONTRIBUTIONS as an amount
distributed to the PARTICIPANT and then contributed by the PARTICIPANT to THIS
PLAN. Recharacterized amounts remain nonforfeitable.

Amounts may not be recharacterized by a HIGHLY COMPENSATED EMPLOYEE to the
extent that such amount, in combination with other EMPLOYEE CONTRIBUTIONS made
by that EMPLOYEE, exceed any stated limit in THIS PLAN for EMPLOYEE
CONTRIBUTIONS.

Recharacterization must occur no later than 2 " months after the last day of the
PLAN YEAR in which such EXCESS CONTRIBUTIONS arose and is deemed to occur no
earlier than the date the last HIGHLY COMPENSATED EMPLOYEE is informed in
writing of the amount recharacterized and the consequences thereof.

Recharacterized amounts are taxable to the PARTICIPANT for the PARTICIPANT'S tax
year in which the PARTICIPANT would have received them in cash.

2.14     MATCHING CONTRIBUTIONS

If the EMPLOYER elects in the ADOPTION AGREEMENT, the EMPLOYER makes MATCHING
CONTRIBUTIONS to THIS PLAN.

         (a)      Forfeitures and Vesting of MATCHING CONTRIBUTIONS

                                       23
<PAGE>   24

                  MATCHING CONTRIBUTIONS are vested by ADOPTION AGREEMENT
                  Section 2. MATCHING CONTRIBUTIONS are fully vested at NORMAL
                  RETIREMENT AGE, on complete or partial termination, or on
                  complete discontinuance of EMPLOYER CONTRIBUTIONS.

                  FORFEITURES of MATCHING CONTRIBUTIONS, other than EXCESS
                  AGGREGATE CONTRIBUTIONS, are made by Section 2.

         (b)      QUALIFIED MATCHING CONTRIBUTIONS

                  If elected by the EMPLOYER in the ADOPTION AGREEMENT, the
                  EMPLOYER makes QUALIFIED MATCHING CONTRIBUTIONS to THIS PLAN.

2.15     LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS

PRIOR YEAR TESTING

         (a)      The AVERAGE CONTRIBUTION PERCENTAGE ("ACP") for a PLAN YEAR
                  for PARTICIPANTS who are HIGHLY COMPENSATED EMPLOYEES for each
                  PLAN YEAR and the prior year's ACP for PARTICIPANTS who were
                  NON-HIGHLY COMPENSATED EMPLOYEES for the same PLAN YEAR
                  satisfy 1 of the following tests ("ACP TEST"):

                  (1)      The ACP for a PLAN YEAR for PARTICIPANTS who are
                           HIGHLY COMPENSATED EMPLOYEES for the PLAN YEAR do not
                           exceed the prior year's ACP for PARTICIPANTS who were
                           NON-HIGHLY COMPENSATED EMPLOYEES for the prior PLAN
                           YEAR multiplied by 1.25; or

                  (2)      The ACP for a PLAN YEAR for PARTICIPANTS who are
                           HIGHLY COMPENSATED EMPLOYEES for the PLAN YEAR do not
                           exceed the prior year's ACP for PARTICIPANTS who were
                           NON-HIGHLY COMPENSATED EMPLOYEES for the prior PLAN
                           YEAR multiplied by 2, provided that the ACP for
                           PARTICIPANTS who are HIGHLY COMPENSATED EMPLOYEES
                           does not exceed the ACP for Participants who were
                           NON-HIGHLY COMPENSATED EMPLOYEES in the prior PLAN
                           YEAR by more than 2 percentage points.

                  For the first PLAN YEAR THIS PLAN permits any PARTICIPANT to
                  make EMPLOYEE CONTRIBUTIONS, provides for MATCHING
                  CONTRIBUTIONS or both, and this is not a successor plan, for
                  purposes of the foregoing tests, the prior year's NON-HIGHLY
                  COMPENSATED EMPLOYEES' ACP shall be 3% unless the EMPLOYER has
                  elected to use the PLAN YEAR'S ACP for these PARTICIPANTS.

                                       24
<PAGE>   25
CURRENT YEAR TESTING

         If elected by the EMPLOYER, the ACP Tests in (1) and (2), above, will
         be applied by comparing the current year's ACP for PARTICIPANTS who are
         HIGHLY COMPENSATED EMPLOYEES for each PLAN YEAR with the current PLAN
         YEAR'S ACP for PARTICIPANTS who are NON-HIGHLY COMPENSATED EMPLOYEES.
         Once made, this election can only be undone if THIS PLAN meets the
         requirements for changing to prior year testing set forth in Notice
         98-1 (or superseding guidance).

                                       25
<PAGE>   26
SPECIAL RULES:

         (c)      If 1 or more HIGHLY COMPENSATED EMPLOYEES participate in both
                  a CODA and a plan subject to the ACP TEST maintained by the
                  EMPLOYER and the sum of the ADP and ACP of those HIGHLY
                  COMPENSATED EMPLOYEES subject to either or both tests exceeds
                  the AGGREGATE LIMIT, the ACP of those HIGHLY COMPENSATED
                  EMPLOYEES who also participate in a CODA will be reduced in
                  the manner described in subsection 2.17 so that such limit is
                  not exceeded.

                  The amount by which each HIGHLY COMPENSATED EMPLOYEE'S
                  CONTRIBUTION PERCENTAGE AMOUNTS is reduced is 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 and ACP Tests and are deemed to be
                  the maximum permitted by 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 of the NON-HIGHLY COMPENSATED EMPLOYEES.

         (d)      The CONTRIBUTION PERCENTAGE for any PARTICIPANT who is a
                  HIGHLY COMPENSATED EMPLOYEE and who is eligible to have
                  CONTRIBUTION PERCENTAGE AMOUNTS allocated to his or her
                  account under 2 or more plans described in CODE SECTION
                  401(a), or arrangements described in CODE SECTION 401(k)
                  maintained by the EMPLOYER, are determined as if the total of
                  such CONTRIBUTION PERCENTAGE AMOUNTS was made to each plan. If
                  a HIGHLY COMPENSATED EMPLOYEE participates in 2 or more cash
                  or deferred arrangements that have different plan years, all
                  cash or deferred arrangements ending with or within the same
                  calendar year are treated as 1 arrangement. Notwithstanding
                  the foregoing, certain plans are treated as separate if
                  mandatorily disaggregated by CODE SECTION 401(m) REGULATIONS.

         (e)      If THIS PLAN satisfies CODE SECTIONS 401(m), 401(a)(4) or
                  410(b) only if aggregated with 1 or more other plans, or if 1
                  or more other plans satisfy such CODE SECTIONS only if
                  aggregated with THIS PLAN, this Section is applied by
                  determining the CONTRIBUTION PERCENTAGE of EMPLOYEES as if all
                  such plans were 1 plan. Any adjustments to the NON-HIGHLY
                  COMPENSATED EMPLOYEE ACP for the prior year will be according
                  to Notice 98-1 and any superseding guidance, unless the
                  EMPLOYER has elected to use the current year testing method.
                  Plans may be aggregated to satisfy CODE SECTION 401(m) only if
                  they have the same PLAN YEAR and use the same ACP testing
                  method.

         (f)      To determine the CONTRIBUTION PERCENTAGE test, EMPLOYEE
                  CONTRIBUTIONS are considered to have been made in the PLAN
                  YEAR in which contributed to the TRUST. MATCHING CONTRIBUTIONS
                  and QUALIFIED NON-ELECTIVE CONTRIBUTIONS are considered 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.

                                       26
<PAGE>   27

         (g)      The EMPLOYER maintains records sufficient to demonstrate
                  satisfaction of the ACP TEST and the amount of QUALIFIED
                  NON-ELECTIVE CONTRIBUTIONS or QUALIFIED MATCHING
                  CONTRIBUTIONS, or both, used in such test.

2.16     DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS

Notwithstanding any other provision, EXCESS AGGREGATE CONTRIBUTIONS, plus any
income and minus any loss allocable thereto, are forfeited, if forfeitable, or
if not forfeitable, distributed 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 the EXCESS
AGGREGATE CONTRIBUTIONS have been allocated. For 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 " months
after the last day of the PLAN YEAR in which such excess amounts arose, a 10%
excise tax is imposed on the EMPLOYER as to those amounts. EXCESS AGGREGATE
CONTRIBUTIONS are treated as ANNUAL ADDITIONS to THIS PLAN.

EXCESS AGGREGATE CONTRIBUTIONS are adjusted for any income or loss up to the
date of distribution. The income or loss allocable to EXCESS AGGREGATE
CONTRIBUTIONS allocated to each PARTICIPANT is the sum of: (i) income or loss
allocable to the PARTICIPANT'S EMPLOYEE CONTRIBUTION ACCOUNT, MATCHING
CONTRIBUTION ACCOUNT, QUALIFIED MATCHING CONTRIBUTION ACCOUNT (if any, and if
all amounts therein are not used in the ADP test) and, if applicable, QUALIFIED
NON-ELECTIVE CONTRIBUTION ACCOUNT and ELECTIVE DEFERRAL ACCOUNT for the PLAN
YEAR multiplied by a fraction, the numerator of which is such PARTICIPANT'S
EXCESS AGGREGATE CONTRIBUTIONS for the year and the denominator is the
PARTICIPANT'S ACCOUNT BALANCE(S) attributable to CONTRIBUTION PERCENTAGE AMOUNTS
without regard to any income or loss occurring during such PLAN YEAR; and (ii)
10% of the amount determined in (i) multiplied by the number of whole calendar
months between the end of the PLAN YEAR and the date of distribution, counting
the month of distribution if distribution occurs after the 15th of such month.

2.17     QUALIFIED NON-ELECTIVE CONTRIBUTIONS

The EMPLOYER may make QUALIFIED NON-ELECTIVE CONTRIBUTIONS to THIS PLAN as
elected in the ADOPTION AGREEMENT.

In addition, if the Employer has elected to use the current year testing method,
in lieu of distributing EXCESS CONTRIBUTIONS in subsection 2.12, or EXCESS
AGGREGATE CONTRIBUTIONS as provided in

                                       27
<PAGE>   28

subsection 2.16, and to the extent elected by the EMPLOYER in the ADOPTION
AGREEMENT, the EMPLOYER may make QUALIFIED NON-ELECTIVE CONTRIBUTIONS for
NON-HIGHLY COMPENSATED EMPLOYEES sufficient to satisfy either the AVERAGE
DEFERRAL PERCENTAGE test or the ACTUAL CONTRIBUTION PERCENTAGE test, or both,
pursuant to REGULATIONS.

2.18     FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS

FORFEITURES of EXCESS AGGREGATE CONTRIBUTIONS may either be reallocated to the
ACCOUNTS of NON-HIGHLY COMPENSATED EMPLOYEES or applied to reduce EMPLOYER
CONTRIBUTIONS, as elected in ADOPTION AGREEMENT Section 2.

EXCESS AGGREGATE CONTRIBUTIONS are forfeited, if forfeitable, or distributed on
a pro-rata basis from the PARTICIPANT'S EMPLOYEE CONTRIBUTION ACCOUNT, MATCHING
CONTRIBUTION ACCOUNT, and QUALIFIED MATCHING CONTRIBUTION ACCOUNT (and, if
applicable, the PARTICIPANT'S QUALIFIED NON-ELECTIVE CONTRIBUTION ACCOUNT or
ELECTIVE DEFERRAL ACCOUNT, or both).

2.19     NONFORFEITABILITY AND VESTING

The PARTICIPANT'S ACCRUED BENEFIT derived from ELECTIVE DEFERRALS, QUALIFIED
NON-ELECTIVE CONTRIBUTIONS, EMPLOYEE NONDEDUCTIBLE CONTRIBUTIONS, and QUALIFIED
MATCHING CONTRIBUTIONS is nonforfeitable. Separate ACCOUNTS for ELECTIVE
DEFERRALS, QUALIFIED NON-ELECTIVE CONTRIBUTIONS, EMPLOYEE NONDEDUCTIBLE
CONTRIBUTIONS, MATCHING CONTRIBUTIONS, and QUALIFIED MATCHING CONTRIBUTIONS are
maintained for each PARTICIPANT. Each ACCOUNT is credited with the applicable
contributions and earnings thereon.

DEFINITIONS

2.20     COMPENSATION

         (a)      "COMPENSATION" is compensation as that term is defined in this
                  subsection 2.20(a). For any SELF-EMPLOYED INDIVIDUAL in THIS
                  PLAN, COMPENSATION is EARNED INCOME. COMPENSATION includes
                  only that compensation which is actually paid to the
                  PARTICIPANT during the determination period. Except as
                  provided elsewhere in THIS PLAN, the determination period is
                  the period elected by the EMPLOYER in the ADOPTION AGREEMENT.
                  If the EMPLOYER makes no election, the determination period is
                  the PLAN YEAR.

                  Notwithstanding the above, if elected by the EMPLOYER in the
                  ADOPTION AGREEMENT, COMPENSATION includes any amount
                  contributed by the EMPLOYER by a salary reduction agreement
                  and not includible in the gross income of the EMPLOYEE in CODE
                  SECTIONS 125, 402(e)(3), 402(h)(1)(B) or 403(b).

                                       28
<PAGE>   29

                  In addition, the EMPLOYER may elect in the ADOPTION AGREEMENT
                  for COMPENSATION and 414(s) COMPENSATION to not include gross
                  income from CODE SECTIONS 125, 402(e)(3), 402(h)(1)(B), 403(b)
                  or 457(b).

                  For PLAN YEARS beginning on or after January 1, 1989, and
                  before January 1, 1994, The annual COMPENSATION of each
                  PARTICIPANT to determine all benefits in THIS PLAN for any
                  PLAN YEAR does not exceed $200,000, adjusted at the same time
                  and in the same manner as in CODE SECTION 415(d), except that
                  the dollar increase in effect on January 1 of any calendar
                  year is effective for PLAN YEARS beginning in such calendar
                  year and the first adjustment to the $200,000 limitation is
                  effective on January 1, 1990.

                  For PLAN YEARS beginning on or after January 1, 1994, the
                  annual COMPENSATION of each PARTICIPANT to determine all
                  benefits in THIS PLAN for any PLAN YEAR does not exceed
                  $150,000, as adjusted for increases in the cost-of-living by
                  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 COMPENSATION limit is an amount equal to the otherwise
                  applicable annual COMPENSATION limit multiplied by a fraction,
                  the numerator of which is the number of months in the short
                  determination period, and the denominator of which is 12.

                  If COMPENSATION for any prior determination period is taken
                  into account to determine a PARTICIPANT'S allocations for the
                  current PLAN YEAR, the COMPENSATION for such prior
                  determination period is subject to the applicable annual
                  COMPENSATION limit in effect for that prior period. For this
                  purpose, in determining allocations in PLAN YEARS beginning on
                  or after January 1, 1989, the annual COMPENSATION limit in
                  effect for determination periods beginning before that date is
                  $200,000.

         (b)      "EARNED INCOME" is the net earnings from self-employment in
                  the trade or business for which THIS PLAN is established, for
                  which personal services of the individual are a material
                  income-producing factor. Net earnings are determined without
                  items not included in gross income and the deductions
                  allocable to such items. Net earnings are reduced by
                  CONTRIBUTIONS by the EMPLOYER to a qualified plan to the
                  extent deductible by CODE SECTION 404.

                  Net earnings are determined with the deduction allowed to the
                  taxpayer by CODE SECTION 164(f) for taxable years beginning
                  after December 31, 1989.

         (c)      "PLAN YEAR" is the 12-consecutive month period elected by the
                  EMPLOYER in the ADOPTION AGREEMENT.

                                       29
<PAGE>   30

         (d)      "DISABILITY" means inability to engage in any substantial
                  gainful activity because of any medically determinable
                  physical or mental impairment that can be expected to result
                  in death or which has lasted or can be expected to last for a
                  continuous period of not less than 12 months. The permanence
                  and degree of such impairment are to be supported by medical
                  evidence.

                  If elected by the EMPLOYER in the ADOPTION AGREEMENT,
                  nonforfeitable contributions are made to THIS PLAN on behalf
                  of each disabled PARTICIPANT (who is not a HIGHLY COMPENSATED
                  EMPLOYEE within the meaning of subsection 2.22(i)).

         (e)      "OWNER-EMPLOYEE" is an individual who is a sole proprietor, or
                  who is a partner owning more than 10% of either the capital or
                  profits interest of the partnership.

         (f)      "SELF-EMPLOYED INDIVIDUAL" is an individual who has earned
                  income for the taxable year from the trade or business for
                  which THIS PLAN is established; also, an individual who would
                  have had earned income but for the fact that the trade or
                  business had no net profits for the taxable year.

         (g)      "COMPENSATION" is 1 of the following as elected by the
                  EMPLOYER in the ADOPTION AGREEMENT:

                  (1)      Information required to be reported by CODE SECTIONS
                           6041, 6051, and 6052 (Wages, tips and other
                           compensation as reported on Form W-2). COMPENSATION
                           is defined as wages in CODE SECTION 3401(a) and all
                           other payments of COMPENSATION to an EMPLOYEE by the
                           EMPLOYER (in the course of the EMPLOYER'S trade or
                           business) for which the EMPLOYER is required to
                           furnish the employee a written statement by CODE
                           SECTIONS 6041(d), 6051(a)(3), and 6052. COMPENSATION
                           is determined without any rules in CODE SECTION
                           3401(a) 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)).

                  (2)      Section 3401(a) wages. COMPENSATION is defined as
                           wages by CODE SECTION 3401(a) for income tax
                           withholding at the source but determined without 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)).

                  (3)      415 safe-harbor compensation. COMPENSATION is defined
                           as wages, salaries, and fees for professional
                           services and other amounts received (without regard
                           to whether or not an amount is paid in cash) for
                           personal services actually rendered in the course of
                           employment with the EMPLOYER maintaining THIS PLAN to
                           the extent that the amounts are includable in gross
                           income (including, but not limited to, commissions
                           paid salesmen, compensation for services on the basis
                           of a percentage of profits, commissions on insurance
                           premiums,

                                       30
<PAGE>   31
                           tips, bonuses, fringe benefits, and reimbursements or
                           other expense allowances in a nonaccountable plan (as
                           described in REGULATIONS 1.62-2(c)), and excluding
                           the following:

                                       31
<PAGE>   32

                           (A)      EMPLOYER contributions to a plan of deferred
                                    compensation not includible in the
                                    EMPLOYEE'S gross income for the taxable year
                                    in which contributed, or EMPLOYER
                                    CONTRIBUTIONS by a simplified employee
                                    pension plan, or any distributions from a
                                    plan of deferred compensation;

                           (B)      Amounts realized from the exercise of a
                                    non-qualified stock option, or when
                                    restricted stock (or property) held by the
                                    EMPLOYEE either becomes freely transferable
                                    or is no longer subject to a substantial
                                    risk of forfeiture;

                           (C)      Amounts realized from the sale, exchange or
                                    other disposition of stock acquired by a
                                    qualified stock option; and

                           (D)      other amounts which received special tax
                                    benefits, or contributions made by the
                                    EMPLOYER (whether or not under a salary
                                    reduction agreement) towards the purchase of
                                    an annuity contract in CODE SECTION 403(b)
                                    (whether or not the contributions are
                                    actually excludable from the gross income of
                                    the EMPLOYEE).

                  For any SELF-EMPLOYED INDIVIDUAL, "Compensation" is EARNED
INCOME.

                  (1)      For limitation years beginning after December 31,
                           1991, applying the limitations of this article,
                           COMPENSATION for a LIMITATION YEAR is the
                           COMPENSATION actually paid or made available in gross
                           income during such LIMITATION YEAR.

                  (2)      Notwithstanding the preceding sentence, COMPENSATION
                           for a PARTICIPANT in a defined contribution plan who
                           is permanently and totally disabled (in CODE SECTION
                           22(e)(3)) is the COMPENSATION such PARTICIPANT would
                           have received for the LIMITATION YEAR if the
                           PARTICIPANT had been paid at the rate of COMPENSATION
                           paid immediately before becoming permanently and
                           totally disabled; for limitation years beginning
                           before January 1, 1997, but not for limitation years
                           beginning after December 31, 1996, such imputed
                           COMPENSATION for the disabled PARTICIPANT may be
                           taken into account only if the PARTICIPANT is not a
                           HIGHLY COMPENSATED EMPLOYEE (in subsection 2.22(i))
                           and contributions made on behalf of such PARTICIPANT
                           are nonforfeitable when made.

                           For limitation years beginning after December 31,
                           1997, to apply the limitations of this Section,
                           COMPENSATION paid or made available during such
                           limitation year shall include any elective deferral
                           (in CODE SECTION

                                       32
<PAGE>   33
                           402(g)(3)), and any amount contributed or deferred by
                           the EMPLOYER at the election of the EMPLOYEE and not
                           includible in the gross income of the EMPLOYEE by
                           CODE SECTION 125 or 457.

         (h)      "ACCOUNT" is the separate account maintained for each
                  EMPLOYEE.

                  Separate accounts for ELECTIVE DEFERRALS, QUALIFIED
                  NON-ELECTIVE CONTRIBUTIONS, QUALIFIED MATCHING CONTRIBUTIONS,
                  MATCHING CONTRIBUTIONS, NON-ELECTIVE EMPLOYER CONTRIBUTIONS,
                  NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS and EMPLOYEE ROLLOVER
                  CONTRIBUTIONS are maintained for each PARTICIPANT. Each
                  ACCOUNT is credited with the applicable contributions, net
                  earnings and losses, and distributions.

