Document:

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                                                                     Exhibit 4.3

                          PAINEWEBBER 401(k) PLUS PLAN

               (As Amended and Restated Effective January 1, 1999)
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                                TABLE OF CONTENTS

<TABLE>
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SECTION                                                                                               PAGE
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                                    ARTICLE I

INTRODUCTION ......................................................................................      1
1.1.            Name ..............................................................................      1
1.2.            Purpose ...........................................................................      1
1.3.            Effective Date ....................................................................      1
1.4.            Type of Plan ......................................................................      1

                                   ARTICLE II

DEFINITIONS .......................................................................................      2
2.1.            Definitions .......................................................................      2
                Accounts ..........................................................................      2
                Affiliated Employer ...............................................................      2
                After-Tax Contributions ...........................................................      2
                Automated Response System .........................................................      2
                Basic Profit Sharing Contributions ................................................      3
                Before-Tax Contributions ..........................................................      3
                Beneficiary .......................................................................      3
                Benefits Administration Committee .................................................      3
                Board .............................................................................      3
                Business Day ......................................................................      3
                Cash-Out Amount ...................................................................      3
                Code ..............................................................................      3
                Committee .........................................................................      4
                Common Stock ......................................................................      4
                Common Stock Fund .................................................................      4
                Company ...........................................................................      4
                Company Account ...................................................................      4
                Company Contributions .............................................................      4
                Company Profit ....................................................................      4
                Compensation ......................................................................      4
                Direct Rollover ...................................................................      5
                Disability ........................................................................      5
                Distributee .......................................................................      5
                Early Retirement Date .............................................................      5
                Effective Date ....................................................................      5
                Electing Grandfathered Participant ................................................      6
                Eligible Employee .................................................................      6
                Eligible Retirement Plan ..........................................................      6
                Eligible Rollover Distribution ....................................................      7
</TABLE>

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<TABLE>
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                Employee ..........................................................................      7
                Employee Account ..................................................................      7
                Employer ..........................................................................      7
                Employment Commencement Date ......................................................      7
                ERISA .............................................................................      7
                Executive Committee ...............................................................      8
                Financial Hardship ................................................................      8
                Five-Percent Owner ................................................................      8
                Five-Year Period of Severance .....................................................      8
                Highly Compensated Employee .......................................................      8
                Hour of Service ...................................................................      9
                Investment Committee ..............................................................      9
                Investment Funds ..................................................................      9
                Loan Need .........................................................................      9
                Matching Contribution Account .....................................................      9
                Matching Contributions ............................................................      9
                Military Leave ....................................................................     10
                Non-Highly Compensated Employee ...................................................     10
                PaineWebber .......................................................................     10
                Parental Leave ....................................................................     10
                Participant .......................................................................     10
                Paysop Contributions ..............................................................     11
                Period of Service .................................................................     11
                Period of Severance ...............................................................     11
                Plan ..............................................................................     11
                Plan Administrator ................................................................     11
                Plan Loan .........................................................................     11
                Plan Year .........................................................................     11
                Prior Plan ........................................................................     11
                Profit Sharing Contribution Account ...............................................     11
                Profit Sharing Contributions ......................................................     12
                PWI ...............................................................................     12
                Qualified Domestic Relations Order or QDRO ........................................     12
                Reemployment Commencement Date ....................................................     12
                Required Beginning Date ...........................................................     12
                Retirement Age ....................................................................     12
                Returning Veteran .................................................................     12
                Rollover Account ..................................................................     12
                Rollover Contribution .............................................................     12
                Service ...........................................................................     12
                Severance Date ....................................................................     14
                Spousal Consent ...................................................................     14
                Spouse ............................................................................     14
                Supplemental Profit Sharing Contributions .........................................     14
                Top-Paid Group of Employees .......................................................     14
</TABLE>

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<TABLE>
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                Trust Agreement ...................................................................     14
                Trust Fund ........................................................................     15
                Trustee ...........................................................................     15
                USERRA ............................................................................     15
                Valuation Date ....................................................................     15
                Vested Account Balance ............................................................     15
2.2.            Rules of Construction .............................................................     15

ARTICLE III

ELIGIBILITY AND PARTICIPATION .....................................................................     16
3.1.            Eligibility .......................................................................     16
3.2.            Commencement of Participation .....................................................     16
3.3.            Ineligible Employees ..............................................................     16

                                   ARTICLE IV

BEFORE-TAX CONTRIBUTIONS AND AFTER-TAX CONTRIBUTIONS ..............................................     17
4.1.            Before-Tax Contributions ..........................................................     17
4.2.            After-Tax Contributions ...........................................................     17
4.3.            Limit on Before-Tax Contributions and After-Tax Contributions .....................     17
4.4.            Election Procedures for Participant Contributions .................................     17
4.5.            Contribution to Trust Fund of Before-Tax Contributions and After-Tax
                Contributions .....................................................................     17
4.6.            Rollover Contributions ............................................................     17

                                    ARTICLE V

COMPANY CONTRIBUTIONS .............................................................................     19
5.1.            Eligibility for Matching Contribution .............................................     19
5.2.            Amount of Matching Contribution ...................................................     19
5.3.            Limitations on Matching Contribution ..............................................     19
5.4.            Eligibility for Basic Profit Sharing Contribution .................................     20
5.5.            Amount of Basic Profit Sharing Contribution .......................................     20
5.6.            Eligibility for Supplemental Profit Sharing Contribution ..........................     21
5.7.            Amount of Supplemental Profit Sharing Contribution ................................     21
5.8.            Limitations on Supplemental Profit Sharing Contribution ...........................     21
5.9.            QNECS and QMACS ...................................................................     22
5.10.           Contributions for Participants Returning from Military Leave ......................     22

                                   ARTICLE VI

LIMITATIONS ON ALLOCATIONS AND CONTRIBUTIONS ......................................................     24
6.1.            Compliance with Section 402(g) of the Code ........................................     24
6.2.            Compliance with Section 401(k)(3) of the Code .....................................     24
6.3.            Compliance with Section 401(m)(2) of the Code .....................................     27
</TABLE>

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<TABLE>
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6.4.            Multiple Use of Alternative Limitations ...........................................     28
6.5.            Chances Effected by the Plan Administrator ........................................     30
6.6.            Compliance with Section 415 of the Code ...........................................     30
6.7.            Special Definitions ...............................................................     32
                ACP Test ..........................................................................     32
                ADP Test ..........................................................................     32
                Aggregate Percentage ..............................................................     32
                Annual Addition ...................................................................     32
                Average Actual Contribution Percentage ............................................     32
                Average Actual Deferral Percentage ................................................     32
                Contribution Percentage ...........................................................     32
                Deferral Percentage ...............................................................     33
                Excess Contribution ...............................................................     33
                Excess Before-Tax Contribution ....................................................     33
                QMAC or Qualified Matching Contribution ...........................................     33
                QNEC or Qualified Non-Elective Contribution .......................................     33
                Section 402(g) Limit ..............................................................     33

                                   ARTICLE VII

VESTING ...........................................................................................     34
7.1.            Employee Account ..................................................................     34
7.2.            Retirement ........................................................................     34
7.3.            Death or Disability ...............................................................     34
7.4.            Vesting in Company Account ........................................................     34
7.5.            Forfeitures .......................................................................     34

                                  ARTICLE VIII

DISTRIBUTIONS .....................................................................................     35
8.1.            Distribution of Vested Account Balance ............................................     35
8.2.            Cash-Outs .........................................................................     35
8.3.            Form and Amount of Distribution ...................................................     35
8.4.            Elections .........................................................................     36
8.5.            Reemployment ......................................................................     37
8.6.            Minimum Required Distributions ....................................................     37
8.7.            Death of a Participant ............................................................     38
8.8.            Rollovers .........................................................................     38

                                   ARTICLE IX

IN-SERVICE WITHDRAWALS AND LOANS ..................................................................     39
9.1.            Withdrawals on Account of Attaining Age Fifty-Nine and One-Half ...................     39
9.2.            Withdrawals of After-Tax, Rollover and Paysop Contributions .......................     39
9.3.            Withdrawals on Account of Financial Hardship ......................................     39
9.4.            Plan Loans ........................................................................     40
</TABLE>

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<TABLE>
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9.5.            Order of Liquidation of Investment Funds ..........................................     43
9.6.            Valuation .........................................................................     44
9.7.            Death .............................................................................     44

                                    ARTICLE X

ADMINISTRATION OF THE PLAN ........................................................................     45
10.1.           In General ........................................................................     45
10.2.           Appointment of Committees .........................................................     45
10.3.           Chairman, Secretary, Agents .......................................................     45
10.4.           Meetings ..........................................................................     45
10.5.           Quorum and Voting .................................................................     45
10.6.           Expenses ..........................................................................     46
10.7.           Powers and Duties of the Benefits Administration Committee ........................     46
10.8.           Powers and Duties of the Plan Administrator .......................................     47
10.9.           Powers and Duties of the Investment Committee .....................................     48
10.10.          Delegation of Authority ...........................................................     49
10.11.          Benefit Claims Procedures .........................................................     49
10.12.          Named Fiduciary ...................................................................     50
10.13.          Indemnification ...................................................................     50
10.14.          Reliance on Reports and Certificates ..............................................     50
10.15.          Members' Own Participation ........................................................     50

                                   ARTICLE XI

TRUST FUND AND INVESTMENT FUNDS ...................................................................     52
11.1.           Trustee ...........................................................................     52
11.2.           Investment of Trust Fund ..........................................................     52
11.3.           Election of Investment Funds ......................................................     52
11.4.           Allocation and Investment of Contributions ........................................     53
11.5.           Valuation of Accounts .............................................................     53
11.6.           Purchases and Sales of Common Stock ...............................................     54
11.7.           Non-Reversion .....................................................................     54
11.8.           Return of Certain Company Contributions ...........................................     54
11.9.           Voting of Common Stock ............................................................     54

                                   ARTICLE XII

AMENDMENT OR TERMINATION ..........................................................................     55
12.1.           Right to Amend or Terminate .......................................................     55
12.2.           Mergers, Consolidations and Transfers .............................................     55
12.3.           Vesting and Distribution upon Plan Termination ....................................     55
12.4.           Distributions upon Sale or Disposition of Substantially All of the Company's
                Assets or of a Subsidiary .........................................................     56
12.5.           Withdrawal of an Employer .........................................................     57
</TABLE>

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<TABLE>
<CAPTION>
                                  ARTICLE XIII
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GENERAL PROVISIONS ................................................................................     58
13.1.           No Guarantee of Employment ........................................................     58
13.2.           Payments to Minors and Incompetents ...............................................     58
13.3.           Nonalienation of Benefits .........................................................     58
13.4.           Evidence of Survivor ..............................................................     58
13.5.           Titles and Headings ...............................................................     59
13.6.           Governing Law .....................................................................     59

                                   ARTICLE XIV

TOP-HEAVY PLAN REQUIREMENTS .......................................................................     60
14.1.           Top-Heavy Plan ....................................................................     60
14.2.           Top-Heavy Ratio ...................................................................     60
14.3.           Minimum Employer Contribution .....................................................     62
14.4.           Limitation of Benefits ............................................................     62
14.5.           Minimum Vesting ...................................................................     62
14.6.           Definitions Applicable to Article XIV .............................................     63
                Account Balance ...................................................................     63
                Key Employee ......................................................................     63
                Non-Key Employee ..................................................................     63
                Permissive Aggregation Group ......................................................     63
                Required Aggregation Group ........................................................     64
                Super Top-Heavy Plan ..............................................................     64
                Top-Heavy Ratio ...................................................................     64
                Top-Heavy Valuation Date ..........................................................     64
</TABLE>

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                          PAINEWEBBER 401(k) PLUS PLAN

                                    ARTICLE I

                                  INTRODUCTION

         1.1. Name. The name of the Plan(1) is the "PaineWebber 401(k) Plus
Plan."

         1.2. Purpose. The purpose of the Plan is to attract and retain
qualified individuals by providing them with an opportunity to accumulate assets
for their retirement, to permit them to derive benefits commensurate with the
financial results of the Company, and to acquire an equity interest in the
Company.

         1.3. Effective Date. Except as otherwise provided in the Plan, the
effective date of this amendment and restatement of the Plan is January 1, 1999
(the "Effective Date"). As of the Effective Date, the Plan amends and restates
the PaineWebber Savings Investment Plan (the "Prior Plan"). Except as required
by law or as otherwise specifically provided herein, the benefits payable
hereunder to any Participant or the Spouse or Beneficiary of any Participant
whose Severance Date occurred prior to the Effective Date shall be determined
under the provisions of the Prior Plan (or any predecessor plan that has been
merged into the Prior Plan) as in effect as of the Participant's Severance Date.

         1.4. Type of Plan. The Plan is intended to be a "profit sharing plan"
for all purposes of the Code.

--------
(1)      Capitalized terms not otherwise defined have the meanings assigned to
         such terms in Article II hereof. Certain special purpose definitions
         are also set forth in Sections 6.7 and 14.6.
<PAGE>   9
                                   ARTICLE II

                                   DEFINITIONS

         2.1. Definitions.

                  "Accounts" means a Participant's (i) Employee Account, (ii)
Matching Contribution Account, (iii) Profit Sharing Contribution Account and
(iv) other accounts which may be established under the Plan. Each Account may
include subaccounts and, to the extent subaccounts are so established, separate
accounting shall be maintained for each such subaccount.

                  "Affiliated Employer" means (i) any corporation which is a
member of a controlled group of corporations (as defined in Section 414(b) of
the Code) which includes the Company, (ii) any trade or business (whether or not
incorporated) which is under common control (as defined in Section 414(c) of the
Code) with the Company, (iii) any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in Section 414(m)
of the Code) which includes the Company and (iv) any other entity required to be
aggregated with the Company pursuant to regulations under Section 414(o) of the
Code. For purposes of determining limitations under Section 6.6, the term
Affiliated Employer shall be determined in accordance with the previous
sentence, except that, to the extent required by Section 415(h) of the Code, the
words "more than fifty percent" shall be substituted for the words "at least
eighty percent" where such term appears in Sections 414(b) and 414(c) of the
Code.

                  "After-Tax Contributions" means the contributions made by a
Participant pursuant to Section 4.2 of the Plan. After-Tax Contributions shall
also refer to amounts previously designated under the Prior Plan as Basic
After-Tax Contributions, Voluntary After-Tax Contributions and Voluntary
Contributions. Separate subaccounts shall be maintained in each Employee Account
to record (i) After-Tax Contributions made to the Prior Plan prior to January 1,
1987 and (ii) After-Tax Contributions made after December 31, 1986 together with
any earnings thereon and on the After-Tax Contributions described in clause (i)
of this sentence.

                  "Automated Response System" means any automated telephone,
computer, internet, intranet or other electronic or automated system adopted by
PaineWebber and communicated to Participants for purposes of Plan
administration, including, without limitation, for receiving and processing
enrollments and instructions with respect to the investment of assets allocated
to a Participant's Accounts and for such other purposes as may be designated
from time to time by the Benefits Administration Committee.

                  "Basic Profit Sharing Contributions" means the contributions
to the Plan by an Employer pursuant to Section 5.5.

                  "Before-Tax Contributions" means that part of a Participant's
Compensation which, in the absence of a Participant's election under Section
4.1, would have been paid to the Participant. Before-Tax Contributions shall
also refer to amounts previously designated under

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the Prior Plan as Basic Before-Tax Contributions, Voluntary Before-Tax
Contributions and Deferral Contributions.

                  "Beneficiary" means (i) in the case of a Participant who has a
Spouse at the time of his death, his Spouse (unless the Participant obtains
Spousal Consent to designate another person as his Beneficiary) or (ii) in the
case of a Participant who does not have a Spouse at the time of his death, the
person designated as the Beneficiary by the Participant on a form supplied by,
and last filed in writing with, the Plan Administrator, who shall receive the
benefits payable under the provisions of Section 8.2 of the Plan upon the death
of the Participant. If (i) no designation is in effect at the time of the death
of the Participant or if no person designated as a Beneficiary survives the
Participant and (ii) the Participant has no Spouse at the time of his death, the
Beneficiary shall be the estate of the Participant.

                  "Benefits Administration Committee" means the committee
appointed by the Executive Committee with the powers, duties and
responsibilities described in Section 10.7.

                  "Board" means the Board of Directors of the Company.

                  "Business Day" means each day in New York City on which the
New York Stock Exchange is open for the trading of securities.

                  "Cash-Out Amount" means $5,000.

                  "Code" means the Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.

                  "Committee" means, as the context requires, the Benefits
Administration Committee, the Investment Committee or both.

                  "Common Stock" means the common stock, $1.00 par value, of the
Company.

                  "Common Stock Fund" means an Investment Fund provided under
the Plan into which Matching Contributions will be directed and into which
Before-Tax Contributions, After-Tax Contributions, Profit Sharing Contributions
and Rollover Contributions may be directed by a Participant, and which is
primarily invested in shares of Common Stock and cash or cash equivalents.

                  "Company" means Paine Webber Group Inc., a Delaware
corporation, or any corporation or entity which may succeed to all or
substantially all of its business.

                  "Company Account" means the separate Account maintained for
each Participant to which Matching Contributions and Profit Sharing
Contributions are credited, together with the income and expenses and realized
and unrealized gains and losses of the Trust Fund allocable thereto.

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                  "Company Contributions" means the Matching Contributions and
the Profit Sharing Contributions made to the Plan by an Employer pursuant to
Article V.

                  "Company Profit" means "Earnings Before Taxes on Income" for
the Company's fiscal year of reference as reported in the Company's consolidated
statements of operations in its annual report to stockholders.

                  "Compensation" means the total compensation paid to an
Employee by an Employer, which is, or in the absence of the Employee's election
under Section 4.1 hereof would be, reportable on the Employee's Federal Income
Tax Withholding Statement (Form W-2). Notwithstanding anything herein to the
contrary, "Compensation" (i) shall include (A) amounts that are not includible
in the Employee's gross income under Sections 125 and 129 of the Code, (B) an
amount equal to the Supplemental Profit Sharing Contribution made on behalf of
such Employee, (C) all other amounts which are deferred on a Before-Tax basis
(1) under the PartnerPlus Plan or the Executive Deferred Compensation Plan or
(2) pursuant to the Business Builder and PR Business Expense policies and (D) an
amount equal to the cost-of-living adjustments provided to third party nationals
and expatriates pursuant to the Hypo Tax and Hypo Housing policies and (ii)
shall exclude (A) any non-cash items (such as amounts realized upon the exercise
of a stock option or related to the use of an Employer provided automobile), (B)
any unusual or nonrecurring payments (such as non-deductible moving expenses and
sign-on bonuses), (C) any prizes and awards (other than production/length of
service awards and asset awards), and (D) any distributions from the PartnerPlus
Plan or any other nonqualified retirement plan. The earnings of an Employee paid
in a currency other than United States dollars shall be converted, for purposes
of the Plan, to United States dollars using the exchange rates employed in
preparing the applicable Form W-2.

                  The Compensation of each Participant taken into account under
the Plan for any Plan Year shall not exceed $160,000, as such amount may be
adjusted pursuant to Section 401(a)(17) of the Code for cost-of-living increases
in effect for the calendar year.

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

                  "Disability" means the status of any individual who has been
absent from employment for a period of more than 180 consecutive days; provided,
that, (i) the absence during such 180-day period was considered by PaineWebber
to qualify for "short-term disability" benefits and (ii) such individual's
absence from employment after such 180-day period is due to the same illness or
injury which permitted the individual to receive short term disability benefits
during such 180-day period, regardless of whether such individual qualifies for
long term disability benefits under PaineWebber's long-term disability plan.

                  "Distributee" means (i) an Employee or a former Employee, (ii)
the surviving Spouse of an Employee or a former Employee and (iii) the Spouse or
former Spouse of an Employee or a former Employee, but only to the extent such
Spouse or former Spouse is an alternate payee under a QDRO and only with regard
to the interest of such Spouse or former Spouse.

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<PAGE>   12
                  "Early Retirement Date" means the later of the date that a
Participant, while in Service, (i) attains age fifty-five and (ii) completes a
Period of Service of ten years.

                  "Effective Date" has the meaning set forth in Section 1.3.

                  "Electing Grandfathered Participant" means an individual (i)
who is an Eligible Employee and a participant in the PaineWebber Pension Plan
immediately prior to the Effective Date, (ii) who, as of the Effective Date or
the sixty-day period following the Effective Date, (A)(1) had attained at least
age fifty and (2) had been credited under the PaineWebber Pension Plan with at
least ten Years of Continuous Employment (as defined in such plan) (a "50/10
Pension Plan Participant") or (B)(l) had attained at least age sixty-five and
(2) whose Employment Commencement Date is on or prior to December 1, 1997 (a "65
Pension-Plan Participant"), (iii) who is not "disabled," within the meaning of
the Pension Plan as of the Effective Date or who is on short term disability on
the Effective Date and on June 30, 1999 is "disabled" within the meaning of the
Plan ("Pension Disabled"), and (iv) who irrevocably elects in writing, in
accordance with procedures established by the Plan Administrator for this
purpose, to be eligible for benefit accruals under the PaineWebber Pension Plan
from and after the Effective Date and not to be eligible to receive Basic Profit
Sharing Contributions under the Plan. Notwithstanding anything herein to the
contrary, an individual (i) who is an Eligible Employee and a participant in the
PaineWebber Pension Plan immediately prior to the Effective Date and (ii) who is
Pension Disabled shall be deemed to be an Electing Grandfathered Participant
during the time such individual continues to be Pension Disabled. Furthermore,
any Pension Disabled individual who is a 50/10 Pension Plan Participant or a 65
Pension Plan Participant who is deemed to be an Electing Grandfathered
Participant shall continue to be an Electing Grandfathered Participant if, and
when, he is no longer a Pension Disabled individual and returns to active
Service with the Company, provided that his return to active employment
coincides with his ceasing to be Pension Disabled.

                  "Eligible Employee" means each Employee of an Employer who
receives regular and stated compensation other than a pension, retainer or
remuneration in the nature of a consulting fee, excluding any person who is (i)
classified by an Employer as a "leased employee" of any Employer (including,
without limitation, a leased employee as defined in Section 414(n) of the Code),
an independent contractor or a consultant or (ii) a provider of services to an
Employer pursuant to a contractual arrangement, either with that person or with
a third party. If any person excluded as an Eligible Employee pursuant to the
preceding clauses (i) and (ii) shall be determined by a court or a federal,
state or local regulatory or administrative authority to have served as a common
law employee of the Employer, such determination shall not alter this exclusion
as an Eligible Employee for purposes of this Plan. No person shall be considered
an Eligible Employee by reason of service with an Employer solely as a director.

                  "Eligible Retirement Plan" means an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code that accepts a Distributee's Eligible Rollover Distribution; provided,

                                       5
<PAGE>   13
however, that in the case of an Eligible Rollover Distribution to the surviving
Spouse, an Eligible Retirement Plan shall be an individual retirement account or
individual retirement annuity.

                  "Eligible Rollover Distribution" means any distribution of all
or any portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include (i) any distribution that is (A)
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 Beneficiary or (B) for a specified period of ten years or more;
(ii) any distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and (iii) the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).

                  "Employee" means any person who is employed as a common-law
employee of PaineWebber.

                  "Employee Account" means the separate Account maintained for
each Participant to which his After-Tax Contributions, Before-Tax Contributions
and Rollover Contributions are credited, together with the income and expenses
and realized and unrealized gains and losses of the Trust Fund allocable
thereto.