2.21     MAXIMUM ANNUAL ADDITIONS

         (a)      "ANNUAL ADDITION" is the sum of the following amounts credited
                  to a PARTICIPANT'S ACCOUNT for the LIMITATION YEAR:

                  (1)      EMPLOYER CONTRIBUTIONS which include EMPLOYEE
                           ELECTIVE DEFERRALS, QUALIFIED NON-ELECTIVE
                           CONTRIBUTIONS, QUALIFIED MATCHING CONTRIBUTIONS,
                           MATCHING CONTRIBUTIONS, and NON-ELECTIVE EMPLOYER
                           CONTRIBUTIONS;

                  (2)      EMPLOYEE NONDEDUCTIBLE CONTRIBUTIONS;

                  (3)      FORFEITURES;

                  (4)      amounts allocated, after March 31, 1984, to an
                           individual medical account, in CODE SECTION
                           415(1)(2), which is part of a pension or annuity plan
                           maintained by the EMPLOYER are treated as ANNUAL
                           ADDITIONS to a defined contribution plan. Also
                           amounts from contributions paid or accrued after
                           December 31, 1985, in taxable years ending after such
                           date, attributable to post-retirement medical
                           benefits, allocated to the separate account of a KEY
                           EMPLOYEE, in CODE SECTION 419A(d)(3) of the Code,
                           under a welfare benefit fund, in CODE SECTION 419(e),
                           maintained by the EMPLOYER are treated as ANNUAL
                           ADDITIONS to a defined contribution plan; and

                  (5)      allocations by a simplified employee pension. For
                           this purpose, any EXCESS AMOUNT applied by
                           subsections 2.4(d) or 2.4(j) in the LIMITATION YEAR
                           to reduce EMPLOYER CONTRIBUTIONS are considered
                           ANNUAL ADDITIONS for such LIMITATION YEAR.

         (b)      "DEFINED CONTRIBUTION DOLLAR LIMITATION" is the limit in CODE
                  SECTION 415(c) as adjusted by CODE SECTION 415(d) as in effect
                  for the LIMITATION YEAR.

                                       33
<PAGE>   34

         (c)      EMPLOYER includes all members of a controlled group of
                  corporations (in CODE SECTION 414(b) as modified by CODE
                  SECTION 415(h)), all commonly controlled trades or businesses
                  (in CODE SECTION 414(c) as modified by CODE SECTION 415(h)) or
                  affiliated service groups (in CODE SECTION 414(m)) of which
                  the EMPLOYER is a part, and any other entity required to be
                  aggregated with the EMPLOYER in CODE SECTION 414(o) and its
                  REGULATIONS.

         (d)      "EXCESS AMOUNT" is the excess of the PARTICIPANT'S ANNUAL
                  ADDITIONS for the LIMITATION YEAR over the MAXIMUM PERMISSIBLE
                  AMOUNT.

         (e)      "HIGHEST AVERAGE COMPENSATION" is a PARTICIPANT'S average
                  COMPENSATION for the 3 consecutive YEARS OF SERVICE with the
                  EMPLOYER that produces the highest average.

         (f)      "LIMITATION YEAR" is a calendar year, or the 12-consecutive
                  month period the EMPLOYER elects in ADOPTION AGREEMENT Section
                  2. All qualified plans maintained by the EMPLOYER must use the
                  same LIMITATION YEAR. If the LIMITATION YEAR is amended to a
                  different 12-consecutive month period, the new LIMITATION YEAR
                  must begin on a date within the LIMITATION YEAR in which the
                  amendment is made.

                  "MASTER OR PROTOTYPE PLAN" is a plan the form of which is the
                  subject of a favorable opinion letter from the Internal
                  Revenue Service.

         (g)      "MAXIMUM PERMISSIBLE AMOUNT" is the maximum ANNUAL ADDITION
                  that may be contributed or allocated to a PARTICIPANT'S
                  ACCOUNT in THIS PLAN for any LIMITATION YEAR which shall not
                  exceed the lesser of:

                  (1)      the DEFINED CONTRIBUTION DOLLAR LIMITATION or

                  (2)      25% of the PARTICIPANT'S COMPENSATION for the
                           LIMITATION YEAR.

                  The compensation limitation referred to in 2.20(a) does not
                  apply to any contribution for medical benefits (in CODE
                  SECTION 401(h) or 419A(f)(2)) which is otherwise treated as an
                  ANNUAL ADDITION in CODE SECTION 415(1)(1) or 419A(d)(2).

                  If a short LIMITATION YEAR is created because of an amendment
                  changing the LIMITATION YEAR to a different 12-consecutive
                  month period, the MAXIMUM

                                       34
<PAGE>   35

                  PERMISSIBLE AMOUNT does not exceed the DEFINED CONTRIBUTION
                  DOLLAR LIMITATION multiplied by the following fraction:

                  NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR DIVIDED BY 12

                  "PROJECTED ANNUAL BENEFIT" is 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 by THIS PLAN assuming:

                  (1)      the PARTICIPANT continues employment until NORMAL
                           RETIREMENT AGE in THIS 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 THIS PLAN remain constant
                           for all future LIMITATION YEARS.

2.22     TOP-HEAVY

         (a)      "KEY EMPLOYEE" is any EMPLOYEE or former EMPLOYEE (and the
                  BENEFICIARIES of such EMPLOYEE) who at any time during the
                  determination period was an officer of the EMPLOYER if such
                  individual's ANNUAL COMPENSATION exceeds 50% of the dollar
                  limitation in CODE SECTION 415(b)(1)(A), an owner (or
                  considered an owner under CODE SECTION 318) of 1 of the 10
                  largest interests in the EMPLOYER if such individual's
                  compensation exceeds 100% of the dollar limitation under CODE
                  Section 415(c)(1)(A), a 5% OWNER of the EMPLOYER, or a 1%
                  OWNER of the EMPLOYER who has an ANNUAL COMPENSATION of more
                  than $150,000.

                  "NON-KEY EMPLOYEE" is an EMPLOYEE who is not a KEY EMPLOYEE.

                  "ANNUAL COMPENSATION" is compensation as defined in ADOPTION
                  AGREEMENT Section 2, but including amounts contributed by the
                  EMPLOYER by a salary reduction agreement which are excludable
                  from the EMPLOYEE'S gross income in CODE SECTION 125,
                  402(e)(3), 402(h)(1)(B) or 403(b).

                  The "Determination Period" is the PLAN YEAR containing the
                  determination date and the 4 preceding PLAN YEARS.

         To determine who is a KEY EMPLOYEE is made by CODE SECTION 416(i)(1)
         and its REGULATIONS.

         (b)      "Top-Heavy Plan" is any PLAN YEAR beginning after December 31,
                  1983, THIS PLAN if any of the following conditions exists:

                                       35
<PAGE>   36

                  (1)      If the TOP-HEAVY RATIO for THIS PLAN exceeds 60% and
                           THIS PLAN is not part of any REQUIRED AGGREGATION
                           GROUP or PERMISSIVE AGGREGATION GROUP of plans.

                  (2)      If THIS PLAN is a part of a REQUIRED AGGREGATION
                           GROUP of plans but not part of a PERMISSIVE
                           AGGREGATION GROUP and the TOP-HEAVY RATIO for the
                           group of plans exceeds 60%.

                  (3)      If THIS PLAN is a part of a REQUIRED AGGREGATION
                           GROUP and part of a PERMISSIVE AGGREGATION GROUP of
                           plans and the TOP-HEAVY RATIO for the PERMISSIVE
                           AGGREGATION GROUP exceeds 60%.

         (c)      "TOP-HEAVY RATIO" is

                  (1)      If the EMPLOYER maintains 1 or more defined
                           contribution plans (including any Simplified Employee
                           Pension Plan) and the EMPLOYER has not maintained any
                           defined benefit plan which during the 5-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
                           5-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 5-year period ending on
                           the DETERMINATION DATE(S)), both computed by CODE
                           SECTION 416 and its REGULATIONS. 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 by CODE SECTION 416
                           and its REGULATIONS.

                  (2)      If the EMPLOYER maintains 1 or more defined
                           contribution plans (including any Simplified Employee
                           Pension Plan) and the EMPLOYER maintains or has
                           maintained 1 or more defined benefit plans which
                           during the 5-year period ending on the DETERMINATION
                           DATE(S) has or has had any 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 ACCOUNT BALANCES in
                           the aggregated defined contribution plan or plans for
                           all KEY EMPLOYEES, determined by (1) above, and

                                       36
<PAGE>   37

                           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 by (1)
                           above, and the present value of accrued benefits in
                           the defined benefit plan or plans for all
                           PARTICIPANTS as of the DETERMINATION DATE(S), all
                           determined by CODE SECTION 416 and its REGULATIONS.
                           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 5-year period ending on
                           the DETERMINATION DATE.

                  (3)      For (1) and (2) above the value of ACCOUNT BALANCES
                           and the PRESENT Value of accrued benefits are
                           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 its REGULATIONS 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 1 HOUR OF SERVICE with
                           any EMPLOYER maintaining THIS PLAN at any time during
                           the 5-year period ending on the DETERMINATION DATE is
                           disregarded. The calculation of the TOP-HEAVY RATIO,
                           and the extent to which distributions, rollovers, and
                           transfers are taken into account are made in
                           accordance with CODE Section 416 and its REGULATIONS.
                           DEDUCTIBLE EMPLOYEE CONTRIBUTIONS are not be taken
                           into account to compute the TOP-HEAVY RATIO. When
                           aggregating plans the value of ACCOUNT BALANCES and
                           accrued benefits are calculated with reference to the
                           DETERMINATION DATES within the same calendar year.

                           The accrued benefit of a PARTICIPANT other than a KEY
                           EMPLOYEE is determined by (i) the method, if any,
                           that uniformly applies for accrual purposes in 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).

                  (4)      The EMPLOYER shall not maintain THIS PLAN at any time
                           when the TOP-HEAVY RATIO exceeds 90%.

         (d)      "PERMISSIVE AGGREGATION GROUP" is the required aggregation
                  group of plans plus any other plan or plans of the EMPLOYER
                  which, when considered as a group with the required
                  aggregation group, continues to satisfy CODE SECTIONS
                  401(a)(4) and 410.

         (e)      "REQUIRED AGGREGATION GROUP" is (i) each qualified plan of the
                  EMPLOYER in which at least 1 KEY EMPLOYEE participates or
                  participated at any time during the determination period
                  (regardless of whether the plan has terminated), and (ii) any
                  other qualified plan of the EMPLOYER which enables a plan
                  described in (i) to satisfy

                                       37
<PAGE>   38

                  CODE SECTIONS 401(a)(4) or 410.

         (f)      "DETERMINATION DATE" is, 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, it is the last day of that
                  year.

         (g)      "VALUATION DATE" is the date the EMPLOYER elects in the
                  ADOPTION AGREEMENT as of which ACCOUNT BALANCES or accrued
                  benefits are valued for calculating the TOP-HEAVY RATIO.

         (h)      "PRESENT VALUE" is based only on the interest and mortality
                  rates specified in the ADOPTION AGREEMENT.

         (i)      Effective for years beginning after December 31, 1996, "HIGHLY
                  COMPENSATED EMPLOYEE" is any employee who:

                           -        was a 5% OWNER at any time during the year
                                    or the preceding year, or

                           -        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 in CODE SECTION 415(d),
                                    except that the base period is the calendar
                                    quarter ending September 30, 1996.

                  The applicable year for which a determination is being made is
                  called a "DETERMINATION YEAR" and the preceding 12-month
                  period is called a "LOOK-BACK YEAR".

                  A highly compensated former employee is based on the rules
                  applicable to determining HIGHLY COMPENSATED EMPLOYEE status
                  as in effect for that DETERMINATION YEAR, according to Temp.
                  Regs. 1.414(q)-1T, A-4 and Notice 97-45.

                  To determine whether an EMPLOYEE is a HIGHLY COMPENSATED
                  EMPLOYEE for years beginning in 1997, the amendments to
                  Section 414(q) stated above are treated as having been in
                  effect for years beginning in 1996.

                  For this subsection, COMPENSATION has the meaning in
                  subsection 2.20(g), including amounts contributed by the
                  Employer pursuant to salary reduction agreements which are
                  excludable from the Employee"s gross income in Code Section
                  125, 402(e)(3), 402 (h)(1)(b) or 403(b).

                                       38
<PAGE>   39
2.23     ELECTIVE DEFERRALS

         (a)      "EMPLOYEE ELECTIVE DEFERRAL" is any EMPLOYER CONTRIBUTION to
                  THIS PLAN at the election of the PARTICIPANT after December
                  31, 1996, in lieu of cash compensation, and includes
                  contributions made pursuant to a salary reduction agreement or
                  other deferral mechanism. As to any taxable year, a
                  PARTICIPANT'S ELECTIVE DEFERRAL is the sum of all EMPLOYER
                  CONTRIBUTIONS made for such PARTICIPANT by an election to
                  defer by any qualified CODA in CODE SECTION 401(k), any salary
                  reduction simplified employee pension cash or deferred
                  arrangement in CODE SECTION 408(k)(6), any eligible deferred
                  compensation plan in CODE SECTION 457, any plan in CODE
                  SECTION 501(c)(18), and any EMPLOYER CONTRIBUTIONS made for a
                  PARTICIPANT for the purchase of an annuity contract in CODE
                  SECTION 403(b) by a salary reduction agreement. ELECTIVE
                  DEFERRALS do not include any deferrals properly distributed as
                  EXCESS ANNUAL ADDITIONS.

         (b)      "EXCESS ELECTIVE DEFERRALS" are those Elective Deferrals
                  includible in a PARTICIPANT'S gross income in CODE SECTION
                  402(g) to the extent such Participant's ELECTIVE DEFERRALS for
                  a taxable year exceed the dollar limitation in such CODE
                  SECTION. EXCESS ELECTIVE DEFERRALS are treated as ANNUAL
                  ADDITIONS in THIS PLAN, unless such amounts are distributed no
                  later than the first April 15 following the close of the
                  PARTICIPANT'S taxable year.

         (c)      "ACTUAL DEFERRAL PERCENTAGE" is, for a specified group of
                  PARTICIPANTS for a PLAN YEAR, the average of the ratios
                  (calculated separately for each PARTICIPANT in such group) of
                  (i) the amount of EMPLOYER CONTRIBUTIONS actually paid to the
                  TRUST for such PARTICIPANT for the PLAN YEAR to (ii) the
                  PARTICIPANT'S COMPENSATION for such PLAN YEAR. EMPLOYER
                  CONTRIBUTIONS for any PARTICIPANT include: (i) any ELECTIVE
                  DEFERRALS made from the PARTICIPANT'S deferral election
                  (including EXCESS ELECTIVE DEFERRALS of HIGHLY COMPENSATED
                  EMPLOYEES), but excluding (a) EXCESS ELECTIVE DEFERRALS of
                  NON-HIGHLY COMPENSATED EMPLOYEES that arise solely from
                  ELECTIVE DEFERRALS made to the plan or plans of the EMPLOYER
                  and (b) ELECTIVE DEFERRALS taken into account in the
                  Contribution Percentage test (if the ADP test is satisfied
                  both with and without exclusion of these ELECTIVE DEFERRALS);
                  and (ii), at the election of the EMPLOYER, QUALIFIED
                  NON-ELECTIVE CONTRIBUTIONS and QUALIFIED MATCHING
                  CONTRIBUTIONS. To compute AVERAGE DEFERRAL PERCENTAGES, an
                  EMPLOYEE who would be a PARTICIPANT but for the failure to
                  make ELECTIVE DEFERRALS are treated as a PARTICIPANT on whose
                  behalf no ELECTIVE DEFERRALS are made.

         (d)      "EXCESS CONTRIBUTION" is, as to any PLAN YEAR, the excess of:

                  (1)      The aggregate amount of EMPLOYER CONTRIBUTIONS
                           actually used in computing the ADP of HIGHLY
                           COMPENSATED EMPLOYEES for such PLAN YEAR, over

                  (2)      The maximum amount of such contributions permitted by
                           the ADP test (determined by reducing contributions
                           made for HIGHLY COMPENSATED EMPLOYEES in order of the
                           ADPs, beginning with the highest of such
                           percentages).

                                       39
<PAGE>   40
         (e)      "QUALIFIED MATCHING CONTRIBUTION" is MATCHING CONTRIBUTION
                  subject to the distribution and nonforfeitability requirements
                  in CODE SECTION 401(k) when made.

         (f)      "AGGREGATE LIMIT" is the sum of (i) 125% of the greater of the
                  ADP of the NON-HIGHLY COMPENSATED EMPLOYEES for the prior PLAN
                  YEAR or the ACP of NON-HIGHLY COMPENSATED EMPLOYEES in the
                  plan subject to CODE SECTION 401(m) for the PLAN YEAR
                  beginning with or within the prior PLAN YEAR of the CODA and
                  (ii) the lesser of 200% or 2 plus the lesser of such ADP or
                  ACP. "Lesser" is substituted for "greater" in "(i)", above,
                  and "greater" is substituted for "lesser" after "2 plus the"
                  in "(ii)" if it results in a larger AGGREGATE LIMIT. If the
                  EMPLOYER has elected to use the current year testing method,
                  then, in calculating the AGGREGATE LIMIT for a particular PLAN
                  YEAR, the NON-HIGHLY COMPENSATED EMPLOYEES' ADP and ACP for
                  that PLAN YEAR, instead of for the prior PLAN YEAR is used.

         (g)      "ELIGIBLE PARTICIPANT" is any EMPLOYEE who is eligible to make
                  an EMPLOYEE NONDEDUCTIBLE CONTRIBUTION, or an ELECTIVE
                  DEFERRAL (if the EMPLOYER takes such contributions into
                  account in the calculation of the CONTRIBUTION PERCENTAGE), or
                  to receive a MATCHING CONTRIBUTION (including FORFEITURES) or
                  a QUALIFIED MATCHING CONTRIBUTION. If an EMPLOYEE CONTRIBUTION
                  is required as a condition of participation in THIS PLAN, any
                  EMPLOYEE who would be a PARTICIPANT in THIS PLAN if such
                  EMPLOYEE made such a contribution is treated as an ELIGIBLE
                  PARTICIPANT on behalf of whom no EMPLOYEE CONTRIBUTIONS are
                  made.

2.24     CONTRIBUTION PERCENTAGE

         (a)      "AVERAGE CONTRIBUTION PERCENTAGE" is the average of the
                  CONTRIBUTION PERCENTAGES of the Eligible PARTICIPANTS in a
                  group.

         (b)      "CONTRIBUTION PERCENTAGE" is the ratio (expressed as a
                  percentage) of the PARTICIPANT'S CONTRIBUTION PERCENTAGE
                  AMOUNTS to the PARTICIPANT'S COMPENSATION for the PLAN YEAR
                  (whether or not the EMPLOYEE was a PARTICIPANT for the entire
                  PLAN YEAR).

         (c)      "CONTRIBUTION PERCENTAGE AMOUNT" is the sum of the EMPLOYEE
                  Contributions, MATCHING CONTRIBUTIONS, and QUALIFIED MATCHING
                  CONTRIBUTIONS (to the extent not taken into account for the
                  ADP test) to THIS PLAN for the PARTICIPANT for the PLAN YEAR.
                  Such CONTRIBUTION PERCENTAGE AMOUNTS do not include MATCHING
                  CONTRIBUTIONS that are forfeited either to correct EXCESS
                  AGGREGATE CONTRIBUTIONS or because the contributions to which
                  they relate are EXCESS DEFERRALS, EXCESS CONTRIBUTIONS, or
                  EXCESS AGGREGATE CONTRIBUTIONS. If so elected in the ADOPTION
                  AGREEMENT the EMPLOYER may include QUALIFIED NON-ELECTIVE
                  CONTRIBUTIONS in the CONTRIBUTION PERCENTAGE AMOUNTS. The
                  EMPLOYER also may elect to use ELECTIVE

                                       40
<PAGE>   41

                  DEFERRALS in the CONTRIBUTION PERCENTAGE AMOUNTS as long as
                  the ADP test is met before the ELECTIVE DEFERRALS are used in
                  the ACP test and continues to be met following the exclusion
                  of those ELECTIVE DEFERRALS used to meet the ACP test.

         (d)      "EMPLOYEE NONDEDUCTIBLE CONTRIBUTION" is any contribution to
                  THIS PLAN by or on behalf of a PARTICIPANT included in the
                  PARTICIPANT'S gross income in the year in which made and that
                  is maintained in a separate ACCOUNT to which earnings and
                  losses are allocated.

         (e)      "MATCHING CONTRIBUTION" is an EMPLOYER CONTRIBUTION to this or
                  any other defined contribution plan for a PARTICIPANT for an
                  EMPLOYEE NONDEDUCTIBLE CONTRIBUTION made by such PARTICIPANT,
                  or for a PARTICIPANT'S ELECTIVE DEFERRAL, in a plan maintained
                  by the EMPLOYER.

         (f)      "EXCESS AGGREGATE CONTRIBUTION" is, as to any PLAN YEAR, the
                  excess of:

                  (1)      The aggregate CONTRIBUTION PERCENTAGE AMOUNTS 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 reducing contributions
                           for HIGHLY COMPENSATED EMPLOYEES in order of their
                           CONTRIBUTION PERCENTAGES beginning with the highest
                           of such percentages).

                           Such determination is made after first determining
                           EXCESS ELECTIVE DEFERRALS by subsection 2.23(b) and
                           then determining EXCESS Contributions by subsection
                           2.23(d).

         (g)      "QUALIFIED NON-ELECTIVE CONTRIBUTION" is a contribution (other
                  than a MATCHING CONTRIBUTION or QUALIFIED MATCHING
                  CONTRIBUTION) made by the EMPLOYER and allocated to a
                  PARTICIPANT'S ACCOUNT that the PARTICIPANT may not elect to
                  receive in cash until distributed from THIS PLAN; that are
                  nonforfeitable when made; and that are distributable only with
                  the distribution provisions applicable to ELECTIVE DEFERRALS
                  and QUALIFIED MATCHING CONTRIBUTIONS (but not as a hardship
                  distribution).

                                                           SECTION 3.   BENEFITS
================================================================================

3.1      BENEFITING

A PARTICIPANT is treated as benefiting in THIS PLAN for any PLAN YEAR during
which the PARTICIPANT receives or is deemed to receive an allocation by
REGULATION 1.410(b)-3(a).

                                       41
<PAGE>   42

3.2      JOINT AND SURVIVOR ANNUITY AND PRERETIREMENT SURVIVOR ANNUITY

         (a)      This Section applies to any PARTICIPANT who is credited with
                  at least 1 HOUR OF SERVICE with the EMPLOYER on or after
                  August 23, 1984, and such other PARTICIPANTS as provided in
                  subparagraph (f) below.

         (b)      Qualified Joint and Survivor Annuity.

                  If the EMPLOYER elects in the ADOPTION AGREEMENT to provide
                  benefits which satisfy this subsection 3.2 and unless an
                  optional form of benefit is selected by a QUALIFIED ELECTION
                  within the 90-day period ending on the ANNUITY STARTING DATE,
                  a married PARTICIPANT'S VESTED ACCOUNT BALANCE is paid in the
                  form of a QUALIFIED JOINT AND SURVIVOR ANNUITY and an
                  unmarried PARTICIPANT'S VESTED ACCOUNT BALANCE is paid in the
                  form of a LIFE ANNUITY. The PARTICIPANT may elect to have such
                  annuity distributed on attainment of the EARLIEST RETIREMENT
                  AGE in THIS PLAN.

         (c)      Qualified Preretirement Survivor Annuity.

                  Unless an optional form of benefit is selected within the
                  ELECTION Period by a QUALIFIED ELECTION, if a PARTICIPANT dies
                  before the ANNUITY STARTING DATE the PARTICIPANT'S VESTED
                  ACCOUNT BALANCE is applied to provide an annuity for the life
                  of the SURVIVING SPOUSE. The SURVIVING SPOUSE may elect to
                  have such annuity distributed within a reasonable period after
                  the PARTICIPANT'S death.

         (d)      Notice Requirements.

                  (1)      For a QUALIFIED JOINT AND SURVIVOR ANNUITY, the
                           ADMINISTRATOR, no less than 30 days and no more than
                           90 days prior to the ANNUITY STARTING DATE, provides
                           each PARTICIPANT a written explanation of: (i) the
                           terms and conditions of a QUALIFIED JOINT AND
                           SURVIVOR ANNUITY; (ii) the PARTICIPANT'S right to
                           make and the effect of an election to waive the
                           QUALIFIED JOINT AND SURVIVOR ANNUITY form of benefit;
                           (iii) the rights of a PARTICIPANT'S SPOUSE; and (iv)
                           the right to make, and the effect of, a revocation of
                           a previous election to waive the QUALIFIED JOINT AND
                           SURVIVOR ANNUITY.

                           The ANNUITY STARTING DATE for a distribution in a
                           form other than a QUALIFIED JOINT AND SURVIVOR
                           ANNUITY may be less than 30 days after receipt of the
                           written explanation described in the preceding
                           paragraph if: (a) 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 (with spousal consent) to a form of
                           distribution other than a QUALIFIED JOINT AND
                           SURVIVOR ANNUITY; (b) the PARTICIPANT is permitted to
                           revoke any affirmative distribution election at

                                       42
<PAGE>   43

                           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 (c) the ANNUITY STARTING DATE
                           is a date after the date that the written explanation
                           was provided to the PARTICIPANT.

                  (2)      For a QUALIFIED PRERETIREMENT SURVIVOR ANNUITY, the
                           ADMINISTRATOR provides each PARTICIPANT within the
                           applicable period for such PARTICIPANT a written
                           explanation of the QUALIFIED PRERETIREMENT SURVIVOR
                           ANNUITY in such terms and in such manner as would be
                           comparable to the explanation provided for meeting
                           the requirements of paragraph (1) above for a
                           QUALIFIED JOINT AND SURVIVOR ANNUITY.

                           The applicable period for this subparagraph is
                           whichever of the following periods ends last: (i) 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; (ii) a
                           reasonable period ending after the individual becomes
                           a PARTICIPANT; (iii) a reasonable period ending after
                           paragraph (3) below ceases to apply to the
                           PARTICIPANT; (iv) a reasonable period ending after
                           this Section first applies to the PARTICIPANT.
                           Notwithstanding the foregoing, notice is provided
                           within a reasonable period ending after separation
                           from SERVICE for a PARTICIPANT who separates from
                           SERVICE before attaining age 35.

                           To apply the preceding paragraph, a reasonable period
                           ending after the enumerated events described in (ii),
                           (iii) and (iv) is the end of the 2-year period
                           beginning 1 year prior to the date the applicable
                           event occurs, and ending 1 year after that date. For
                           a PARTICIPANT who separates from SERVICE before the
                           PLAN YEAR in which he or she attains age 35, notice
                           is provided within the 2-year period beginning 1 year
                           prior to separation and ending 1 year after
                           separation. If such a PARTICIPANT thereafter returns
                           to employment with the EMPLOYER, the applicable
                           period for such PARTICIPANT is redetermined.

                  (3)      Notwithstanding the other requirements of paragraph
                           (1) above, the respective notices prescribed by this
                           Section need not be given to a PARTICIPANT if (i)
                           THIS PLAN "fully subsidizes" the costs of a QUALIFIED
                           JOINT AND SURVIVOR ANNUITY or QUALIFIED PRERETIREMENT
                           SURVIVOR ANNUITY, and (ii) THIS PLAN does not allow
                           the PARTICIPANT to waive the QUALIFIED JOINT AND
                           SURVIVOR ANNUITY or QUALIFIED PRERETIREMENT SURVIVOR
                           ANNUITY and does not allow a married PARTICIPANT to
                           designate a nonspouse beneficiary. THIS PLAN fully
                           subsidizes the costs of a benefit if no increase in
                           cost, or decrease in benefits, to the PARTICIPANT
                           results from the PARTICIPANT'S failure to elect
                           another benefit.

                                       43
<PAGE>   44

         (e)      Safe harbor rules.

                  (1)      This Section applies to a PARTICIPANT in a
                           profit-sharing plan, and to any distribution, made on
                           or after the first day of the first PLAN YEAR
                           beginning after December 31, 1988, from or by a
                           separate account attributable solely to accumulated
                           DEDUCTIBLE EMPLOYEE CONTRIBUTIONS, in CODE SECTION
                           72(o)(5)(B), and maintained on behalf of a
                           PARTICIPANT in a money purchase pension plan,
                           (including a target benefit plan) if the following
                           conditions are satisfied: (i) the PARTICIPANT does
                           not or cannot elect payments in the form of a life
                           annuity and (ii) on the PARTICIPANT'S death, the
                           PARTICIPANT'S VESTED ACCOUNT BALANCE is paid to the
                           PARTICIPANT'S SURVIVING SPOUSE, but if there is no
                           SURVIVING SPOUSE, or if the SURVIVING SPOUSE has
                           consented in a manner conforming to a QUALIFIED
                           ELECTION, to the PARTICIPANT'S designated
                           BENEFICIARY. The SURVIVING SPOUSE may elect to have
                           distribution of the VESTED ACCOUNT BALANCE begin
                           within the 90-day period following the date of the
                           PARTICIPANT'S death. The ACCOUNT BALANCE is adjusted
                           for gains or losses occurring after the Participant's
                           death by the provisions of THIS PLAN governing the
                           adjustment of ACCOUNT BALANCES for other types of
                           distributions. This Section is not operative for a
                           PARTICIPANT in a profit-sharing plan if the plan is a
                           direct or indirect transferee of a defined benefit
                           plan, money purchase plan, a target benefit plan,
                           stock bonus, or profit-sharing plan which is subject
                           to the survivor annuity requirements of CODE SECTION
                           401(a)(11) and 417. If this paragraph (e) is
                           operative, the provisions of this subsection, other
                           than paragraph (f), are inoperative.

                  (2)      The PARTICIPANT may waive the spousal death benefit
                           described in this subsection at any time; however, no
                           such waiver is effective unless it satisfies the
                           conditions of subsection 3.15(e) (other than the
                           notification requirement referred to therein) that
                           would apply to the PARTICIPANT'S waiver of the
                           QUALIFIED PRERETIREMENT SURVIVOR ANNUITY.

                  (3)      For this Section, "VESTED ACCOUNT BALANCE" is, for a
                           money purchase pension plan or a target benefit plan,
                           the PARTICIPANT'S separate ACCOUNT BALANCE
                           attributable solely to accumulated DEDUCTIBLE
                           EMPLOYEE CONTRIBUTIONS in CODE SECTION 72(o)(5)(B).
                           For a profit-sharing plan, VESTED ACCOUNT BALANCE has
                           the same meaning as in subsection 3.15.

         (f)      Transitional Rules.

                  (1)      Any living PARTICIPANT not receiving benefits on
                           August 23, 1984, who would otherwise not receive the
                           benefits prescribed by the previous subsections is
                           given the opportunity to elect to have the prior
                           subsections apply if such

                                       44
<PAGE>   45

                           PARTICIPANT is credited with at least 1 HOUR OF
                           SERVICE in THIS PLAN or a predecessor plan in a PLAN
                           YEAR beginning on or after January 1, 1976, and such
                           PARTICIPANT had at least 10 years of vesting SERVICE
                           when he or she separated from SERVICE.

                  (2)      Any living PARTICIPANT not receiving benefits on
                           August 23, 1984, who was credited with at least 1
                           HOUR OF SERVICE in THIS PLAN or a predecessor plan on
                           or after September 2, 1974, and who is not otherwise
                           credited with any SERVICE in a PLAN YEAR beginning on
                           or after January 1, 1976, is given the opportunity to
                           have his or her benefits paid by subsection 3.15.

                  (3)      The respective opportunities to elect (as described
                           in subsections 3.2(f)(1) and 3.2(f)(2) H are afforded
                           to the appropriate PARTICIPANTS during the period
                           beginning on August 23, 1984, and ending on the date
                           benefits would otherwise begin to PARTICIPANTS.

                  (4)      Any PARTICIPANT who elects by subsection 3.2(f)(2)
                           and any PARTICIPANT who does not elect by subsection
                           3.2(f)(1) or who meets the requirements of subsection
                           3.2(f)(1) except that such PARTICIPANT does not have
                           at least 10 years of vesting SERVICE when he or she
                           separates from SERVICE, has his or her benefits
                           distributed by all of the following requirements if
                           benefits would have been payable in the form of a
                           LIFE ANNUITY:

                           (A)      Automatic joint and survivor annuity. If
                                    benefits in the form of a LIFE ANNUITY
                                    become payable to a married PARTICIPANT who:

                                    (i)      begins to receive payments under
                                             THIS PLAN on or after NORMAL
                                             RETIREMENT AGE; or

                                    (ii)     dies on or after NORMAL RETIREMENT
                                             AGE while still working for the
                                             EMPLOYER; or

                                    (iii)    begins to receive payments on or
                                             after the QUALIFIED EARLY
                                             RETIREMENT AGE; or

                                    (iv)     separates from SERVICE on or after
                                             attaining NORMAL RETIREMENT AGE (or
                                             the QUALIFIED EARLY RETIREMENT AGE)
                                             and after satisfying the
                                             eligibility requirements for the
                                             payment of benefits by THIS PLAN
                                             and thereafter dies before
                                             beginning to receive such benefits;
                                             such benefits are received from
                                             THIS PLAN in the form of a
                                             QUALIFIED JOINT AND SURVIVOR
                                             ANNUITY, unless the PARTICIPANT
                                             elects otherwise during the
                                             election period. The ELECTION
                                             PERIOD begins at least 6 months
                                             before the PARTICIPANT attains
                                             QUALIFIED EARLY RETIREMENT AGE and

                                       45
<PAGE>   46
                                            ends not more than 90 days before
                                            benefits begin. Any election
                                            hereunder is in writing and may be
                                            changed by the PARTICIPANT at any
                                            time.

                           (B)      Election of early survivor annuity. A
                                    PARTICIPANT employed after attaining
                                    QUALIFIED EARLY RETIREMENT AGE is given the
                                    opportunity to elect, during the ELECTION
                                    PERIOD, to have a survivor annuity payable
                                    on death. If the PARTICIPANT elects the
                                    survivor annuity, payments of such annuity
                                    are not less than the payments which would
                                    have been made to the SPOUSE by the
                                    QUALIFIED JOINT AND SURVIVOR ANNUITY if the
                                    PARTICIPANT had retired on the day before
                                    his or her death. Any election by this
                                    provision is in writing and may be changed
                                    by the PARTICIPANT at any time. The ELECTION
                                    PERIOD begins on the later of (i) the 90th
                                    day before the PARTICIPANT attains the
                                    QUALIFIED EARLY RETIREMENT AGE, or (ii) the
                                    date on which participation begins, and ends
                                    on the date the PARTICIPANT terminates
                                    employment.

                           (C)      For this subsection 3.2(f):

                                    QUALIFIED EARLY RETIREMENT AGE is the latest
                                    of:

                                    (i)      the earliest date, in THIS PLAN, on
                                             which the PARTICIPANT may elect to
                                             receive retirement benefits,

                                    (ii)     the first day of the 120th month
                                             beginning before the PARTICIPANT
                                             reaches NORMAL RETIREMENT AGE, or

                                    (iii)    the date the PARTICIPANT begins
                                             participation.

3.3      RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS.

         (a)      If the value of a PARTICIPANT'S VESTED ACCOUNT BALANCE from
                  EMPLOYER and EMPLOYEE CONTRIBUTIONS exceeds (or at the time of
                  any prior distribution (i) in PLAN YEARS beginning before
                  August 6, 1997, exceeded $3,500, or (ii) in PLAN Years
                  beginning after August 5, 1997, exceeded) $5,000, and the
                  ACCOUNT BALANCE is immediately distributable, the PARTICIPANT
                  and the PARTICIPANT'S SPOUSE (or where either the PARTICIPANT
                  or the SPOUSE has died, the survivor) has to consent to any
                  distribution of such ACCOUNT BALANCE.

                  The consent of the PARTICIPANT and the PARTICIPANT'S SPOUSE
                  has to be in writing within the 90-day period ending on the
                  ANNUITY STARTING DATE. The ANNUITY STARTING DATE is the first
                  day of the first period for which an amount is paid as an

                                       46
<PAGE>   47

                  annuity or any other form.

                  The ADMINISTRATOR notifies the PARTICIPANT and the
                  PARTICIPANT'S SPOUSE of the right to defer any distribution
                  until the PARTICIPANT'S ACCOUNT balance is no longer
                  immediately distributable. Such notification includes a
                  general description of the material features, and an
                  explanation of the relative values of, the optional forms of
                  benefit in THIS PLAN in a manner that satisfies the notice
                  requirements of CODE SECTION 417(a)(3), and is provided no
                  less than 30 days and no more than 90 days prior to the
                  ANNUITY STARTING DATE. However, distribution may begin less
                  than 30 days after the notice described in the preceding
                  sentence is given, if the distribution is one to which CODE
                  SECTIONS 401(a)(11) and 417 do not apply, the ADMINISTRATOR
                  clearly informs the Participant that the PARTICIPANT has a
                  right to a period of at least 30 days after receiving the
                  notice to consider the decision of whether or not to elect a
                  distribution (and, if applicable, a particular distribution
                  option), and the PARTICIPANT, after receiving the notice,
                  affirmatively elects a distribution.

                  Notwithstanding the foregoing, only the PARTICIPANT need
                  consent to the beginning of a distribution in the form of a
                  QUALIFIED JOINT AND SURVIVOR ANNUITY while the ACCOUNT balance
                  is immediately distributable. (Furthermore, if payment in the
                  form of a QUALIFIED JOINT AND SURVIVOR ANNUITY is not required
                  for the Participant by subsection 3.2, only the PARTICIPANT
                  need consent to the distribution of an ACCOUNT balance that is
                  immediately distributable).

                  Neither the consent of the PARTICIPANT nor the PARTICIPANT'S
                  SPOUSE is required to the extent that a distribution is
                  required to satisfy CODE SECTION 401(a)(9) or 415. In
                  addition, on termination of THIS PLAN if THIS PLAN does not
                  offer an annuity option (purchased from a commercial provider)
                  and if the EMPLOYER or any entity within the same controlled
                  group as the EMPLOYER does not maintain another defined
                  contribution plan (other than an employee stock ownership plan
                  in CODE SECTION 4975(e)(7)), the PARTICIPANT'S ACCOUNT BALANCE
                  is, without the PARTICIPANT'S consent, distributed to the
                  PARTICIPANT. However, if any entity within the same controlled
                  group as the EMPLOYER maintains another defined contribution
                  plan (other than an employee stock ownership plan in CODE
                  SECTION 4975(e)(7)) the PARTICIPANT'S ACCOUNT balance is
                  transferred, without the PARTICIPANT'S consent, to the other
                  plan if the PARTICIPANT does not consent to an immediate
                  distribution.

                  An ACCOUNT BALANCE is immediately distributable if any part of
                  the ACCOUNT Balance could be distributed to the PARTICIPANT
                  (or SURVIVING SPOUSE) before the PARTICIPANT attains or would
                  have attained if not deceased) the later of NORMAL RETIREMENT
                  AGE or age 62.

         (b)      To determine the applicability of the foregoing consent
                  requirements for distributions made before the first day of
                  the first PLAN YEAR beginning after December 31, 1988, the
                  PARTICIPANT'S VESTED ACCOUNT BALANCE does not include amounts
                  attributable to

                                       47
<PAGE>   48

                  accumulated DEDUCTIBLE EMPLOYEE CONTRIBUTIONS in CODE SECTION
                  72(o)(5)(B).

3.4      WHEN BENEFITS BEGIN.

Unless the PARTICIPANT elects otherwise, distribution of benefits begin no later
than the 60th day after the latest of the close of the PLAN YEAR in which:

         (a)      the PARTICIPANT attains age 65 (or NORMAL RETIREMENT AGE, if
                  earlier);

         (b)      occurs the 10th anniversary of the year in which the
                  PARTICIPANT began participation in THIS PLAN; or,

         (c)      the PARTICIPANT separates from SERVICE with the EMPLOYER.

Notwithstanding the foregoing, the failure of a PARTICIPANT and SPOUSE to
consent to a distribution while a benefit is immediately distributable, in
subsection 3.3, is deemed an election to defer beginning of payment of any
benefit sufficient to satisfy this Section.

3.5      EARLY RETIREMENT BENEFIT.

If a PARTICIPANT separates from SERVICE before satisfying the age requirement
for early retirement, but has satisfied the SERVICE requirement, the PARTICIPANT
is entitled to elect an early retirement benefit upon satisfaction of such age
requirement.

3.6      NONTRANSFERABILITY OF ANNUITIES.

Any annuity contract distributed by THIS PLAN is nontransferable.

3.7      CONFLICTS WITH ANNUITY CONTRACTS.

The terms of any annuity contract purchased and distributed by THIS PLAN to a
PARTICIPANT or Spouse comply with the requirements of THIS PLAN.

3.8      TIMING AND MODES OF DISTRIBUTION.

         (a)      General Rules.

                  Subject to subsection 3.2, Joint and Survivor Annuity
                  Requirements, the requirements of this Section apply to any
                  distribution of a PARTICIPANT'S interest and take precedence
                  over any inconsistent provisions of THIS PLAN. Unless
                  otherwise specified, the provisions of this Section apply to
                  calendar years beginning after December 31, 1984.

                                       48
<PAGE>   49

                  All distributions required by this Section are determined and
                  made in accordance with the proposed CODE SECTION 401(a)(9)
                  REGULATIONS, including the minimum distribution incidental
                  benefit requirement of Proposed REGULATIONS 1.401(a)(9)-2.

         (b)      Required Beginning Date.

                  The entire interest of a PARTICIPANT are 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 1 of the
                  following periods (or a combination thereof):

                  (1)      the life of the PARTICIPANT,

                  (2)      the life of the PARTICIPANT and a designated
                           BENEFICIARY,

                  (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
                  apply on or after the REQUIRED BEGINNING DATE:

                  (1)      Individual account.

                           (A)      If a PARTICIPANT'S benefit is to be
                                    distributed over (i) 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
                                    (ii) a period not extending beyond the life
                                    expectancy of the designated BENEFICIARY,
                                    the amount required to be distributed for
                                    each calendar year, beginning with
                                    distributions for the first distribution
                                    calendar year, is at least equal the
                                    quotient obtained by dividing the
                                    PARTICIPANT'S BENEFIT by the APPLICABLE LIFE
                                    EXPECTANCY.