                  "Employer" means the Company and any Affiliated Employer (i)
which has adopted the Plan and (ii) whose participation in the Plan has been
approved by the Board, the Executive Committee or the Benefits Administration
Committee. Each Employer who participates in the Plan shall be deemed to appoint
the Company, each Committee, the Plan Administrator and the Trustee with all the
power and authority conferred hereby, or by the Trust Agreement, upon such
parties. Such power and authority to act as such agents for the Employer shall
continue until the Plan is completely terminated as to the Employer and the
relevant portion of the Trust Fund has been distributed from the Trust as
provided in Section 12.3.

                  "Employment Commencement Date" means the date upon which an
individual first performs an Hour of Service.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the applicable rulings and regulations thereunder.

                  "Executive Committee" means the Executive Committee of PWI.

                  "Financial Hardship" means, as determined by the Committee in
accordance with the Code, any of the following:

                  (i)      tuition payments for the next twelve months of
                           post-secondary education of the Participant or his
                           Spouse or dependents;

                  (ii)     costs directly related to the purchase (excluding
                           mortgage payments) of a Participant's principal
                           residence;

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<PAGE>   14
                  (iii)    expenses for medical care described in Section 213(d)
                           of the Code previously incurred by a Participant or
                           his Spouse or dependents, or necessary for these
                           persons to obtain such medical care;

                  (iv)     amounts necessary to prevent the eviction of a
                           Participant from his principal residence or the need
                           to prevent foreclosure on the mortgage of his
                           principal residence; or

                  (v)      any other type of expenses that are deemed by the
                           Commissioner of the Internal Revenue Service through
                           revenue rulings, notices and other administrative
                           pronouncements of general applicability to constitute
                           immediate and heavy financial burden for purposes of
                           Section 401(k) of the Code.

                  "Five-Percent Owner" means an Employee who at any time during
the Plan Year was a five-percent owner as defined in Section 416(i)(1) of the
Code.

                  "Five-Year Period of Severance" means a Period of Severance of
sixty or more consecutive months.

                  "Highly Compensated Employee" means, effective as of January
1, 1997, any Employee who (i) was a Five-Percent Owner during the Plan Year and
for the preceding Plan Year or (ii) for the preceding year had compensation
(within the meaning of Section 414(q) of the Code) from PaineWebber in excess of
$80,000, as indexed, and was in the Top-Paid Group of Employees for such
preceding year. A former Employee shall be treated as a Highly Compensated
Employee if such Employee was a Highly Compensated Employee at the time of his
Severance Date or such Employee was a Highly Compensated Employee at any time
after attaining age fifty-five. Notwithstanding anything contained herein to the
contrary, solely for the purpose of determining the Employees who are Highly
Compensated Employees for the 1997 Plan Year, this definition will be treated as
having been effective for the 1996 Plan Year.

                  "Hour of Service" means an "hour of service" within the
meaning of 29 C.F.R.Section 2530.200b-2(a)(1).

                  "Investment Committee" means the committee appointed by the
Executive Committee with the powers, duties and responsibilities described in
Section 10.9.

                  "Investment Funds" means the various investment options
designated from time to time by the Investment Committee for the investment of
the assets of the Trust Fund.

                  "Loan Need" means, as determined by the Committee, any of the
following:

                  (i)      a Financial Hardship;

                  (ii)     tuition payments for the next four years of
                           post-secondary education of the Participant or his
                           Spouse or dependents;

                                       7
<PAGE>   15
                  (iii)    costs related to the improvement of a Participant's
                           principal residence;

                  (iv)     costs related to funeral expenses;

                  (v)      costs related to payments required by a court order
                           with respect to a Participant's personal bankruptcy;

                  (vi)     costs related to the payment of Participant's
                           delinquent taxes;

                  (vii)    costs related to the payment by a Participant or his
                           Spouse of delinquent child support payments; and

                  (viii)   costs related to Participant's debt consolidation.

                  "Matching Contribution Account" means the separate Account
maintained for each Participant to which Matching Contributions are credited,
together with the income and expenses and realized and unrealized gains and
losses of the Trust Fund allocable thereto.

                  "Matching Contributions" means the contribution to the Plan by
PaineWebber pursuant to Article V.

                  "Military Leave" means an absence from employment with
PaineWebber due to the performance of duty, on a voluntary or involuntary basis,
in a uniformed service of the United States under competent authority and
includes active duty, active duty for training, initial active duty for
training, inactive duty training, full-time National Guard duty and an
examination to determine the fitness of the person to perform any such duty. A
person shall not be deemed to have been absent due to Military Leave unless (i)
such person has given advance written or verbal notice of such uniformed service
to PaineWebber, (ii) the cumulative length of the absence and all previous
Military Leaves from PaineWebber does not exceed five years or such other period
of time permitted by USERRA and (iii) such person reports to, or submits an
application for reemployment to, PaineWebber in accordance with paragraphs (e)
and (f) of Section 4312 of USERRA. Notwithstanding anything contained herein to
the contrary, the Committee may, on a uniform and nondiscriminatory basis, deem
a person's absence to be a Military Leave if such absence would qualify for a
Military Leave but for the fact that the time period exceeds the maximum period
of Military Leave set forth in clause (ii) above.

                  "Non-Highly Compensated Employee" means an Employee,
determined in accordance with Section 414(q) of the Code, who is not a Highly
Compensated Employee.

                  "PaineWebber" means the Company and each Affiliated Employer.

                  "Parental Leave" means a period in which the Employee is
absent from work (i) by reason of the pregnancy of the Employee, (ii) by reason
of the birth of a child of the Employee, (iii) by reason of the placement of a
child with the Employee in connection with the adoption of the child by the
Employee or (iv) for purposes of caring for a child born to, or placed with, the
Employee during the period immediately following such birth or placement. At the

                                       8
<PAGE>   16
request of the Plan Administrator, any Employee invoking the provisions of this
paragraph shall promptly furnish to the Plan Administrator such information that
the Plan Administrator may reasonably require to establish (i) the number of
days the Employee was absent in connection with the claimed Parental Leave and
(ii) that such period of absence in fact constituted a Parental Leave as defined
above.

                  "Participant" means any individual for whom an Account is
maintained under the Plan, including, without limitation, any alternative payee
under any Qualified Domestic Relations Order for whom an Account is maintained.
Following the date of death of a Participant described in the previous sentence,
Participant shall also include any Beneficiary of such Participant who is
entitled to benefits under the Plan.

                  "Paysop Contributions" means contributions made to the Plan
which were designated as Paysop Contributions with respect to Plan Years
beginning before 1987.

                  "Period of Service" means a Participant's aggregate years,
months and days of Service taken into account under the Plan.

                  "Period of Severance" means a continuous period of time during
which a person is not an Employee. Except as provided in the definition of
Service, such period shall commence on an Employee's Severance Date.

                  "Plan" means this "PaineWebber 401(k) Plus Plan," formerly
known as the PaineWebber Savings Investment Plan, as the same may be amended
from time to time.

                  "Plan Administrator" means the person serving from time to
time as Director of Corporate Benefits of PWI.

                  "Plan Loan" means a loan granted under Section 9.5.

                  "Plan Year" means the calendar year, which shall be the basis
on which the records of the Plan are kept.

                  "Prior Plan" has the meaning set forth in Section 1.3.

                  "Profit Sharing Contribution Account" means the separate
Account maintained for each Participant to which Basic Profit Sharing
Contributions and Supplemental Profit Sharing Contributions are credited,
together with the income and expenses and realized and unrealized gains and
losses of the Trust Fund allocable thereto.

                  "Profit Sharing Contributions" means Basic Profit Sharing
Contributions and Supplemental Profit Sharing Contributions.

                  "PWI" means PaineWebber Incorporated, a Delaware corporation,
or any corporation or entity which succeeds to all or substantially all of its
business.

                                       9
<PAGE>   17
                  "Qualified Domestic Relations Order" or "QDRO" means a
domestic order issued by a court of competent jurisdiction which the Plan
Administrator determines complies with the requirements of Section 414(p) of the
Code.

                  "Reemployment Commencement Date" means the date following an
Employee's last Severance Date on which the Employee first performs an Hour of
Service.

                  "Required Beginning Date" means (i) with respect to each
Participant who is a Five-Percent Owner, the April 1st of the calendar year
following the year in which the Participant attains age seventy and one-half and
(ii) for each other Participant, April 1st following the later to occur of (A)
the Participant's Severance Date and (B) the year in which the Participant
attains age seventy and one-half.

                  "Retirement Age" means the date of an Employee's sixty-fifth
birthday.

                  "Returning Veteran" means a Participant or former Participant
who is absent due to a Military Leave and thereafter performs an Hour of
Service.

                  "Rollover Account" means a subaccount maintained as part of a
Participant's Employee Account to which a Participant's Rollover Contribution is
allocated or was previously allocated in accordance with Section 4.6.

                  "Rollover Contribution" means a contribution by an Eligible
Employee to a Rollover Account which the Plan Administrator determines qualifies
as an Eligible Rollover Distribution.

                  "Service" means the period commencing on an Employee's
Employment Commencement Date or Reemployment Commencement Date, as the case may
be, and ending on his next Severance Date. The following rules shall apply in
calculating Service:

                  (a)      If, after an Employee's Severance Date, the Employee
                           performs an Hour of Service before the earlier of the
                           first anniversary of (i) his Severance Date and (ii)
                           the first date of any absence from employment for a
                           reason described in clause (ii) of the definition of
                           Severance Date, the period between his Severance Date
                           and the date he thereafter completed an Hour of
                           Service shall be included as Service.

                  (b)      If, after an Employee's Severance Date, the Employee
                           has a Reemployment Commencement Date after a
                           Five-Year Period of Severance, the Employee's Service
                           after such Five-Year Period of Severance shall be
                           disregarded for the purpose of determining the vested
                           amount of the Company Contributions made on behalf of
                           such Participant prior to the Five-Year Period of
                           Severance.

                  (c)      If, after an Employee's Severance Date, the Employee
                           has a Reemployment Commencement Date after a
                           Five-Year Period of

                                       10
<PAGE>   18
                           Severance and, at the time of such Participant's
                           Severance Date, he has a Vested Account Balance which
                           is attributable in part to Company Contributions,
                           then the Employee's Service prior to the Five-Year
                           Period of Severance will count in determining the
                           vested amount of the Company Contributions made on
                           behalf of such Participant after the Five-Year Period
                           of Severance and will count in determining the amount
                           of the Employee's Basic Profit Sharing Contribution.

                  (d)      If, after an Employee's Severance Date, the Employee
                           has a Reemployment Commencement Date after a
                           Five-Year Period of Severance and, at the time of
                           such Employee's Severance Date, he does not have a
                           Vested Account Balance which is attributable in part
                           to Company Contributions, then the Employee's Service
                           prior to the Five-Year Period of Severance will not
                           count in determining the vested amount of the Company
                           Contributions made on behalf of such Employee after
                           the Five-Year Period of Severance.

                  (e)      In determining the length of an Employee's Service,
                           periods of Military Leave shall be taken into account
                           in accordance with USERRA.

                  (f)      Solely for purposes of determining a Participant's
                           nonforfeitable rights to his Accounts under Article
                           VII, the Severance Date of an Employee who is absent
                           from Service beyond the first anniversary of the
                           first day of absence by reason of Parental Leave
                           shall be the first anniversary of the first day of
                           such absence. The period between the first and second
                           anniversaries of the first day of such absence is
                           neither a Period of Service nor a Period of
                           Severance.

                  (g)      In no event will the amount of a Participant's
                           Service as of the Effective Date be less than the
                           amount of "service" credited to the Participant under
                           the Prior Plan immediately prior to the Effective
                           Date.

                  (h)      Nothing in the Plan shall be construed as requiring
                           the double crediting of Service for any period of
                           time.

                  "Severance Date" means the earlier of:

                  (a)      the date on which an Employee quits, retires, is
                           discharged, is absent from employment due to a
                           Disability, or dies; and

                  (b)      the first anniversary of the first date of absence
                           for any other reason, such as layoff or leave of
                           absence.

                  "Spousal Consent" means a Spouse's consent to the
Participant's election to designate someone other than his Spouse as his
Beneficiary; provided, however, that (i) the Spouse's consent to such election
is in writing, (ii) the Participant's election designates a specific

                                       11
<PAGE>   19
Beneficiary (including any class of Beneficiaries) or any contingent
Beneficiaries, which may not be changed without the Spouse's consent (or the
Spouse expressly permits a change in designation by the Participant without any
further consent by the Spouse), (iii) the Spouse's consent acknowledges the
effect of the Participant's election and (iv) the Spouse's consent is witnessed
by the Plan Administrator, another authorized Plan representative or a notary
public.

                  "Spouse" means, as of the date of determination, the
individual to whom the Participant is legally married.

                  "Supplemental Profit Sharing Contributions" means the
contributions made to the Plan by an Employer pursuant to Section 5.7.

                  "Top-Paid Group of Employees" means those Employees who are
included in the group consisting of the top twenty percent of the Employees when
ranked on the basis of compensation paid during the Plan Year, as determined in
accordance with Section 414(q)(3) of the Code.

                  "Trust Agreement" means the "PaineWebber Savings Investment
Plan Trust Agreement" entered into between the Company and the Trustee, as
amended, and any successor agreement thereto.

                  "Trust Fund" means the cash and other property of the Plan
held and administered by the Trustee in accordance with the provisions of the
Trust Agreement and the Plan.

                  "Trustee" means The Northern Trust Company or any successor
Trustee.

                  "USERRA" means the Uniformed Service Employment and
Reemployment Rights Act of 1994, as amended, and the applicable rulings and
regulations thereunder.

                  "Valuation Date" means each Business Day.

                  "Vested Account Balance" means, as of each Valuation Date, the
sum of the value of a Participant's (i) Employee Account and (ii) the portion of
the Matching Contribution Account and Profit Sharing Account in which the
Participant has vested in accordance with Article VII.

         2.2.     Rules of Construction. The use of the masculine gender herein
shall be deemed to encompass the feminine, and the use of the singular form of a
word shall be deemed to encompass the plural form, unless the context requires
otherwise. Unless otherwise noted, section references are to sections of the
Plan.

                                       12
<PAGE>   20
                                  ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

         3.1. Eligibility. Each Employee who is an Eligible Employee shall be
eligible to participate in the Plan on the date he first performs an Hour of
Service for an Employer.

         3.2. Commencement of Participation. An Eligible Employee who is
eligible to participate in the Plan in accordance with Section 3.1 shall begin
participating in the Plan for purposes of Article IV effective as of the first
day of the first payroll period coinciding with or immediately following the
date on or after he is both eligible to participate and has elected, in
accordance with rules and procedures adopted by the Plan Administrator which
shall be uniformly applied to all Eligible Employees, to make Before-Tax
Contributions, After-Tax Contributions or Rollover Contributions.

         3.3. Ineligible Employees. A nonresident alien who is employed outside
of the United States, or is employed in the United States on temporary
assignment only, shall not be eligible to participate in the Plan, and his
remuneration for such employment shall not be treated as Compensation with
respect to which he may make or share in contributions under the Plan. Any
Employee who is subject to a labor agreement or collective bargaining agreement
shall not be eligible to participate in the Plan unless the applicable
collective bargaining agreement specifically authorizes such participation. Any
Employee who is employed by an Employer on a temporary basis for a period of
time which is intended not to exceed five (5) months shall not be eligible to
participate in the Plan.

                                       13
<PAGE>   21
                                   ARTICLE IV

              BEFORE-TAX CONTRIBUTIONS AND AFTER-TAX CONTRIBUTIONS

         4.1. Before-Tax Contributions. For each Plan Year, each Eligible
Employee shall be permitted to elect to reduce the amount of his Compensation
payable during each Plan Year in whole percentages from one percent to sixteen
percent. Any election made by an Eligible Employee shall be valid only with
respect to Compensation thereafter paid to him during the period his election is
in effect.

         4.2. After-Tax Contributions. For each Plan Year, each Eligible
Employee shall be permitted to elect to make After-Tax Contributions from his
Compensation payable during the Plan Year in whole percentages from one percent
to sixteen percent. Any election made by an Eligible Employee shall be valid
only with respect to the Compensation thereafter paid to him during the period
his election is in effect.

         4.3. Limit on Before-Tax Contributions and After-Tax Contributions. The
sum of the rate of a Participant's Before-Tax Contributions and After-Tax
Contributions in effect at any time may not exceed sixteen percent of his
Compensation.

         4.4. Election Procedures for Participant Contributions. Before-Tax
Contributions and After-Tax Contributions shall be made through payroll
deductions. A Participant's election as to the rate of his Before-Tax
Contributions and After-Tax Contributions or a Participant's election to suspend
his Before-Tax Contributions or After-Tax Contributions shall be made by
utilizing the Automated Response System in accordance with the procedures of
such system. A Participant's election shall remain in effect until changed or
revoked. Any election of a Participant as to his rate of Before-Tax
Contributions or After-Tax Contributions shall terminate upon his termination of
employment for any reason.

         4.5. Contribution to Trust Fund of Before-Tax Contributions and
After-Tax Contributions. All Before-Tax Contributions and After-Tax
Contributions withheld as payroll deductions shall be credited to the Employee
Account of the Participant for the Plan Year in which such Before-Tax
Contributions and After-Tax Contributions are withheld and shall be paid over to
the Trustee on the earliest date that they can be reasonably segregated from
PaineWebber's general assets, but in no event later than fifteen Business Days
following the end of the month in which such amounts would otherwise have been
payable to the Participant as Compensation.

         4.6. Rollover Contributions. Effective as of August 5, 1997 any
Eligible Employee may file a written request with the Plan Administrator
requesting that the Trustee accept the transfer of a Rollover Contribution with
respect to the Eligible Employee. The Plan Administrator may decline to accept a
proposed Rollover Contribution to the Plan for any reason or for no stated
reason. In addition, the Plan Administrator may permit a Rollover Contribution
prior to the time that any other amounts are credited to an Eligible Employee's
Account. The Plan Administrator, in its sole discretion and in accordance with
the Code and procedures which shall be uniformly applied to all similarly
situated individuals, shall as soon as practicable after

                                       14
<PAGE>   22
receipt by it of the Eligible Employee's written request determine whether the
transfer of the Rollover Contribution shall be permitted. Any written request
filed pursuant to this Section 4.6 shall set forth the fair market value of such
Rollover Contribution, the nature of the property contained in the Rollover
Contribution and a statement satisfactory to the Plan Administrator that the
amount to be transferred constitutes a Rollover Contribution, which may include
a statement from the distributing plan that such plan has received a favorable
determination letter from the Internal Revenue Service. In the event the Plan
Administrator permits the transfer of a Rollover Contribution, the Plan
Administrator shall instruct the Trustee to accept such Rollover Contribution
and the transfer of such Rollover Contribution shall be deemed to have been made
on the Valuation Date next following the date on which it was paid over to the
Trustee. The Rollover Contribution shall be maintained in a separate, fully
vested Rollover Account for the benefit of the contributing Eligible Employee.

                                       15
<PAGE>   23
                                   ARTICLE V

                              COMPANY CONTRIBUTIONS

         5.1. Eligibility for Matching Contribution. Each individual who (i) is
an Eligible Employee at the end of a Plan Year or who, during such Plan Year and
while an Eligible Employee, dies, incurs a Disability or terminates Service on
or after his Early Retirement Date or Retirement Age and (ii) made Before-Tax
Contributions or After-Tax Contributions to the Plan during such Plan Year shall
be eligible to receive a Matching Contribution for such Plan Year in accordance
with Section 5.2. If a Participant makes both Before-Tax Contributions and
After-Tax Contribution, the match for the year will first be deemed made on the
Participant's Before-Tax Contributions and then on After-Tax Contributions.

         5.2. Amount of Matching Contribution. With respect to each individual
who is eligible for a Matching Contribution in accordance with Section 5.1
above, the Company shall make a Matching Contribution equal to the lesser of (i)
fifty percent of the sum of such Participant's Before-Tax Contributions and
After-Tax Contributions and (ii) the applicable limit on Matching Contributions
for such Plan Year imposed by Section 5.3.

         5.3. Limitations on Matching Contribution. In no event will an Eligible
Employee receive a Matching Contribution to a Plan Year in an amount greater
than the lesser of (a) three percent of such Eligible Employee's Compensation
for such Plan Year and (b) the amount determined in accordance with the schedule
set forth below based upon Company Profits for such Plan Year.

<TABLE>
<CAPTION>
       COMPANY PROFITS           ANNUAL MAXIMUM AMOUNT OF
                                  MATCHING CONTRIBUTIONS
<S>                              <C>
less than $450 million                   $0

$450 million, but less $750              $1,200
million

$750 million, but less than              $1,800
$850 million

$850 million, but less than              $2,400
$1 billion

$1 billion or more                       $3,000
</TABLE>

                                       16
<PAGE>   24
         5.4. Eligibility for Basic Profit Sharing Contribution. Each individual
who (i) is an Eligible Employee at the end of a Plan Year or who, during such
Plan Year and while an Eligible Employee, dies, incurs a Disability or
terminates Service on or after his Early Retirement Date or Retirement Age, and
(ii) is not an Electing Grandfathered Participant shall be eligible to receive a
Basic Profit Sharing Contribution for such Plan Year in an amount determined in
accordance with Section 5.5.

         5.5. Amount of Basic Profit Sharing Contribution. Each individual who
is eligible for a Basic Profit Sharing Contribution under Section 5.4 for a Plan
Year shall receive a Basic Profit Sharing Contribution for such Plan Year equal
to a specified percentage of the Eligible Employee's Compensation for such year.
The amount of Basic Profit Sharing Contribution for a Plan Year shall be
determined in accordance with the following schedule based upon the
Participant's Compensation for such Plan Year and the Eligible Employee's
attained Period of Service as of the first day of such Plan Year:

<TABLE>
<CAPTION>
NUMBER OF YEARS IN THE PERIOD         PERCENTAGE OF
  OF SERVICE AS OF THE FIRST        COMPENSATION TO BE
     DAY OF THE PLAN YEAR          CONTRIBUTED AS BASIC
                                      PROFIT SHARING
                                CONTRIBUTION FOR THE PLAN
                                           YEAR

<S>                             <C>
less than 5                              1.5

5, but less than 10                      2.0

10, but less than 15                     3.0

15, but less than 20                     4.0

20, but less than 25                     5.5

25 or more                               6.5
</TABLE>

         5.6. Eligibility for Supplemental Profit Sharing Contribution.

         (a) Eligibility Requirement. Each individual (i) who is an Eligible
Employee and whose Compensation, determined without regard to the limitations
set forth in the second paragraph of such definition, exceeds the threshold
described in Section 5.6(b) for the Plan Year and (ii) who is an Eligible
Employee at the end of a Plan Year shall be eligible to receive a Supplemental
Profit Sharing Contribution for such Plan Year in an amount determined in
accordance with Section 5.7.

                                       17
<PAGE>   25
         (b) Threshold. The threshold for Compensation for a Plan Year shall be
$400,000 or such other amount as shall be specified by an amendment to the Plan
adopted by the Board or the Executive Committee prior to the end of the
applicable Plan Year.

         5.7. Amount of Supplemental Profit Sharing Contribution. Each
individual who is eligible for a Supplemental Profit Sharing Contribution under
Section 5.6 for a Plan Year shall receive a Supplemental Profit Sharing
Contribution for such Plan Year equal to a specified dollar amount determined in
accordance with the schedule below based upon the Eligible Employee's attained
age as of the first day of such Plan Year:

<TABLE>
<CAPTION>
       AGE ON THE FIRST           AMOUNT OF SUPPLEMENTAL
             DAY                      PROFIT SHARING
       OF THE PLAN YEAR         CONTRIBUTION FOR THE PLAN
                                           YEAR
<S>                             <C>
25, but less than 36                      $2,500

36, but less than 41                      $5,000

41, but less than 51                     $10,000

51 or more                               $20,000
</TABLE>

         5.8. Limitations on Supplemental Profit Sharing Contribution. In no
event will an Eligible Employee receive a Supplemental Profit Sharing
Contribution for a Plan Year in an amount greater than the lesser of (a) the
amount determined in accordance with the schedule set forth above and (b) the
amount determined in accordance with the formula A minus B minus C minus D,
where A is the dollar limitation set forth in Section 415(c)(1) of the Code, as
adjusted, B is the maximum Section 402(g) Limit for the Plan Year, C is the
maximum Matching Contribution for the Plan Year (as determined in accordance
with Section 5.3 and assuming the individual defers to the Plan an amount equal
to the maximum Section 402(g) Limit) and D is the Basic Profit Sharing
Contribution made on behalf of the individual (determined in accordance with
Section 5.5).

         5.9. QNECS and QMACS. Each Employer may contribute for a Plan Year
QNECs and QMACs in order to permit the Plan to comply with the applicable
provisions of Article VI.

                                       18
<PAGE>   26
         5.10. Contributions for Participants Returning from Military Leave.

         (a) General Rule. Notwithstanding any other provisions of the Plan, a
Returning Veteran shall be entitled to make Before-Tax Contribution and
After-Tax Contributions and to receive Company Contributions in accordance with
Section 414(u) of the Code. The provisions of this Section 5.10 shall apply only
to the extent required by USERRA and Section 414(u) of the Code.

         (b) Compensation of a Returning Veteran. A Returning Veteran shall be
treated as having received Compensation during such Military Leave in an amount
equal to the Compensation such Returning Veteran would have received from an
Employer, but for the Military Leave; provided, however, that if a Returning
Veteran's Compensation during Military Leave would not have been reasonably
certain, such Returning Veteran shall be treated as having received Compensation
during such Military Leave based upon the Returning Veteran's average
Compensation from the Employer either (i) during the twelve-month period
preceding the Military Leave, or (ii) if shorter, the Returning Veteran's
service preceding the Military Leave.

         (c) Amount of Before-Tax Contributions and After-Tax Contributions. A
Returning Veteran may make Before-Tax Contributions and After-Tax Contributions
without regard to any limitations that would otherwise apply in the year such
contributions are actually made. The Before-Tax Contributions and After-Tax
Contributions must meet the applicable limitations for the year with respect to
which such contributions relate. PaineWebber shall permit the Returning Veteran
to make additional Before-Tax Contributions to the Plan during the period which
begins on the date of reemployment and ends on the sooner of (i) three times the
period of qualified military service, or (ii) five years.

         (d) Amount of Company Contributions and Earnings. PaineWebber shall
make contributions which satisfy any obligation of the Plan to provide an
"accrued benefit" within the meaning of Section 411(a)(7) of the Code to a
Returning Veteran. For this purpose, make-up Company Contributions shall be
allocated on behalf of the Returning Veteran with respect to each Plan Year in
which the Returning Veteran was absent on Military Leave as of the last day of
the Plan Year and shall not be subject to any limitations that would otherwise
apply in the years that such Company Contributions are made. PaineWebber shall
neither be required to credit earnings to the Returning Veteran with respect to
Before-Tax, After-Tax, or Company Contributions before such contributions are
made, nor to allocate forfeitures which occurred during the period of qualified
military service to a Returning Veteran.

         (e) Annual Additions. Make-up Company Contributions on behalf of a
Returning Veteran shall not be considered Annual Additions for the Plan Year in
which such make-up Company Contributions are made, but shall be considered
Annual Additions for the Plan Year to which the Company Contribution relates.

         (f) No Duplicating Payments. Nothing in this Section 5.9 shall in any
way be construed as obligating PaineWebber to make any duplicate contributions
in respect of any Returning Veteran or any other person.

                                       19
<PAGE>   27
                                   ARTICLE VI

                  LIMITATIONS ON ALLOCATIONS AND CONTRIBUTIONS

         6.1. Compliance with Section 402(g) of the Code.

         (a) Limitation. No Eligible Employee shall be permitted to have
Before-Tax Contributions made on his behalf under the Plan if those Before-Tax
Contributions, when added to elective deferrals (as defined in Section 402(g)(3)
of the Code) under any other plans for such calendar year, would cause the
Eligible Employee to exceed the Section 402(g) Limit.

         (b) Correction. If any amount of elective deferrals in excess of the
Section 402(g) Limit is made for any Eligible Employee in any calendar year,
notwithstanding any provisions of the Plan to the contrary:

         (i)      not later than the March 1st following the close of the
                  calendar year, the Eligible Employee may allocate the amount
                  of such excess elective deferrals among the Plan and, as
                  applicable, any other plans under which the elective deferrals
                  were made, and may notify the Plan Administrator, and, as
                  applicable, each other plan's administrator of the portion
                  allocated to it; and

         (ii)     not later than the April 15th following the close of the
                  calendar year, the Plan and, as applicable, each such other
                  plan shall distribute to the Participant any amount allocated
                  to it under clause (i) plus any income on such amount through
                  the close of the calendar year in respect of which the
                  deferrals were made.

The notice required pursuant to clause (i) above shall be made in writing to the
Plan Administrator in such form as the Plan Administrator shall require;
provided, however, if the elective deferrals in excess of the Section 402(g)
Limit arise solely under plans maintained by PaineWebber, the Participant shall
be deemed to have notified the Plan Administrator of any such excess elective
deferrals.

         6.2. Compliance with Section 401(k)(3) of the Code.

         (a) Requirements of the Average Actual Deferral Percentage Tests. For
each Plan Year, the Plan shall comply with, in a manner consistent with the
applicable provisions of the Code, one of the following ADP Tests with respect
to Before-Tax Contributions made to the Plan:

         (i)      the Average Actual Deferral Percentage for the group of
                  Eligible Employees who are Highly Compensated Employees for
                  the Plan Year shall not exceed the Average Actual Deferral
                  Percentage for the group of Eligible Employees who are
                  Non-Highly Compensated Employees for the Plan Year multiplied
                  by 1.25; or

                                       20
<PAGE>   28
         (ii)     the Average Actual Deferral Percentage for the group of
                  Eligible Employees who are Highly Compensated Employees for
                  the Plan Year shall not exceed the Average Actual Deferral
                  Percentage for the group of Eligible Employees who are
                  Non-Highly Compensated Employees for the Plan Year multiplied
                  by two; provided, however, that the Average Actual Deferral
                  Percentage for the group of Eligible Employees who are Highly
                  Compensated Employees for the Plan Year does not exceed the
                  Average Actual Deferral Percentage for the group of Eligible
                  Employees who are Non-Highly Compensated Employees by more
                  than two percentage points.

         (b) Method of Complying with the ADP Test. The Plan Administrator shall
cause the Plan to comply with the ADP Test for a Plan Year by undertaking, as
necessary, any one or more of the following measures:

         (i)      The Plan Administrator may recharacterize Excess Before-Tax
                  Contributions, pursuant to Section 6.2(c).

         (ii)     The Plan Administrator may reduce Before-Tax Contributions of
                  Highly Compensated Employees and then distribute any Excess
                  Before-Tax Contributions and earnings thereon, pursuant to
                  Section 6.2(d).

         (iii)    The Company may make QNECs or QMACs that are treated as
                  Before-Tax Contributions for purposes of the ADP Test and
                  that, when combined with other Before-Tax Contributions, cause
                  the ADP Test to be satisfied, pursuant to Section 6.2(e).

         (c) Recharacterization. To the extent that the Plan Administrator
chooses to recharacterize Excess Before-Tax Contributions as After-Tax
Contributions, pursuant to the requirements of Treasury Regulations
1.401(k)-l(f)(3), such Excess Before-Tax Contributions shall remain
nonforfeitable.

         (i)      Excess Before-Tax Contributions shall not be recharacterized
                  to the extent that such amount, in combination with the Highly
                  Compensated Employee's Before-Tax and After-Tax Contributions,
                  exceeds the maximum amount of contributions permitted under
                  the Plan.

         (ii)     Excess Before-Tax Contributions that are recharacterized shall
                  be treated as After-Tax Contributions in connection with the
                  ACP Test for the relevant Plan Year.

         (iii)    Recharacterization of Before-Tax Contributions shall occur not
                  later than two and one-half months after the last day of the
                  Plan Year in which such Excess Before-Tax Contributions arose
                  and shall be deemed to occur no earlier than the date on which
                  the last Highly Compensated Employee is

                                       21
<PAGE>   29
                  informed in writing of the amount recharacterized and the
                  consequences thereof.

         (iv)     Recharacterized amounts are taxable to the Highly Compensated
                  Employee for the taxable year in which the Highly Compensated
                  Employee would have received such amounts in cash.

         (d) Distribution of Excess Before-Tax Contributions. To the extent that
the Plan Administrator chooses to distribute Excess Before-Tax Contributions to
comply with the ADP Test for a Plan Year, then the Plan Administrator shall
reduce Excess Before-Tax Contributions and the earnings thereon through the end
of the Plan Year for which such Excess Before-Tax Contributions were made, as
may be necessary to reduce the Deferral Percentages of the Highly Compensated
Employees with the largest amounts of Before-Tax Contributions. Such Excess
Before-Tax Contributions shall be distributed to the Highly Compensated
Employees with the largest amounts of Before-Tax 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 dollar amount of
such Before-Tax Contributions and continuing in descending order until all of
the Excess Before-Tax Contributions have been distributed. For purpose of the
preceding sentence, largest amount is determined after distribution of any
Excess Before-Tax Contribution.

         (i)      To the extent practicable, any distribution shall be made from
                  a Participant's Accounts in the following order: first, from
                  amounts attributable to unmatched Before-Tax Contributions and
                  second, from amounts attributable to matched Before-Tax
                  Contributions.

         (ii)     Any distributions and the earnings thereon shall be
                  distributed, to the extent feasible, within two and one-half
                  months after the end of the Plan Year to which such Excess
                  Before-Tax Contributions relate, but no later than twelve
                  months thereafter.

         (iii)    The earnings on Excess Before-Tax Contributions is the amount
                  of the allocable gain or loss for the Plan Year. The method
                  used to determine earnings on Excess Before-Tax Contributions
                  shall be consistently used for all Participants and for all
                  corrective distributions.

         (e) QNECS and QMACS. If the Company chooses to make QNECs and QMACs,
the Company shall do so before the end of the twelve-month period immediately
following the Plan Year to which the contributions relate.

         6.3. Compliance with Section 401(m)(2) of the Code.

         (a) Requirements of the Average Actual Contribution Percentage Tests.
For each Plan Year, the Plan shall comply with, in a manner consistent with the
applicable provisions of the Code, one of the following ACP Tests with respect
to any Matching Contributions and any After-Tax Contributions made to the Plan:

                                       22
<PAGE>   30
         (i)      the Average Actual Contribution Percentage for the group of
                  Eligible Employees who are Highly Compensated Employees for
                  the Plan Year shall not exceed the Average Actual Contribution
                  Percentage for the group of Eligible Employees who are
                  Non-Highly Compensated Employees for the Plan Year multiplied
                  by 1.25; or

         (ii)     the Average Actual Contribution Percentage for the group of
                  Eligible Employees who are Highly Compensated Employees for
                  the Plan Year shall not exceed the Actual Contribution
                  Percentage for the group of Eligible Employees who are
                  Non-Highly Compensated Employees for the Plan Year multiplied
                  by two; provided, however, that the Average Actual
                  Contribution Percentage for the group of Eligible Employees
                  who are Highly Compensated Employees for the Plan Year does
                  not exceed the Average Actual Contribution Percentage for the
                  group of Eligible Employees who are Non-Highly Compensated
                  Employees by more than two percentage points.

         (b) Compliance with the ACP Test. The Plan Administrator shall cause
the Plan to comply with the ACP Test for a Plan Year by undertaking, as
necessary, any one or more of the following measures:

         (i)      The Plan Administrator may treat Before-Tax Contributions as
                  Matching Contributions for purposes of the ACP Test, which,
                  when combined with After-Tax and Matching Contributions, cause
                  the ACP Test to be satisfied, pursuant to Section 6.3(c).

         (ii)     The Plan Administrator may reduce After-Tax Contributions of
                  Highly Compensated Employees and distribute such After-Tax
                  Contributions and earnings thereon, pursuant to Section
                  6.3(d).

         (iii)    The Plan Administrator may cause Excess Contributions, to the
                  extent attributable to nonvested Matching Contributions, to be
                  forfeited, pursuant to Section 6.3(e).

         (iv)     The Company may make QNECs that are treated as Matching
                  Contributions for purposes of the ACP Test which, when
                  combined with After-Tax Contributions and Matching
                  Contributions, cause the Plan to comply with the ACP Test,
                  pursuant to Section 6.3(t).

         (c) Use of Before-Tax Contributions. The Company may elect to use
Before-Tax Contributions to calculate Contribution Percentages and determine
compliance with the ACP Test, provided that such Before-Tax Contributions shall
not be taken into account in determining compliance with the ADP Test.

         (d) Distribution. To the extent that the Plan Administrator chooses to
distribute After-Tax Contributions to comply with the ACP Test, then the Plan
Administrator

                                       23
<PAGE>   31
shall reduce After-Tax Contributions and the earnings thereon through the end of
the Plan Year for which such After-Tax Contributions were made, as may be
necessary to reduce the Contribution Percentages of the Highly Compensated
Employees with the largest amounts of After-Tax Contributions. Such After-Tax
Contributions shall be distributed to the Highly Compensated Employees with the
largest dollar amounts of After-Tax Contributions 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 After-Tax Contribution and
continuing in descending order until all the Excess Contributions have been
allocated. For purposes of the preceding sentence, the "largest amount" is
determined after distribution of any Excess Contributions.

         (i)      To the extent practicable, any distribution shall be made from
                  a Participant's Accounts in the following order: first. from
                  unmatched After-Tax Contributions and second, from matched
                  After-Tax Contributions.

         (ii)     Any distributions and the earnings thereon shall be
                  distributed, to the extent feasible, within two and one-half
                  months after the end of the Plan Year to which such Excess
                  Contributions relate, but no later than twelve months
                  thereafter.

         (iii)    The earnings on Excess Contributions is the amount of the
                  allocable gain or loss for the Plan Year. The method used to
                  determine earnings on Excess Contributions shall be
                  consistently used for all Participants and for all corrective
                  distributions.

         (e) Forfeitures. If the Plan Administrator chooses to cause the
forfeiture of certain Excess Contributions, then the Plan Administrator shall
either allocate forfeitures of Excess Contributions to the accounts of
Non-Highly Compensated Employees or apply the forfeitures to reduce future
Matching Contributions.

         (f) QNECs. If the Company chooses to make QNECs, the Plan Administrator
shall allocate such QNECs as Matching Contributions in a nondiscriminatory
manner.

         6.4. Multiple Use of Alternative Limitations.

         (a) Application. This Section 6.4 shall apply for any Plan Year if:

         (i)      any Eligible Employee who is a Highly Compensated Employee is
                  eligible to participate in both portions of the Plan that are
                  subject to the requirements of Section 401(k) and 401(m) of
                  the Code;

         (ii)     the Plan does not pass the ADP Test of Section 6.2(a) for the
                  Plan Year and the Plan does not pass the ACP Test of Section
                  6.3(a) for the Plan Year; and

                                       24
<PAGE>   32
         (iii)    the sum of (A) the Average Actual Deferral Percentage for all
                  Eligible Employees who are Highly Compensated Employees for
                  the Plan Year and (B) the Average Actual Contribution
                  Percentage for all Eligible Employees who are Highly
                  Compensated Employees for the Plan Year exceeds the "aggregate
                  limit" of Section 6.4(b).

For purposes of this Section 6.4, the Average Actual Deferral Percentage of
Highly Compensated Employees for the Plan Year and the Average Actual
Contribution Percentage for all Highly Compensated Employees for the Plan Year
shall be determined after any corrective measures described in Sections 6.2(b)
and 6.3(b) are undertaken for the Plan Year.

         (b) Aggregate Limit. For purposes of this Section 6.4(b), the term
"aggregate limit" means the greater of (i) or (ii) below:

         (i) the sum of:

         (A)      1.25 times the greater of: (x) the Average Actual Deferral
                  Percentage for Eligible Employees who are Non-Highly
                  Compensated Employees for the Plan Year or (y) the Average
                  Actual Contribution Percentage for Eligible Employees who are
                  Non-Highly Compensated Employees for the Plan Year; plus

         (B)      two plus the lesser of clauses (x) and (y) above; provided,
                  however, that in no event shall this amount exceed two times
                  the lesser of clauses (x) and (y) above; or

         (ii) the sum of:

         (A)      1.25 times the lesser of: (x) the Average Actual Deferral
                  Percentage for Eligible Employees who are Non-Highly
                  Compensated Employees for the Plan Year or (y) the Average
                  Actual Contribution Percentage for Eligible Employees who are
                  Non-Highly Compensated Employees for the Plan Year; plus

         (B)      two plus the greater of clauses (x) and (y) above; provided,
                  however, that in no event shall this amount exceed two times
                  the greater of the relevant clause (x) or (y) above.

         (c) Correction of the Multiple Use of Alternative Limit. Effective as
of January 1, 1997, if Section 6.4(a) is applicable, then the multiple use of
the alternative limit shall be corrected first by reducing the Contribution
Percentages, in the manner described in Section 6.3(d) of the Plan, of those
Highly Compensated Employees eligible to participate in both portions of the
Plan that are subject to the requirements of Section 401(k) and 401(m) of the
Code. If necessary, the Deferral Percentages of such Highly Compensated
Employees shall be reduced also in a manner described in Section 6.2(d). In lieu
of said reduction, the Company may make QNECs in an amount sufficient to permit
compliance with the aforesaid limits. The

                                       25
<PAGE>   33
Deferral Percentages and Contribution Percentages of Highly Compensated
Employees and Non-Highly Compensated Employee are determined after the Plan
satisfies the ADP Test pursuant to Section 6.2(a) and the ACP Test pursuant to
Section 6.3(a) and are deemed to be the maximum permitted under such tests for
the Plan Year.

         6.5. Chances Effected by the Plan Administrator. Notwithstanding the
preceding provisions of this Article VI, the Plan Administrator is authorized to
take such action with respect to Before-Tax Contributions, After-Tax
Contributions and Company Contributions of any Participant or groups of
Participants as may be necessary to avoid the disqualification of the Plan, the
loss of any tax deduction or the imposition of any excise tax; provided,
however, that any such action shall generally be applied in a uniform and
nondiscriminatory manner.

         6.6. Compliance with Section 415 of the Code.

         (a) Correction. Anything in the Plan to the contrary notwithstanding,
if the Annual Additions for a Plan Year with respect to a Participant would
cause the limits of Section 415(c) of the Code applicable to that Participant to
be exceeded, the excess amount over the maximum Annual Addition shall be
disposed of in accordance with the following provisions and shall not be deemed
an Annual Addition:

         (i)      first, unmatched After-Tax Contributions made by the
                  Participant, as well as any earnings attributable thereto,
                  shall be returned to such Participant;

         (ii)     second, to the extent an excess amount exists after
                  application of clause (i), the unmatched Before-Tax
                  Contributions made on behalf of the Participant, as well as
                  any earnings attributable thereto, shall be returned to such
                  Participant;

         (iii)    third, to the extent an excess amount exists after application
                  of clauses (i) and (ii), Supplemental Profit Sharing
                  Contributions as well as earnings attributable thereto shall
                  be reduced and allocated to a suspense account for the Plan
                  Year and then shall be allocated to all Participants in the
                  next Plan Year to reduce Company Contributions for the next
                  Plan; and

         (iv)     fourth, to the extent an excess amount exists after
                  application of clauses (i), (ii) and (iii), Basic Profit
                  Sharing Contributions and Matching Contributions, in that
                  order, as well as earnings attributable thereto shall be
                  reduced and allocated to a suspense account for the Plan Year
                  and then shall be allocated to all Participants in the next
                  Plan Year to reduce Company Contributions for the next Plan
                  Year.

         (b) Suspense Account. If a suspense account is in existence at any time
during a Plan Year pursuant to this Section 6.6, such account shall be invested
in the money market or equivalent Investment Fund and shall participate in the
allocation of the Trust's investment gains and losses in such Investment Fund.
If a suspense account is in existence at any time during a particular Plan Year,
all amounts in the suspense account must be allocated

                                       26
<PAGE>   34
and reallocated to Participants' Accounts before any Company Contributions may
be made to thc Plan for that Plan Year. In the event that the Plan shall be
terminated, a partial termination shall occur, or any entity which is a part of
PaineWebber shall completely discontinue contributions to the Plan, the amount
in the suspense account, or, in the case of a partial termination or complete
discontinuance of contributions to the Plan, the portion of the suspense account
allocable to the Participants affected by such partial termination or complete
discontinuance, shall be treated as a Company Contribution made immediately
prior to such termination, partial termination or complete discontinuance of
contributions, which amount shall be allocated to the affected Participants on
the basis that each such Participant's Compensation for such year bears to the
Compensation of all other affected Participants.

         (c) Prohibition on Distribution. Except as otherwise provided in
Section 6.6(a), excess amounts above the maximum Annual Addition shall not be
distributed to Participants or former Participants.

         (d) Crediting Rule. For purposes of this Section 6.6(d), an Annual
Addition shall be credited to a Participant's Accounts for a Plan Year if it is
allocated to the Participant's Accounts under the terms of the Plan as of any
date within that Plan Year. Such amount shall not be deemed allocated as of any
date within a Plan Year if such allocation is dependent upon participation in
the Plan as of any date subsequent to such date. For purposes of this Section
6.6(d), Before-Tax and Profit Sharing Contributions shall not be deemed credited
to a Participant's Accounts for a particular Plan Year, unless said
contributions are actually made to the Plan no later than thirty days after the
end of the period described in Section 404(a)(6) of the Code applicable to the
taxable year with or within which the particular Plan Year ends.

         (e) Combined Statutory Limitation of Defined Benefit Plans and Defined
Contribution Plans. In the case where a Participant is also a participant in a
defined benefit plan maintained by an Affiliated Employer, the sum of the
defined benefit plan fraction and the defined contribution plan fraction (as
such terms are defined in Section 415 of the Code) for any year shall not exceed
1.0. In the manner contemplated by the Code, the provisions of this Section
6.6(e) shall cease to apply to the extent that the provisions of Section 415 of
the Code cease to contain a combined limit on benefits for Participants who
participate in the Plan and in a defined benefit plan.

         6.7. Special Definitions.

         "ACP Test" means the Average Actual Contribution Percentage tests of
Section 6.3(a).

         "ADP Test" means the Average Actual Deferral Percentage Test.

         "Aggregate Percentage" means the sum of a Participant's Deferral
Percentage and Contribution Percentage.

         "Annual Addition" means the sum of the following amounts credited to a
Participant's Accounts for the Plan Year:

                                       27
<PAGE>   35
         (a) Before-Tax Contributions,

         (b) After-Tax Contributions,

         (c) Matching Contributions,

         (d) Profit Sharing Contributions, and

         (e) forfeitures, if any.

         "Average Actual Contribution Percentage" means the average of the
Contribution Percentage of each of the Participants of any designated group of
Participants and shall be determined utilizing the data for the Plan Year in
reference.

         "Average Actual Deferral Percentage" means the average of the Deferral
Percentage of each of the Participants of any designated group of Participants
and shall be determined utilizing the data for the Plan Year in reference.