                           (B)      For calendar years beginning before January
                                    1, 1989, if the PARTICIPANT'S SPOUSE is not
                                    the designated BENEFICIARY, the method

                                       49
<PAGE>   50
                                    of distribution selected assures that at
                                    least 50% of the present value of the amount
                                    available for distribution is paid within
                                    the life expectancy of the PARTICIPANT.

                           (C)      For calendar years beginning after December
                                    31, 1988, the amount to be distributed each
                                    year, beginning with distributions for the
                                    first distribution calendar year is not less
                                    than the quotient obtained by dividing the
                                    PARTICIPANT'S BENEFIT by the lesser of (i)
                                    the APPLICABLE LIFE EXPECTANCY or (ii) if
                                    the PARTICIPANT'S SPOUSE is not the
                                    designated BENEFICIARY, the applicable
                                    divisor determined from the table set forth
                                    in Q&A-4 of Proposed REGULATIONS
                                    1.401(a)(9)-2. Distributions after the death
                                    of the PARTICIPANT are distributed using the
                                    applicable life expectancy in subsection
                                    3.8(a) above as the relevant divisor without
                                    Proposed REGULATIONS 1.401(a)(9)-2.

                           (D)      The minimum distribution required for the
                                    PARTICIPANT'S first distribution calendar
                                    year are made on or before the PARTICIPANT'S
                                    REQUIRED BEGINNING DATE. The minimum
                                    distribution for other calendar years,
                                    including the minimum distribution for the
                                    distribution calendar year in which the
                                    EMPLOYEE'S REQUIRED BEGINNING DATE occurs,
                                    are 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 are made in
                           accordance with the requirements of CODE SECTION
                           401(a)(9) and its Proposed REGULATIONS.

         (e)      Death Distribution Provisions.

                  (1)      Distribution beginning before death.

                           If the PARTICIPANT dies after distribution of his or
                           her interest begins, the remaining portion of such
                           interest continues 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.

                           If the PARTICIPANT dies before distribution of his or
                           her interest begins, distribution of the
                           PARTICIPANT'S entire interest is completed by
                           December 31 of the calendar year containing the 5th
                           anniversary of the PARTICIPANT'S death except to the
                           extent that an election is made to receive
                           distributions by (A) or (B) below:

                                       50
<PAGE>   51

                           (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 to begin by (A) above are
                                    not earlier than the later of (i) December
                                    31 of the calendar year immediately
                                    following the calendar year in which the
                                    PARTICIPANT died and (ii) December 31 of the
                                    calendar year in which the PARTICIPANT would
                                    have attained age 70".

                                    If the PARTICIPANT does not make an election
                                    by this subsection 3.8 by the time of his or
                                    her death, the PARTICIPANT'S designated
                                    BENEFICIARY elects the method of
                                    distribution no later than the earlier of
                                    (i) December 31 of the calendar year in
                                    which distributions would be required to
                                    begin under this subsection, or (ii)
                                    December 31 of the calendar year which
                                    contains the 5th anniversary of the date of
                                    death of the PARTICIPANT. 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 is completed
                                    by December 31 of the calendar year
                                    containing the 5th anniversary of the
                                    PARTICIPANT'S death.

                  (3)      For this subsection 3.8, if the SURVIVING SPOUSE dies
                           after the PARTICIPANT, but before payments to such
                           SPOUSE begin, subsection 3.8, with the exception of
                           paragraph (B), is applied as if the SURVIVING SPOUSE
                           were the PARTICIPANT.

                  (4)      For this subsection 3.8, distribution of a
                           Participant's interest is considered to begin on the
                           PARTICIPANT'S REQUIRED BEGINNING DATE (or, if
                           subsection 3.8(d)(3) above is applicable, the date
                           distribution is required to begin to the SURVIVING
                           SPOUSE in subsection 3.8(d)(2)). 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.

         (f)      Transitional Rule

                  (1)      Notwithstanding the other requirements of this
                           Section and subject to the requirements of subsection
                           3.2, Joint and Survivor Annuity Requirements,

                                       51
<PAGE>   52

                           distribution for any EMPLOYEE, including a 5% OR MORE
                           OWNER, are made by all of the following requirements
                           (regardless of when such distribution begins):

                           (A)      The distribution by THIS PLAN is one which
                                    would not have disqualified THIS PLAN by
                                    CODE SECTION 401(a)(9) as in effect prior to
                                    amendment by the Deficit Reduction Act of
                                    1984.

                           (B)      The distribution is by a method of
                                    distribution designated by the EMPLOYEE
                                    whose interest in THIS PLAN is being
                                    distributed or, if the EMPLOYEE is deceased,
                                    by a BENEFICIARY of such EMPLOYEE.

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

                           (D)      The EMPLOYEE had accrued a benefit in THIS
                                    PLAN as of December 31, 1983.

                           (E)      The method of distribution designated by the
                                    EMPLOYEE or the BENEFICIARY specifies the
                                    time at which distribution begins, the
                                    period over which distributions are made,
                                    and, in the case of any distribution upon
                                    the EMPLOYEE'S death, the Beneficiaries of
                                    the EMPLOYEE listed in order of priority.

                  (2)      A distribution upon death is not covered by this
                           transitional rule unless the information in the
                           designation contains the required information
                           described above as to the distributions to be made at
                           the EMPLOYEE'S death.

                  (3)      For any distribution which begins before January 1,
                           1984, but continues after December 31, 1983, the
                           EMPLOYEE, or the BENEFICIARY, to whom such
                           distribution is being made, is presumed to have
                           designated the method of distribution for which the
                           distribution is made if the method of distribution is
                           specified in writing and the distribution satisfies
                           the requirements in subsections 3.8(f)(1)(A) and (E).

                  (4)      If a designation is revoked, any subsequent
                           distribution has to satisfy the requirements of CODE
                           SECTION 401(a)(9) and its Proposed REGULATIONS. If a
                           designation is revoked subsequent to the date
                           distributions are required to begin, THIS PLAN has to
                           distribute by the end of the calendar year following
                           the calendar year in which the revocation occurs the
                           total amount not yet distributed which would have
                           been required to have been distributed to satisfy
                           Proposed REGULATIONS 401(a)(9), but for the Section
                           242(b)(2) election.

                                       52
<PAGE>   53

                           For calendar years beginning after December 31, 1988,
                           such distributions has to meet the minimum
                           distribution incidental benefit requirements in
                           Proposed REGULATIONS 1.401(a)(9)-2. Any changes in
                           the designation are considered a revocation of the
                           designation. However, the mere substitution or
                           addition of another BENEFICIARY (one not named in the
                           designation) by the designation is not considered to
                           be a revocation of the designation, as long as such
                           substitution or addition does not alter the period
                           over which distributions are to be made by the
                           designation, directly or indirectly (for example, by
                           altering the relevant measuring life). When an amount
                           is transferred or rolled over from one plan to
                           another plan, the rules in Q&A J-2 and Q&A J-3 apply.

         (g)      Optional forms of benefit may be elected by the EMPLOYER in
                  the ADOPTION Agreement.

3.9      DIRECT ROLLOVERS.

This subsection applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of THIS PLAN to the contrary that would otherwise
limit a DISTRIBUTEE'S election in this part, a DISTRIBUTEE may elect, at the
time and in the manner prescribed by the ADMINISTRATOR, to have any portion of
an ELIGIBLE ROLLOVER DISTRIBUTION equal to at least $500 be paid directly to an
ELIGIBLE RETIREMENT PLAN specified by the DISTRIBUTEE in a DIRECT ROLLOVER.

3.10     LIFE INSURANCE

If the EMPLOYER elects in the ADOPTION AGREEMENT, THIS PLAN may purchase
insurance on the life of PARTICIPANTS.

INCIDENTAL DEATH BENEFITS FOR PLANS OTHER THAN MONEY PURCHASE PENSION PLANS AND
TARGET BENEFIT PLANS:

         (a)      Ordinary life - For these incidental insurance provisions,
                  ordinary life insurance contracts are contracts with both
                  nondecreasing death benefits and nonincreasing premiums. If
                  such contracts are purchased, (i) less than 50% of the
                  aggregate EMPLOYER CONTRIBUTIONS accumulated in the
                  PARTICIPANT'S ACCOUNT for at least 2 years (measured from the
                  ALLOCATION DATE of CONTRIBUTION) or (ii) up to 100% of the
                  aggregate EMPLOYER CONTRIBUTIONS (other than EMPLOYEE ELECTIVE
                  DEFERRALS) accumulated in the PARTICIPANT'S ACCOUNT for at
                  least 2 years (measured from the ALLOCATION DATE of
                  CONTRIBUTION) are used to pay premiums attributable to them.

         (b)      Term and universal life - No more than 25% of the aggregate
                  EMPLOYER Contributions allocated to any PARTICIPANT is used to
                  pay the premiums on term life insurance contracts, universal
                  life insurance contracts, and all other life insurance
                  contracts which are not ordinary life.

                                       53
<PAGE>   54

         (c)      Combination - The sum of 50% of the ordinary life insurance
                  premiums and all other life insurance premiums cannot exceed
                  25% of the aggregate EMPLOYER CONTRIBUTIONS allocated to any
                  PARTICIPANT.

         (d)      Direct Rollovers - 100% of DIRECT ROLLOVERS may be used to pay
                  premiums for life insurance.

INCIDENTAL DEATH BENEFITS FOR MONEY PURCHASE PENSION PLANS AND TARGET BENEFIT
PLANS:

No more than 25% of the aggregate EMPLOYER CONTRIBUTIONS allocated to any
PARTICIPANT may be used to pay life insurance premiums.

DISTRIBUTION OF INSURANCE CONTRACTS:

Subject to subsection 3.2, Joint and Survivor Annuity Requirements, the
contracts on a Participant's life are converted to cash or an annuity or
distributed to the PARTICIPANT at the beginning of benefits.

CONFLICT WITH INSURANCE CONTRACTS:

The TRUSTEE applies for and is the owner of any insurance contract purchased by
THIS PLAN. The insurance contract(s) have to provide that proceeds are payable
to the TRUSTEE; however, the Trustee is required to pay over all proceeds of the
contract(s) to the PARTICIPANT'S DESIGNATED BENEFICIARY by the distribution
provisions of THIS PLAN. A PARTICIPANT'S SPOUSE is the DESIGNATED BENEFICIARY of
the proceeds in all circumstances unless a QUALIFIED ELECTION is made by
subsection 3.15(e), Joint and Survivor Annuity Requirements, if applicable.
Under no circumstances shall the TRUST retain any part of the proceeds. On any
conflict between the terms of THIS PLAN and the terms of any insurance contract
purchased by THIS PLAN, THIS PLAN'S provisions shall control.

TRANSACTIONS WITH LIFE INSURANCE POLICIES:

Incidental life insurance and annuity contracts may be transferred -

         (a)      to THIS PLAN as permitted by Department of Labor PTE 77-7, as
                  amended by PTE 92-5; and

         (b)      from THIS PLAN as permitted by Department of Labor PTE 77-8,
                  as amended by PTE 92-6.

3.11     LOANS TO PARTICIPANTS.

If the EMPLOYER elects in the ADOPTION AGREEMENT to permit PARTICIPANT loans,

                                       54
<PAGE>   55
         (a)      Loans shall be made available to all PARTICIPANTS and
                  BENEFICIARIES on a reasonably equivalent basis.

         (b)      Loans shall not be made available to HIGHLY COMPENSATED
                  EMPLOYEES in an amount greater than the amount made available
                  to other EMPLOYEES.

         (c)      Loans must be adequately secured and bear a reasonable
                  interest rate.

         (d)      No PARTICIPANT loan shall exceed 50% of the PRESENT VALUE of
                  the PARTICIPANT'S VESTED ACCRUED BENEFIT as of THIS PLAN'S
                  most recent VALUATION DATE.

         (e)      A PARTICIPANT must obtain the consent of his or her SPOUSE, if
                  any, to use of the ACCOUNT BALANCE 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 is to be so secured. The consent must be in writing,
                  must acknowledge the effect of the loan, and must be witnessed
                  by a PLAN REPRESENTATIVE or NOTARY PUBLIC. Such consent shall
                  thereafter be binding as to the consenting SPOUSE or any
                  subsequent SPOUSE as to that loan. A new consent shall be
                  required if the ACCOUNT BALANCE is used for renegotiation,
                  extension, renewal, or other revision of the loan.

         (f)      On default, foreclosure on the note and attachment of security
                  will not occur until a distributable event occurs in THIS
                  PLAN.

         (g)      No loans will be made to any SHAREHOLDER-EMPLOYEE or
                  OWNER-EMPLOYEE. For 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 in CODE SECTION 318(a)(1)), on any day during the
                  taxable year of such corporation, more than 5% of the
                  outstanding stock of the corporation.

                  If a valid SPOUSAL consent has been obtained in accordance
                  with (e) above, notwithstanding any other provision of THIS
                  PLAN, the portion of the PARTICIPANT'S VESTED ACCOUNT BALANCE
                  used as a security interest held by THIS Plan for a loan
                  outstanding to the PARTICIPANT shall be taken into account to
                  determine the amount of the ACCOUNT BALANCE payable at the
                  time of death or distribution, but only if the reduction is
                  used as repayment of the loan. If less than 100% of the
                  PARTICIPANT'S VESTED ACCOUNT BALANCE (determined without the
                  preceding sentence) is payable to the SURVIVING SPOUSE, the
                  ACCOUNT BALANCE shall be adjusted by first reducing the vested
                  ACCOUNT BALANCE by the amount of the security used as
                  repayment of the loan, and then determining the benefit
                  payable to the SURVIVING SPOUSE.

                  No loan to any PARTICIPANT or BENEFICIARY can be made to the
                  extent that such loan when added to the outstanding balance of
                  all other loans to the PARTICIPANT or BENEFICIARY would exceed
                  the lesser of (a) $50,000 reduced by the excess (if any) of

                                       55
<PAGE>   56

                  the highest outstanding balance of loans during the 1 year
                  period ending on the day before the loan is made, over the
                  outstanding balance of loans from THIS PLAN on the date the
                  loan is made, or (b) 50% of the PRESENT Value of the
                  nonforfeitable accrued benefit of the PARTICIPANT.

                  For the above limitation, all loans from all plans of the
                  EMPLOYER and other members of a group of EMPLOYERS described
                  in CODE SECTIONS 414(b), 414(c), and 414(m) are aggregated.
                  Furthermore, any 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 5 years from the date of the loan, unless
                  such loan is used to acquire a dwelling unit which within a
                  reasonable time (determined at the time the loan is made) will
                  be used as the principal residence of the PARTICIPANT. An
                  assignment or pledge of any portion of the PARTICIPANT'S
                  interest in THIS PLAN and a loan, pledge, or assignment as to
                  any insurance contract purchased under THIS PLAN, will be
                  treated as a loan in this paragraph. The loan amortization
                  period may not extend past the NORMAL RETIREMENT AGE stated in
                  the ADOPTION AGREEMENT.

3.12     DISTRIBUTION REQUIREMENTS

ELECTIVE DEFERRALS, QUALIFIED NON-ELECTIVE CONTRIBUTIONS, and QUALIFIED MATCHING
CONTRIBUTIONS, and income allocable to each are not distributable to a
PARTICIPANT or his or her BENEFICIARY, by such PARTICIPANT'S or BENEFICIARY'S
election, earlier than upon separation from SERVICE, death, or disability.

Such amounts may also be distributed upon:

         (a)      Termination of THIS PLAN without the establishment of another
                  defined contribution plan other than an employee stock
                  ownership plan (in CODE SECTION 4975(e)(7), a simplified
                  employee pension plan in CODE SECTION 408(k) or a simple IRA
                  plan (defined in CODE SECTION 408(p)).

         (b)      The disposition by 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 such
                  corporation if such corporation continues to maintain THIS
                  PLAN after the disposition, but only as to EMPLOYEES who
                  continue employment with the corporation acquiring such
                  assets.

         (c)      The disposition by a corporation to an unrelated entity of
                  such corporation's interest in a subsidiary (within the
                  meaning of CODE SECTION 409(d)(3)) if such corporation
                  continues to maintain THIS PLAN, but only as to EMPLOYEES who
                  continue employment with such subsidiary.

         (d)      The attainment of age 59 " in the case of a profit-sharing
                  plan.

                                       56
<PAGE>   57

         (e)      The hardship of the PARTICIPANT as described in subsection
                  3.13.

         (f)      All distributions that may be made by 1 or more of the
                  foregoing distributable events are subject to the SPOUSAL and
                  PARTICIPANT consent requirements (if applicable) contained in
                  CODE SECTIONS 411(a)(11) and 417. In addition, distributions
                  after March 31, 1988, that are triggered by any of (a), (b) or
                  (c), above, must be made in a lump sum.

3.13     HARDSHIP DISTRIBUTION

If the EMPLOYER elects in the ADOPTION AGREEMENT, THIS PLAN may provide hardship
distributions.

         (a)      Distribution of ELECTIVE DEFERRALS (and any earnings credited
                  to a PARTICIPANT'S ACCOUNT as of the later of December 31,
                  1988, and the end of the last PLAN YEAR ending before July 1,
                  1989) may be made to a PARTICIPANT for hardship. For this
                  subsection, hardship is defined as an immediate and heavy
                  financial need of the EMPLOYEE where such EMPLOYEE lacks other
                  available resources. Hardship distributions are subject to the
                  SPOUSAL consent requirements contained in CODE SECTIONS
                  401(a)(11) and 417.

                  Special Rules:

         (b)      The following are the only financial needs considered
                  immediate and heavy: expenses incurred or necessary for
                  medical care, in CODE SECTION 213(d), of the EMPLOYEE, the
                  EMPLOYEE'S SPOUSE, children, or dependents; the purchase
                  (excluding mortgage payments) of a principal residence for the
                  EMPLOYEE; payment of tuition and related educational fees for
                  the next 12 months of post-secondary education for the
                  EMPLOYEE, the EMPLOYEE'S SPOUSE, children or dependents; or
                  the need to prevent the eviction of the EMPLOYEE from, or a
                  foreclosure on the mortgage of, the EMPLOYEE'S principal
                  residence.

         (c)      A distribution will be considered as necessary to satisfy an
                  immediate and heavy financial need of the EMPLOYEE only if:

                  (1)      The EMPLOYEE has obtained all distributions, other
                           than hardship distributions, and all nontaxable loans
                           under all plans maintained by the EMPLOYER;

                  (2)      All plans maintained by the EMPLOYER provide that the
                           EMPLOYEE'S ELECTIVE DEFERRALS (and EMPLOYEE
                           CONTRIBUTIONS) will be suspended for 12 months after
                           the receipt of the hardship distribution;

                  (3)      The distribution is not in excess of the amount of an
                           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); and

                                       57
<PAGE>   58
                  (4)      All plans maintained by the EMPLOYER provide that the
                           EMPLOYEE may not make ELECTIVE DEFERRALS for the
                           EMPLOYEE'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 taxable year less the amount of such EMPLOYEE'S
                           ELECTIVE DEFERRALS for the taxable year of the
                           hardship distribution.

3.14     REINSTATEMENT OF BENEFIT.

If a benefit is forfeited because the PARTICIPANT or BENEFICIARY cannot be
found, such benefit will be reinstated if a claim is made by the PARTICIPANT or
BENEFICIARY.

DEFINITIONS

The following are definitions for this SECTION and THIS PLAN:

3.15     JOINT AND SURVIVOR AND PRE-RETIREMENT SURVIVOR ANNUITIES.

         (a)      "NORMAL RETIREMENT AGE" is the age selected in the ADOPTION
                  AGREEMENT. If the EMPLOYER enforces a mandatory retirement
                  age, the NORMAL RETIREMENT AGE is the lesser of that mandatory
                  age or the age specified in the ADOPTION AGREEMENT.

         (b)      "ELECTION PERIOD" is the period which begins on the first day
                  of the PLAN YEAR in which the PARTICIPANT attains age 35 and
                  ends on the date of the PARTICIPANT'S death. If a PARTICIPANT
                  separates from SERVICE prior to the first day of the PLAN YEAR
                  in which age 35 is attained, as to the ACCOUNT BALANCE as of
                  the date of separation, the ELECTION PERIOD shall begin on the
                  date of separation.

         (c)      Pre-age 35 waiver: A PARTICIPANT who will not yet attain age
                  35 as of the end of any current PLAN YEAR may make a special
                  QUALIFIED ELECTION to waive the QUALIFIED PRERETIREMENT
                  SURVIVOR ANNUITY for the period beginning on the date of such
                  election and ending on the first day of the PLAN YEAR in which
                  the PARTICIPANT attains age 35. Such election shall not be
                  valid unless the PARTICIPANT receives a written explanation of
                  the QUALIFIED PRERETIREMENT SURVIVOR ANNUITY in such terms as
                  are comparable to the explanation required under subsection
                  3.2(d)(1). QUALIFIED PRERETIREMENT SURVIVOR ANNUITY coverage
                  will be automatically reinstated as of the first day of the
                  PLAN YEAR in which the PARTICIPANT attains age 35. Any new
                  waiver on or after such date shall be subject to the full
                  requirements of this subsection.

         (d)      "EARLIEST RETIREMENT AGE" is the earliest date on which, by
                  THIS PLAN, the PARTICIPANT can elect to receive retirement
                  benefits.

                  "EARLY RETIREMENT AGE" is the age selected by the EMPLOYER in
                  the ADOPTION AGREEMENT.

                                       58
<PAGE>   59

         (e)      "QUALIFIED ELECTION" is a waiver of a QUALIFIED JOINT AND
                  SURVIVOR ANNUITY or a QUALIFIED PRERETIREMENT SURVIVOR
                  ANNUITY. Any waiver of a QUALIFIED JOINT AND SURVIVOR ANNUITY
                  or a QUALIFIED PRERETIREMENT SURVIVOR ANNUITY shall not be
                  effective unless: (i) the PARTICIPANT'S SPOUSE consents in
                  writing to the election; (ii) the election designates a
                  specific BENEFICIARY, including any class of BENEFICIARIES or
                  any contingent BENEFICIARIES, which may not be changed without
                  SPOUSAL consent (or the SPOUSE expressly permits designations
                  by the PARTICIPANT without any further SPOUSAL consent); (iii)
                  the SPOUSE'S consent acknowledges the effect of the election;
                  and (d) the SPOUSE'S consent is witnessed by a PLAN
                  REPRESENTATIVE or NOTARY PUBLIC. Additionally, a PARTICIPANT'S
                  waiver of the QUALIFIED JOINT AND SURVIVOR ANNUITY shall not
                  be effective unless the election designates a form of benefit
                  payment which may not be changed without SPOUSAL consent (or
                  the SPOUSE expressly permits designations by the PARTICIPANT
                  without any further SPOUSAL consent). If it is established to
                  the satisfaction of a PLAN REPRESENTATIVE that there is no
                  SPOUSE or that the SPOUSE cannot be located, a waiver will be
                  deemed a QUALIFIED ELECTION.

                  Any consent by a SPOUSE obtained by this provision (or
                  establishment that the consent of a SPOUSE may not be
                  obtained) shall be effective only as to such Spouse. A consent
                  that permits designations by the PARTICIPANT without any
                  requirement of further consent by such SPOUSE must acknowledge
                  that the SPOUSE has the right to limit consent to a specific
                  BENEFICIARY, and a specific form of benefit where applicable,
                  and that the SPOUSE voluntarily elects to relinquish either or
                  both of such rights. A revocation of a prior waiver may be
                  made by a PARTICIPANT without the consent of the SPOUSE at any
                  time before the beginning of benefits. The number of
                  revocations shall not be limited. No consent obtained under
                  this provision shall be valid unless the PARTICIPANT has
                  received notice as provided in subsection 3.2(d).

         (f)      "QUALIFIED JOINT AND SURVIVOR ANNUITY" is an immediate annuity
                  for the life of the PARTICIPANT with a survivor annuity for
                  the life of the SPOUSE which is not less than 50% and not more
                  than 100% of the amount of the annuity which is payable during
                  the joint lives of the PARTICIPANT and the SPOUSE and which is
                  the amount of benefit which can be purchased with the
                  PARTICIPANT'S VESTED ACCOUNT BALANCE. The percentage of the
                  survivor annuity in THIS PLAN shall be 50% (unless a different
                  percentage is elected by the EMPLOYER in the ADOPTION
                  AGREEMENT).

         (g)      "SPOUSE (SURVIVING SPOUSE)" is the PARTICIPANT'S SPOUSE or
                  SURVIVING SPOUSE, provided that a former SPOUSE will be
                  treated as the SPOUSE or SURVIVING SPOUSE and a current SPOUSE
                  will not be treated as the SPOUSE or SURVIVING SPOUSE to the
                  extent provided by a QUALIFIED DOMESTIC RELATIONS ORDER in
                  CODE SECTION 414(p).

                                       59
<PAGE>   60

         (h)      "ANNUITY STARTING DATE" is the first day of the first period
                  for which an amount is paid as an annuity or any other form.

         (i)      "VESTED ACCOUNT BALANCE" is the aggregate value of the
                  PARTICIPANT'S VESTED ACCOUNT BALANCES derived from EMPLOYER
                  and EMPLOYEE CONTRIBUTIONS (including ROLLOVERS), whether
                  vested before or upon death, including the proceeds of
                  insurance contracts, if any, on the PARTICIPANT'S life. This
                  Section shall apply to a PARTICIPANT who is vested in amounts
                  attributable to EMPLOYER CONTRIBUTIONS, EMPLOYEE CONTRIBUTIONS
                  (or both) at the time of death or distribution.

         (j)      Any PARTICIPANT who has elected by subsection 3.2(f)(4) and
                  any PARTICIPANT who does not elect by subsection 3.2(f)(4) or
                  who meets the requirements of subsection 3.2(f)(4) except that
                  such PARTICIPANT does not have at least 10 years of vesting
                  SERVICE when he or she separates from SERVICE, shall have his
                  or her benefits distributed by all of the following
                  requirements if benefits would have been payable in the form
                  of a LIFE ANNUITY:

                  (1)      Automatic joint and survivor annuity.

                           If benefits in the form of a LIFE ANNUITY become
                           payable to a married PARTICIPANT who:

                           (A)      begins to receive payments by THIS PLAN on
                                    or after NORMAL RETIREMENT AGE; or

                           (B)      dies on or after NORMAL RETIREMENT AGE while
                                    still working for the EMPLOYER; or

                           (C)      begins to receive payments on or after the
                                    QUALIFIED EARLY RETIREMENT AGE; or

                           (D)      separates from SERVICE on or after attaining
                                    NORMAL RETIREMENT AGE (or the QUALIFIED
                                    EARLY RETIREMENT AGE) and after satisfying
                                    the eligibility requirements for the payment
                                    of h benefits by THIS PLAN and thereafter
                                    dies before beginning to receive such
                                    benefits; such benefits shall be paid from
                                    THIS PLAN in the form of a QUALIFIED JOINT
                                    AND SURVIVOR ANNUITY, unless the PARTICIPANT
                                    elects otherwise during the ELECTION PERIOD.
                                    The ELECTION PERIOD must begin at least 6
                                    months before the PARTICIPANT attains
                                    QUALIFIED EARLY RETIREMENT AGE and end not
                                    more than 90 days before the beginning of
                                    benefit payments. Any election shall will be
                                    in writing and may be changed by the
                                    PARTICIPANT at any time.

                  (2)      Election of early survivor annuity.

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<PAGE>   61

                           A PARTICIPANT who is employed after attaining the
                           QUALIFIED EARLY RETIREMENT AGE will be given the
                           opportunity to elect, during the ELECTION PERIOD, to
                           have a survivor annuity payable on death. If the
                           PARTICIPANT elects the survivor annuity, payments of
                           such annuity must not be less than the payments which
                           would have been made to the SPOUSE by the QUALIFIED
                           JOINT AND SURVIVOR ANNUITY if the PARTICIPANT had
                           retired on the day before his or her death. Any
                           election in this Section shall be in writing and may
                           be changed by the PARTICIPANT at any time. The
                           ELECTION PERIOD begins on the later of (i) the 90th
                           day before the PARTICIPANT attains the QUALIFIED
                           EARLY RETIREMENT AGE, or (ii) the date on which
                           participation begins, and ends on the date the
                           PARTICIPANT terminates employment.

                  (3)      For subsection 3.2:

                           (A)      "QUALIFIED EARLY RETIREMENT AGE" is the
                                    latest of:

                                    (i)      the earliest date, under THIS PLAN,
                                             on which the PARTICIPANT may elect
                                             to receive retirement benefits,

                                    (ii)     the first day of the 120th month
                                             beginning before the PARTICIPANT
                                             reaches NORMAL RETIREMENT AGE, or

                                    (iii)    the date the PARTICIPANT begins
                                             participation.

                           (B)      "QUALIFIED JOINT AND SURVIVOR ANNUITY" is an
                                    annuity for the life of the PARTICIPANT with
                                    an survivor annuity for the life of the
                                    SPOUSE as described in subsection 3.15(f).

         (k)      "APPLICABLE LIFE EXPECTANCY" is the 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 1 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 as so
                  recalculated. The applicable calendar year shall be the first
                  distribution calendar year, and if life expectancy is being
                  recalculated such succeeding calendar year.

         (l)      "STRAIGHT LIFE ANNUITY" is an annuity payable in equal
                  installments for the life of the PARTICIPANT that terminates
                  on the PARTICIPANT'S death.

3.16     MINIMUM DISTRIBUTION.

         (a)      "DESIGNATED BENEFICIARY" is the individual who is designated
                  as the beneficiary in THIS PLAN in CODE SECTION 401(a)(9) and
                  its Proposed REGULATIONS.

                                       61
<PAGE>   62

         (b)      "DISTRIBUTION CALENDAR YEAR" is a calendar year for which a
                  minimum distribution is required. For distributions beginning
                  before the PARTICIPANT'S death, the first DISTRIBUTION
                  CALENDAR YEAR is the calendar year immediately preceding the
                  calendar year which contains the PARTICIPANT'S REQUIRED
                  BEGINNING DATE. For distributions beginning after the
                  PARTICIPANT'S death, the first DISTRIBUTION CALENDAR YEAR is
                  the calendar year in which distributions are required to begin
                  by subsection 3.8.

         (c)      "LIFE EXPECTANCY" is the life expectancy and joint and last
                  survivor expectancy computed by use of the expected return
                  multiples in Tables V and VI of Regulations 1.72-9.

                  Unless otherwise elected by the PARTICIPANT (or SPOUSE, for
                  distributions described in subsection 3.2(b)) by the time
                  distributions are required to begin, life expectancies 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.

         (d)      "PARTICIPANT'S BENEFIT" is

                  (1)      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
                           dates in the valuation calendar year after the
                           VALUATION DATE and decreased by distributions made in
                           the valuation calendar year after the VALUATION DATE.

                  (2)      Exception for the second DISTRIBUTION CALENDAR YEAR.
                           For paragraph (1) 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.

         (e)      As elected by the EMPLOYER in the ADOPTION AGREEMENT,
                  "REQUIRED BEGINNING DATE" is

                  (1)      The REQUIRED BEGINNING DATE of a PARTICIPANT is the
                           first day of April of the calendar year following the
                           calendar year in which the Participant attains age
                           70 1/2.

                  (2)      The REQUIRED BEGINNING DATE of a PARTICIPANT is the
                           first day of April of the calendar year following the
                           calendar year in which the Participant attains age

                                       62
<PAGE>   63

                           70 1/2, except that benefit distributions to a
                           PARTICIPANT (other than a 5% OWNER) for benefits
                           accrued after the later of the adoption or effective
                           date of the amendment to THIS PLAN must begin by the
                           later of the April 1 of the calendar year following
                           the calendar year in which the PARTICIPANT attains
                           age 70 1/2 or retires.

                  (3)      The REQUIRED BEGINNING DATE of a PARTICIPANT is the
                           later of the April 1 of the calendar year following
                           the calendar year in which the Participant attains
                           age 70 1/2 or retires except that benefit
                           distributions to a 5% OWNER must begin by the April 1
                           of the calendar year following the calendar year in
                           which the PARTICIPANT attains age 70 1/2.

                                    (A)      Any PARTICIPANT attaining age 70
                                             1/2 after 1995 may elect by April 1
                                             of the calendar year following the
                                             year in which the PARTICIPANT
                                             attained age 70 1/2 (or by December
                                             31, 1997 for a PARTICIPANT
                                             attaining age 70 1/2 in 1996) to
                                             defer distributions until the
                                             calendar year following the
                                             calendar year in which the
                                             PARTICIPANT retires. If no such
                                             election is made, the PARTICIPANT
                                             will begin receiving distributions
                                             by the April 1 of the calendar year
                                             following the year in which the
                                             PARTICIPANT attained age 70 1/2 (or
                                             by December 31, 1997 for a
                                             PARTICIPANT attaining age 70 1/2 in
                                             1996).

                                    (B)      Any PARTICIPANT attaining age 70
                                             1/2 before 1997 may elect to stop
                                             distributions and begin
                                             distribution by the April 1 of the
                                             calendar year following the year in
                                             which the PARTICIPANT retires.
                                             There is either (as elected in the
                                             ADOPTION AGREEMENT)

                                             (i)      a new ANNUITY STARTING
                                                      DATE when distributions
                                                      begin, or

                                             (ii)     no new ANNUITY STARTING
                                                      DATE when distributions
                                                      begin.

                                    (C)      The preretirement age 70 1/2
                                             distribution option is only
                                             eliminated for EMPLOYEES 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. The
                                             preretirement age 70 1/2
                                             distribution option is an optional
                                             form of benefit for benefits
                                             payable in a particular
                                             distribution form (including any
                                             modifications that may be elected
                                             after benefit begins) begun at a
                                             time during the period that begins

                                       63
<PAGE>   64
                                            on or after January 1 of the
                                            calendar year in which an EMPLOYEE
                                            attains age 70 1/2 and ends April 1
                                            of the immediately following
                                            calendar year.

                  5% OWNER. A PARTICIPANT treated as a 5% OWNER for this
                  subsection is a 5% OWNER in CODE SECTION 416 at any time
                  during the PLAN YEAR ending with or within the calendar year
                  in which such 5% OWNER attains age 70 1/2 .

                  Once distributions begin to a 5% OWNER in this subsection,
                  they must continue to be distributed, even if the PARTICIPANT
                  ceases to be a 5% OWNER in a subsequent year.

3.17     ROLLOVERS.

         (a)      "ELIGIBLE ROLLOVER DISTRIBUTION" is any distribution of all or
                  any portion of the balance to the credit of the DISTRIBUTEE,
                  except that an ELIGIBLE ROLLOVER DISTRIBUTION does not
                  include: any distribution that is 1 of a series of
                  substantially equal periodic payments (not less frequently
                  than annually) made for the life (or life expectancy) of the
                  DISTRIBUTEE or the joint lives (or joint life expectancies) of
                  the DISTRIBUTEE and the DISTRIBUTEE'S designated Beneficiary,
                  or for a specified period of 10 years or more; any
                  distribution to the extent such distribution is required under
                  CODE SECTION 401(a)(9); the portion of any other
                  distribution(s) that is not includible in gross income
                  (without the exclusion for net unrealized appreciation as to
                  employer securities); any other distribution(s) that is
                  reasonably expected to total less than $500 during a year; and
                  (for distributions made after December 31, 1998) a hardship
                  distribution in subsection 3.13.

         (b)      "ELIGIBLE RETIREMENT PLAN" is an individual retirement account
                  in CODE SECTION 408(a), an individual retirement annuity in
                  CODE SECTION 408(b), an annuity plan in CODE SECTION 403(a),
                  or a qualified plan in CODE SECTION 401(a), that accepts the
                  DISTRIBUTEE'S ELIGIBLE ROLLOVER DISTRIBUTION. However, for an
                  ELIGIBLE ROLLOVER DISTRIBUTION to the SURVIVING SPOUSE, an
                  ELIGIBLE RETIREMENT PLAN is an individual retirement account
                  or individual retirement annuity.

         (c)      "DISTRIBUTEE" includes 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, in CODE SECTION 414(p), are DISTRIBUTEES as
                  to the interest of the SPOUSE or former SPOUSE.

         (d)      "DIRECT ROLLOVER" is (i) a payment by THIS PLAN to the
                  ELIGIBLE RETIREMENT PLAN specified by the DISTRIBUTEE or (ii)
                  a payment to THIS PLAN of an ELIGIBLE ROLLOVER DISTRIBUTION.

                                       64
<PAGE>   65

                                                              SECTION 4.   OTHER
================================================================================

4.1      ANNUAL VALUATION OF ASSETS; ALLOCATION OF TRUST NET EARNINGS AND
         LOSSES.

The assets of THIS PLAN will be valued as of the ALLOCATION DATE selected by the
EMPLOYER in the ADOPTION AGREEMENT. On the ALLOCATION DATE, the net earnings and
losses of THIS PLAN will be allocated as selected by the EMPLOYER in the
ADOPTION AGREEMENT.

4.2      TREATMENT OF INSURANCE DIVIDENDS OR CREDITS.

Any dividends or credits earned on insurance contracts will be allocated to the
PARTICIPANT'S ACCOUNT for whose benefit the contract is held, and any premiums
on an insurance contract will be charged to the PARTICIPANT'S ACCOUNT for whose
benefit the contract is held.

4.3      DIRECTED INVESTMENTS.

If elected by the EMPLOYER in the ADOPTION AGREEMENT, each PARTICIPANT will
direct THIS PLAN as to the type of investment (which may only be as traded in a
regularly maintained market) to be purchased with the PARTICIPANT'S ACCOUNT,
otherwise, each EMPLOYEE will have a ratable interest in all assets in THIS
PLAN. Directed Investments will be credited or charged with their separate net
earnings and losses.

THIS PLAN and the TRUST are intended to constitute a plan described in Section
404(c) of the Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended, and the regulations issued thereunder. As such, and if selected by the
EMPLOYER in the ADOPTION AGREEMENT, THIS PLAN and the TRUST shall provide the
opportunity for each PARTICIPANT and BENEFICIARY to exercise control over some
or all of the assets in his PARTICIPANT'S ACCOUNT and to choose from a broad
range of investment alternatives as made available by the TRUSTEE, the manner in
which some or all of such assets are invested.

Each PARTICIPANT and BENEFICIARY is authorized and empowered, in his sole
discretion, to give directions to the TRUSTEE, pursuant to the procedure
established by the ADMINISTRATOR and in such form as the TRUSTEE may require,
concerning the investment of such PARTICIPANT'S or BENEFICIARY'S PARTICIPANT
ACCOUNT. The TRUSTEE shall comply as promptly as practicable with directions
given by the PARTICIPANT or BENEFICIARY. The TRUSTEE may refuse to comply with
any direction if the Trustee, in his sole and absolute discretion, deems such
direction improper by virtue of applicable law.

The TRUSTEE and other fiduciaries of THIS PLAN and the TRUST are not liable for
any loss, nor for any breach, resulting from a PARTICIPANT'S or BENEFICIARY'S
direction of the investment of any part of his PARTICIPANT'S ACCOUNT.

                                       65
<PAGE>   66
4.4      PARTICIPATING EMPLOYER

A PARTICIPATING EMPLOYER is any employer that has requested its employees be
included as PARTICIPANTS in THIS PLAN and participation has been approved on
such terms, conditions and requirements as determined by the EMPLOYER, the
TRUSTEE, the ADMINISTRATOR, and InWest Pension Management, Inc.

4.5      AMENDMENT BY EMPLOYER.

The EMPLOYER may (1) change the choice of options in the ADOPTION AGREEMENT, (2)
add overriding language in the ADOPTION AGREEMENT when such language is
necessary to satisfy CODE SECTION 415 or 416 because of the required aggregation
of multiple plans, and (3) add certain model amendments published by the
Internal Revenue Service which do not change THIS PLAN to an individually
designed plan. An EMPLOYER that amends THIS PLAN for any other reason, including
a waiver of the minimum funding requirement under CODE SECTION 412(d), will no
longer participate in the InWest Pension Management, Inc. Regional Prototype
Plan and will be considered to have an individually designed plan.

4.6      PLAN MERGER - MAINTENANCE OF BENEFITS.

On a merger or consolidation with, or transfer of assets or liabilities of THIS
PLAN to any other plan, each PARTICIPANT will receive a benefit immediately
after such merger, etc. (if THIS PLAN terminated) which is at least equal to the
benefit the PARTICIPANT was entitled to immediately before such merger, etc. (if
THIS PLAN had terminated).

4.7      INALIENABILITY OF BENEFITS.

No benefit or interest in THIS PLAN will be subject to assignment or alienation,
either voluntarily or involuntarily. The preceding sentence shall also apply to
the creation, assignment, or recognition of a right to any benefit payable as to
a PARTICIPANT by a domestic relations order, unless such order is determined to
be a QUALIFIED DOMESTIC RELATIONS ORDER in CODE SECTION 414(p) or any domestic
relations order entered before January 1, 1985.

4.8      EXCLUSIVE BENEFIT.

The principal or income of the TRUST may not be diverted to or used for other
than the exclusive benefit of the PARTICIPANTS or their BENEFICIARIES.

Any EMPLOYER CONTRIBUTION made by a mistake of fact must be returned to the
EMPLOYER within 1 year of the contribution.

If the deduction of an EMPLOYER CONTRIBUTION is disallowed by CODE SECTION 404,
such contribution (to the extent disallowed) must be returned to the EMPLOYER
within 1 year of the disallowance of the deduction.

                                       66
<PAGE>   67

If the Commissioner of Internal Revenue determines that THIS PLAN is not
initially qualified, any CONTRIBUTION incident to the initial qualification must
be returned to the EMPLOYER within 1 year after the date initial qualification
is denied, but only if the application for the qualification is made by the time
prescribed by law for filing the EMPLOYER'S federal income tax return for the
taxable year in which THIS PLAN is adopted, or such later date as the Secretary
of the Treasury may prescribe.

No contract is purchased in this Plan unless the insurer provides that: (1) no
value of contracts providing benefits in this Plan or credits determined by the
insurer (on account of dividends, earnings, or other experience rating credits,
or surrender or cancellation credits) for such contract may be paid or returned
to the employer or diverted to or used for other than the exclusive benefit of
the Participants or their Beneficiaries. However, any Employer contribution made
by a mistake of fact must be returned to the Employer within 1 year of the
contribution.