         "Contribution Percentage" means the ratio, expressed as a percentage,
of the sum of After-Tax Contributions, Matching Contributions and any Before-Tax
Contributions QNECs and QMACs which are treated as "matching contributions"
within the meaning of Section 401(m) of the Code on behalf of an Eligible
Employee for a Plan Year to the Employee's "compensation" (within the meaning of
Section 414(s) of the Code) for any portion of such Plan Year during which the
Employee was a Participant.

         "Deferral Percentage" means the ratio, expressed as a percentage, of
the amount of Before-Tax Contributions made to the Plan on behalf of an Eligible
Employee for a Plan Year and any QNECs and QMACs treated as Before-Tax
Contribution for such Plan Year to the Eligible Employee's "compensation"
(within the meaning of Section 414(s) of the Code) for any portion of such Plan
Year during which the Eligible Employee was a Participant.

         "Excess Contribution" means, for a Highly Compensated Employee, the
amount by which the After-Tax and Matching Contributions of a Highly Compensated
Employee must be reduced so that such employee's Contribution Percentage will
cause the ACP Test to be satisfied.

         "Excess Before-Tax Contribution" means, for a Highly Compensated
Employee, the amount by which the Before-Tax Contributions of a Highly
Compensated Employee must be decreased so that the Deferral Percentage of the
Highly Compensated Employee will cause the ADP Test to be satisfied.

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

                                       28
<PAGE>   36
         "QNEC" or "Qualified Non-Elective Contribution" means contributions
(other than Matching Contributions or Qualified Matching Contributions) made by
the employer and allocated to Participants' Accounts that (i) the Participants
may not elect to receive in cash until distributed from the Plan, (ii) are
nonforfeitable when made, and (iii) are distributable only in accordance with
the distribution provisions that are applicable to Before-Tax Contributions.

         "Section 402(g) Limit" means $10,000 (or such greater amount as may be
permitted by reason of the application of Section 402(g)(5) of the Code).

                                       29
<PAGE>   37
                                  ARTICLE VII

                                     VESTING

         7.1. Employee Account. A Participant shall be 100 percent vested in all
amounts in his Employee Account at all times.

         7.2. Retirement. A Participant shall be 100 percent vested in his
Company Account upon attaining his Retirement Age while in Service.

         7.3. Death or Disability. A Participant shall be 100 percent vested in
his Company Account upon the occurrence of the Participant's death or Disability
while in Service.

         7.4. Vesting in Company Account. A Participant's interest in the
Company Contributions and earnings attributable thereto credited to his Company
Account shall be 100 percent vested as of the date a Participant shall have
completed, and is credited with under the Plan, a Period of Service of five
years.

         7.5. Forfeitures.

         (a) Rules Applicable to Forfeitures. A Participant who has not attained
a Period of Service of five years as of his Severance Date shall forfeit all
Company Contributions and earnings thereon as of such Severance Date. Any
forfeitures under this Article VII shall be allocated to a forfeiture suspense
account under the Plan as of the applicable Participant's Severance Date and
shall be applied to reduce succeeding Company Contributions by the Employers
made after such Severance Date. If a Participant who incurs a Severance Date
subsequently resumes Service prior to the completion of a Five-Year Period of
Severance, the amount of Company Contributions and earnings thereon previously
forfeited shall be restored as of the date of such return to Service.

         (b) Deemed Forfeiture Distribution. A Participant who forfeits Company
Contributions by operation of this Article VII shall be deemed to have a
distribution of zero as of his Severance Date of his Company Contributions.

                                       30
<PAGE>   38
                                  ARTICLE VIII

                                  DISTRIBUTIONS

         8.1. Distribution of Vested Account Balance.

         (a) Eligibility For Distribution. Following the occurrence of a
Participant's Severance Date for any reason other than death, the Participant
shall be entitled to receive a distribution of his Vested Account Balance.

         (b) Right to Defer. A Participant (i) who is eligible for a
distribution under Section 8.1(a) above and (ii) whose Vested Account Balance
exceeds the Cash-Out Amount may elect to defer distribution of his Vested
Account Balance until the last day of any month selected by the Participant
after the month in which his Severance Date occurs, but in no event later than
his Required Beginning Date.

         8.2. Cash-Outs. Any other provision in the Plan to the contrary
notwithstanding, if, on a Participant's Severance Date, the Participant's Vested
Account Balance does not exceed the Cash-Out Amount (and, at the time of any
prior distribution, did not exceed the Cash-Out Amount), then (i) the
Participant shall not be eligible to make an election to delay payment described
in Section 8.1(b) and (ii) the entire Vested Account Balance shall be
distributed to the Participant in a cash lump sum as soon as practicable
following the Participant's Severance Date.

         8.3. Form and Amount of Distribution.

         (a) Valuation. The amount of each distribution under this Article VIII
shall be valued as of the Valuation Date immediately prior to the date such
distribution is made, and no interest or other earnings shall be credited on the
amount of the distribution from such Valuation Date to the date that the
proceeds of the distribution are received by the Participant or transferred to
an Eligible Retirement Plan designated by the Participant.

         (b) Payment Options. A Participant may elect to receive his
distribution either (i) as a single lump sum or (ii) in monthly, quarterly,
semiannual or annual installments over a period not to exceed ten years, with
each installment being determined by dividing the total value of the
Participant's Account as of the Valuation Date immediately prior to the date
such installment is made by the total number of such remaining installments
(including that installment).

         (c) Payment Form. If a Participant elects to receive his distribution,
then, with respect to the Participant's Company Account and the portion, if any,
of the Participant's Employee Account invested in the Common Stock Fund, the
Participant may elect to receive such distribution in either (i) cash equal to
the value of the portion of the Vested Account Balance invested in the Common
Stock Fund, determined as of the Valuation Date immediately prior to the date of
such distribution, or (ii) a number of shares of Common Stock (and cash
representing any fractional shares) determined in accordance with Section
8.3(d). The remainder

                                       31
<PAGE>   39
of the Participant's Employee Account not invested in the Common Stock Fund
shall be paid in cash.

         (d) Methodology for Calculating Shares of Common Stock. Shares of
Common Stock shall be calculated in accordance with procedures applicable to all
Participants on a uniform basis. To determine the number of Shares of Common
Stock a Participant is entitled to on a Valuation Date, the amount of a
Participant's Account balance attributable to Shares of Common Stock will be
divided by the closing Share price for such Valuation Date. All fractional
Shares of Common Stock shall be paid in cash.

         (e) Certain Limitations on Distributions. If a Participant elects to
receive a distribution but the Participant does not elect a form of distribution
under Section 8.3(c) within the prescribed period, the value of the Vested
Account Balance shall be paid in cash.

         8.4. Elections.

         (a) Election Procedures. To the extent permitted by the Code, a
Participant may elect a distribution or a form of distribution permitted by
Section 8.3 by utilizing the Automated Response System in accordance with the
applicable procedures of such system. In the event the Automated Response System
is not available for a distribution election, the Participant shall complete a
form provided for this purpose by the Plan Administrator, which shall be
delivered to the Participant no earlier than ninety days and no later than
thirty days prior to the commencement of a distribution. A distribution to a
Participant will not commence before the expiration of the thirty-day period
beginning on the date that the Participant is provided with the written notice
and explanation contemplated by Treas. Reg. Section 411(a)-11(c) (the "Notice"),
unless the requirements of Section 8.4(b) are satisfied.

         (b) Waiver of Thirty-Day Notice. Notwithstanding Section 8.4(a), if (i)
the Committee informs the Participant that the Participant has the right to a
period of at least thirty days after receiving the Notice to consider the
decision of whether to elect a distribution and (ii) the Participant, after
receiving the Notice, affirmatively elects in writing, or such other method
permitted by the Code, to receive an immediate distribution and to waive the
remainder of the thirty-day period, then a distribution of the Participant's
Vested Account Balance may commence at any time following the expiration of the
seven-day period beginning on the date that the Notice was first delivered to
the Participant.

         (c) Beneficiary Designation. Subject to Section 8.4(d) below, a
Participant shall have the right to designate the Beneficiary who shall receive
the unpaid portion of his Vested Account Balance upon the death of the
Participant. Subject to Section 8.4(d) below, a Participant may from time to
time revoke or change his Beneficiary designation without the consent of any
prior Beneficiary by filing a new beneficiary designation form with the
Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation form, or change or
revocation thereof, shall be effective unless received by the Plan Administrator
prior to the Participant's death, and in no event shall it be effective as of
any date prior to such receipt. In the absence of an effective designation,
payment shall be made to the first of the following classes of successive
preference beneficiaries then

                                       32
<PAGE>   40
surviving: the Participant's (i) surviving Spouse, (ii) children, (iii) parents,
(iv) brothers and sisters, or (v) executors or administrators.

         (d) Spouse as Beneficiary. Anything in Section 8.4(c) to the contrary
notwithstanding, the designation by a Participant who has a Spouse at the time
of such designation of a non-Spouse Beneficiary or Beneficiaries shall be
effective only with Spousal Consent. Any such Spousal Consent shall be
irrevocable by the Spouse. Any Spousal Consent shall be effective as of the date
of such consent and shall be valid only with respect to the Spouse who signs
such consent. Spousal Consent will be deemed satisfied if it is established to
the satisfaction of the Plan Administrator that Spousal Consent cannot be
obtained because (i) the Participant in fact has no Spouse, (ii) the
Participant's Spouse cannot be located, or (iii) of other circumstances as the
Plan Administrator may determine in accordance with applicable law.

         (e) QDROs. Notwithstanding any other provision of the Plan to the
contrary, benefits awarded to any alternate payee (as defined in Section 414(p)
of the Code) pursuant to a Qualified Domestic Relations Order may be distributed
to the alternate payee at any time upon the request of such alternate payee and
without regard to any limitation in the Plan as to the time when such benefits
would otherwise have been distributable.

         8.5. Reemployment. If a Participant is entitled to a distribution
pursuant to this Article VIII but does not receive such distribution prior to
resuming Service, then no distribution will be made to him as a result of the
Participant's prior Severance Date and the distributable amounts shall be
retained in his Accounts.

         8.6. Minimum Required Distributions. Notwithstanding any other
provision of the Plan, distributions under the Plan shall be made in accordance
with the amount and timing requirements of Section 401(a)(9) of the Code.
Furthermore, a Participant who (i) is not a Five-Percent Owner, (ii) attains age
seventy and one-half on or after January 1, 1999 and (iii) is an Employee on
April l of the year following the year in which the Participant attains age
seventy and one-half shall not receive a distribution of his Vested Account
Balance until the Participant's Severance Date, but in no event later than April
1st following the year in which such Severance Date occurs.

         8.7. Death of a Participant.

         (a) Death in Service. If a Participant's Service with PaineWebber ends
by reason of the Participant's death, the Participant's Beneficiary shall
receive a distribution of his Vested Account Balance in a lump sum as soon as
practicable after the date of death of the Participant. Notwithstanding anything
contained herein to the contrary, if the Vested Account Balance equals or
exceeds the Cash-Out Amount, the Beneficiary may elect to defer distribution of
the Vested Account Balance until the Participant's Required Beginning Date. The
amount of the lump sum shall be valued as of the Valuation Date immediately
prior to the date of the distribution. If a portion of the Vested Account
Balance is invested in the Common Stock Fund, the Beneficiary may elect to
receive shares of Common Stock in connection with such lump sum distribution in
the manner contemplated by Section 8.3(c) as if, solely for such purpose, the
Beneficiary were the electing Participant.

                                       33
<PAGE>   41
            (b) Death After Distributions Commence. If a Participant who is
currently receiving an installment distribution dies before his entire Vested
Account Balance is distributed to him, then the remaining portion of his Vested
Account Balance, if any, shall be distributed at least as rapidly as under the
method of distributions being used prior to the date of the Participant's death;
provided, however, that, if a Beneficiary so elects, the Participant's remaining
Vested Account Balance may be paid to the Beneficiary in a lump sum. If a
Participant who has incurred a Severance Date and elected a lump sum payment
dies before such payment is made to the Participant, such prior election by the
Participant shall be void and the provisions of Section 8.7(a) shall apply as if
the Participant had died in Service.

         8.8. 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. The Committee may establish or change
reasonable procedures from time to time to effectuate Direct Rollovers.

                                       34
<PAGE>   42
                                   ARTICLE IX

                        IN-SERVICE WITHDRAWALS AND LOANS

         9.1. Withdrawals on Account of Attaining Age Fifty-Nine and One-Half.
Any Participant who has attained age fifty-nine and one-half and who is in
Service may withdraw any or all of his Vested Account Balance in the following
order: (i) After-Tax Contributions made prior to 1987, (ii) After-Tax
Contributions made after 1986 and the earnings attributable to After-Tax
Contributions made at any time, (iii) Rollover Contributions, (iv) Paysop
Contributions, (v) Vested Supplemental Profit Sharing Contributions, (vi) vested
Basic Profit Sharing Contributions, (vii) vested Matching Contributions and
(viii) Before-Tax Contributions.

         9.2. Withdrawals of After-Tax, Rollover and Paysop Contributions. In
accordance with the provisions of Section 72 of the Code, a Participant who is
in Service may withdraw at any time the portion of his After-Tax Contributions
contributed to his Account prior to January 1, 1987. A Participant who has
withdrawn his After-Tax Contributions deposited prior to January 1, 1987 may
withdraw any amounts remaining in his After-Tax Contributions sub-account. With
regard to any Participant who makes a withdrawal from his After-Tax
Contributions sub-account in excess of the amount deposited prior to 1987, the
withdrawal shall be taken out pro-rata from the After-Tax Contributions
(deposited post-1986), the earnings attributable to pre-1987 After-Tax
Contributions and the earnings attributable to post-1986 After-Tax
Contributions. A Participant who is in Service may, at any time, withdraw at any
time any portion of his Rollover and Paysop Contributions.

         9.3. Withdrawals on Account of Financial Hardship.

         (a) Contributions Available for Hardship Withdrawal. A Participant who
is in Service and who has made all permissible withdrawals under Sections 9.1
and 9.2 and who has received all permissible loans under Section 9.5 may
withdraw in a hardship withdrawal under this Section 9.4(a) (i) all or any
amount of his Before-Tax Contributions, (ii) any earnings credited on Before-Tax
Contributions prior to December 31, 1988 and (iii) all or any amount of his
vested Company Contributions and any earnings thereon.

         (b) Purpose for Hardship Withdrawal. Hardship withdrawals shall be
limited to the amount necessary to satisfy the Financial Hardship of the
Participant and not reasonably available from other resources. In determining
whether a request for a withdrawal from the Plan is necessary to satisfy a
Financial Hardship of the Participant, the Plan Administrator shall rely on a
written representation by the Participant that (i) the need cannot be reasonably
met (x) through reimbursement or compensation by insurance or otherwise, (y) by
liquidation of the Participant's assets, and (z) by borrowing from commercial
sources on reasonable commercial terms in an amount sufficient to satisfy the
Financial Hardship and (ii) the Participant has taken all available
distributions and loans from the Plan and will suspend, for a period of not less
than twelve months, his Before-Tax Contributions to the Plan.

         (c) Order of Plan Interests. Hardship withdrawals shall be deemed to be
paid in the following order of the Participant's interests in his Accounts: (i)
from the portion of his

                                       35
<PAGE>   43
Company Account which is attributable to Profit Sharing Contributions and
Matching Contributions and in which the Participant is 100 percent vested, (ii)
from the portion of his Employee Account which is attributable to Before-Tax
Contributions, and (iii) from the portion of his Employee Account attributable
to earnings, if any, on Before-Tax Contributions which were credited to the
Employee Account as of December 31, 1988.

         9.4. Plan Loans.

         (a) Persons Eligible for Plan Loans. Upon approval by the Committee or
its delegate that a Participant has a Loan Need, and to the extent permitted by
applicable law, Plan Loans may be granted under the terms of the Plan to the
following persons:

         (i)      each Participant prior to his separation from Service; and

         (ii)     each former officer or director or other "party-in-interest"
                  as defined by Section 3(14) of ERISA.

Notwithstanding anything in the preceding sentence to the contrary, a Plan Loan
will be granted regardless of whether the Participant has a Loan Need if (i) the
proceeds of the Plan Loan are paid from the Participant's Rollover Account or
(ii) the Participant has attained at least age fifty-nine and one-half.

         (b) Number of Plan Loans. Each person who is eligible for a Plan Loan
under this Article shall be precluded from having more than one Plan Loan
outstanding at a time.

         (c) Amount of Plan Loan. The amount of any Plan Loan shall be governed
by the following rules:

         (i)      Each Plan Loan must be for an amount equal to at least $1,000.

         (ii)     The amount of any Plan Loan, when added to the outstanding
                  balance of a Participant's other Plan Loans, may not exceed
                  the lesser of:

                  (A)      fifty percent of the value of the Participant's
                           Vested Account Balance, or

                  (B)      $50,000, reduced by the excess, if any, of:

                           (y)      the highest outstanding balance of a
                                    Participant's Plan Loans during the one-year
                                    period ending the day before a new Plan Loan
                                    is to be made or a Plan Loan is to be
                                    renegotiated, over

                           (z)      the outstanding balance of a Participant's
                                    Plan Loans on the day before the day the new
                                    Plan Loan is to be made, or a Plan Loan is
                                    to be renegotiated, or

                                       36
<PAGE>   44
                  (C)      the value of the Participant's Employee Account.

         (iii)    For the purpose of determining any outstanding Plan Loan
                  balances, the Plan Administrator may use the amortization
                  schedule included in the Participant's loan agreement, unless
                  the Plan Administrator has reason to know of a material
                  discrepancy between the amount set forth on the amortization
                  schedule and the actual outstanding Plan Loan balance.

         (d) Term of Plan Loan. All Plan Loans, other than those for the purpose
of purchasing or constructing the dwelling unit which is, or within a reasonable
time will be, the principal residence of the Participant ("Principal Residence
Loans"), must be repaid over a period of one, two, three, four or five years.
Principal Residence Loans must be repaid over a period of five, ten or twenty
years. All Plan Loans must be repaid within ninety days after the Participant's
Severance Date.

         (e) Interest Rate. Each Plan Loan granted or renewed hereunder shall
bear a reasonable rate of interest on the unpaid balance. The interest rate,
which shall remain in effect for the term of the Plan Loan, shall accrue on the
principal amount of a Plan Loan up to and including the date on which the
earliest of the following occurs: a prepayment, a deemed distribution, or an
offset against an actual distribution, as applicable.

         (f) Repayment.

         (i)      The terms of the Plan Loan shall be evidenced by written
                  documentation including, without limitation, a loan
                  application form, any required truth-in-lending disclosure
                  statement, a promissory note, a payroll deduction
                  authorization and an amortization schedule signed by the
                  Participant specifying the amount of the Plan Loan, the term
                  of the Plan Loan, the repayment schedule, the Participant's
                  consent to a distribution in the event of Default (as defined
                  below), and such other information as the Plan Administrator
                  determines is necessary to describe the terms of the Plan
                  Loan. If the Benefits Administration Committee so provides,
                  Plan Loans may be originated, processed and administered
                  through the Automated Response System, in accordance with the
                  procedures of such system which shall be uniformly applied to
                  all similarly situated Participants.

         (ii)     The Plan Loan must be repaid in a series of substantially
                  level installments as determined by the Plan Administrator
                  (not less frequently than quarterly) over the term of the Plan
                  Loan, except for the last repayment.

         (iii)    Notwithstanding anything in this paragraph to the contrary,
                  but subject to paragraph 9.5(h) below, recipients of a Plan
                  Loan who are no longer on the payroll because of an
                  uncompensated leave of absence, Disability or Military Leave
                  or who are transferred to a work location where payroll
                  deductions are not possible, shall make cash payments to the
                  Trustee of the Plan.

                                       37
<PAGE>   45
         (iv)     Proceeds from the repayment of a Participant Loan shall be
                  allocated among the Investment Funds in the same proportion,
                  if any, that the Participant has elected to invest new Plan
                  contributions at the time of each such repayment.

         (g) Prepayments. Full cash prepayments of a Plan Loan may be made to
the Trustee of the Plan, without imposition of any penalty. Notwithstanding
anything contained herein to the contrary, with respect to a Participant who has
an outstanding Plan Loan at his termination of employment, such Participant may
make a cash prepayment in any amount.

         (h) Unpaid Absences. If a Participant who has a Plan Loan outstanding
is no longer on the payroll because of an uncompensated leave of absence,
Disability or Military Leave such that payroll deductions are not possible, such
Participant may continue to make payments in accordance with Section 9.3(f)(iii)
above or may submit a request for a suspension of such payments during such
unpaid leave of absence to the Plan Administrator. If a Participant requests a
suspension, such Participant's payments may be suspended for up to one year in
the sole discretion of the Plan Administrator; provided, however, that any
Compensation paid by PaineWebber to such Participant during the leave of absence
is insufficient to make the payments required on the Plan Loan for the duration
of such period; and provided further that the Plan Administrator's decision
shall be made pursuant to procedures uniformly applied to all similarly situated
Participants. The term of a Plan Loan shall not be extended beyond the limits
imposed by Section 9.5(d) by reason of this Section 9.5(h), regardless of
whether a Participant's payments are suspended hereunder. Installments due on a
Plan Loan will be increased proportionately upon expiration of the Participant's
leave of absence to compensate for the period of suspension, if necessary.

         (i) Defaults. If a Participant fails to comply with the terms of this
Section 9.5 or fails to make any installment payment on any Plan Loan within
ninety days of the date when due ("Default"), the entire unpaid principal amount
of such Plan Loan, together with any accrued and unpaid interest thereon, shall
immediately become due and payable.

         (j) Remedies. If a Participant Defaults on a Plan Loan and such
Participant is not entitled to a distribution from his Accounts, then the Plan
Administrator will declare a deemed distribution to have occurred with respect
to such Plan Loan, effective as of the date of the Default. Such deemed
distribution shall be applied toward the satisfaction of the Participant's Plan
Loan at the time a distribution is made to the Participant in accordance with
the terms of the Plan and the balance of the Participant's Accounts will be
reduced accordingly at such time. If a Participant Defaults on a Plan Loan and
such Participant is eligible for a distribution from any of the Participant's
Accounts in accordance with the terms of the Plan, the Plan Administrator shall
cause a distribution from the Participant's Accounts to be applied towards
satisfaction of the Participant's Plan Loan Default effective as of the date of
Default and the balance of the Participant's Accounts will be reduced
accordingly.

                                       38
<PAGE>   46
         (k) Source and Application of Funds.

         (i)      All Plan Loans shall be made from and considered assets of the
                  Trust. All Plan Loans shall be secured, as of the date of the
                  Plan Loan, by the portion of a Participant's Vested Account
                  Balance under the Plan which is equal to the outstanding Plan
                  Loan balance.

         (ii)     A Participant's application for a Plan Loan submitted to the
                  Plan Administrator shall constitute an investment direction to
                  sell or liquidate from investment funds in the Participant's
                  Employee Account an amount sufficient to yield the amount of
                  the Plan Loan approved by the Plan Administrator, regardless
                  of whether the Participant subsequently declines the Plan
                  Loan.

         (iii)    Until disbursed by the Trustee to the Participant as a Plan
                  Loan, the proceeds of the liquidation of the Investment Funds
                  in a Participant's Account shall be held uninvested. If a
                  Participant declines a Plan Loan after such Plan Loan has been
                  approved by the Plan Administrator, the proceeds of the
                  liquidation shall be reinvested in the Investment Funds in the
                  same proportion as the amounts in the Participant's Account
                  were invested in such Investment Funds immediately before
                  liquidation.

         (iv)     Upon the disbursement of the Plan Loan to the Participant, the
                  Participant's Account shall be deemed invested (and each
                  Participant's application for a Plan Loan shall constitute an
                  election to invest), to the extent of the unpaid balance of
                  such Plan Loan, in the Plan Loan extended to the Participant.
                  The unpaid balance of any Plan Loan shall not reduce the
                  amount credited to the Participant's Account.