If this Plan is funded by individual contracts that provide a Participant's
benefit, such individual contracts shall constitute the Participant's Account
Balance. If this Plan is funded by group contracts, by the group annuity or
group insurance contract, premiums or other consideration received by the
insurance company must be allocated to Participants' accounts in this Plan.

4.9      FAILURE TO QUALIFY.

If the EMPLOYER'S adoption of THIS PLAN fails to attain or retain qualification,
such plan will no longer participate in the InWest Pension Management, Inc.
Regional Prototype Defined Contribution Plan and will be considered an
individually designed plan.

4.10     DISQUALIFICATION OF PLAN.

If the EMPLOYER'S adoption of THIS PLAN fails to attain or retain qualification,
the funds of such plan will be removed from the TRUST as soon as
administratively feasible.

4.11     ADMINISTRATOR

         (a)      Appointment of ADMINISTRATOR.

                  THIS PLAN shall be administered by the ADMINISTRATOR
                  consisting of those persons who shall be appointed by and
                  serve at the pleasure of the EMPLOYER. All usual and
                  reasonable expenses of the ADMINISTRATOR may be paid in whole
                  or in part by the EMPLOYER, and any expenses not paid by the
                  EMPLOYER shall be paid by the TRUSTEE out of the principal or
                  income of the Fund. Any members of the ADMINISTRATOR who are
                  EMPLOYEES shall not receive COMPENSATION for their services
                  for the ADMINISTRATOR.

                                       67
<PAGE>   68

         (b)      Claims Procedure.

                  The ADMINISTRATOR shall make all determinations as to claims
                  for benefits. The ADMINISTRATOR shall give adequate written
                  notice, delivered or mailed, to each Claimant; if such claims
                  are denied, such notice shall state:

                  (1)      Specific reasons for the denial and

                  (2)      A description of the procedure necessary for appeal
                           by the Claimant.

         (c)      Records and Reports.

                  The ADMINISTRATOR shall exercise such authority and
                  responsibility as it deems appropriate in order to comply with
                  the ACT and REGULATIONS issued thereunder for records of a
                  PARTICIPANT'S SERVICE, benefits and the percentage of such
                  benefits which are nonforfeitable under THIS PLAN,
                  notifications to PARTICIPANTS, annual registration with the
                  Internal Revenue Service, annual reports to the Department of
                  Labor, and any other reports required by law.

         (d)      Other ADMINISTRATOR Powers and Duties.

                  The ADMINISTRATOR shall have the power to:

                  (1)      Construe and interpret THIS PLAN, decide all
                           questions of eligibility and determine the amount,
                           manner and time of payment of any benefits hereunder;

                  (2)      Prescribe procedures to be followed by PARTICIPANTS
                           or BENEFICIARIES filing applications for benefits;

                  (3)      Prepare and distribute, in such manner as the
                           ADMINISTRATOR determines to be appropriate,
                           information explaining THIS PLAN;

                  (4)      Receive from the EMPLOYER and from PARTICIPANTS such
                           information as shall be necessary for the proper
                           administration of THIS PLAN;

                  (5)      Furnish the EMPLOYER, upon request, such annual
                           reports for the administration of THIS PLAN as are
                           reasonable and appropriate;

                  (6)      Receive, review and keep on file (as it deems
                           convenient or appropriate), reports of the financial
                           condition, and of the receipts and disbursements, of
                           the Fund from the TRUSTEE and any valuations of THIS
                           PLAN;

                                       68
<PAGE>   69

                  (7)      Appoint or employ individuals to assist in the
                           administration of THIS PLAN and any other agents it
                           deems advisable, including legal and actuarial
                           counsel.

                  (8)      Establish and carry out a funding policy consistent
                           with the purposes of THIS PLAN and the requirements
                           of applicable law, as they may be appropriate from
                           time to time, and, as a part of such funding policy,
                           direct the TRUSTEE to exercise its investment
                           discretion so as to provide sufficient assets in an
                           amount determined under the funding policy then in
                           effect necessary to meet the liquidity requirements
                           for administration of THIS PLAN and payment of
                           benefits.

                  (9)      Exercise all rights, except payment receipts, in
                           qualified employer securities in the Fund.

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

         (e)      Rules and Decisions.

                  The ADMINISTRATOR may adopt such rules as it deems necessary,
                  desirable or appropriate. All rules and decisions of the
                  ADMINISTRATOR shall be applied in a nondiscriminatory,
                  consistent, and uniform manner as to all PARTICIPANTS in
                  similar circumstances. When making a determination or
                  calculation, the ADMINISTRATOR shall be entitled to rely upon
                  information furnished by a PARTICIPANT or BENEFICIARY,
                  EMPLOYER, the legal counsel of the EMPLOYER, or the TRUSTEE,
                  or any other official of THIS PLAN.

         (f)      ADMINISTRATOR Procedures.

                  The ADMINISTRATOR may act at a meeting or in writing without a
                  meeting. The ADMINISTRATOR shall elect one of its members as
                  chairman, appoint a secretary, who may or may not be a
                  ADMINISTRATOR member, and advise the TRUSTEE of such actions
                  in writing. The secretary shall keep a record of all meetings
                  and forward all necessary communications to the EMPLOYER, the
                  TRUSTEE, or any other official of THIS PLAN. The ADMINISTRATOR
                  may adopt such bylaws and REGULATIONS as it deems desirable
                  for the conduct of its affairs. All decisions of the
                  ADMINISTRATOR shall be made by the vote of the majority,
                  except actions in writing taken without a meeting which shall
                  be unanimous. A dissenting ADMINISTRATOR member who, within a
                  reasonable time after he has knowledge of any action or
                  failure to act by the majority, registers his dissent in
                  writing delivered to the other ADMINISTRATOR members, the
                  EMPLOYER and the TRUSTEE shall not be responsible for any such
                  act or failure to act. No ADMINISTRATOR member shall vote on
                  any matter that directly and personally concerns him.

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<PAGE>   70

         (g)      Authorization of Benefit Payments.

                  The ADMINISTRATOR shall issue directions to the TRUSTEE
                  concerning all benefits which are to be paid from the Fund
                  pursuant to the provisions of THIS PLAN and warrant that all
                  such directions are in accordance with THIS PLAN.

         (h)      Application and Forms for Benefits.

                  The ADMINISTRATOR may require a PARTICIPANT to complete and
                  file with the ADMINISTRATOR an application for a benefit and
                  all other forms approved by the ADMINISTRATOR, and to furnish
                  all information requested by the ADMINISTRATOR. The
                  ADMINISTRATOR may rely upon all such information so furnished
                  it. This subsection is not a condition to payment of benefits.

         (i)      Facility of Payment.

                  When, in the ADMINISTRATOR'S opinion, a person entitled to
                  receive any payment of a benefit or installment thereof
                  hereunder is under a legal disability or is incapacitated in
                  any way as to be unable to manage his financial affairs, the
                  ADMINISTRATOR may direct the TRUSTEE to make such payments to
                  such person or to his legal representative or to a relative or
                  friend of such person for his benefit, or the ADMINISTRATOR
                  may direct the TRUSTEE to apply the payment for the benefit of
                  such person in such manner as the ADMINISTRATOR considers
                  advisable.

                  Any payment of a benefit or installment thereof under this
                  subsection shall be a complete discharge of any liability for
                  the making of such payment under the provisions of THIS PLAN.

4.12     ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES

Each named Fiduciary has only those specific powers, duties, responsibilities
and obligations as are specifically given it by THIS PLAN.

The EMPLOYER has the sole responsibility for making EMPLOYER CONTRIBUTIONS and
has the sole authority to appoint and remove the TRUSTEE and the ADMINISTRATOR
and to amend or terminate, in whole or part, THIS PLAN.

The ADMINISTRATOR has the sole responsibility for the administration of THIS
PLAN.

The TRUSTEE has the sole responsibility for administration and management of the
Fund.

                                       70
<PAGE>   71

Each named Fiduciary warrants that any directions given, information furnished,
or action taken by it shall be according to the terms of THIS PLAN. Furthermore,
each named Fiduciary may rely upon any such direction, information or action of
another named Fiduciary as being proper under THIS Plan and is not required
under THIS PLAN to inquire into the propriety of such direction, information or
action. It is intended that each named Fiduciary be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations in THIS
PLAN and not be responsible for any act or failure to act of another named
Fiduciary. No named Fiduciary guarantees the Fund in any manner against
investment loss or depreciation in asset value.

4.13     MANAGEMENT OF TRUST

         (a)      Receipt and Title to Assets.

                  The TRUSTEE receives any Contributions paid and delivered to
                  it in cash or in kind as it deems acceptable. The EMPLOYER
                  timely and appropriately makes Contributions to the TRUSTEE.
                  The TRUSTEE is not responsible for the calculation or
                  collection of any Contribution but is responsible only for
                  property it receives for THIS PLAN. The TRUSTEE shall take and
                  keep title to assets delivered to it under THIS PLAN.

         (b)      Principal; Income.

                  The Fund is held, managed and administered by the TRUSTEE by
                  the terms of this Declaration of Trust without distinction
                  between principal and income.

         (c)      Powers.

                  The TRUSTEE has the power to:

                  (1)      Sell, lease, exchange, mortgage, pledge, or assign
                           all or part of the trust property and to do all the
                           TRUSTEE thinks necessary or desirable to administer
                           such property;

                  (2)      Retain property even if it is underproductive;

                  (3)      Invest and reinvest the trust property in any real or
                           personal property, including but not limited to
                           interests in trusts, common trust funds, stocks,
                           bonds, notes, certificates of deposit, and other
                           securities, regardless of class, whether full or
                           undivided interests, whether secured or unsecured,
                           and whether the obligation of individuals,
                           corporations, trusts or governments, either within or
                           outside of the state whose laws are chosen by the
                           EMPLOYER to govern THIS PLAN;

                  (4)      Pay to or for the use and benefit of any PARTICIPANT
                           (or, if he is deceased, his BENEFICIARY), the proper
                           proportion of the PARTICIPANT'S ACCOUNT then held by
                           the TRUSTEE; distribute the Fund in cash or
                           investments or both, in full or

                                       71
<PAGE>   72
                           undivided interest, or convert the trust property
                           into money or other property and distribute such
                           converted forms or in any other manner in which
                           property may be distributed by the TRUSTEE;

                  (5)      Invest up to 10% of the fair market value of the Fund
                           in qualifying employer securities and/or qualifying
                           employer real property (as defined in the ACT);

                  (6)      Maintain a bond that:

                           (A)      Protects against losses by acts of fraud or
                                    dishonesty of plan fiduciaries and fund
                                    managers, directly or through conivance with
                                    others;

                           (B)      Is in an amount of (i) not less than $1,000
                                    or 10% of the amount of funds handled,
                                    whichever is greater, and (ii) not greater
                                    than $500,000 for each plan covered, unless
                                    otherwise specifically required by the
                                    Department of Labor;

                           (C)      Is with a corporate surety acceptable for
                                    federal bonding purposes by 31 U.S.C.S.
                                    Sections 9304-9308;

                           (D)      Is not with a party in interest;

                           (E)      Has a discovery period of no less than 1
                                    year after termination or cancellation; and

                           (F)      Otherwise satisfies ERISA bonding
                                    requirements as they may be amended from
                                    time to time.

                  (7)      Purchase or sell, at its current market price, any
                           asset of the Fund to any other trust or estate of
                           which it is trustee or personal representative.

                  (8)      Buy, sell, or retain and vote by proxy or in person
                           any stock or securities, and rights and options
                           thereto, including, but not limited to, its own stock
                           and securities.

                  (9)      Act with all of the powers conferred upon a TRUSTEE
                           by the laws chosen by the EMPLOYER to govern THIS
                           PLAN, as amended; provided, such powers are not
                           prohibited specifically by this instrument.

                  (10)     Employ, pay for from the Fund and rely on agents and
                           advisors.

                                       72
<PAGE>   73

4.14     ACCOUNTING; DISTRIBUTIONS

         (a)      Duties.

                  The TRUSTEE performs the duties required of it in THIS PLAN,
                  especially in Section 3.

         (b)      Records.

                  The TRUSTEE maintains accurate and detailed accounts, books,
                  and records of all investments, receipts, disbursements and
                  other transactions hereunder, which are available at
                  reasonable times for inspection and audit by the EMPLOYER, and
                  by such person or persons as the EMPLOYER designates.

         (c)      Reporting.

                  The TRUSTEE furnishes to the EMPLOYER a statement of the fair
                  market value of the Fund and of PARTICIPANTS' ACCOUNTS as of
                  the end of each PLAN YEAR, including any CONTRIBUTIONS for
                  such PLAN YEAR, as required by the ACT and CODE. Such
                  statements are mailed within 90 days following the end of such
                  PLAN YEAR. In making such statements, the TRUSTEE may rely on
                  any information about any Insurance Contract furnished to the
                  TRUSTEE. The TRUSTEE values all assets at their fair market
                  value as the TRUSTEE in its discretion prescribes but
                  according to a method consistently followed and uniformly
                  applied. The EMPLOYER may approve such statements either by
                  written notice of approval delivered to the TRUSTEE or by
                  failure to express objection to such statements in writing
                  delivered to the TRUSTEE within 90 days from the date the
                  statements were mailed to the EMPLOYER.

                  When written approval of the statements is received or there
                  is passage of such period of time without written objection
                  having been delivered to the TRUSTEE, such statements are
                  deemed approved, and the TRUSTEE is released and discharged as
                  to all such items, matters and things set forth in such
                  statements as if such statements had been jurisdiction in an
                  action or proceeding in which the TRUSTEE, the EMPLOYER and
                  all persons having, or which may have, any interest in the
                  Fund or in THIS PLAN were parties. If the TRUSTEE and the
                  EMPLOYER cannot agree on any act or transaction reported in
                  the statements, the TRUSTEE has the right to have its account
                  settled by judicial proceedings, in which only the TRUSTEE and
                  the EMPLOYER are necessary parties.

         (d)      Distributions.

                  TRUSTEE makes distributions from the Fund to PARTICIPANTS or
                  their BENEFICIARIES with the terms of THIS PLAN as the
                  ADMINISTRATOR directs in writing. The TRUSTEE is fully
                  protected in acting upon any written directions from the
                  ADMINISTRATOR for

                                       73
<PAGE>   74

                  benefit payments and has no duty or responsibility (apart from
                  maintenance of accounts) to see to the application of any such
                  payments, to determine the rights or interests of any person
                  in the TRUST or THIS PLAN, or to ascertain whether the
                  ADMINISTRATOR'S directions comply with THIS PLAN; and the
                  TRUSTEE is not required to pay any sum of money or other
                  benefits to any person except upon the delivery to the TRUSTEE
                  of a receipt in a form satisfactory to the TRUSTEE, together
                  with such evidence of the right of such person to receive such
                  money or other benefits and such authentication or guarantee
                  of the signature on such receipt as the TRUSTEE may require.

4.15     REPLACEMENT/REMOVAL OF TRUSTEE

         (a)      Resignation of TRUSTEE.

                  The TRUSTEE may resign at any time upon giving 60 days prior
                  written notice thereof to the EMPLOYER. The EMPLOYER may
                  remove any TRUSTEE at any time upon giving 60 days prior
                  written notice thereof to such TRUSTEE. The EMPLOYER fills any
                  vacancy in the office of TRUSTEE by written instrument
                  appointing a successor TRUSTEE to be effective as of any date
                  specified in such instrument and upon acceptance thereof by
                  such successor TRUSTEE endorsed thereon.

         (b)      Successor TRUSTEE.

                  Each successor TRUSTEE succeeds to the title of the Fund
                  vested in its predecessor without the signing or filing of any
                  further instrument, but any resigning or removed TRUSTEE must
                  execute all documents and do all acts necessary to vest such
                  title in any successor TRUSTEE, and must promptly turn over to
                  the successor TRUSTEE, copies of all such records pertaining
                  to the Fund and to the PARTICIPANTS in THIS PLAN.

         (c)      Rights, Powers and Duties of Successor TRUSTEE.

                  Each successor TRUSTEE has all the rights, powers and duties
                  conferred upon its predecessor. No successor TRUSTEE is
                  personally liable for any act or failure to act of any
                  predecessor TRUSTEE, and, with the approval of the EMPLOYER, a
                  successor TRUSTEE may accept the statements rendered and the
                  property delivered to it by the predecessor TRUSTEE as full
                  and complete discharge to the predecessor TRUSTEE without
                  incurring any liability or responsibility for so doing.

         (d)      Payment of TRUSTEE'S Expenses.

                  The TRUSTEE may, without the direction or approval of the
                  PARTICIPANTS or the EMPLOYER, reserve from the Fund assets as
                  are necessary for payment of any expenses and compensation
                  then or thereafter due to the TRUSTEE and any sums then

                                       74
<PAGE>   75

                  or thereafter chargeable against the Fund for which the
                  TRUSTEE may be liable, but if the amount so reserved by the
                  TRUSTEE is not sufficient, the TRUSTEE is entitled to
                  reimbursement for any deficiency from the EMPLOYER.

4.16     MISCELLANEOUS

         (a)      Taxes.

                  Any and all taxes levied or assessed upon any part of the
                  TRUST are paid by the EMPLOYER, and, until paid, constitute a
                  charge upon the TRUST. To the extent possible, taxes upon
                  benefits are allocated to the PARTICIPANT'S ACCOUNT from which
                  they are paid.

         (b)      Particular Expenses.

                  Expenses related to a particular PARTICIPANT'S ACCOUNT in the
                  TRUST, including amounts billed to the EMPLOYER, may be
                  charged by the TRUSTEE against such account as if it were a
                  separate trust.

         (c)      Compensation of TRUSTEE.

                  The TRUSTEE is entitled to receive as compensation the
                  customary charges for similar trusts under its regularly
                  adopted schedule of compensation in effect at such time as the
                  services are rendered. The TRUSTEE shall be entitled to
                  receive additional compensation for valuation of the Fund at
                  any time other than the VALUATION DATE.

         (d)      Spendthrift Provision.

                  The interest of each PARTICIPANT and BENEFICIARY in the Fund
                  is held subject to a spendthrift trust unless such interest is
                  subject to a qualified domestic relations order as defined in
                  CODE SECTION 414(p).

         (e)      Separability.

                  If any provision of THIS PLAN is held by a court of competent
                  jurisdiction to be invalid or unenforceable, the remaining
                  provisions continue to be fully effective.

         (f)      Participant Direction of Investment.

                  A PARTICIPANT, if selected by the EMPLOYER in the ADOPTION
                  AGREEMENT, has the right to direct the TRUSTEE in the
                  investment or re-investment of the assets comprising the
                  PARTICIPANT'S ACCOUNT. To effect participation direction of
                  investment, the TRUSTEE and the PARTICIPANT execute the
                  Participant Direction Investment Form prescribed by

                                       75
<PAGE>   76

                  the ADMINISTRATOR before the TRUSTEE follows any PARTICIPANT
                  direction in the investment or re-investment of any part of
                  the PARTICIPANT'S ACCOUNT. The TRUSTEE is not liable for any
                  loss, resulting from a PARTICIPANT'S direction of the
                  investment or re-investment of any part of the PARTICIPANT'S
                  ACCOUNT.

         (g)      No person is obligated to see to the application of money or
                  property paid or delivered to the TRUSTEE.

4.17     TRUSTEE, NAMED FIDUCIARY

The TRUSTEE as a named Fiduciary is only responsible for the management and
control of the TRUST.

By execution of THIS PLAN the TRUSTEE accepts the TRUST created in THIS PLAN and
agrees to perform the obligations imposed on it by THIS PLAN.

                                       76
<PAGE>   77
                             ADOPTION AGREEMENT FOR

                         INWEST PENSION MANAGEMENT, INC.
                     NON-STANDARDIZED 401(K) PROFIT SHARING
                                 PLAN AND TRUST

         The undersigned Employer adopts the InWest Pension Management, Inc.
Non-Standardized 401(k) Profit Sharing Plan and Trust for those Employees who
shall qualify as Participants hereunder, to be known as the

A1       Sauer Drilling Company 401(k) Plan
         ----------------------------------
                 (Enter Plan Name)

It shall be effective as of the date specified below. The Employer hereby
selects the following Plan specifications:

CAUTION: The failure to properly fill out this Adoption Agreement may result in
         disqualification of the Plan.

EMPLOYER INFORMATION

B1       Name of Employer   Sauer Drilling Company
                          -------------------------------------

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

B2       Address  5710 West Yellowstone
                 ----------------------------------------------
                     Casper,                WY      82604-1924
                 -----------------------  -------  ------------
                      City                 State       Zip

         Telephone  (307) 472-7020
                   --------------------------------------------

B3       Employer Identification Number  83-0320012
                                         -----------

B4       Date Business Commenced
                                  ------------------

B5       TYPE OF ENTITY

         a.   ( )   S Corporation
         b.   ( )   Professional Service Corporation
         c.   (X)   Corporation
         d.   ( )   Sole Proprietorship
         e.   ( )   Partnership
         f.   ( )   Other

         AND, is the Employer a member of...
              g.    a controlled group?   ( ) Yes    (X) No
              h.    an affiliated service group?   ( ) Yes    (X) No

Copyright 1999-R InWest Pension Management, Inc.

                                       1
<PAGE>   78
B6       NAME(S) OF TRUSTEE(S)

         a.    Bruce De Boer
            --------------------------------------------------------------------

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

            --------------------------------------------------------------------
         d.    Kim Harris
            --------------------------------------------------------------------
         e.    Jack Reed
            --------------------------------------------------------------------

B7       TRUSTEES' ADDRESS

         a.   ( )   Use Employer Address

         b.   (X)    508 W. Wall, Ste. 500
                    ------------------------------------------------------------
                                              Street

                     Midland,         Texas        79701
                    ----------     -------------  -------
                      City            State         Zip

B8       LOCATION OF EMPLOYER'S PRINCIPAL OFFICE:

         a.   (X)   State   b.  ( ) Commonwealth of c. Texas and this Plan
                    and Trust shall be governed under the same.

B9 EMPLOYER FISCAL YEAR means the 12 consecutive month period:

         Commencing on a.  January 1    (e.g., January 1st) and
                          -------------
                            month  day

         ending on b.  December 31.
                      --------------
                        month   day

                                       2
<PAGE>   79
PLAN INFORMATION

C1       EFFECTIVE DATE

         This Adoption Agreement of the InWest Pension Management, Inc.
         Non-Standardized 401(k) Profit Sharing Plan and Trust shall:

          a.   (X) establish a new Plan and Trust effective as of January 1,
                   1999 (hereinafter called the "Effective Date").

          b.   ( ) constitute an amendment and restatement in its entirety of a
                   previously established qualified Plan and Trust of the
                   Employer which was effective ____ (hereinafter called the
                   "Effective Date"). Except as specifically provided in the
                   Plan, the effective date of this amendment and restatement is
                   ____ (For TRA '86 amendments, enter the first day of the
                   first Plan Year beginning in 1989).

C2 PLAN YEAR means the 12 consecutive month period:

         Commencing on a.  January 1  (e.g., January 1st) and ending on
         b.  December 31.

         IS THERE A SHORT PLAN YEAR?

         c.   (X)   No
         d.   ( )   Yes, beginning ____
                    and ending __________________________.

C3       ANNIVERSARY DATE of Plan (Annual Valuation Date)

         a.  December 31
             -------------
              month   day

C4       PLAN NUMBER assigned by the Employer (select one)

         a. (X) 001   b. ( ) 002   c. ( ) 003   d. ( ) Other _______

                                       3
<PAGE>   80
C5       NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to
         appoint an Administrator. If none is named, the Employer will become
         the Administrator.)

         a.   (X)   Employer  (Use Employer Address)

         b.   ( )   Name _____________________________________

                    Address  ( ) Use Employer Address

                           -----------------------------------
                                            ,
                           -----------------  ------- --------
                                 City          State    Zip

                    Telephone
                              --------------------------------

                    Administrator's I.D. Number
                                                --------------

C6       PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS

         a.   (X)   Employer (Use Employer Address)

         b.   ( )   Name
                         -------------------------------------
                    Address
                           -----------------------------------

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

                                       4
<PAGE>   81
ELIGIBILITY, VESTING AND RETIREMENT AGE

D1 ELIGIBLE EMPLOYEES (Plan Section 1.15) shall mean:

          a.   ( ) all Employees who have satisfied the eligibility
                   requirements.

          b.   (X) all Employees who have satisfied the eligibility requirements
                   except those checked below:

              1.    ( )    Employees paid by commissions only.
              2.    ( )    Employees hourly paid.
              3.    ( )    Employees paid by salary.
              4.    (X)    Employees whose employment is governed by a
                           collective bargaining agreement between the Employer
                           and "employee representatives" under which retirement
                           benefits were the subject of good faith bargaining.
                           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 of the Employer.
              5.    ( )    Highly Compensated Employees.
              6.    (X)    Employees who are non-resident aliens who
                           received no earned income (within the meaning of Code
                           Section 911(d)(2)) from the Employer which
                           constitutes income from sources within the United
                           States (within the meaning of Code Section
                           861(a)(3)).
              7.    ( )    Other

         NOTE:      For purposes of this section, the term Employee shall
                    include all Employees of this Employer and any leased
                    employees deemed to be Employees under Code Section 414(n)
                    or 414(o).

D2       EMPLOYEES OF AFFILIATED EMPLOYERS (Plan Section 1.16)

         Employees of Affiliated Employers:

         a.   (X)   will not or N/A
         b.   ( )   will

         be treated as Employees of the Employer adopting the Plan.

         NOTE: If D2b is elected, each Affiliated Employer should execute this
               Adoption Agreement as a Participating Employer.

                                       5
<PAGE>   82
D3       HOURS OF SERVICE (Plan Section 1.31) will be determined on the basis of
         the method selected below. Only one method may be selected. The method
         selected will be applied to all Employees covered under the Plan.

          a.   (X) On the basis of actual hours for which an Employee is paid or
                   entitled to payment.
          b.   ( ) On the basis of days worked. An Employee will be credited
                   with ten (10) Hours of Service if under the Plan such
                   Employee would be credited with at least one (1) Hour of
                   Service during the day.
          c.   ( ) On the basis of weeks worked. An Employee will be credited
                   forty-five (45) Hours of Service if under the Plan such
                   Employee would be credited with at least one (1) Hour of
                   Service during the week.
          d.   ( ) On the basis of semi-monthly payroll periods. An Employee
                   will be credited ninety-five (95) Hours of Service if under
                   the Plan such Employee would be credited with at least one
                   (1) Hour of Service during the semi-monthly payroll period.
          e.   ( ) On the basis of months worked. An Employee will be credited
                   one hundred ninety (190) Hours of Service if under the Plan
                   such Employee would be credited with at least one (1) Hour of
                   Service during the month.

                                       6
<PAGE>   83
D4       CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
         (Check either a OR b and c, and if applicable, d)

         Any Eligible Employee will be eligible to participate in the Plan if
         such Eligible Employee has satisfied the service and age requirements,
         if any, specified below:

         a.   ( )   NO AGE OR SERVICE REQUIRED.

         b.   (X)   SERVICE REQUIREMENT. (may not exceed 1 year)

              1.    ( )    None
              2.    ( )    1/2 Year of Service
              3.    ( )    1 Year of Service
              4.    (X)    Other   6 Months of Service

         NOTE:      If the Year(s) of Service selected is or includes a
                    fractional year, an Employee will not be required to
                    complete any specified number of Hours of Service to receive
                    credit for such fractional year. If expressed in Months of
                    Service, an Employee will not be required to complete any
                    specified number of Hours of Service in a particular month.

         c.   (X)   AGE REQUIREMENT (may not exceed 21)

              1.    ( )    N/A - No Age Requirement.
              2.    ( )    20 1/2
              3.    (X)    21
              4.    ( )    Other

         d.   ( ) FOR NEW PLANS ONLY - Regardless of any of the above age or
                  service requirements, any Eligible Employee who was employed
                  on the Effective Date of the Plan shall be eligible to
                  participate hereunder and shall enter the Plan as of such
                  date.

                                       7
<PAGE>   84
D5       EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2) An Eligible Employee
         shall become a Participant as of:

          a.   ( ) the first day of the Plan Year in which he met the
                   requirements.
          b.   ( ) the first day of the Plan Year in which he met the
                   requirements, if he met the requirements in the first 6
                   months of the Plan Year, or as of the first day of the next
                   succeeding Plan Year if he met the requirements in the last 6
                   months of the Plan Year.
          c.   ( ) the earlier of the first day of the seventh month or the
                   first day of the Plan Year coinciding with or next following
                   the date on which he met the requirements.
          d.   ( ) the first day of the Plan Year next following the date on
                   which he met the requirements. (Eligibility must be 1/2 Year
                   of Service or less or 1 1/2 Years of Service or less if 100%
                   immediate vesting is selected and age 20 1/2 or less.)
          e.   (X) the first day of the quarter coinciding with or next
                   following the date on which he met the requirements.
          f.   ( ) Other: _____________________, provided that an Employee who
                   has satisfied the maximum age and service requirements that
                   are permissible in Section D4 above and who is otherwise
                   entitled to participate, shall commence participation no
                   later than the earlier of (a) 6 months after such
                   requirements are satisfied, or (b) the first day of the first
                   Plan Year after such requirements are satisfied, unless the
                   Employee separates from service before such participation
                   date.

                                       8
<PAGE>   85
D6       VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))

         The vesting schedule, based on number of Years of Service, shall be as
follows:

<TABLE>
<S>           <C>   <C>
         a.   ( )   100% upon entering Plan. (Required if eligibility requirement is greater than one (1) Year of
                    Service.)

         b.   ( )     0-2  years             0%                        c. ( )  0-4  years               0%
                        3  year            100%                                  5  years             100%

         d.   ( )     0-1  year              0%                        e. ( )    1  year               25%
                        2  years            20%                                  2  years              50%
                        3  years            40%                                  3  years              75%
                        4  years            60%                                  4  years             100%
                        5  years            80%
                        6  years           100%

         f.   (X)       1  year             20%                        g. ( )  0-2  years               0%
                        2  years            40%                                  3  years              20%
                        3  years            60%                                  4  years              40%
                        4  years            80%                                  5  years              60%
                        5  years           100%                                  6  years              80%
                                                                                 7  years             100%

         h.   ( )       Other - Must be at least as liberal as either c. or g. above.
</TABLE>

                        Years of Service                          Percentage

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

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

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

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

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

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

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

D7       FOR AMENDED PLANS (Plan Section 6.4(f)) If the vesting schedule has
         been amended to a less favorable schedule, enter the pre-amended
         schedule below:

         a.   ( )   Vesting schedule has not been amended or amended schedule is
                    more favorable in all years.

         b.   ( )   Years of Service                              Percentage

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

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

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

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

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

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

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

                                       9
<PAGE>   86
D8       TOP HEAVY VESTING (Plan Section 6.4(c)) If this Plan becomes a Top
         Heavy Plan, the following vesting schedule, based on number of Years of
         Service, for such Plan Year and each succeeding Plan Year, whether or
         not the Plan is a Top Heavy Plan, shall apply and shall be treated as a
         Plan amendment pursuant to this Plan. Once effective, this schedule
         shall also apply to any contributions made prior to the effective date
         of Code Section 416 and/or before the Plan became a Top Heavy Plan.

         a.   (X)   N/A (D6a, b, d, e or f was selected)

         b.   ( )   0-1  year              0%          c. ( )  0-2 years   0%
                      2  years            20%                    3 years 100%
                      3  years            40%
                      4  years            60%
                      5  years            80%
                      6  years           100%

         NOTE:      This section does not apply to the Account balances of any
                    Participant who does not have an Hour of Service after the
                    Plan has initially become top heavy. Such Participant's
                    Account balance attributable to Employer contributions and
                    Forfeitures will be determined without regard to this
                    section.

D9       VESTING (Plan Section 6.4(h)) In determining Years of Service for
         vesting purposes, Years of Service attributable to the following shall
         be EXCLUDED:

         a.   ( )   Service prior to the Effective Date of the Plan or a
                    predecessor plan.
         b.   (X)   N/A.
         c.   (X)   Service prior to the time an Employee attained age 18.
         d.   ( )   N/A.

D10      PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER

         a.   (X)   No.
         b.   ( )   Yes: Years of Service with ____ shall be recognized for the
                    purpose of this Plan.

         NOTE:      If the predecessor Employer maintained this qualified Plan,
                    then Years of Service with such predecessor Employer shall
                    be recognized pursuant to Section 1.74 and b. must be
                    marked.

D11      NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.42) means:

         a.   (X)   the date a Participant attains his 65 birthday.
                    (not to exceed 65th)
         b.   ( )   the later of the date a Participant attains his __ birthday
                    (not to exceed 65th) or the c. ____ (not to exceed 5th)
                    anniversary of the first day of the Plan Year in which
                    participation in the Plan commenced.

                                       10
<PAGE>   87
D12 NORMAL RETIREMENT DATE (Plan Section 1.43) shall commence:

         a.   ( )   as of the Participant's "NRA."

              OR (must select b. or c. AND 1. or 2.)

         b.   (X)   as of the first day of the month...
         c.   ( )   as of the Anniversary Date...

              1.    (X)    coinciding with or next following the Participant's
                           "NRA."
              2.    ( )    nearest the Participant's "NRA."

D13 EARLY RETIREMENT DATE (Plan Section 1.12) means the:

         a.   (X)   No Early Retirement provision provided.
         b.   ( )   date on which a Participant...
         c.   ( )   first day of the month coinciding with or next following the
                    date on which a Participant...
         d.   ( )   Anniversary Date coinciding with or next following the date
                    on which a Participant...

         AND, if b., c. or d. was selected...

              1.    ( )    attains his ____ birthday and has
              2.    ( )    completed at least ____ Years of Service.

                                       11
<PAGE>   88
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS

E1       a.   COMPENSATION (Plan Section 1.9) with respect to any Participant
              means:

              1.    ( )    "415 Compensation."
              2.    (X)    Compensation reportable as wages on Form W-2.

         b.   COMPENSATION shall be

              1.    (X)    actually paid (must be selected if Plan is
                           integrated)
              2.    ( )    accrued

         c.   HOWEVER, FOR NON-INTEGRATED PLANS, Compensation shall exclude
              (select all that apply):

              1.    (X)    N/A. No exclusions
              2.    ( )    overtime
              3.    ( )    bonuses
              4.    ( )    commissions
              5.    ( )    other ____

         d.   FOR PURPOSES OF THIS SECTION E1, Compensation shall be based on:

              1.    (X)    the Plan Year.
              2.    ( )    the Fiscal Year coinciding with or ending within the
                           Plan Year.
              3.    ( )    the Calendar Year coinciding with or ending within
                           the Plan Year.

         NOTE:      The Limitation Year shall be the same as the year on which
                    Compensation is based.

         e.   HOWEVER, for an Employee's first year of participation,
              Compensation shall be recognized as of:

              1.    ( )    the first day of the Plan Year.
              2.    (X)    the date the Participant entered the Plan.

         f.   IN ADDITION, COMPENSATION and "414(s) Compensation"
              1. (X) shall 2. ( ) shall not include compensation which is not
              currently includible in the Participant's gross income by reason
              of the application of Code Sections 125, 402(a)(8), 402(h)(1)(B)
              or 403(b).

                                       12
<PAGE>   89
E2       SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION
         (Plan Section 11.2) Each Employee may elect to have his Compensation
         reduced by:

         a.   ( )   ____%
         b.   ( )   up to ____%
         c.   ( )   from ____% to ____%
         d.   (X)   up to the maximum percentage allowable not to exceed the
                    limits of Code Sections 401(k), 404 and 415.

         AND...

         e.   (X)   A Participant may elect to commence salary reductions as
                    of the first day of the Plan Year Quarter coinciding with or
                    next following date eligibility requirements were met (ENTER
                    AT LEAST ONE DATE OR PERIOD). A Participant may modify the
                    amount of salary reductions as of the first day of each Plan
                    Year Quarter (ENTER AT LEAST ONE DATE OR PERIOD).

         AND...

              Shall cash bonuses paid within 2 1/2 months after the end of the
              Plan Year be subject to the salary reduction election?

         f.   ( )   Yes
         g.   (X)   No

                                       13
<PAGE>   90
E3       FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION
         (Plan Section 11.1(b))

         a.   ( )   N/A. There shall be no matching contributions.
         b.   ( )   The Employer shall make matching contributions equal to
                    ____% (e.g. 50%) of the Participant's salary reductions.
         c.   (X)   The Employer may make matching contributions equal to a
                    discretionary percentage, to be determined by the Employer,
                    of the Participant's salary reductions.
         d.   ( )   The Employer shall make matching contributions equal to the
                    sum of ____% of the portion of the Participant's salary
                    reduction which does not exceed ____% of the Participant's
                    Compensation plus ____% of the portion of the Participant's
                    salary reduction which exceeds ____% of the Participant's
                    Compensation, but does not exceed ____% of the Participant's
                    Compensation.
         e.   ( )   The Employer shall make matching contributions equal to the
                    percentage determined under the following schedule:

                    Participant's Total                  Matching Percentage
                     Years of Service

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

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

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

                                       14
<PAGE>   91
         FOR PLANS WITH MATCHING CONTRIBUTIONS

         f.   (X)   Matching contributions g. ( )  shall  h. (X)  shall not be
                    used in satisfying the deferral percentage tests. (If used,
                    full vesting and restrictions on withdrawals will apply and
                    the match will be deemed to be an Elective Contribution).

         i.   (X)   Shall a Year of Service be required in order to share in the
                    matching contribution?

              With respect to Plan Years beginning after 1989...
                    1.   ( )    Yes (Could cause Plan to violate minimum
                                participation and coverage requirements under
                                Code Sections 401(a)(26) and 410)
                    2.   (X)    No

              With respect to Plan Years beginning before 1990...
                    1.   (X)    N/A, new Plan, or same as years beginning after
                                1989
                    2.   ( )    Yes
                    3.   ( )    No

         j.   ( )   In determining matching contributions, only salary
                    reductions up to ____% of a Participant's Compensation will
                    be matched.   k. (X)  N/A
         l.   ( )   The matching contribution made on behalf of a Participant
                    for any Plan Year shall not exceed $____.  m. (X)  N/A
         n.   (X)   Matching contributions shall be made on behalf of
                    1.   (X)    all Participants.
                    2.   ( )    only Non-Highly Compensated Employees.

                                       15
<PAGE>   92
E4       WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED (OTHER THAN A
         DISCRETIONARY MATCHING OR QUALIFIED NON-ELECTIVE CONTRIBUTION) (Plan
         Section 11.1(c))?

         a.   ( )   No.
         b.   ( )   Yes, the Employer may make a discretionary contribution out
                    of its current or accumulated Net Profit.
         c.   (X)   Yes, the Employer may make a discretionary contribution
                    which is not limited to its current or accumulated Net
                    Profit.

         IF YES (b. or c. is selected above), the Employer's discretionary
         contribution shall be allocated as follows:

         d.   (X)   FOR A NON-INTEGRATED PLAN

         The Employer discretionary contribution for the Plan Year shall be
         allocated in the same ratio as each Participant's Compensation bears to
         the total of such Compensation of all Participants.

         e.   ( )   FOR AN INTEGRATED PLAN

         The Employer discretionary contribution for the Plan Year shall be
         allocated in accordance with Plan Section 4.3(b)(2) based on a
         Participant's Compensation in excess of:

              f.    ( )    The Taxable Wage Base.
              g.    ( )    The greater of $10,000 or 20% of the Taxable Wage
                           Base.
              h.    ( )    ____% of the Taxable Wage Base. (See Note below)
              i.    ( )    $____. (see Note below)

         NOTE:      The integration percentage of 5.7% shall be reduced to:

                    1.     4.3% if h. or i. above is more than 20% and less than
                           or equal to 80% of the Taxable Wage Base.
                    2.     5.4% if h. or i. above is less than 100% and more
                           than 80% of the Taxable Wage Base.

E5       QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 11.1(d))

         a.   ( )   N/A. There shall be no Qualified Non-Elective Contributions
                    except as provided in Sections 11.5(b) and 11.7(h).
         b.   ( )   The Employer shall make a Qualified Non-Elective
                    Contribution equal to ____% of the total Compensation of all
                    Participants eligible to share in the allocations.
         c.   (X)   The Employer may make a Qualified Non-Elective Contribution
                    in an amount to be determined by the Employer.

                                       16
<PAGE>   93
E6       FORFEITURES (Plan Section 4.3(e))

         a.   Forfeitures of contributions other than matching contributions
              shall be...

              1.    ( )    added to the Employer's contribution under the Plan.
              2.    (X)    allocated to all Participants eligible to share
                           in the allocations in the same proportion that each
                           Participant's Compensation for the year bears to the
                           Compensation of all Participants for such year.

         b.   Forfeitures of matching contributions shall be...

              1.    ( )    N/A. No matching contributions or match is fully
                           vested.
              2.    (X)    used to reduce the Employer's matching contribution.
              3.    ( )    allocated to all Participants eligible to share in
                           the allocations in proportion to
                           each such Participant's Compensation for the year.
              4.    ( )    allocated to all Non-Highly Compensated Employee's
                           eligible to share in the allocations in proportion to
                           each such Participant's Compensation for the year.

E7       ALLOCATIONS TO ACTIVE PARTICIPANTS (Plan Section 4.3) With respect to
         Plan Years beginning after 1989, a Participant...

         a.   ( )   shall (Plan may become discriminatory)
         b.   (X)   shall not

         be required to complete a Year of Service in order to share in any
         Non-Elective Contributions (other than matching contributions) or
         Qualified Non-Elective Contributions. For Plan Years beginning before
         1990, the Plan provides that a Participant must complete a Year of
         Service to share in the allocations.

                                       17
<PAGE>   94
E8       ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.3(k))
         Any Participant who terminated employment during the Plan Year (i.e.
         not actively employed on the last day of the Plan Year) for reasons
         other than death, Total and Permanent Disability or retirement:

         a.   With respect to Employer Non-Elective Contributions (other than
              matching), Qualified Non-Elective Contributions, and Forfeitures:

              1.    For Plan Years beginning after 1989,

                    i.      ( )    N/A, Plan does not provide for such
                                   contributions.
                    ii.     ( )    shall share in the allocations provided such
                                   Participant completed more than
                                   500 Hours of Service.
                    iii.    ( )    shall share in such allocations provided such
                                   Participant completed a Year of Service.
                    iv.     (X)    shall not share in such allocations,
                                   regardless of Hours of Service.