         (l) Plan Loan Application and Processing. Plan Loan applications are
made by completing the required forms constituting the Loan Agreement and
submitting such forms and any additional required documentation to the Plan
Administrator. The Plan Administrator may, but shall not be required to, direct
the Trustee to make a Plan Loan to such Participant from the Plan. The Plan
Administrator may establish or change from time to time the standards or
requirements for making any Plan Loan, provided, however, that the standards or
requirements shall be nondiscriminatory, uniformly applicable to all
Participants similarly situated and shall permit Plan Loans to be available to
all Participants on a reasonably equivalent basis.

         9.5. Order of Liquidation of Investment Funds. In connection with each
withdrawal or loan under this Article IX, the Participant's investments in each
Investment Fund shall be liquidated pro rata from each Investment Fund.

         9.6. Valuation. The value of a Participant's Accounts for purposes of
any withdrawal or Plan Loan under this Article IX shall be determined as of the
Valuation Date immediately prior to the date of the Plan Loan or withdrawal, and
no interest or other earnings shall be credited on the amount of such withdrawal
from such Valuation Date to the date the

                                       39
<PAGE>   47
proceeds of the withdrawal or Plan Loan are received by the Participant or
transferred, if applicable, to an Eligible Retirement Plan designated by the
Participant.

         9.7. Death. If a Participant should die prior to the payment of any
withdrawal or the disbursement of the proceeds of any Plan Loan requested under
this Article IX, the Participant's withdrawal or loan request shall be void as
of the date of death.

                                       40
<PAGE>   48
                                   ARTICLE X

                           ADMINISTRATION OF THE PLAN

         10.1. In General. The administration, management and operation of the
Plan and the responsibility for the management and investment of the assets of
the Trust Fund shall be allocated among the Investment Committee, the Benefits
Administration Committee, the Plan Administrator, the Trustee and their
respective delegates, agents and appointees in the manner described in this
Article X and in Article XI.

         10.2. Appointment of Committees. The Executive Committee shall appoint
the members of each Committee, and each Committee shall consist of such number
of individuals as have been appointed from time to time by the Executive
Committee and who are then serving on the Committee. Committee members shall
serve at the pleasure of the Executive Committee and may be removed by the
Executive Committee for any reason or for no stated reason upon written notice
to the individual Committee member. Such removal shall be effective upon
delivery of the written notice to the member of the Committee or as of the date
of removal specified in such written notice, if later. If an individual who is
serving on a Committee terminates Service with PaineWebber for any reason, the
individual will automatically be deemed to be removed as a Committee member as
of the date of such termination of Service without further action by the
Executive Committee or such individual. An individual may resign as a member of
the Committee on thirty days' prior written notice to the Executive Committee,
or such lesser period as the Executive Committee shall allow on a case-by-case
basis.

         10.3. Chairman, Secretary, Agents. Each Committee shall have a
Chairperson appointed by the Executive Committee or, if no such Chairperson is
appointed by the Executive Committee, elected from among its members. Each
Committee shall appoint a Secretary who may, but need not, be one of the members
of the Committee. Each Committee may appoint agents who may, but need not, be
members of the Committee. Any person who is appointed as an agent of the
Committee may be delegated such powers and duties as the Committee may deem
expedient or appropriate. No member of the Committee will receive any
compensation for his services as such.

         10.4. Meetings. A Committee shall hold meetings upon such notice, at
such place or places, and at such intervals as it may from time to time
determine. Meetings of a Committee may be held in person, by telephone, through
other suitable communications media or in any combination thereof.

         10.5. Quorum and Voting. If the number of members of the Committee in
office at the relevant time is an odd number, then a majority of such members
shall constitute a quorum for the transaction of business. If the number of
members of the Committee in office at the relevant time is an even number, then
one-half of such members shall constitute a quorum for the transaction of
business. Any action taken by a majority of the members of a Committee at a
meeting at which a quorum is present shall constitute for all purposes of the
Plan an act of the

                                       41
<PAGE>   49
Committee. Each Committee shall have the authority to ratify and approve any
prior actions taken on behalf of the Committee.

         10.6. Expenses. The reasonable expenses incident to the operation of
the Plan, including the compensation of the Trustee, attorney, fiduciaries, and
such other technical and clerical assistance as may be required, shall be paid
by PaineWebber; provided, however, that PaineWebber, in its discretion and in
accordance with applicable law, may elect at any time to have such expenses paid
out of the Trust Fund.

         10.7. Powers and Duties of the Benefits Administration Committee.

         (a) General Authority. Except as otherwise provided in Sections 10.8
and 10.9, the Benefits Administration Committee shall have responsibility for
the interpretation and construction of the Plan and final authority with respect
to the operation and administration of the Plan. The Benefits Administration
Committee shall have the power and the duty to take all actions and to make all
decisions necessary or proper to carry out its responsibilities under the Plan.
All determinations of the Benefits Administration Committee as to any question
involving its responsibilities under the Plan, including, but not limited to,
interpretation of the Plan, or as to any discretionary actions to be taken under
the Plan, shall be solely in the Benefits Administration Committee's discretion
and shall be final, conclusive and binding on all persons claiming to have any
right or interest in or under the Plan.

         (b) Additional Powers and Responsibilities. In addition to any implied
powers and duties which may be needed to carry out the provisions of the Plan,
the Benefits Administration Committee shall have the following specific powers
and duties:

         (i)      To make and enforce such rules and regulations as it shall
                  deem necessary or proper for the efficient administration of
                  the Plan;

         (ii)     To construe and interpret the terms and provisions of the Plan
                  and all documents which relate to the Plan and to decide any
                  and all matters arising thereunder, including the right to
                  remedy possible ambiguities, inconsistencies or omissions;

         (iii)    To determine the eligibility for benefits under the Plan;

         (iv)     To investigate and make factual determinations with regard to
                  any matter related to the Plan;

         (v)      To appoint one or more Plan record keepers and third-party
                  administrators;

         (vi)     To review appeals of claims for benefits in accordance with
                  Section 10.11, and to approve or deny any such benefit claim;
                  and

                                       42
<PAGE>   50
         (vii)    To undertake any action that Section 10.8 allows the Plan
                  Administrator to undertake.

         (c) Residual Authority. Any power, duty or responsibility with respect
to Plan administration and operation not specifically allocated hereunder shall
reside with the Benefits Administration Committee.

         10.8. Powers and Duties of the Plan Administrator.

         (a) General Authority. The Plan Administrator shall have day-to-day
responsibility for the operation and administration of the Plan. The Plan
Administrator shall have the power and the duty to take all actions and to make
all decisions necessary or proper to carry out its responsibilities under the
Plan.

         (b) Additional Powers and Responsibilities. In addition to any implied
powers and duties which may be needed to carry out the provisions of the Plan,
the Plan Administrator shall have the following specific powers and duties:

         (i)      To monitor and supervise the activities of any Plan record
                  keepers and third party administrators appointed for the Plan;

         (ii)     To review benefit claims in accordance with Section 10.11 and
                  to approve or deny any benefit claim;

         (iii)    To review domestic relations orders and to determine whether
                  any such domestic relations order constitutes a QDRO;

         (iv)     To approve Plan Loans, hardship withdrawals, other in-Service
                  withdrawals or Plan distributions;

         (v)      To determine the eligibility for benefits under the Plan;

         (vi)     To investigate and make factual determinations with regard to
                  any matter related to the Plan;

         (vii)    To compute the Account balance or the amount which shall be
                  payable to any Participant or Beneficiary in accordance with
                  the provisions of the Plan or to review the computation or
                  amount computed by any third-party administrator;

         (viii)   To supervise the employees of PaineWebber who are retained in
                  connection with the operation of the Plan;

         (ix)     To determine which Plan expenses shall be charged to the Trust
                  Fund; and

         (x)      To authorize disbursements from the Trust Fund.

                                       43
<PAGE>   51
         (c) Voting and Investment Direction. The Plan Administrator shall be
responsible for supervising the implementation of all investment directions by
Participants and their Beneficiaries and the actions necessary to permit the
exercise by Participants and Beneficiaries of voting and other rights with
respect to any Investment Fund, including, without limitation, the Common Stock
Fund. Furthermore, the Plan Administrator shall use his best efforts to ensure
the confidentiality of all information relating to Participants' investments and
the exercise of voting and other rights. In furtherance thereof, the Plan
Administrator shall be permitted to delegate all or any of the foregoing
responsibilities to any other fiduciary of the Plan whenever the Plan
Administrator, in his judgment, determines that such delegation is in the best
interests of Participants and their Beneficiaries.

         (d) QDRO Procedures. The Plan Administrator shall establish and may
change from time to time reasonable rules and procedures to determine the
qualified status of any domestic relations orders (as defined in Section 414(p)
of the Code).

         10.9. Powers and Duties of the Investment Committee.

         (a) General Authority. The Investment Committee shall have
responsibility for the selection of the Investment Funds, the periodic review
and performance of the manager of each Investment Fund and the direction of the
Trustee with respect to the investment of the assets of the Plan to the extent
that such direction is not delegated to Participants under the terms of the
Plan. The Investment Committee shall have the power and the duty to take all
actions and to make all decisions necessary or proper to carry out its
responsibilities under the Plan.

         (b) Additional Powers and Responsibilities. In addition to any implied
powers and duties which may be needed to carry out the provisions of the Plan,
the Investment Committee shall have the following specific powers and duties:

         (i)      To determine the number and category of Investment Funds that
                  will be offered under the Plan;

         (ii)     To appoint, remove or change, from time to time, persons
                  constituting "Investment Managers," as defined in Section
                  3(38) of ERISA, to manage the assets of an Investment Fund,
                  and to delegate to such Investment Managers the exclusive
                  authority to manage (including the power to acquire and
                  dispose of) all or such portion of the Trust Fund as the
                  Committee shall designate at any time or from time to time as
                  constituting such Investment Fund or as may be allocated to
                  such Investment Fund by Participants;

         (iii)    To investigate and make factual determinations with regard to
                  any manner related to the Trust Fund;

         (iv)     To make and enforce such rules and regulations as it shall
                  deem necessary or proper for the efficient investment of the
                  Trust Fund;

                                       44
<PAGE>   52
         (v)      To appoint the Trustee or Trustees, to approve the Trust
                  Agreement and to authorize any officer of PaineWebber to
                  execute the Trust Agreement (or any amendments thereto) on
                  behalf of the Company; and

         (vi)     To construe and interpret the terms and provisions of the Plan
                  and the Trust Agreement and all documents which relate to the
                  Trust Fund and to decide any and all matters arising
                  thereunder, including the right to remedy possible
                  ambiguities, inconsistencies or omissions.

                  Subject to ERISA and the Code, an Investment Manager appointed
hereunder may be the Company or an Affiliated Employer.

         10.10. Delegation of Authority. Notwithstanding anything in this
Article X to the contrary, each Committee and the Plan Administrator may
authorize or delegate one or more persons to perform the routine administrative
functions of the Committee or the Plan Administrator and to sign on behalf
thereof any statements of the Committee or instructions to the Trustee or
notices or other communications to Participants, Beneficiaries or other persons.

         10.11. Benefit Claims Procedures.

         (a) Initial Review. In the event any person disputes the amount of, or
his entitlement to, any benefits under the Plan or their method of payment, such
person shall file a claim in writing (identified as a claim) for the benefits to
which he believes he is entitled with the Plan Administrator, setting forth the
reason for his claim. The Plan Administrator shall consider the claim and, if he
shall deny such claim in whole or in part, within ninety days he shall give to
such person (and if such person has designated in writing any representative, he
shall also give a copy to such representative) (i) a written notice setting
forth the specific reason or reasons for the denial of the claim, including
references to the applicable provisions of the Plan, (ii) a description of any
additional material or information necessary to perfect such claim along with an
explanation of why such material or information is necessary, and (iii)
appropriate information as to the procedure to be followed for review of such
claim by the Committee. If the Plan Administrator shall fail to respond to such
claim within ninety days after its receipt, such claim, for purposes of seeking
review by the Benefits Administration Committee, shall be deemed denied.

         (b) Appeal. Any person whose claim is denied by the Plan Administrator
may request that the Benefits Administration Committee review the Plan
Administrator's decision by filing a written request with the Benefits
Administration Committee for such review within sixty days after such claim is
denied. In connection with that review, such person (or his authorized
representative) may examine pertinent documents and submit such written comments
as may be appropriate. The Benefits Administration Committee shall render its
decision within sixty days after the receipt of the request for review, unless
special circumstances require an extension of time up to an additional sixty
days. Any decision of the Benefits Administration Committee shall be in writing
and shall include specific reasons for the decision and references to the
pertinent provisions of the Plan on which the decision is based.

                                       45
<PAGE>   53
         10.12. Named Fiduciary. The Benefits Administration Committee shall be
the "named fiduciary" for purposes of Section 402(c) of ERISA.

         10.13. Indemnification. PaineWebber shall indemnify and hold harmless,
to the extent permitted by law, the Plan Administrator, each Committee, each
individual member of a Committee and each person to whom fiduciary
responsibilities are delegated by the Plan Administrator or a Committee from and
against any liability, damage, cost and expense (including attorneys' fees and
amounts paid in settlement of any claim approved by PaineWebber) incurred by or
asserted against him by reason of his occupying or having occupied fiduciary
positions in connection with the Plan, except that no indemnification shall be
provided if an indemnified person personally profited from any act or
transaction in respect of which indemnification is sought. Neither the Plan
Administrator nor any member of a Committee shall be liable for any act or
omission by him unless such act or omission constitutes a breach of his
fiduciary duty under ERISA.

         10.14. Reliance on Reports and Certificates. Each Committee and Plan
Administrator will be entitled to rely conclusively upon all tables, valuations,
certificates, opinions and reports which will be furnished by PaineWebber, any
accountant, controller, counsel, the Trustee or other person who is employed or
engaged for such purposes.

         10.15. Members' Own Participation. Neither the Plan Administrator nor
any member of a Committee may act, vote or otherwise influence a decision
specifically relating to his own participation under the Plan. Any person or
group of persons may serve in more than one fiduciary capacity with respect to
the Plan, including, without limiting the generality of the foregoing, service
as both Plan Administrator and a member of the Committee.

                                       46
<PAGE>   54
                                   ARTICLE XI

                         TRUST FUND AND INVESTMENT FUNDS

         11.1. Trustee. A Trustee shall be designated by the Investment
Committee and a Trust Agreement shall be executed between PaineWebber and such
Trustee under the terms of which a Trust Fund shall be established to receive
and hold contributions, dividends, and other income, to invest the assets of the
Trust Fund and to pay the expenses of, and the benefits provided by, the Plan.

         11.2. Investment of Trust Fund. The Trustee shall invest and reinvest
the Trust Fund as follows:

         (a) all Matching Contributions and Paysop Contributions and the
             earnings thereon shall be invested exclusively in the Common Stock
             Fund; and

         (b) all amounts in each Participant's Employee Account and Profit
             Sharing Account shall be invested and reinvested as elected by
             Participants from among the Investment Funds made available by the
             Investment Committee from time to time, one of which shall be the
             Common Stock Fund. Investment Funds may be added or deleted from
             time to time by the Investment Committee and may include open-ended
             investment companies registered under the Investment Company Act of
             1940, as amended, which are managed by the Company or an Affiliated
             Employer.

         11.3. Election of Investment Funds.

         (a) Choice of Investment Funds. Each Participant shall be permitted to
elect the Investment Fund or Funds in which the amounts in his Employee Account
and Profit Sharing Account shall be invested. Subject to Section 11.3(c), on
each Business Day a Participant shall be permitted to reallocate the amounts in
his Employee Account and Profit Sharing Account between and among the Investment
Fund. Such reallocation will be effected through the Automated Response System
in accordance with the procedures of such system. If a Participant elects to
participate in the Plan, but fails to elect the Investment Fund or Funds in
which the amounts in his Employee Account and Profit Sharing Account are to be
invested, the amounts in his Employee Account and Profit Sharing Account shall
be invested in a default Investment Fund specified by the Investment Committee.
All elections with respect to the investment of Before-Tax Contributions and
After-Tax Contributions shall be made in such minimum percentages of each
Investment Fund as the Plan Administrator shall from time to time determine.

         (b) Frequency of Investment Allocations. On any Business Day, a
Participant may change his investment elections with respect to the allocation
of future Before-Tax Contributions, After-Tax Contributions and Profit Sharing
Contributions. All elections shall be made by utilizing the Automated Response
System in accordance with the procedures of such system.

                                       47
<PAGE>   55
         (c) Use and Limitations. The Benefits Administration Committee shall
adopt such rules and procedures as it deems advisable with respect to all
matters relating to the election and use of the Investment Funds. The Plan
Administrator shall advise, or make provisions to advise, the Trustee of all
elections made by Participants pursuant to this Section 11.3. The Plan
Administrator shall have the right, without prior notice to any Participant, to
suspend for a limited period of time daily transfers between and among
Investment Funds or to delay effecting transfers between and among Investment
Funds for one or more days if the Plan Administrator determines that such action
is necessary or advisable (i) in light of unusual market conditions, (ii) in
response to technical or mechanical problems with the Automated Response System
or the Plan's third-party record keeper or (iii) in connection with any
suspension of normal trading activity on the New York Stock Exchange.

         11.4. Allocation and Investment of Contributions.

         (a) Allocation of Matching Contributions. Matching Contributions
contributed to the Trust Fund for each Plan Year shall be allocated to the
Matching Contribution Account of each Participant for whom a Matching
Contribution is made and shall be invested in the Common Stock Fund as soon as
practicable after the date such amounts are contributed to the Trust Fund.

         (b) Allocation of Profit Sharing Contributions. Profit Sharing
Contributions contributed to the Trust Fund for each Plan Year shall be
allocated to the Profit Sharing Contribution Account of each Participant for
whom a Profit Sharing Contribution is made and shall be invested in the
Investment Fund or Funds selected by the Participant in accordance with the
provisions of Section 11.3(b) as soon as practicable after the date such amounts
are contributed to the Trust Fund.

         (c) Before-Tax Contributions and After-Tax Contributions. Before-Tax
Contributions and After-Tax Contributions made by a Participant for a Plan Year
shall be allocated to the Employee Account of such Participant and shall be
invested in the Investment Fund or Funds selected by the Participant in
accordance with the provisions of Section 11.3(b) as soon as practicable after
the date such amounts are contributed to the Trust Fund.

         11.5. Valuation of Accounts. As of each Valuation Date, the Trustee
shall determine the value of the Trust Fund and each Investment Fund, and the
Plan Administrator shall cause the value of the Accounts of each Participant to
be determined based upon such valuation. The valuation methodology used by the
Trustee for purposes of valuing the Trust Fund shall be reasonable in light of
prevailing commercial practices for defined contribution plans that utilize
daily valuations and daily transfers and shall take into account all
contributions, withdrawals, distributions, charges, income, gains and losses to
the Trust Fund from the prior Valuation Date.

         11.6. Purchases and Sales of Common Stock. Whenever the Trustee is
authorized or required to sell shares of Common Stock held in the Common Stock
Fund in response to a change in the investment allocation of a Participant's
Account, the Trustee may, in its absolute discretion, purchase for the benefit
of the Common Stock Fund or other portion of

                                       48
<PAGE>   56
the Trust Fund the shares to be sold at their fair market value (as determined
by the Trustee on a uniform basis consistently applied) on the applicable date.

         11.7. Non-Reversion. Except as provided in Section 11.8, all
contributions when made to the Trust Fund and all property of the Trust Fund,
including income from investments and all other sources, shall be retained for
the exclusive benefit of Participants or their Beneficiaries and shall be used
to pay benefits provided hereunder or to pay expenses of administration of the
Plan and the Trust Fund to the extent not paid by PaineWebber.

         11.8. Return of Certain Company Contributions. Notwithstanding any
other provisions of the Plan to the contrary, in the case of any Before-Tax
Contribution, After-Tax Contribution or Company Contribution which is made by an
Employer as a result of a mistake of fact or which is conditioned upon the
deductibility thereof under Section 404 of the Code, such contribution, to the
extent made by a mistake of fact or to the extent that the deduction for such
contribution is disallowed, shall be returned to PaineWebber or the Participant,
as the case may be; provided, however, that contributions are returned within
one year after it is mistakenly paid or one year after such deduction is
disallowed, as the case may be. For this purpose, all Before-Tax Contributions
and Company Contributions are expressly declared to be conditioned upon their
deductibility under Section 404 of the Code.

         11.9. Voting of Common Stock. A Participant shall be entitled to direct
the exercise of voting rights or other rights with respect to the number of
whole and fractional shares of Common Stock which corresponds to the
Participant's Account Balance which is invested in the Common Stock Fund.
PaineWebber shall provide to each Participant materials pertaining to the
exercise of such rights containing all the materials distributed to shareholders
of the Company. A Participant shall have the opportunity to exercise any such
rights within the same time period as shareholders of the Company and if the
Participant declines to exercise his voting or other rights with respect to such
Common Stock, such Common Stock shall not be voted by the Trustee. Any shares of
Common Stock held by the Trustee which as of the record date are not allocated
to the Employee Account or Company Account of any Participant shall not be voted
by the Trustee.

                                       49
<PAGE>   57
                                  ARTICLE XII

                            AMENDMENT OR TERMINATION

         12.1. Right to Amend or Terminate. The Company, with respect to each
Employer, and each Employer, with respect to its Employees, maintains the right
to suspend, terminate, or completely discontinue contributions under the Plan.
In addition, the Plan may be amended or modified from time to time by the
Company; provided, however, that no such action shall adversely affect the
accrued benefit of any Participant. Notwithstanding the foregoing, however, any
modification or amendment of the Plan may be made prospectively or
retroactively, including retroactively if necessary or appropriate to qualify or
maintain the Plan as a plan meeting the requirements of the Code and ERISA, as
now in effect or hereafter amended, or any other provisions of law, as now in
effect or hereafter amended or adopted, and any regulation issued thereunder.
Any amendment to the Plan may be made by the Board or the Compensation Committee
of the Board. Notwithstanding the foregoing, any amendment to the Plan which (i)
is necessary or advisable to effect changes approved by the Compensation
Committee of the Board, (ii) makes changes required by applicable law, (iii)
adopts technical or clarifying amendments or (iv) does not in any significant
respect increase benefits or cost to the Company may be made by any of the
following Company officers: the Chairman and Chief Executive Officer, the
President, the Chief Financial Officer, the General Counsel and the Director of
Human Resources.

         12.2. Mergers, Consolidations and Transfers. The Plan shall not be
automatically terminated by the Company's acquisition by, or merger into, any
other company, but the Plan shall be continued after such merger, provided the
successor company agrees to continue the Plan. All rights to amend, modify,
suspend, or terminate the Plan shall be transferred to the successor company,
effective as of the date of the merger. The merger or consolidation with, or
transfer of assets and liabilities to, any other qualified retirement plan shall
be permitted only if each Participant would receive a benefit immediately after
such merger, consolidation, or transfer of assets and liabilities (determined as
if the Plan had then terminated) which is equal to or greater than the benefit
he would have received immediately before any such transaction (determined as if
the Plan had then terminated); provided, however, that this sentence shall not
be construed as requiring the full vesting of all Accounts in connection with
any event described in this Section 12.2.

         12.3. Vesting and Distribution upon Plan Termination.

         (a) Vesting. In the event that (i) the Plan shall be terminated, (ii)
the Internal Revenue Service, the Board or the Executive Committee determines
that a partial termination of the Plan has occurred, or (iii) any Employer
completely discontinues contributions to the Plan, then (i) the accrued benefit
of all Participants, in the case of a Plan termination, or (ii) the accrued
benefits of those Participants affected by the partial termination or complete
discontinuance of contributions, in the case of a partial termination or
complete discontinuance of contributions, shall be fully vested and
nonforfeitable. In the case of a complete termination of the Plan, any
unallocated assets of the Trust Fund then held by the Trustee shall be
allocated,

                                       50
<PAGE>   58
after providing for any unpaid expenses, among the appropriate Company Accounts
and Employee Accounts of Participants. Upon a complete termination of the Plan,
the Accounts of all Participants shall be distributed in a lump sum in
accordance with the distribution provisions of Article VIII.

         (b) Distribution. Such Participants shall receive a lump sum
distribution of the balances in the Participant's Accounts following the
allocation described in Section 12.3(a) as soon as practicable after Plan
termination, provided that the Employer does not establish or maintain a
successor plan. For purposes of this Section 12.3(b), a successor plan is any
defined contribution plan maintained by the Employer, provided, however, that if
at all times during the twenty-four month period beginning twelve months before
the Plan termination, fewer than two percent of the Employees who were eligible
to participate in the Plan as of the date of its termination are eligible to
participate under the other defined contribution plan, such plan is not a
successor plan. A plan is a successor plan only if it exists at any time during
the period beginning on the date of plan termination and ending twelve months
after distribution of all assets from the terminated plan.

         12.4. Distributions upon Sale or Disposition of Substantially All of
the Company's Assets or of a Subsidiary.

         (a) Distribution Permitted. In the event that the Company (i) sells or
disposes of substantially all of the assets used by the Company in the trade or
business of the Company to an unrelated corporation or (ii) sells or disposes of
its interest in a subsidiary to an unrelated entity or individual, Participants
may receive a distribution of their Vested Account Balances as soon as
practicable after such sale or disposition, as long as the following provisions
apply:

         (i)      The Company continues to maintain the Plan after the sale or
                  disposition and the purchaser does not maintain or adopt the
                  Plan. The purchaser shall be considered to maintain the Plan
                  if the purchaser adopts the Plan or otherwise becomes an
                  employer whose employees accrue benefits under the Plan. The
                  purchaser shall also be considered to maintain the Plan if the
                  Plan is merged or consolidated with, or any assets or
                  liabilities are transferred from, the Plan to a plan
                  maintained by the purchaser. A purchaser shall not be
                  considered to maintain the Plan by virtue of any accepting
                  elective transfers or rollover contributions from the Plan to
                  a plan maintained by the purchaser.

         (ii)     The Participant seeking a distribution pursuant to this
                  Section 12.4 continues employment as an employee of the
                  purchaser.

         (iii)    Before-Tax Contributions shall not be distributed under this
                  Section 12.4 except in connection with a sale or disposition
                  that results in the Participant's transfer to the purchaser. A
                  distribution shall not be considered to have been made in
                  connection with a sale or disposition unless such distribution
                  was made by the end of the second calendar year after the
                  calendar year in which the disposition occurred.

                                       51
<PAGE>   59
         (b) Certain Defined Terms. For the purposes of this Section 12.4, the
sale of "substantially all" the assets used in a trade or business means the
sale of at least eighty-five percent of the assets. The term "unrelated" entity
or individual means one that is not required to be aggregated with the Company
under Section 414(b), (c), (m), or (o) of the Code.

         12.5. Withdrawal of an Employer. Upon any Employer's withdrawal from
the Plan, the Benefits Administration Committee may direct, in accordance with
ERISA and the Code, that any or all of the Accounts of the affected Participants
(who are Employees of such Employer) may continue to be maintained by the Plan,
or, after payment of or provision for expenses and charges and appropriate
adjustment of the Accounts of all such Participants as described in Section
10.6, the Benefits Administration Committee may direct, subject to ERISA and the
Code, that the balances of such Accounts be transferred, subject to Section
12.2, to a successor defined contribution plan that is qualified under Section
401(a) of the Code.

                                       52
<PAGE>   60
                                  ARTICLE XIII

                               GENERAL PROVISIONS

         13.1. No Guarantee of Employment. The Plan shall not be deemed to
constitute a contract between PaineWebber and any person or to be a
consideration for, or an inducement for, the employment of any person by
PaineWebber. Nothing contained in the Plan shall be deemed to give any person
the right to be retained in the service of any Employer or to interfere with the
right of PaineWebber to discharge or to terminate the service of any Employee at
any time without regard to the effect such discharge or termination may have on
any rights under the Plan.

         13.2. Payments to Minors and Incompetents. If a Participant or
Beneficiary entitled to receive any benefits hereunder is a minor or is deemed
by the Plan Administrator or is adjudged to be legally incapable of giving valid
receipt and discharge for such benefits, the benefits will be paid to such
persons as the Plan Administrator shall designate or to the duly appointed
guardian. Such payments shall, to the extent made, be deemed a complete
discharge of any liability for such payment under the Plan.

         13.3. Nonalienation of Benefits. To the extent permitted by law, no
benefit payable under the Plan will be subject in any manner to anticipation,
assignment, garnishment or pledge, and any attempt to anticipate, assign,
garnish or pledge the same will be void and no such benefits will be in any
manner liable for or subject to the debts, liabilities, engagements or torts of
any Participant. Notwithstanding the foregoing, the creation, assignment or
recognition of a right to any benefit payable with respect to a Participant (i)
pursuant to a Qualified Domestic Relations Order or (ii) in a manner consistent
with Treas. Reg. Section 1.401(a)-13(b)(2) related to federal tax levies shall
not be treated as an assignment or alienation prohibited in this Section 13.3.

         13.4. Evidence of Survivor. If the Plan Administrator, or the Trustee
with the assistance of the Plan Administrator, cannot make payment of any amount
to a Participant or Beneficiary within two years after such amount becomes
payable because the identity or whereabouts of such Participant or Beneficiary
cannot be ascertained notwithstanding the mailing of a notice to such
Participant or Beneficiary by certified mail to his last known address, the Plan
Administrator, at the end of such two-year period, may direct that all unpaid
amounts which would have been payable to such Participant or Beneficiary be
forfeited and treated as a forfeiture under Section 7.5. In determining whether
such two-year period has elapsed, the Plan Administrator may establish rules to
be applied on a uniform and nondiscriminatory basis concerning how such periods
shall be counted. Notwithstanding the foregoing, the forfeited benefits of any
Participant or Beneficiary shall be reinstated and payment of such benefits will
commence upon the filing at any time of a claim for such benefits by such
Participant or Beneficiary.

                                       53
<PAGE>   61
         13.5. Titles and Headings. The titles to Articles and headings of
Sections in the Plan are for convenience of reference only and, in case of any
conflict, the text of the Plan, rather than such titles and headings, shall
control.

         13.6. Governing Law. To the extent not preempted by ERISA, the
provisions of the Plan will be construed according to the laws of the State of
New York applicable to agreements to be wholly performed therein and without
regard to the choice of law provisions thereof.

                                       54
<PAGE>   62
                                  ARTICLE XIV

                           TOP-HEAVY PLAN REQUIREMENTS

         14.1. Top-Heavy Plan.

         (a) Notwithstanding any other provisions of the Plan to the contrary,
the Plan will be considered to be a Top-Heavy Plan for any Plan Year if it is
determined to be a Top-Heavy Plan as of the last day of the preceding Plan Year
(the "Determination Date").

         (b) For any Plan Year, the Plan will be a Top-Heavy Plan if any of the
following conditions exist:

         (i)      The Plan is not part of a Required Aggregation Group or
                  Permissive Aggregation Group and the Top-Heavy Ratio for the
                  Plan exceeds sixty percent.

         (ii)     The Plan is part of a Required Aggregation Group but not part
                  of a Permissive Aggregation Group and the Top-Heavy Ratio for
                  the Required Aggregation Group exceeds sixty percent.

         (iii)    The Plan is part of a Required Aggregation Group and a
                  Permissive Aggregation Group and the Top-Heavy Ratio for the
                  Permissive Aggregation Group exceeds sixty percent.

         (c) Notwithstanding any other provision in the Plan, the provisions of
this Article XIV shall apply and supersede all other provisions in the Plan
during each Plan Year with respect to which the Plan is determined to be a
Top-Heavy Plan.

         14.2. Top-Heavy Ratio. For purposes of this Article XIV, "Top-Heavy
Ratio" shall be determined as follows:

         (a) If the Affiliated Employers maintain one or more defined
             contribution plans and the Affiliated Employers have not maintained
             any defined benefit plan which, during the five-year period ending
             on the Determination Date, has or had accrued benefits, then the
             Top-Heavy Ratio for the Plan or for the Required or Permissive
             Aggregation Group, as appropriate, is a fraction (x) the numerator
             of which is the sum of the Account Balances of all Key Employees as
             of the Determination Date and (y) the denominator of which is the
             sum of all Account Balances, both computed in accordance with
             Section 416 of the Code. Both the numerator and denominator of the
             Top-Heavy Ratio shall be increased to reflect any contribution not
             actually made as of the Determination Date but which is required to
             be taken into account on that date under Section 416 of the Code.

                                       55
<PAGE>   63
         (b) If the Affiliated Employers maintain one or more defined
             contribution plans and the Affiliated Employers maintain or have
             maintained one or more defined benefit plans which, during the
             five-year period ending on the Determination Date, has or had any
             accrued benefits, the Top-Heavy Ratio for any Required or
             Permissive Aggregation Group, as appropriate, is a fraction (x) the
             numerator of which is the sum of Account Balances under the
             aggregated defined contribution plans for all Key Employees,
             determined in accordance with clause (a) above, plus the present
             value of accrued benefits under the aggregated defined benefit
             plans for all Key Employees as of the Determination Date and (y)
             the denominator of which is the sum of the Account Balances under
             the aggregated defined contribution plans for all Participants,
             determined in accordance with clause (a) above, plus the present
             value of accrued benefits under the defined benefit plans for all
             Participants as of the Determination Date, all determined in
             accordance with Section 416 of the Code. The accrued benefits under
             a defined benefit plan in both the numerator and denominator of the
             Top-Heavy Ratio shall be increased by an amount equal to any
             distribution of an accrued benefit made in the five-year period
             ending on the Determination Date.

         (c) For purposes of clauses (a) and (b) above, the value of Account
             Balances and the present value of accrued benefits will be
             determined as of the most recent Top-Heavy Valuation Date that
             falls within or ends with the twelve-month period ending on the
             Determination Date, except as provided in Section 416 of the Code,
             for the first and second plan years of a defined benefit plan. The
             Account Balances and accrued benefits of a Participant who is a
             Non-Key Employee but who was a Key Employee in a prior year or who
             has not been credited with at least one Hour of Service at any time
             during the five-year period ending on the Determination Date will
             be disregarded.

         (d) The calculation of the Top-Heavy Ratio and the extent to which
             distributions, rollovers, and transfers are taken into account will
             be made in accordance with Section 416 of the Code. Deductible
             employee contributions will not be taken into account for purposes
             of computing the Top-Heavy Ratio. When aggregating plans, the value
             of Account Balances and accrued benefits will be calculated with
             reference to the Determination Dates that fall within the same
             calendar year.

         (e) The accrued benefit of a Non-Key Employee shall be determined under
             the method, if any, that uniformly applies for accrual purposes
             under all defined benefit plans maintained by the Affiliated
             Employers or, 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 Section 411(b)(1)(C) of the Code.

                                       56
<PAGE>   64
         14.3. Minimum Employer Contribution. If the Plan is a Top-Heavy Plan in
a Plan Year, the Company shall contribute a Company Contribution (the "Employer
Minimum Contribution") on behalf of each Participant who is (i) a Non-Key
Employee for such Plan Year and (ii) still an Eligible Employee on the last day
of the Plan Year (to the extent not otherwise contributed by the Affiliated
Employers for such Plan Year on behalf of the Participant to any other qualified
plan maintained by the Affiliated Employers) which is equal to at least three
percent of a Participant's "annual compensation." Notwithstanding anything in
the preceding sentence to the contrary, if the Company has no defined benefit
plan which designates this Plan to satisfy Section 401 of the Code, the Employer
Minimum Contribution under this Section 14.3 shall not be the lesser of (i)
three percent and (ii) the amount which results from multiplying a Non-Key
Employee's "annual compensation" times the highest contribution rate, including
elective deferrals under a Section 401(k) plan maintained by the Affiliated
Employers, of any Key Employee covered by the Plan.

         14.4. Limitation of Benefits. If the Plan is a Top-Heavy Plan in a Plan
Year, the limitations imposed by Section 415(e) of the Code shall be modified as
provided in Section 416(h) of the Code. Notwithstanding the foregoing, this
Section 14.4 shall not apply if (i) the Account Balances of Key Employees are
less than ninety percent of the Account Balances of all Employees who are
Participants and (ii) the minimum allocation provided under Section 11.4 is
increased to four percent (x) for each Participant who is not a participant in a
defined benefit plan maintained by the Affiliated Employers that is determined
to be a Top-Heavy Plan for the Plan Year or (y) in the case of a Participant who
is a participant in a defined benefit plan maintained by the Affiliated
Employers that is determined to be a Top-Heavy Plan for the Plan Year, such
Participant receives a minimum benefit equal to three percent of the
Participant's highest average annual compensation for a period of five
consecutive years under the defined benefit plan, but in no event exceeding
thirty percent of such average annual compensation.

         14.5. Minimum Vesting. If the Plan is a Top-Heavy Plan in a Plan Year,
each Participant who is credited with an Hour of Service on or after the date
the Plan becomes a Top-Heavy Plan with respect to any Plan Year, the vested
interest of each such Participant in his Accounts derived from Company
Contributions shall not be less than the percentage determined in accordance
with the following schedule:

<TABLE>
<CAPTION>
Years of Service                                Nonforfeitable Percentage
<S>                                             <C>
         2                                             20 percent
         3                                             40 percent
         4                                             60 percent
         5 or more                                     100 percent
</TABLE>

         14.6. Definitions Applicable to Article XIV.

                  "Account Balance" means, for purposes of Article XIV, the sum
of (i) the aggregate balance of the accounts of an Employee under the applicable
plans of the Aggregated Group as of the Top-Heavy Valuation Date, (ii) any
contribution allocated to such accounts after

                                       57
<PAGE>   65
the most recent Valuation Date and on or before the Top-Heavy Valuation Date and
(iii) the aggregate distributions made with respect to such accounts during the
Determination Period and not reflected in the value of the accounts as of the
most recent Top-Heavy Valuation Date under clause (i) above.

                  "Key Employee" means any Employee or former Employee (and the
Beneficiaries of such Employee) of the Affiliated Employers who, at any time
during the Plan Year containing the Determination Date and the four preceding
Plan Years, was (i) an officer of the Affiliated Employers whose annual
compensation was greater than fifty percent of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code, (ii) an owner (or someone considered an
owner under Section 318 of the Code) of one of the ten largest interests in the
Affiliated Employers and whose annual compensation exceeds the dollar limitation
in effect under Section 415(c)(1)(A) of the Code, (iii) a five-percent owner of
the Affiliated Employers or (iv) a one-percent owner of the Affiliated Employers
who has an annual compensation from the Affiliated Employers of more than
$150,000. For the purpose of determining who is a Key Employee, "annual
compensation" means compensation as defined in Section 415(c)(3) of the Code,
but including amounts contributed by the Affiliated Employers pursuant to a
salary reduction agreement which are excludable from the Employee's gross income
under Sections 125 and 402(e)(5) of the Code.

                  "Non-Key Employee" means any Employee who is not a Key
Employee.

                  "Permissive Aggregation Group" means the Required Aggregation
Group plus any other qualified plans maintained by the Affiliated Employers
which would continue to satisfy the requirements of Sections 401(a)(4) and
410(b) of the Code when considered as a group.

                  "Required Aggregation Group" means the group composed of (i)
each qualified plan maintained by the Affiliated Employers in which at least one
Key Employee participates, or participated in the Plan Year containing the
Determination Date, or any of the four preceding Plan Years, regardless of
whether the plan has been terminated, and (ii) any other qualified plan
maintained by the Affiliated Employers which enables a plan described in clause
(i)during the period tested to meet the requirements of Section 401(a)(4) or
410(b) of the Code.

                  "Super Top-Heavy Plan" means a Top-Heavy Plan which would
continue to be a Top-Heavy Plan if ninety were substituted for sixty percent
each place it appears in the definition of "Top-Heavy Plan."

                  "Top-Heavy Ratio" means the ratio(s) described in Article XIV
hereof, provided that the Participants' Accounts shall be valued on the
Top-Heavy Valuation Date for purposes of determining the Top-Heavy Ratio.

                  "Top-Heavy Valuation Date" means, with respect to a Plan Year
in which the Committee makes a determination as to the Top-Heavy Ratio of the
Plan, the Determination Date.

                                       58
<PAGE>   66
                                    AMENDMENT
                                     TO THE
                          PAINEWEBBER 401(k) PLUS PLAN

                  WHEREAS, Paine Webber Group Inc. (the "Company") sponsors the
PaineWebber 401(k) Plus Plan (the "Plan"); and

                  WHEREAS, Section 12.1 of the Plan provides that the Company
may amend the Plan at any time; and

                  WHEREAS, the Company desires to amend the Plan to permit
Matching Contributions and Basic Profit Sharing Contributions to made on behalf
of each individual who would have been eligible to receive such contributions
but for the fact that such individual was transferred to an Affiliated Entity
which is not an Employer.

                  NOW, THEREFORE, effective as of January 1, 1999, the Plan
shall be, and hereby is, amended as follows:

                  1. Section 5.1 of the Plan shall be, and hereby is, amended so
that the first sentence therein shall read as follows:

                  "Each individual (i)(A) who is an Eligible Employee at the end
                  of a Plan Year, or (B) who, during such Plan Year and while an
                  Eligible Employee dies, incurs a Disability or terminates
                  Service on or after his Early Retirement Date or Retirement
                  Age, or (C) who, during such Plan Year, (x) was an Eligible
                  Employee, (y) was transferred to an Affiliated Entity which is
                  not an Employer and (z) is an Employee at the end of the Plan
                  Year and (ii) made Before-Tax Contributions or After-Tax
                  Contributions to the Plan during such Plan Year shall be
                  eligible to receive a Matching Contribution for such Plan Year
                  in accordance with Section 5.2."

                  2. Section 5.3 of the Plan shall be, and hereby is, amended so
that the first sentence therein shall read as follows:

                  "In no event will an individual receive a Matching
                  Contribution for a Plan Year in an amount greater than the
                  lesser of (a) three percent of such individual's Compensation
                  earned during the portion of the Plan Year in which such
                  individual was an Eligible Employee and (b) the amount
                  determined in accordance with the schedule set
<PAGE>   67
                                       2

                  forth below based upon Company Profits for such Plan Year."

                  3. Section 5.4 of the Plan shall be, and hereby is, amended so
that the first sentence therein shall read as follows:

                  "Each individual who (i)(A) is an Eligible Employee at the end
                  of a Plan Year, or (B) who, during such Plan Year and while an
                  Eligible Employee, dies, incurs a Disability or terminates
                  Service on or after his Early Retirement Date or Retirement
                  Age, or (C) who, during such Plan Year, (x) was an Eligible
                  Employee, (y) was transferred to an Affiliated Entity which is
                  not an Employer and (z) is an Employee at the end of the Plan
                  Year and (ii) is not an Electing Grandfathered Participant
                  shall be eligible to receive a Basic Profit Sharing
                  Contribution for such Plan Year in an amount determined in
                  accordance with Section 5.5."

                  4. Section 5.5 of the Plan shall be, and hereby is, amended so
that the first paragraph therein shall read as follows:

                  "Each individual who is eligible for a Basic Profit Sharing
                  Contribution under Section 5.4 for a Plan Year shall receive a
                  Basic Profit Sharing Contribution for such Plan Year equal to
                  a specified percentage of the individual's Compensation earned
                  during the portion of the Plan Year in which such individual
                  was an Eligible Employee. The amount of Basic Profit Sharing
                  Contribution for a Plan Year shall be determined in accordance
                  with the following schedule based upon the individual's
                  Compensation earned during the portion of the Plan Year in
                  which such individual was an Eligible Employee and the
                  individual's attained Period of Service as of the first day of
                  the Plan Year:"

                  5. In all other respects, the Plan shall remain the same.

                  IN WITNESS WHEREOF, this Amendment to the Plan has been
executed the 7th day of June, 2000.

                                             /s/ Matthew Levitan
                                             ---------------------------
<PAGE>   68
                                    AMENDMENT
                                     TO THE
                          PAINEWEBBER 401(k) PLUS PLAN

         WHEREAS, Paine Webber Group Inc. (the "Company") sponsors the
PaineWebber 401(k) Plus Plan (the "Plan"); and

         WHEREAS, Section 12.1 of the Plan provides that the Company may amend
the Plan at any time; and

         WHEREAS, the Company desires to amend the Plan to (1) add a definition
of DSI and a definition of Former DSI Employees, (2) recognize Former DSI
Employees' employment with DSI as Service, (3) recognize Former DSI Employees'
earnings with DSI in 1999 as Compensation, to the extent that such amounts would
otherwise have been Compensation under the Plan if earned while employed with
the Company and subject to certain specified exceptions, (4) to clarify that
certain service with Kidder Peabody shall be recognized as Service, and (5) to
clarify the breadth of the indemnification provision provided for in Section
10.13 of the Plan.

         NOW, THEREFORE, effective as of January 1, 1999, the Plan shall be, and
hereby is, amended as follows:

                  1. Section 2.1 of the Plan shall be, and hereby is, amended to
add the following definitions:

                  "DSI" means DSI International Management Group or one of its
                  subsidiaries or affiliates.

                  "Former DSI Employee" means each individual who became an
                  Employee in November or December, 1999 immediately following
                  his or her termination of employment with DSI.

                  2. Section 2.1 of the Plan shall be, and hereby is, further
amended to add the following sentence immediately following the first paragraph
within the definition of "Compensation":

                  "Notwithstanding anything contained herein to the contrary,
                  Compensation shall include, with respect to Former DSI
                  Employees only, the amounts earned by such individuals in 1999
                  due to their employment with DSI, but only to the extent such
                  amounts would otherwise have been Compensation if such amounts
                  were earned while an Employee."
<PAGE>   69
                  3. Section 2.1 of the Plan shall be, and hereby is, further
amended to add the following paragraphs as paragraphs "(j)" and "(k)" at the end
of the definition of "Service":

                  "(j) With respect to each individual who is a Former DSI
                  Employee, Service shall include such individual's employment
                  period with DSI.

                  "(k) With respect to any person (A) who was employed by Kidder
                  Peabody & Co. Inc., (B) who, immediately thereafter
                  transferred directly to and became an employee of an Employer
                  during the period commencing on December 1, 1994 and ending on
                  March 31, 1995 and (C) whose service with Kidder Peabody was
                  considered Service under the Prior Plan Terms, Service shall
                  include such period of service with Kidder Peabody."

                  4. Section 5.5 of the Plan shall be, and hereby is, amended by
adding, in both the first and second sentences, the phrase "or Former DSI
Employee" after the phrase "in which such individual was an Eligible Employee".

                  5. Section 5.6(a) of the Plan shall be, and hereby is, amended
by adding the following sentence at the end thereof:

                  "Notwithstanding anything herein to the contrary, for purposes
                  of this Section 5.6, no amount earned by a Former DSI Employee
                  while employed by DSI and deemed to be Compensation under the
                  Plan shall be considered."