              2.    For Plan Years beginning before 1990,

                    i.      (X)    N/A, new Plan, or same as for Plan Years
                                   beginning after 1989.
                    ii.     ( )    shall share in such allocations provided such
                                   Participant completed a Year of Service.
                    iii.    ( )    shall not share in such allocations,
                                   regardless of Hours of Service.

         NOTE:      If a.1.iii or iv is selected, the Plan could violate minimum
                    participation and coverage requirements under Code Sections
                    401(a)(26) and 410.

                                       18
<PAGE>   95
         b.   With respect to the allocation of Employer Matching Contributions,
              a Participant:

              1.    For Plan Years beginning after 1989,

                    i.      ( )    N/A, Plan does not provide for matching
                                   contributions.
                    ii.     (X)    shall share in the allocations, regardless of
                                   Hours of Service.
                    iii.    ( )    shall share in the allocations provided such
                                   Participant completed more than
                                   500 Hours of Service.
                    iv.     ( )    shall share in such allocations provided such
                                   Participant completed a Year of
                                   Service.
                    v.      ( )    shall not share in such allocations,
                                   regardless of Hours of Service.

              2.    For Plan Years beginning before 1990,

                    i.      (X)    N/A, new Plan, or same as years beginning
                                   after 1989.
                    ii.     ( )    shall share in the allocations, regardless of
                                   Hours of Service.
                    iii.    ( )    shall share in such allocations provided such
                                   Participant completed a Year of Service.
                    iv.     ( )    shall not share in such allocations,
                                   regardless of Hours of Service.

         NOTE:      If b.1.iv or v is selected, the Plan could violate minimum
                    participation and coverage requirements under Code Section
                    401(a)(26) and 410.

E9       ALLOCATIONS OF EARNINGS (Plan Section 4.3(c))

         Allocations of earnings with respect to amounts contributed to the Plan
         after the previous Anniversary Date or other valuation date shall be
         determined...

         a.   ( )   by using a weighted average.
         b.   (X)   by treating one-half of all such contributions as being
                    a part of the Participant's nonsegregated account balance as
                    of the previous Anniversary Date or valuation date.
         c.   ( )   by using the method specified in Section 4.3(c).
         d.   ( )   other

                                       19
<PAGE>   96
E10      LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)

         a.   If any Participant is or was covered under another qualified
              defined contribution plan maintained by the Employer, or if the
              Employer maintains a welfare benefit fund, as defined in Code
              Section 419(e), or an individual medical account, as defined in
              Code Section 415(l)(2), under which amounts are treated as Annual
              Additions with respect to any Participant in this Plan:

              1.    (X)    N/A.
              2.    ( )    The provisions of Section 4.4(b) of the Plan will
                           apply.
              3.    ( )    Provide the method under which the Plans will limit
                           total Annual Additions to the Maximum Permissible
                           Amount, and will properly reduce any Excess Amounts,
                           in a manner that precludes Employer discretion.

         b.   If any Participant is or ever has been a Participant in a defined
              benefit plan maintained by the Employer:

              1.    (X)    N/A.
              2.    ( )    In any Limitation Year, the Annual Additions credited
                           to the Participant under this Plan may not cause the
                           sum of the Defined Benefit Plan Fraction and the
                           Defined Contribution Fraction to exceed 1.0. If the
                           Employer's contribution that would otherwise be made
                           on the Participant's behalf during the limitation
                           year would cause the 1.0 limitation to be exceeded,
                           the rate of contribution under this Plan will be
                           reduced so that the sum of the fractions equals 1.0.
                           If the 1.0 limitation is exceeded because of an
                           Excess Amount, such Excess Amount will be reduced in
                           accordance with Section 4.4(a)(4) of the Plan.
              3.    ( )    Provide the method under which the Plans involved
                           will satisfy the 1.0 limitation in a manner that
                           precludes Employer discretion.

E11      DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))
         Distributions upon the death of a Participant prior to receiving any
         benefits shall...

         a.   (X)   be made pursuant to the election of the Participant or
                    beneficiary.
         b.   ( )   begin within 1 year of death for a designated beneficiary
                    and be payable over the life (or over a period not exceeding
                    the life expectancy) of such beneficiary, except that if the
                    beneficiary is the Participant's spouse, begin within the
                    time the Participant would have attained age 70 1/2.
         c.   ( )   be made within 5 years of death for all beneficiaries.
         d.   ( )   other ____

                                       20
<PAGE>   97
E12      LIFE EXPECTANCIES (Plan Section 6.5(f)) for minimum distributions
         required pursuant to Code Section 401(a)(9) shall...

         a.   (X)   be recalculated at the Participant's election.
         b.   ( )   be recalculated.
         c.   ( )   not be recalculated.

E13      CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
         Distributions upon termination of employment pursuant to Section 6.4(a)
         of the Plan shall not be made unless the following conditions have been
         satisfied:

         a.   ( )   N/A. Immediate distributions may be made at Participant's
                    election.
         b.   ( )   The Participant has incurred ____ 1-Year Break(s) in
                    Service.
         c.   ( )   The Participant has reached his or her Early or Normal
                    Retirement Age.
         d.   (X)   Distributions may be made at the Participant's election on
                    or after the Anniversary Date following termination of
                    employment.
         e.   ( )   Other ____

E14      FORM OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6)
         Distributions under the Plan may be made...

         a.   1.    (X)    in lump sums.
              2.    ( )    in lump sums or installments.

         b.   AND, pursuant to Plan Section 6.13,

              1.    (X)    no annuities are allowed (avoids Joint and Survivor
                           rules).
              2.    ( )    annuities are allowed (Plan Section 6.13 shall not
                           apply).

         NOTE:      b.1. above may not be elected if this is an amendment to a
                    plan which permitted annuities as a form of distribution or
                    if this Plan has accepted a plan to plan transfer of assets
                    from a plan which permitted annuities as a form of
                    distribution.

         c.   AND, may be made in...

              1.    ( )    cash only (except for insurance or annuity
                           contracts).
              2.    (X)    cash or property.

                                       21
<PAGE>   98
TOP HEAVY REQUIREMENTS

F1       TOP HEAVY DUPLICATIONS (Plan Section 4.3(i)): When a Non-Key Employee
         is a Participant in this Plan and a Defined Benefit Plan maintained by
         the Employer, indicate which method shall be utilized to avoid
         duplication of top heavy minimum benefits.

         a.   (X)   The Employer does not maintain a Defined Benefit Plan.
         b.   ( )   A minimum, non-integrated contribution of 5% of each Non-Key
                    Employee's total Compensation shall be provided in this
                    Plan, as specified in Section 4.3(i). (The Defined Benefit
                    and Defined Contribution Fractions will be computed using
                    100% if this choice is selected.)
         c.   ( )   A minimum, non-integrated contribution of 7 1/2% of each
                    Non-Key Employee's total Compensation shall be provided in
                    this Plan, as specified in Section 4.3(i). (If this choice
                    is selected, the Defined Benefit and Defined Contribution
                    Fractions will be computed using 125% for all Plan Years in
                    which the Plan is Top Heavy, but not Super Top Heavy.)
         d.   ( )   Specify the method under which the Plans will provide top
                    heavy minimum benefits for Non-Key Employees that will
                    preclude Employer discretion and avoid inadvertent
                    omissions, including any adjustments required under Code
                    Section 415(e).

F2       PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for Top Heavy
         purposes where the Employer maintains a Defined Benefit Plan in
         addition to this Plan, shall be based on...

         a.   (X)   N/A. The Employer does not maintain a defined benefit plan.

         b.   ( )   Interest Rate:

                    Mortality Table:

F3       TOP HEAVY DUPLICATIONS: Employer maintaining two (2) or more Defined
         Contribution Plans.

         a.   (X)   N/A.
         b.   ( )   A minimum, non-integrated contribution of 3% of each Non-Key
                    Employee's total Compensation shall be provided in the Money
                    Purchase Plan (or other plan subject to Code Section 412),
                    where the Employer maintains two (2) or more non-paired
                    Defined Contribution Plans.
         c.   ( )   Specify the method under which the Plans will provide top
                    heavy minimum benefits for Non-Key Employees that will
                    preclude Employer discretion and avoid inadvertent
                    omissions, including any adjustments required under Code
                    Section 415(e).

                                       22
<PAGE>   99
MISCELLANEOUS

G1       LOANS TO PARTICIPANTS (Plan Section 7.4)

         a.   ( )   Yes, loans may be made up to $50,000 or 1/2 Vested interest.
         b.   (X)   No, loans may not be made.

         If YES, (check all that apply)...

         c.   ( )   loans shall be treated as a Directed Investment.
         d.   ( )   loans shall only be made for hardship or financial
                    necessity.
         e.   ( )   the minimum loan shall be $1,000.
         f.   ( )   $10,000 de minimis loans may be made regardless of Vested
                    interest. (If selected, Plan may need security in addition
                    to Vested interest.)

         NOTE:      Department of Labor Regulations require the adoption of a
                    SEPARATE written loan program setting forth the requirements
                    outlined in Plan Section 7.4.

G2       DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.8) are permitted for the
         interest in any one or more accounts.

         a.   (X)   Yes, regardless of the Participant's Vested interest in the
                    Plan.
         b.   ( )   Yes, but only with respect to the Participant's Vested
                    interest in the Plan.
         c.   ( )   Yes, but only with respect to those accounts which are 100%
                    Vested.
         d.   ( )   No directed investments are permitted.

G3       TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.6)

         a.   (X)   Yes, transfers from qualified plans (and rollovers) will be
                    allowed.
         b.   ( )   No, transfers from qualified plans (and rollovers) will not
                    be allowed.

         AND, transfers shall be permitted...

         c.   (X)   from any Employee, even if not a Participant.
         d.   ( )   from Participants only.

G4       EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.7)

         a.   ( )   Yes, Voluntary Contributions are allowed subject to the
                    limits of Section 4.9.
         b.   (X)   No, Voluntary Contributions will not be allowed.

         NOTE:      TRA '86 subjects voluntary contributions to strict
                    discrimination rules.

                                       23
<PAGE>   100
G5       HARDSHIP DISTRIBUTIONS (Plan Sections 6.11 and 11.8)

         a.   ( )   Yes, from any accounts which are 100% Vested.
         b.   ( )   Yes, from Participant's Elective Account only.
         c.   ( )   Yes, but limited to the Participant's Account only.
         d.   (X)   No.

         NOTE:      Distributions from a Participant's Elective Account are
                    limited to the portion of such account attributable to such
                    Participant's Deferred Compensation and earnings
                    attributable thereto up to December 31, 1988. Also hardship
                    distributions are not permitted from a Participant's
                    Qualified Non-Elective Account.

G6       PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)

         a.   ( )   If a Participant has reached the age of ____, distributions
                    may be made, at the Participant's election, from any
                    accounts which are 100% Vested without requiring the
                    Participant to terminate employment.

         b.   (X)   No pre-retirement distribution may be made.

         NOTE:      Distributions from a Participant's Elective Account and
                    Qualified Non-Elective Account are not permitted prior to
                    age 59 1/2.

G7       LIFE INSURANCE (Plan Section 7.2(d)) may be purchased with Plan
         contributions.

         a.   (X)   No life insurance may be purchased.
         b.   ( )   Yes, at the option of the Administrator.
         c.   ( )   Yes, at the option of the Participant.

         AND, the purchase of initial or additional life insurance shall be
         subject to the following limitations: (select all that apply)

         d.   ( )   N/A, no limitations.
         e.   ( )   each initial Contract shall have a minimum face amount of
                    $____.
         f.   ( )   each additional Contract shall have a minimum face amount of
                    $____.
         g.   ( )   the Participant has completed ____ Years of Service.
         h.   ( )   the Participant has completed ____ Years of Service while a
                    Participant in the Plan.
         i.   ( )   the Participant is under age ____ on the Contract issue
                    date.
         j.   ( )   the maximum amount of all Contracts on behalf of a
                    Participant shall not exceed $____.
         k.   ( )   the maximum face amount of life insurance shall be $____.

                                       24
<PAGE>   101
The adopting Employer may not rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence that the plan is qualified
under Code Section 401. In order to obtain reliance with respect to plan
qualification, the Employer must apply to the appropriate Key District Office
for a determination letter.

This Adoption Agreement may be used only in conjunction with basic Plan document
01. This Adoption Agreement and the basic Plan document shall together be known
as InWest Pension Management, Inc. Non-Standardized 401(k) Profit Sharing Plan
and Trust 01-001.

The adoption of this Plan, its qualification by the IRS, and the related tax
consequences are the responsibility of the Employer and its independent tax and
legal advisors.

InWest Pension Management, Inc. will notify the Employer of any amendments made
to the Plan or of the discontinuance or abandonment of the Plan provided this
Plan has been acknowledged by InWest Pension Management, Inc. or its authorized
representative. Furthermore, in order to be eligible to receive such
notification, we agree to notify InWest Pension Management, Inc. of any change
in address.

                                       25
<PAGE>   102
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to be
executed on June 15, 1999. Furthermore, this Plan may not be used unless
acknowledged by InWest Pension Management, Inc. or its authorized
representative.

EMPLOYER:

Sauer Drilling Company

By: /s/ T.W. DYK
   ---------------------------
     T.W. Dyk, President

         KIM HARRIS
------------------------------
          TRUSTEE

         JACK REED
------------------------------
          TRUSTEE

      BRUCE R. DEBOER
------------------------------
          TRUSTEE

PARTICIPATING EMPLOYER:

           N/A               .
------------------------------
      (enter name)

By:
   ---------------------------

                                       26
<PAGE>   103
This Plan may not be used, and shall not be deemed to be a Regional Prototype
Plan, unless an authorized representative of InWest Pension Management, Inc. has
acknowledged the use of the Plan. Such acknowledgment is for administerial
purposes only. It acknowledges that the Employer is using the Plan but does not
represent that this Plan, including the choices selected on the Adoption
Agreement, has been reviewed by a representative of the sponsor or constitutes a
qualified retirement plan.

InWest Pension Management, Inc.

By:
   -----------------------

                                       27
<PAGE>   104

                     TOM BROWN, INC. 401(k) RETIREMENT PLAN

<PAGE>   105
                     TOM BROWN, INC. 401(k) RETIREMENT PLAN

                                Table of Contents

<TABLE>
<CAPTION>
Section                                                                                                        Page
-------                                                                                                        ----
<S>      <C>                                                                                                   <C>
1.       Name of Plan; Effective Date.............................................................................1

2.       Definitions..............................................................................................1
         2.1      "Anniversary Date"..............................................................................1
         2.2      "Code"..........................................................................................1
         2.3      "Committee".....................................................................................1
         2.4      "Company".......................................................................................1
         2.5      "Compensation"..................................................................................1
         2.6      "Computation Period"............................................................................2
         2.7      "Disability"....................................................................................2
         2.8      "Employee"......................................................................................2
         2.9      "Employment Beginning Date".....................................................................2
         2.10     "Fund" or "Funds"...............................................................................2
         2.11     "Highly Compensated Employee"...................................................................2
         2.12     "Hour of Service"...............................................................................3
         2.13     "Income"........................................................................................4
         2.14     "Non-Highly Compensated Employee"...............................................................4
         2.15     "Normal Retirement Age".........................................................................4
         2.16     "One-Year Break in Service".....................................................................4
         2.17     "Participating Employee" and "Participant"......................................................5
         2.18     "this Plan".....................................................................................5
         2.19     "Plan Year".....................................................................................5
         2.20     "Pooled Investment Account".....................................................................5
         2.21     "Qualified Non-Elective Contribution"...........................................................5
         2.22     "Service".......................................................................................5
         2.23     "Trust".........................................................................................5
         2.24     "Trustee".......................................................................................5
         2.25     "Valuation Date"................................................................................6
         2.26     "Vesting Year of Service".......................................................................6

3.       Purpose..................................................................................................6

4.       Plan Entry Requirements..................................................................................6

5.       Contributions............................................................................................7
         5.1      Salary Reduction Contributions..................................................................7
         5.2      Matching Company Contributions..................................................................8
         5.3      Discretionary TOM BROWN, INC. Contributions.....................................................9
         5.4      Rollover Contributions..........................................................................9
</TABLE>

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TOM BROWN, INC. 401(k) Retirement Plan - Table of Contents        Page iii of iv
<PAGE>   106
<TABLE>
<S>      <C>                                                                                                   <C>
6.       Withdrawals.............................................................................................10
         6.1      Age 59-1/2.....................................................................................10
         6.2      Hardship.......................................................................................10
         6.3      Conditions for Hardship Distribution...........................................................11
         6.4      Available Other Resources......................................................................11
         7.1      Actual Deferral Percentage Tests...............................................................11
         7.2      Actual Contribution Percentage Tests...........................................................13
                  A.       The "Actual Contribution Percentage"..................................................13
                  B.       The excess of the "Actual Contribution Percentage"....................................13
                  C.       Adjustment to Actual Deferral Percentage Tests........................................14
                  E.       Safe Harbor Nondiscrimination Rules...................................................15
                  F.       Adjustment to Actual Contribution Percentage Tests....................................16
                  G.       Safe Harbor Nondiscrimination Rules...................................................17
                           (1)      Salary Reduction Contribution Safe Harbor....................................17
                           (2)      Matching TOM BROWN, INC. Contribution Safe Harbor............................18

8.       Selection of Investments; Employee Accounts and Allocation of Benefits..................................18
         8.1      Establishment of Investment Funds..............................................................18
         8.2      Selections.....................................................................................19
         8.3      Separate Records...............................................................................19
         8.4      Allocation of Income and Expenses..............................................................20
         8.5      Revaluation of Assets..........................................................................20
         8.6      Unit Accounting................................................................................20
         8.7      Allocation of Contributions....................................................................21
         8.8      Limitation on Annual Additions.................................................................21
         8.9      Combination With Other Plans...................................................................22
         8.10     Code Section 415 Definitions...................................................................23
                  A.       Annual additions......................................................................23
                  B.       Compensation..........................................................................24
                  C.       Defined benefit fraction..............................................................25
                  D.       Defined contribution dollar limitation................................................25
                  E.       Defined contribution fraction.........................................................25
                  F.       Employer..............................................................................25
                  G.       Excess amount.........................................................................25
                  H.       Highest average compensation..........................................................25
                  I.       Limitation year.......................................................................25
                  J.       Maximum permissible amount............................................................26
                  K.       Projected Annual Benefit..............................................................26

9.       Retirement and Severance................................................................................26
         9.1      Normal Retirement, Etc.........................................................................26
         9.2      Vested Benefits; Termination of Employment.....................................................26
         9.3      Restoration of Vesting Service and Forfeited Amounts...........................................27
         9.4      Treatment of Forfeitures.......................................................................28

10.      Distribution of Benefits................................................................................28
</TABLE>

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TOM BROWN, INC. 401(k) Retirement Plan - Table of Contents         Page iv of iv
<PAGE>   107
<TABLE>
<S>      <C>                                                                                                   <C>
         10.1     Normal Form of Payment.........................................................................28
         10.2     Alternative Form of Payment....................................................................29
         10.3     Other Rules for Beginning and Duration of Benefits.............................................29
         10.4     Death Benefits; Beneficiary Designation; Distribution of Death Benefits........................30
         10.5     Small Distributions............................................................................30
         10.6     Waiver of Form of Benefit; Notification........................................................30
         10.7     Segregated Accounts............................................................................31
         10.8     Location of Participant or Beneficiary Unknown.................................................32
         10.9     Special Distribution Rules Applicable to Qualified Domestic Relations Order                    32
         10.10    Direct Rollovers...............................................................................32
                  A.       Eligible rollover distribution........................................................32
                  B.       Eligible retirement plan..............................................................32
                  C.       Distributee...........................................................................33
                  D.       Direct rollover.......................................................................33

11.      Loans to Participating Employees........................................................................33

12.      Spendthrift Clause......................................................................................34

13.      Administration of Plan Trust............................................................................35

14.      Administrative Committee................................................................................35

15.      Allocation of Responsibilities..........................................................................36
         15.1     Administrative Responsibilities................................................................36
         15.2     Management of Plan Assets......................................................................36
         15.3     Trustee and Investment Managers................................................................37
         15.4     Delegation of Fiduciary Responsibilities.......................................................37

16.      Amendments..............................................................................................37

17.      Termination of Contributions............................................................................37

18.      Merger or Consolidation of Plan, Transfer of Plan Assets................................................38

19.      Top-Heavy Provisions....................................................................................38
         19.1     Determination of Top-Heavy Status..............................................................38
         19.2     Minimum Allocations............................................................................39
         19.3     Effect on Code Section 415 Limitations.........................................................40

20.      Expenses of Administration..............................................................................40

21.      Rights of Participants..................................................................................40

22.      Claims Procedure........................................................................................40
</TABLE>

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TOM BROWN, INC. 401(k) Retirement Plan - Table of Contents          Page v of iv
<PAGE>   108
<TABLE>
<S>      <C>                                                                                                   <C>
23.      Construction............................................................................................41

24.      Defense of Plan.........................................................................................41

25.      Governing Law...........................................................................................41

26.      Mistaken Contributions, Etc.............................................................................41

27.      Plan Administrator; Legal Agent.........................................................................42
</TABLE>

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TOM BROWN, INC. 401(k) Retirement Plan - Table of Contents         Page vi of iv

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