                  6. Section 5.6(b) of the Plan shall be, and hereby is, amended
by adding the following sentence at the end thereof:

                  "Notwithstanding anything herein to the contrary, the
                  Compensation threshold shall be determined without regard to
                  any amount earned by a Former DSI Employee while employed by
                  DSI and deemed to be Compensation under the Plan."

                  7. Section 9.3(c) of the Plan shall be, and hereby is, amended
to read as follows:

                  "(c) Order of Plan Interests. Hardship withdrawals shall be
                  deemed to be paid in the following order of the Participant's
                  interests in his Accounts: (i) from the portion of his Company
                  Account which is attributable to vested Supplemental Profit
                  Sharing Contributions, (ii) from the portion of his Company
                  Account which is attributable to vested Basic Profit Sharing
                  Contributions, (iii) from the

                                       2
<PAGE>   70
                  portion of his Company Account which is attributable to vested
                  Matching Contributions, (iv) from the portion of his Employee
                  Account which is attributable to Before-Tax Contributions, and
                  (v) from the portion of his Employee Account attributable to
                  earnings, if any, on Before-Tax Contributions which were
                  credited to the Employee Account as of December 31, 1988."

                  8. Section 9.3(d) of the Plan shall be, and hereby is, deleted
in its entirety.

                  9. Section 10.13 of the Plan shall be, and hereby is, amended
to read as follows:

                  "10.13 Indemnification. PaineWebber shall indemnify and hold
                  harmless, to the extent permitted by law, the Plan
                  Administrator, each Committee, each individual member of a
                  Committee and each person to whom fiduciary responsibilities
                  are delegated by the Plan Administrator or a Committee from
                  and against any liability, damage, cost and expense (including
                  attorneys' fees and amounts paid in settlement of any claim
                  approved by PaineWebber) incurred by or asserted against him
                  by reason of his occupying or having occupied fiduciary
                  positions in connection with the Plan, except that no
                  indemnification shall be provided (1) if an indemnified person
                  personally profited from any act or transaction in respect of
                  which indemnification is sought or (2) with respect to any
                  person who is not an Employee, officer or director of
                  PaineWebber. Neither the Plan Administrator nor any member of
                  a Committee shall be liable for any act or omission by him
                  unless such act or omission constitutes a breach of his
                  fiduciary duty under ERISA."

                  10. In all other respects, the Plan shall remain the same.

         IN WITNESS WHEREOF, this Amendment to the Plan has been executed the
7th day of June, 2000.

                                                /s/ Matthew Levitan
                                                --------------------------

                                       3
<PAGE>   71
                                    AMENDMENT
                                     TO THE
                          PAINEWEBBER 401(k) PLUS PLAN

                  WHEREAS, Paine Webber Group Inc. (the "Company") sponsors the
PaineWebber 401(k) Plus Plan (the "Plan"); and

                  WHEREAS, Section 12.1 of the Plan provides that the Company
may amend the Plan at any time; and

                  WHEREAS, pursuant to the Agreement and Plan of Merger dated as
of April 24, 2000, among the Company, JCB Acquisition Company and J.C. Bradford
& Co., LLC ("Bradford"), ("Merger Agreement"), each individual employed by
Bradford as of the Closing (each a "Bradford Employee"), as defined in the
Merger Agreement, shall become an Employee (as defined in the Plan) as of the
Closing;

                  WHEREAS, the Company has determined that each Bradford
Employee who has been provided written notice from Bradford prior to the Closing
that his or her employment will be terminated effective as of July 31, 2000 will
be ineligible to participate in the Plan (each an "Ineligible Bradford
Employee");

                  WHEREAS, the Company has determined that, in order for each
Bradford Employee, other than those individuals who are an Ineligible Bradford
Employee, to participate in the Plan as of the Closing, the following provisions
shall apply to them during the period commencing with the Closing and ending
with the date upon which the Bradford Employees are integrated into the
Company's main payroll system and the recordkeeping system maintained by Hewitt
Associates LLC for administration of the Plan (the "Conversion Period");

                  WHEREAS, the Company has determined that each individual who
(1) becomes an Employee after the Closing, (2) but for the Merger Agreement,
would have been a Bradford Employee, and (3) will not be paid on the Company's
main payroll system until the end of the Conversion Period will be deemed a
Bradford Employee for purposes of this Appendix A (other than paragraph 5).

                  NOW, THEREFORE, effective as of June 7, 2000, the Plan shall
be, and hereby is, amended to add the following Appendix A:

                                   APPENDIX A

                  Except as otherwise provided for in this Appendix A, each
individual who (1) was employed by J.C. Bradford & Co., LLC ("Bradford")
immediately prior to becoming an Employee, (2) becomes an Employee as a direct
result of the transactions
<PAGE>   72
contemplated by the Agreement and Plan of Merger dated as of April 24, 2000,
among the Company, JCB Acquisition Company and J.C. Bradford & Co., LLC (each a
"Bradford Employee") shall be eligible to participate in the Plan as of the
Closing.

         1.       Notwithstanding anything in the Plan to the contrary, each
                  Bradford Employee who has been provided written notice from
                  Bradford prior to the Closing that his or her employment will
                  be terminated effective as of July 31, 2000 will be ineligible
                  to participate in the Plan (each an "Ineligible Bradford
                  Employee").

         2.       Notwithstanding anything in the Plan to the contrary, each
                  individual who (1) becomes an Employee after the Closing, (2)
                  but for the Merger Agreement, would have been a Bradford
                  Employee, and (3) will not be paid on the Company's main
                  payroll system until the end of the period commencing with the
                  Closing and ending with the date upon which the Bradford
                  Employees are integrated into the Company's main payroll
                  system and the recordkeeping system maintained by Hewitt
                  Associates LLC for administration of the Plan (the "Conversion
                  Period") will be deemed a Bradford Employee for purposes of
                  this Appendix A (other than paragraph 5).

         3.       Notwithstanding anything in the Plan to the contrary, each
                  Bradford Employee (other than those who are an Ineligible
                  Bradford Employee) shall be subject to the following rules,
                  limitations and procedures during the Conversion Period.

                  a. Each Bradford Employee shall be permitted to elect to make
                  Before-Tax Contributions from his Compensation during the
                  Conversion Period in whole percentages from one percent to
                  fifteen percent. If a Bradford Employee makes an election
                  during the Conversion Period to make Before-Tax Contributions
                  in excess of fifteen percent, such election shall become
                  effective immediately following the end of the Conversion
                  Period.

                  b. Each Bradford Employee shall not be permitted to elect to
                  make After-Tax Contributions from his Compensation during the
                  Conversion Period. If a Bradford Employee makes an election
                  during the Conversion Period to make After-Tax Contributions,
                  such election shall become effective immediately following the
                  end of the Conversion Period.

                  c. Each Bradford Employee's election as to the rate of his or
                  her Before-Tax Contributions or his or her election to suspend
                  his Before-Tax Contributions shall be made in accordance with
                  procedures established by

                                       2
<PAGE>   73
                  the Plan Administrator and uniformly applied to the Bradford
                  Employee group.

                  d. Each Bradford Employee's Before-Tax Contributions, and the
                  earnings thereon, which are deposited in the Trust during the
                  Conversion Period shall initially be invested in the LIR Money
                  Market Fund, or similar vehicle selected by the Investment
                  Committee, and shall remain invested in such fund or other
                  vehicle until it is reallocated by the Bradford Employee after
                  the Conversion Period.

                  e. Each Former Bradford Employee shall not be permitted to
                  apply for any withdrawals or loans during the Conversion
                  Period. If a Bradford Employee makes such an application
                  during the Conversion Period, the Plan Administrator will deem
                  such request to have been received immediately following the
                  Conversion Period and such request will be processed in
                  accordance with the terms of the Plan.

         4.       Notwithstanding anything in the Plan to the contrary, each
                  Bradford Employee may file a written request with the Plan
                  Administrator requesting that the Trustee accept the Transfer
                  of a Rollover Contribution from the J.C. Bradford & Co.
                  Retirement Accumulation Plan (the "Bradford Plan"), but such
                  request will not be granted until the Bradford Plan is issued
                  a favorable determination letter from the Internal Revenue
                  Service which acknowledges that the Bradford Plan is
                  tax-qualified upon its termination.

         5.       Each Bradford Employee's Service shall, for all purposes,
                  including vesting and calculating the amount of such
                  individual's Basic Profit Sharing Contribution, include (i)
                  the period during which such individual was employed by
                  Bradford and (ii) to the extent such individual was an
                  Employee immediately prior to his employment with Bradford,
                  the period during which such individual was an Employee prior
                  to his employment with Bradford.

         6.       Solely for purposes of Section 5.6 of the Plan, Eligibility
                  for Supplemental Profit Sharing Contribution, the amount paid
                  to each Bradford Employee for services performed in 2000 by
                  Bradford and reflected on such Bradford Employee's W-2 shall
                  be considered Compensation.

         7.       Notwithstanding anything in the Plan to the contrary, each
                  individual who is a Bradford Employee and who has been
                  provided written notice from Bradford prior to the Closing
                  that his or her employment will be terminated effective as of
                  September 29, 2000 shall be subject to the terms

                                       3
<PAGE>   74
                  and conditions set forth in paragraphs 3a, 3b, 3c and 3e
                  during the Conversion Period and any period thereafter during
                  which the individual is an Employee.

         8.       In all other respects, the Plan shall remain the same.

                  IN WITNESS WHEREOF, this Amendment to the Plan has been
executed the 7th day of June, 2000.

                                           /s/ Matthew Levitan
                                           --------------------------

                                       4
<PAGE>   75
                                    AMENDMENT
                                     TO THE
                          PAINEWEBBER 401(k) PLUS PLAN

                  WHEREAS, Paine Webber Group Inc. (the "Company") sponsors the
PaineWebber 401(k) Plus Plan (the "Plan"); and

                  WHEREAS, Section 12.1 of the Plan provides that the Company
may amend the Plan at any time;

                  WHEREAS, the Company desires to amend the Plan, effective as
of January 1, 1999, to provide for a special vesting provision; and

                  WHEREAS, the Company desires to amend the Plan, effective as
of January 1, 2000, to exclude from eligibility Eligible Employees who are bona
fide Puerto Rico residents; and

                  WHEREAS, the Company desires to amend the Plan to provide that
Eligible Employees who become bona fide Puerto Rico residents during a Plan Year
will not, with respect to such Plan Year, become ineligible for Company
Contributions due to such event.

                  NOW, THEREFORE:

                  1. Effective as of January 1, 2000, the following definition
shall be added to Section 2.1 of the Plan:

                  "Puerto Rico PaineWebber Employee" means an Employee who is a
                  bona fide Puerto Rico resident within the meaning of Section
                  1022(i) of ERISA or who is eligible to participate in the
                  PaineWebber Puerto Rico Savings Plus Plan."

                  2. Effective as of January 1, 2000, the following paragraph
shall be added at the end of Section 3.3:

                  "An Employee who is a Puerto Rico PaineWebber Employee shall
                  not be eligible to commence or continue active participation
                  in the Plan."

                  3. Effective as of January 1, 2000, the following sentence
shall be added immediately following the first sentence of Section 5.1:

                  "Notwithstanding anything in the Plan to the contrary, an
                  individual who would have been an Eligible Employee at the end
                  of a Plan Year, but for the fact that, during such
<PAGE>   76
                                       2

                  Plan Year, the individual became a Puerto Rico PaineWebber
                  Employee, shall be eligible to receive a Matching Contribution
                  for such Plan Year."

                  4. Effective as of January 1, 2000, the following sentence
shall be added immediately following the first sentence of Section 5.4:

                  "Notwithstanding anything in the Plan to the contrary, an
                  individual who (i) would have been an Eligible Employee at the
                  end of a Plan Year, but for the fact that, during such Plan
                  Year, the individual became a Puerto Rico PaineWebber Employee
                  and (ii) is not an Electing Grandfathered Participant shall be
                  eligible to receive a Basic Profit Sharing Contribution for
                  such Plan Year."

                  5. Effective as of January 1, 2000, the following sentence
shall be added immediately following the first sentence of Section 5.6:

                  "Notwithstanding anything in the Plan to the contrary, an
                  individual who would have been an Eligible Employee at the end
                  of a Plan Year, but for the fact that, during such Plan Year,
                  the individual became a Puerto Rico PaineWebber Employee,
                  shall be eligible to receive a Supplemental Profit Sharing
                  Contribution for such Plan Year if such individual otherwise
                  satisfies the eligibility requirements for receiving such
                  contribution."

                  6. Effective as of January 1, 1999, Section 7.5 of the Plan is
renumbered Section 7.6 and the following sentence is added to the Plan as a new
Section 7.5:

                  "If a Participant's employment is terminated as a result of
                  the closing of a branch office or other facility, a permanent
                  reduction in staff, a substantial organizational change or a
                  substantial change in economic conditions, the Committee,
                  under rules uniformly applicable to all similarly situated
                  Participants, may determine that such a Participant shall be
                  100% vested."

                  7. In all other respects, the Plan shall remain the same.

                  IN WITNESS WHEREOF, this Amendment to the Plan has been
executed the 20th day of December, 1999.

                                           /s/ Matthew Levitan
                                           ---------------------------
<PAGE>   77
                                    AMENDMENT
                                     TO THE
                          PAINEWEBBER 401(k) PLUS PLAN

                  WHEREAS, Paine Webber Group Inc. (the "Company") sponsors the
PaineWebber 401(k) Plus Plan (the "Plan"); and

                  WHEREAS, Section 12.1 of the Plan provides that the Company
may amend the Plan at any time; and

                  WHEREAS, the Company desires to amend the Plan, effective as
of the dates set forth below, to provide the following: (1) Financial
Hardship(1) withdrawals attributable to Before-Tax Contributions will be
excluded from the definition of Eligible Rollover Distributions and taxes and
penalties reasonably anticipated from Financial Hardship withdrawals will be
considered to determine Financial Hardship need; (2) Service will include
certain employment periods with Drexel Burnham Lambert Inc. ("DBL") for certain
former DBL employees; (3) Severance Date will be modified; (4) Matching
Contributions and Basic Profit Sharing Contributions will not be made for
inactive employees who have not incurred a Severance Date due to the operation
of subpart (b) of the Severance Date definition; (5) distributions will be
permitted following the occurrence of a Disability; (6) the rules regarding
Cash-Out Amounts will reflect the most recent guidance issued by the Internal
Revenue Service; (7) a Participant may take a plan loan from Before-Tax
Contributions, Rollover Contributions, vested Basic Profit Sharing Contributions
and vested Supplemental Profit Sharing Contributions; (8) loan repayments may
not be suspended due to a leave of absence; (9) Principal Residence Loans are to
be repaid over a period of 10, 15 or 20 years; (10) a Participant's benefit may
be reduced in the event such Participant has committed a breach of fiduciary
duty to the Plan or committed a criminal act against the Plan; and (11) the
Director of Human Resources of PWI can amend the Plan in certain respects.

                  NOW, THEREFORE:

                  1. Effective as of January 1, 1999, Section 2.1 of the Plan
shall be, and hereby is, amended by adding the following sentence at the end of
the paragraph in which "Eligible Rollover Distribution" is defined:

                  "Notwithstanding anything contained in this paragraph to the
                  contrary, effective as of January 1, 1999, an Eligible
                  Rollover Distribution does not include any distribution that
                  is withdrawn by a Participant pursuant to Section 9.3 of the
                  Plan and which is attributable to Before-Tax Contributions."

--------
(1)      Capitalized terms not otherwise defined have the meaning assigned to
         such terms in the Plan.
<PAGE>   78
                                       2

                  2. Effective as of January 1, 1999, Section 2.1 of the Plan
shall be, and hereby is, further amended by adding the following subparagraph at
the end of the paragraph in which "Service" is defined:

                  "(i)     With respect to any person (excluding a nonresident
                           alien) (A) who was employed by Drexel Burnham Lambert
                           Inc. ("DBL"), (B) who became an employee of an
                           Employer during the period commencing on May 2, 1989
                           and ending on June 5, 1989, and (iii) whose customer
                           accounts were converted from DBL Inc. to the Company
                           by a tape to tape basis, Service shall include the
                           period of his most recent employment with DBL Inc."

                  3. Effective as of January 1, 1999, Section 2.1 of the Plan
shall be, and hereby is, further amended by deleting the current definition of
"Severance Date" and replacing it with the following definition:

                  "Severance Date" means the earlier of:

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

                  (b)      the second anniversary of the first date of an
                           absence due to a leave of absence for any reason
                           other than Disability;

                  (c)      the second anniversary of the first date on which an
                           individual is deemed to have a Disability under this
                           Plan; or

                  (d)      the first anniversary of the first date of absence
                           for any other reason, such as layoff.

                  4. Effective as of January 1, 1999, Section 5.1 of the Plan
shall be, and hereby is, amended by adding the following sentence immediately
following the first sentence:

                  "Notwithstanding anything contained in the Plan to the
                  contrary, no Matching Contribution shall be made for a Plan
                  Year on behalf of an Eligible Employee who at the end of such
                  Plan Year (1) was not actively employed and (2) had not
                  incurred a Severance Date due to operation of subpart (b) of
                  the definition of Severance Date, unless at such time such
                  Eligible Employee is on a leave of absence due to Parental
                  Leave or pursuant to the Family Medical Leave Act."
<PAGE>   79
                                       3

                  5. Effective as of January 1, 1999, Section 5.4 of the Plan
shall be, and hereby is, amended by adding the following sentence immediately
following the first sentence:

                  "Notwithstanding anything contained in the Plan to the
                  contrary, no Basic Profit Sharing Contribution shall be made
                  for a Plan Year on behalf of an Eligible Employee who at the
                  end of such Plan Year (1) was not actively employed and (2)
                  had not incurred a Severance Date due to operation of subpart
                  (b) of the definition of Severance Date, unless at such time
                  such Eligible Employee is on a leave of absence due to
                  Parental Leave or pursuant to the Family Medical Leave Act."

                  6. Effective as of June 15, 1999, Section 8.1 shall be, and
hereby is, amended by adding the phrase "Disability or" immediately before the
term "Severance Date".

                  7. Effective as of June 15, 1999, Section 8.2 shall be, and
hereby is, amended by deleting the phrase "(and, at the time of any prior
distributions, did not exceed the Cash-Out Amount)".

                  8. Effective as of June 15, 1999, Section 9.3(b) shall be, and
hereby is, amended by adding the words "and any amounts necessary to pay any
federal, state, or local income taxes or penalties reasonably anticipated to
result from such withdrawal" immediately after the words "in an amount
sufficient to satisfy the Financial Hardship".

                  9. Effective as of June 15, 1999, Section 9.4(d) shall be, and
hereby is, amended by deleting the phrase "five, ten or twenty years" and
replacing it with the phrase "ten, fifteen or twenty years".

                  10. Effective as of June 15, 1999, Section 9.4(h) shall be,
and hereby is, amended by ending the first sentence after the phrase "with
Section 9.3(f)(iii) above" and deleting the phrase "or may submit a request for
a suspension of such payments during such unpaid leave of absence to the Plan
Administrator.

                  11. Effective as of January 1, 1999, Section 9.4(k)(ii) shall
be, and hereby is, amended by deleting the phrase "in the Participant's Employee
Account" and replacing it with the phrase "in the Participants' Accounts which
relate to Before-Tax Contributions, Rollover Contributions, vested Basic Profit
Sharing Contributions and vested Supplemental Profit Sharing Contributions".

                  12. Effective as of January 1, 1999, Section 12.1 of the Plan
shall be, and hereby is amended by adding the phrase "the Director of Human
Resources of PWI and" immediately before the phrase "any of the following" and
by deleting the phrase "and the Director of Human Resources" in the last
sentence of such section.
<PAGE>   80
                                       4

                  13. Effective as of January 1, 1999, Section 13.3 of the Plan
shall be, and hereby is, amended as follows:

                  (a)      the word "or" before the phrase "(ii) in a manner
                           consistent with" is deleted and replaced with a
                           comma; and

                  (b)      the language "or (iii) in a manner consistent with
                           Section 401(a)(13)(C) relating to a breach of
                           fiduciary duty to the Plan or a criminal act against
                           the Plan" is inserted after the phrase "federal tax
                           levies."

                  14. In all other respects, the Plan shall remain the same.

                  IN WITNESS WHEREOF, this Amendment to the Plan has been
executed the 9th day of June, 1999.

                                         /s/ Matthew Levitan
                                         ----------------------------
<PAGE>   81
                 CERTIFICATE OF AMENDMENT AND RESTATEMENT OF THE

                       PAINEWEBBER SAVINGS INVESTMENT PLAN

I, Matthew Levitan, being the Director of Human Resources, pursuant to the
authority contained in the resolutions of the Compensation Committee of
PaineWebber Group Inc. adopted at a meeting on August 31, 1998, do hereby
certify and adopt the PaineWebber 401(k) Plus Plan (amended and restated
PaineWebber Savings Investment Plan) in substantially the same form as the
attached hereto.

IN WITNESS WHEREOF, I have executed this Certificate of Amendment this 29th day
of December 1998.

                                            /s/ Matthew Levitan
                                            -----------------------
                                                Matthew Levitan<PAGE>   1
                                      RHA

                         STANDARD FORM APARTMENT LEASE
                                  (FIXED TERM)

                                                           Date:   May 19, 2000
                                                                 ---------------

David Cuniff 828-2966     218 Tearall Road, Raynham, MA 02767
---------------------     ------------------------------------------------------
  (Name)                              (Address)                  (Telephone No.)

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

Lessor, hereby leases to         Infotopia, Inc./Daniel Hoyng
                         -------------------------------------------------------

                      43 Taunton Green, 3rd Floor, Taunton, MA      508-884-9900
--------------------------------------------------------------------------------
  (Name)                               (Address)                 (Telephone No.)

                                                        Lessee, who hereby hires
--------------------------------------------------------

the following premises  (Apartment)   (Suite)         at     218 Tearall Road,
                                             --------    -----------------------
                                                                 (Street)

  Raynham, MA 02676                            4 bedroom house and all furniture
--------------------------------               ---------------------------------
        (city or town)       Mass. (consisting of)

   on the first floor (See attached addendum)
--------------------------------------------------------------------------------

xxxxxxxxxx       1 year            beginning     July 1st                  2000
          -------------------------                      -----------------

and terminating on    June 30,  2001
                  --------------      The rent to be paid by the Lesee for the
                                      leased premises shall be as follows:

                                      RENT

A: The term rent shall be $32,400.00 payable, except as herein otherwise
                          -----------
provided, in installments of $2,700.00 on the 1st day of every month, in
                             ---------       ---------
advance, so long as this lease is in force and effect:

B: However, if any tax year commencing with the fiscal year n/a the real estate
----- taxes on the land and buildings, of which the leased premises are a part,
are in excess of the amount of the real estate taxes thereon for the fiscal year
n/a ----- (herein called the "Base Year", and being the most recent year in
which Lessor has annually received a real estate tax bill for the leased
premises. Lessee will pay to Lessor as additional rent hereunder, when and as
designated by notice in writing by Lessor n/a. per cent of such excess that may
occur in each year of the term of this Lease or any extension or renewal
thereof and proportionately for any part of a fiscal year. The Lessor
represents to the Lessee that the term rent set forth in the immediately
preceeding paragraph (A) does not reflect any real estate tax increase
subsequent to the said Base Year. Notwithstanding anything contained herein to
the contrary, the Lessee shall be obligated to pay only that proportion of such
increased tax as the unit leased by him bears to the whole of the real estate
so taxed, and if the Lessor obtains an abatement of the real estate tax levied
on the whole of the real estate of which the unit leased by Lessee is a part, a
proportionate share of such abatement, less reasonable attorney's fees, if any,
shall be refunded to said Lessee.

C: Notwithstanding anything contained herein to the contrary, if the leased
premises are or become subject to rent control laws or other laws regulating
rents, the Lessee shall pay not more than the maximum rent allowed under such
applicable rent control laws or other laws regulating rents.

D: If at any time after the date hereof the leased premises are or become
subject to rent control laws or other laws regulating rents, and if the Lessor
is, in accordance with such laws, at any time authorized or permitted to
increase the rent for the leased premises, and if at any time thereafter the
Lessor gives written notice of his intention to implement such increase in whole
or in part, then, in such event and not otherwise, the Lessee may terminate this
lease by giving notice of his intention within thirty days after the Lessor's
notice of implementation. If the Lessee gives such notice within thirty days,
this lease shall terminate on the last day of the monthly rental period next
after the date of such notice. If the Lessee does not give such notice within
thirty days, then the rent shall be increased in accordance with the Lessor's
notice of implementation commencing with the rent payment immediately following
the expiration of said thirty day period, but in no event shall the rent exceed
$ n/a per month during the term hereof.
------

                                    TENANT:

This section governs Rent payments. In some cases, rent payments may increase
during the lease term. Please be sure that you carefully read and understand
this section. Please initial here when you are certain that you understand and
agree with this section. Lessee's initials:
                                            --------------

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

LESSOR AND LESSEE FURTHER COVENANT AND AGREE
That during the term of this Lease and for such other and further period as the
said Lessee shall occupy the said premises, all of the terms, covenants and
conditions contained herein shall remain in full force and effect.

1. MAINTENANCE  For Maintenance, if other than lessor contact:

            Michael Cunniff      33 McCormich Terrace Stoughton, MA 781-297-3556
            --------------------------------------------------------------------
               (Name)                   (Address)                (Telephone No.)

2. ADDITIONAL
   PROVISIONS
            $2,500.00 security deposit, $5,400.00 for first and last months rent
            total due is $7,900.00

<PAGE>   2
3. HEAT AND OTHER UTILITIES

TENANT. This section governs utility payments. Be sure to discuss with the
Lessor those payments which will be required of you for this apartment.

The Lessee shall pay, as they become due, all bills for electricity and other
utilities, whether they are used for furnishing heat or other purposes that are
furnished to the demised premises and presently separately metered. The Lessor
agrees that he will furnish reasonably hot and cold water and reasonable heat
(except to the extent that such water and heat are furnished through utilities
metered to the demised premises as stated above) during the regular heating
season, all in accordance with applicable laws, but the failure of the Lessor to
provide any of the foregoing items to any specific degree, quantity, quality, or
character due to any causes beyond the reasonable control of the Lessor, such as
accident, restriction by City, State or Federal regulations, or during necessary
repairs to the apparatus shall not (subject to applicable law) form a basis of
any claim for damages against the Lessor.

4. ATTACHED FORMS

The forms, if any, attached hereto are incorporated herein by reference.

5. CARE OF PREMISES

The Lessee shall not paint, decorate or otherwise embollish and/or change and
shall not make nor suffer any additions or alterations to be made in or to the
leased premises without the prior written consent of the Lessor, nor make nor
suffer any strip or waste, nor suffer the heat or water to be wasted, and at the
termination of this lease shall deliver up the leased premises and all property
belonging to the Lessor in good, clean and tenantable order and condition,
reasonable wear and tear expected. No washing machine, air-conditioning unit,
space heater, clothes dryer, television or other aerials, or other like
equipment shall be installed without the prior written consent of the Lessor. No
waterbeds shall be permitted in the leased premises.

6. CLEANLINESS

The Lessee shall maintain the leased premises in a clean condition. He shall
not sweep, throw, or dispose of, nor permit to be swept, thrown or disposed of,
from said premises nor from any doors, windows, balconies, porches or other
parts of said building, any dirt, waste, rubbish or other substance or
article into any other parts of said building or the land adjacent thereon,
except in proper receptacles and except in accordance with the rules of the
Lessor.

7. DEFINITIONS

The words "Lessor" and "Lesee" as used herein shall include their respective
heirs, executors, administrators, successors, representatives and assigns,
agents and servants; and the words "he,'' "his,'' and "him'' where applicable
shall apply to the Lessor or Lessee regardless of sex, number, corporate entity,
trust or other body. If more than one party signs as Lessee hereunder, the
covenants, conditions, and agreements herein of the Lessee shall be the joint
and several obligations of each such party.

8. DELIVERY OF PREMISES

In the event the Lessor is not able through no fault of his own to deliver the
leased premises to the Lessee at the time called for herein, the rent shall be
abated on a pro rata basis until such time as occupancy can be obtained which
abatement shall constitute full settlement of all damages caused by such delay,
or the Lessor, at his election, shall be allowed reasonable time to deliver
possession of the leased premises, and if he cannot deliver such possession
within 30 days from the beginning of said term, either the Lessor or Lessee may
then terminate this lease by giving written notice to the other and any payment
made under this lease shall be forthwith refunded. Lessee hereby authorizes and
empowers Lessor to institute proceedings to recover possession of the premises
on behalf of and in the name of Lessee.

9. EMINENT DOMAIN

If the leased premises, or any part thereof, or the whole or any part of the
building of which they are a part, shall be taken for any purpose by exercise of
the power of eminent domain or condemnation, or by action of the city or other
authorities or shall receive any direct or consequential damage for which the
Lessor or Lessee shall be entitled to compensation by reason of anything
lawfully done in pursuance of any public authority after the execution hereof
and during said term, or any extension or renewal thereof, than at the option of
either the Lessor or the Lessee, this lease and said term shall terminate and
such option may be exercised in the case of any such taking, notwithstanding the
entire interest of the Lessor and the Lessee may have been divested by such
taking. Said option to terminate shall be exercised by either the Lessor or the
Lessee, by giving a written notice of exercise of such option to terminate in
the manner described in Section 17 of the lease. Said option to terminate shall
not be exercised by either party (a) earlier than the effective date of taking,
nor (b) later than thirty (30) days after the effective date of taking. The
mailing of the notice of exercise as set forth hereinabove shall be deemed to be
the exercise of said option; and upon the giving of such notice, the lease shall
be terminated as of the date of the taking. If this lease and said term are not
so terminated, then in case of any such taking or destruction of or damage to
the lease premises, rendering the same or any part thereof unfit for use and
occupation, a just proportion of the rent hereinbefore reserved, according to
the nature and extent of the damages to the leased premises, shall be suspended
or abated until, in the case of such taking, what may remain of the leased
premises, shall have been put in proper condition for use and occupation. The
Lessee hereby assigns to the Lessor any and all claims and demands for damages
on account of any such taking or for compensation for anything lawfully done in
pursuance of any public authority, and covenants with the Lessor that the Lessee
will from time to time execute and deliver to the Lessor such further
instruments of assignment of any such claims and demands as the Lessor shall
request, provided however that the Lessee does not assign to the Lessor any
claim based upon Lessee's personal property or other improvements installed by
Lessee with Lessor's written permission.

10. FIRE, OTHER CASUALTY

If the leased premises, or any part thereof, or the whole or a substantial
part of the building of which they are a part, shall be destroyed or damaged by
fire or other casualty after the execution hereof and during said term, or any
extension or renewal thereof, then this lease and said term shall terminate at
the option of the Lessor by notice to the Lessee. If this lease and said term
are not so terminated, then in case of any such destruction of or damage to the
leased premises, or to the common areas of the building customarily used by the
Lessee for access to and egress from the leased premises, rendering the same or
any part thereof unfit for use and occupation, a just proportion of the rent
hereinbefore reserved, according to the nature and extent of the damage to the
leased premises, shall be suspended or abated until the leased premises shall
have been put in proper condition for use and occupation. If the leased
premises or such common areas have not been restarted by the Lessor to
substantially their former condition for use and occupancy within thirty days
after the damage occurred, the Lessee may terminate this lease by giving notice
to the Lessor within thirty days following the termination of the thirty day
period within which the Lessor failed to restore. If either party gives notice
of intention to terminate under this section, this lease shall terminate on the
last day of the then-current monthly rental period.

11. DISTURBANCE, ILLEGAL USE

Neither the Lessee nor his family, friends, relatives, invitees, visitors,
agents or servants shall make or suffer any unlawful, noisy or otherwise
offensive use of the leased premises, nor commit or permit any nuisance to
exist thereon, nor cause damage to the leased premises, nor create any
substantial interference with the rights, comfort, safety or enjoyment of the
Lessor or other occupants of the same or any other apartment, nor make any use
whatsoever thereof than as and for a private residence. No articles shall be
hung or shaken from the windows, doors, porches, balconies, or placed upon the
exterior windowsills.

12. GOVERNMENTAL REGULATIONS

The Lessor shall be obligated to fulfill all of the Lessor's obligations
hereunder to the best of the Lessor's ability but the Lessee's obligations,
covenants and agreements hereunder shall not (subject to applicable law) be
affected, impaired or excused because the Lessor is unable to supply or is
delayed in supplying any service or is unable to make or is delayed in making
any repairs, additions, alterations or decorations, or is unable to supply or
is delayed in supplying any equipment or fixtures, if Lessor is prevented or
delayed from so doing because of any law or governmental action or any order,
rule or regulation of any governmental agency, (other than those regulating
rents) which is beyond the Lessor's reasonable control.
<PAGE>   3
13. COMMON AREAS

No receptacles, vehicles, baby carriages or other articles or obstructions shall
be placed in the halls or other common areas or passageways.

14. INSURANCE

Lessee understands and agrees that it shall be Lessee's own obligation to
insure his personal property.

15. KEYS AND LOCKS

Upon expiration or termination of the lease, the Lessee shall deliver the keys
of the premises to the landlord. Delivery of keys by the Lessee to the Lessor,
or to anyone on his behalf, shall not constitute a surrender or acceptance of
surrender of the leased premises unless so stipulated in writing by the Lessor.
In the event that the exterior door lock or locks in the leased premises are
not in normal working order at any time during the term hereof, and if the
Lessee reports such condition to the Lessor, then and in that event, the Lessor
shall, within a reasonable period of time following receipt of notice from the
Lessee of such condition, repair or replace such lock or locks. Locks shall not
be changed, altered, or replaced nor shall new locks be added by the Lessee
without the written permission of the Lessor. Any locks so permitted to be
installed shall become the property of the Lessor and shall not be removed by
the Lessee. The Lessee shall promptly give a duplicate key to any such changed,
altered, replaced or new lock to the Lessor.

16. LOSS OR DAMAGE

The Lessee agrees to indemnify and save the Lessor harmless from all
liability, loss or damage arising from any nuisance made or suffered on the
leased premises by the Lessee, his family, friends, relatives, invitees,
visitors, agents, or servants or from any carelessness, neglect or improper
conduct of any of such persons. All personal property in any part of the
building within the control of the Lessee shall be at the sole risk of the
Lessee. Subject to provisions of applicable law the Lessor shall not be liable
for damage to or loss of property of any kind which may be lost or stolen,
damaged or destroyed by fire, water, steam, defective refrigeration, elevators,
or otherwise, while on the leased premises or in any storage space in the
building or for any personal injury unless caused by the negligence of the
Lessor.

17. NOTICES

Written notice from the Lessor to the Lessee shall be deemed to have been
properly given it mailed by registered or certified mail, postage prepaid,
return receipt requested to the Lessee at the address of the leased premises,
or if delivered or left in or on any part thereof, provided that if so mailed,
the receipt has been signed, or if so delivered or left, that such notice has
been delivered to or left with, the Lessee or anyone expressly or impliedly
authorized to receive messages for the Lessee, or by any adult who resides with
the Lessee in the leased premises. Written notice from the Lessee to the Lessor
shall be deemed to have been properly given if mailed by registered or
certified mail, postage prepaid, return receipt requested, to the Lessor at his
address set forth in the first paragraph of this lease, unless the Lessor shall
have notified the Lessee of a change of the Lessor's address, in which case
such notice shall be so sent to such changed address of the Lessor, provided
that the receipt has been signed by the Lessor or anyone expressly or impliedly
authorized to receive messages for the Lessor. Notwithstanding the foregoing,
notice by either party to the other shall be deemed adequate if given in any
other manner authorized by law.
<PAGE>   4
18. OTHER REGULATIONS

The Lessee agrees to conform to such lawful rules and regulations which are
reasonably related to the purpose and provisions of this lease, as shall from
time to time be established by the Lessor in the future for the safety, care,
cleanliness, or orderly conduct of the leased premises and the building of
which they are a part, and for the benefit safety, comfort and conveniences of
all the occupants of said building.

19. PARKING

Parking on the premises of the Lessor is prohibited unless written consent is
given by the Lessor.

20. PETS

No dogs or other animals, birds or pets shall be kept in or upon the leased
premises without the Lessor's written consent; and consent so given may be
revoked at any time.

21. PLUMBING

The water closets, disposals, and waste pipes shall not be used for any
purposes other than those for which they were constructed, nor shall any
sweepings, rubbish, rags, or any other improper articles be thrown into the
same; and any damage to the building caused by the misuse of such equipment
shall be borne by the Lessee by whom or upon whose premises it shall have been
caused, unless by the negligence of the Lessor, or by the negligence of an
independent contractor employed by the Lessor.

22. REPAIRS

The Lessee agrees with the Lessor that, during this lease and for such further
time as the Lessee shall hold the leased premises or any part thereof, the
Lessee will at all times keep and maintain the leased premises and all
equipment and fixtures therein or used therewith repaired, whole and of the
same kind, quality and description and in such good repair, order and condition
as the same are at the beginning of, or may be put in during the term or any
extension or renewal thereof, reasonable wear and tear and damage by
unavoidable casualty only expected. The Lessor and the Lessee agree to comply
with any responsibility which either may have under applicable law to perform
repairs upon the leased premises. If Lessee fails within a reasonable time, or
improperly makes such repairs, then and in any such event or events, the Lessor
may (but shall not be obligated to) make such repairs and the Lessee shall
reimburse the Lessor for the reasonable cost of such repairs in full, upon
demand.

23. RIGHT OF ENTRY

The Lessor may enter upon the leased premises to make repairs thereto, to
inspect the premises, or to show the premises to prospective tenants,
purchasers, or mortgagees. The Lessor may also enter upon the said premises if
same appear to have been abandoned by the Lessee or as otherwise permitted by
law.

24. NON-PERFORMANCE OR BREACH BY LESSEE

If the Lessee shall fail to comply with any lawful term, condition, covenant,
obligation, or agreement expressed herein or implied hereunder, or if the
Lessee shall be declared bankrupt, or insolvent according to law or if any
assignment of the Lessee's property shall be made for the benefit of creditors,
or if the premises appear to be abandoned then, and in any of the said cases
and notwithstanding any license or waiver of any prior breach of any of the
said terms, conditions, covenants, obligations, or agreements, the Lessor,
without necessity or requirement of making any entry may (subject to the
Lessee's rights under applicable law) terminals this lease by:

    1. a seven (7) day written notice to the Lessee to vacate said leased
       premises in case of any breach except only for non-payment of rent, or

    2. a fourteen (14) day written notice to the Lessee to vacate said leased
       premises upon the neglect or refusal of the Lessee to pay the rent as
       herein provided.

Any termination under this section shall be without prejudice to any remedies
which might otherwise be used for arrears of rent or preceding breach of any of
the said terms, conditions, convenants, obligations or agreements.
<PAGE>   5
25. LESSEE'S COVENANTS IN EVENT OF TERMINATION

The Lessee covenants that in case of any termination of this lease, by reason
the the default of the Lessee, then at the option of Lessor

  (A) the Lessee will forthwith pay to the Lessor as damages hrerunder a sum
      equal to the amount by which the rent and other payments called for
      hereunder for the remainder of the term or any extension or nevewal
      thereof exceed the fair rental value of said premises for the remainder of
      the term or any extension or renewal thereof; and

  (B) the Lessee covenants that he will furthermore indennify the Lessor from
      and against any loss and damage sustained by reason of any termination
      caused by the default of, or the breach by, the Lessee. Lessor's damages
      hereunder shall include, but shall not be limited to any loss of rents;
      reasonable broker's commissions for the re-letting of the leased premises;
      advertising costs; the reasonable cost incurred in cleaning and repainting
      the premises in order to re-let the same; and moving and storage charges
      incurred by Lessor in moving Lesee's belongings pursuant to eviction
      proceedings.

<PAGE>   6
     (C)  At the option of Lessor, however, Lessor's cause of action under this
          article shall accrue when a new tenancy or lease term first commences
          subsequent to a termination under this lease, in which event Lessor's
          damages shall be limited to any and all damages sustained by him
          prior to said new tenancy or lease date. Lessor shall also be entitled
          to any and all other remedies provided by law. All rights and remedies
          are to be cumulative and not exclusive.

26. REMOVAL OF GOODS

   Lessee further covenants and agrees that if Lessor shall remove Lessor's
goods or effects, pursuant to the terms hereof or at any Court order, Lessor
shall not be liable or responsible for any loss of or damage to Lessee's goods
or effects and the Lessor's act of so removing such goods or effects shall be
deemed to be the act of and for the account of Lessee, provided, however, that
if the Lessor removes the Lessee's goods or effects, he shall comply with all
applicable laws, and shall exercise due care in the handling of such goods to
the fullest practical extent under the circumstances.

27. NON-SURRENDER

   Neither the vacating of the premise by Lessee, nor the delivery of keys to
the Lessor shall be deemed a surrender or an acceptance of surrender of the
leased premises, unless so stipulated in writing by Lessor.

28. SUBLETTING NUMBER OF OCCUPANTS

   The Lessee shall not assign nor underlet any part or the whole of the leased
premises, nor shall permit the leased premises to be occupied for a period
longer than a temporary visit by anyone except the individuals specifically
named in the first paragraph of this lease, their spouses, and any children
born to them during the term at this lease or any extension or renewal thereof
without first obtaining on each occasion the assent in writing of the Lessor.

29. TRUSTEE

   In the event that the Lessor is a trustee or a partnership, no such trustee
nor any beneficiary nor any shareholder of said trust and no partner, General
or Limited, of such partnership shall be personally liable to anyone under any
term, condition, covenant, obligation, or agreement expressed herein or implied
hereunder or for any claim of damage or cause at law or in equity arising out
of the occupancy of said leased premises, the use of the maintenance of said
building or its approaches and equipment.

30. WAIVER

   The waiver of one breach of any term, condition, covenant, obligation, or
agreement of this lease shall not be considered to be a waiver of that or any
other term, condition, covenant, obligation, or agreement or of any subsequent
breach thereof.

31. SEPARABILITY CLAUSE

   If any provision of this lease or portion of such provision or the
application thereof to any person or circumstance is held invalid, the remainder
of the lease (for the remainder of such provisions) and the application thereof
to other persons or circumstances shall not be affected thereby.

32. COPY OF LEASE

   The Lessor shall deliver a copy of this lease, duly executed by Lessor or
his authorized agent, to the Lessee within thirty (30) days after a copy
hereof, duly executed by the Lessee, has been delivered to the Lessor.

33. REPRISALS PROHIBITED

   The Lessor acknowledges that provisions of applicable law forbid a landlord
from threatening to take or taking reprisals against any tenant for seeking to
assert his legal rights.

   As a result of Sheehan Realty procuring the tenant, if a sale of the
property is consummated Sheehan Realty will be due a 5% commission.

   Tenant to notify landlord 60 to 90 days prior to termination of agreement
whether they will extend lease or leave at the end of the term.

IN WITNESS WHEREOF, the said parties hereunto and to another instrument of like
tenor, have set their hands and seals on the day and year first above written;
and Lessee as an individual states under the pains and penalties of perjury
that said Lessee is over the age of 18 years.

_____________________________________       ___________________________________
              Lessee                                       Lessor

_____________________________________       ___________________________________
                                                       Trustee or Agent

_____________________________________       ___________________________________

TENANT:   SUBJECT TO APPLICABLE LAW, THE LANDLORD WILL PROVIDE INSURANCE FOR UP
------    TO $750 IN BENEFITS TO COVER THE ACTUAL COSTS OF RELOCATION OF THE
          TENANT IF DISPLACED BY FIRE OR DAMAGE RESULTING FROM FIRE.

TENANT:   MAKE SURE TO RECEIVE A SIGNED COPY OF THIS LEASE.
------

In consideration of the execution of the within lease by the Lessor at the
request of the undersigned and of one dollar paid to the undersigned by the
Lessor, the undersigned hereby, jointly and severally, guarantee to the Lessor,
and the heirs, successors, and assigns of the Lessor, the punctual performance
by the Lessee and the legal representatives, successors and assigns of the
Lessee of all the terms, conditions, covenants, obligations and agreements in
said lease on the Lessee's or their part to be performed or observed, demand
and notice of default being hereby waived. The undersigned waive all
surety-ship defenses and defenses in the nature thereof and assent to any and
all extensions and postponements of the time of payment and other indulgences
and forebearances which may be granted from time to time to the Lessee.

          WITNESS the execution hereof under seal by the undersigned the day
and year first written in said lease

____________________________________        ___________________________________

____________________________________        ___________________________________

____________________________________        ___________________________________

ADOPTED BY THE RENTAL HOUSING ASSOCIATION OF THE
      GREATER BOSTON REAL ESTATE BOARD
<PAGE>   7
Addendum to lease
----------------

218 Tearall Rd.
Raynham, Ma.

1)  Tenants must follow Declaration of Restrictions as outlined by the Deer
    Hollow subdivision covenants.

2)  Tenants can not change the interior paint colors on the walls or trimmings
               ----
    of the house.

3)  No pets allowed

4)  Tenants may store items in the basement or garbage but not in the attic.
                                                         -----
5)  Tenant allowed to temporarily use one weber barbecue grill during the
    lease period.

6)  No additional phone jacks, cable jacks or other related wiring and
    installation is permitted without prior written permission of
    the owner. If tenant wishes any additional phone or cable installation
    it will be done at tenants expense.

8)  No changing of lighting fixtures or any other permanent fixtures mounted to
    the ceilings or walls. (i.e. Ceiling Lights, sconces etc.)

9)  No installing any lighting fixtures, plant boxes, or any other items
    to exterior house.

10) Fireplace is not to be used.
                ----
11) Tenants not allowed to dig up lawn, plant vegetable gardens, flower gardens
           ----
    or any other related activity which would materially change the look of
    the lawn. Tenants may however plant flowers around or about the front
    of the house if they wish.

12) Any items brought in and stored in the house by the tenant, must be removed
    by tenant at the end of the lease term.

13) Condition of home interior (i.e. carpets, rugs, hard wood floors, cabinets,
    mirrors, tile, walls etc.) and exterior should be in similar condition
    as they were before occupancy by tenant within reason.
<PAGE>   8
May 22, 2000
-----------
218 Tearall Road, Raynham, Ma - Furniture list
----------------------------------------------
Kitchen
-------

*  Four kitchen stool chairs
*  One kitchen table
*  Six kitchen chairs
*  One Hutch

Dining Room
-----------
*  One Dining Room table
*  Eight Dining Room Chairs
*  One Hutch
*  Curtains
*  One Oriental Rug

Formal Living Room
------------------
*  One sofa
*  One love seat sofa
*  Two side tables
*  Two side table lamps
*  One entertainment center
*  One 35 inch television
*  Curtains
*  One glass coffee table
*  One Queen Anne chair

Family Room
-----------
*  One entertainment center
*  Two oversized couches with pillows
*  One coffee table
*  One side table
*  Curtains and window treatments
*  Two leather chairs

Bedroom/Office
--------------
*  One executive desk

Bedroom (With His & Her Closets)
-------------------------------
*  Curtains

Hallway
-------
*  One side table

Other (Deck)
-----------
*  One Weber Grill

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]