Document:

<PAGE>

                              INVESTMENT AGREEMENT

         THIS AGREEMENT is entered into as of June 16, 1998, by and among
BIONEBRASKA, INC., a Delaware corporation (the "Company"), and MEDTRONIC, INC.,
a Minnesota corporation ("Medtronic").

                                    RECITALS:

         A.       The Company desires to issue and sell to Medtronic, and
Medtronic desires to purchase from the Company, upon the terms and subject to
the conditions set forth in this Agreement, shares of the Company's Series G
Convertible Preferred Stock, par value $.01 per share ("Series G Preferred"), as
provided for in Section 2.1 hereof.

         B.       As a condition to Medtronic's investment described above, the
Company is willing to grant to Medtronic certain rights as set forth in this
Agreement and the Registration Rights Agreement (as defined below).

         NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants, and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         1.1      SPECIFIC DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings set forth or as referenced below:

"AFFILIATE" of a specified person (natural or juridical) means a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified. "Control"
shall mean ownership of more than 50% of the shares of stock entitled to vote
for the election of directors in the case of a corporation, and more than 50% of
the voting power in the case of a business entity other than a corporation.

"AGREEMENT" means this Agreement and all Exhibits and Schedules hereto.

"BOARD" means the Company's Board of Directors.

"CAPITAL STOCK" means any of the authorized shares of the Company.

"CGMP" means current Good Manufacturing Practices.

[***]

"CLOSING" shall have the meaning set forth in Section 2.3.

"COMMON STOCK" means the shares of Common Stock of the Company, par value $.01
per share.

"CONFIDENTIAL INFORMATION" means know-how, trade secrets, and unpublished
information disclosed (whether before or during the term of this Agreement) by
one of the parties (the "disclosing party") to the other party (the "receiving
party") or generated under this Agreement, excluding information that:

                                       1
<PAGE>

                  (a)      was already in the possession of the receiving party
         prior to its receipt from the disclosing party or has been
         independently developed by the receiving party without breach of this
         Agreement or use of any Confidential Information of the other party
         (provided that the receiving party is able to provide the disclosing
         party with reasonable documentary proof thereof);

                  (b)      is or becomes part of the public domain by reason of
         acts not attributable to the receiving party;

                  (c)      is or becomes available to the receiving party from a
         source other than the disclosing party, which source, to the best of
         the receiving party's knowledge, has rightfully obtained such
         information and has no obligation of nondisclosure or confidentiality
         to the disclosing party with respect thereto;

                  (d)      is made available by the disclosing party to a third
         party unaffiliated with the disclosing party on an unrestricted basis;
         or

                  (e)      has been or must be publicly disclosed by reason of
         legal, accounting, or regulatory requirements beyond the reasonable
         control, and despite the reasonable efforts, of the receiving party.

         All Confidential Information disclosed by one party to the other under
this Agreement shall be in writing and bear a legend stating "Proprietary,"
"Confidential," or words of similar import or, if disclosed in any manner other
than writing, shall be preceded by an oral statement indicating that the
information is Company proprietary or confidential, and shall be followed by
transmittal of a reasonably detailed written summary of the information provided
to the receiving party within 30 days and identified as Confidential Information
bearing the legend described above.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and all
regulations promulgated thereunder.

"FDA" means the United States Food and Drug Administration.

"FIELD" [***]

[***]

"INTELLECTUAL PROPERTY" means letters patent and patent applications;
trademarks, service marks and registrations thereof and applications therefor;
copyrights and copyright registrations and applications; all discoveries, ideas,
inventions, technology, know-how, trade secrets, processes, formulas, drawings
and designs, notebooks, computer programs and software, and licenses; and all
amendments, modifications, and improvements to any of the foregoing.

"KNOWLEDGE" means actual knowledge of a fact or the knowledge that such person
could reasonably be expected to have based on reasonable inquiry. The knowledge
of an entity shall include the knowledge of such entity's executive officers.

"LIENS" means liens, mortgages, charges, security interests, claims, voting
trusts, pledges, encumbrances, options, assessments, restrictions, or
third-party or spousal interests of any nature.

"PREFERRED STOCK" means shares of the Company's Series A Preferred Stock, Series
B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D
Convertible Preferred Stock, Series E Convertible Preferred Stock, Series F
Convertible Preferred Stock, and Series G Convertible Preferred Stock.

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       2
<PAGE>

"PURCHASED SHARES" means the shares of Series G Preferred purchased by Medtronic
pursuant to Section 2.1.

"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement of even
date herewith between Medtronic and the Company.

"SEC" shall mean the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.

"SECURITIES ACT" means the Securities Act of 1933, as amended, and all
regulations promulgated thereunder.

         1.2      DEFINITIONAL PROVISIONS.

                  (a)      The words "hereof," "herein," and "hereunder" and
         words of similar import, when used in this Agreement, shall refer to
         this Agreement as a whole and not to any particular provisions of this
         Agreement.

                  (b)      Terms defined in the singular shall have a comparable
         meaning when used in the plural, and vice versa.

                  (c)      References to an "Exhibit" or to a "Schedule" are,
         unless otherwise specified, to one of the Exhibits or Schedules
         attached to or referenced in this Agreement, and references to an
         "Article" or a "Section" are, unless otherwise specified, to one of the
         Articles or Sections of this Agreement.

                  (d)      The term "person" includes any individual,
         partnership, joint venture, corporation, trust, unincorporated
         organization or government or any department or agency thereof.

                                    ARTICLE 2
                      PURCHASE OF SERIES G PREFERRED STOCK

         2.1      PURCHASE AND SALE OF SHARES; PURCHASE PRICE. At or before the
Closing, the Company shall adopt and file with the Secretary of State of
Delaware a Certificate of Designation relating to the Series G Preferred in the
form attached hereto as EXHIBIT A. Subject to the terms and conditions hereof,
the Company shall issue and deliver to Medtronic, and Medtronic shall purchase
from the Company, 50,000 shares of Series G Preferred (the "Purchased Shares"),
which shall have a face value and purchase price of $100 per share and an
aggregate purchase price of $5,000,000. As described in the Certificate of
Designation, the Purchased Shares shall initially be convertible into shares of
Common Stock based on a price per share of Common Stock of $7.75. Certificates
representing the Purchased Shares shall be issued on the Closing Date in form
acceptable to Medtronic and its counsel.

         2.2      PAYMENT OF PURCHASE PRICE. Medtronic shall pay the Purchase
Price to the Company on the Closing Date via wire transfer of funds to an
account designated by the Company.

         2.3      CLOSING. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place, following the satisfaction or
waiver of all of the conditions to Closing contained in this Agreement, at 10:00
a.m. on June 16, 1998, or at such other time as shall be agreed upon by
Medtronic and the Company (the "Closing Date"). The Closing shall take place (i)
at the office of Fredrikson & Byron, P.A. in Minneapolis, Minnesota, or (ii) on
the mutual agreement of the parties, by delivery via facsimile transmission
(with originals sent by overnight courier service) of the documents to be
delivered at the Closing, or (iii) at such other place or in such other manner
as the parties mutually agree.

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       3
<PAGE>

         2.4 USE OF PROCEEDS. The Company and Medtronic agree that the proceeds
received by the Company from the sale of the Purchased Shares hereunder shall be
used by the Company for [***]

                                    ARTICLE 3
                MEDTRONIC RIGHTS OF FIRST OFFER AND FIRST REFUSAL

         3.1      RIGHT OF FIRST REFUSAL ON NEW ISSUANCES.

                  (a)      The Company hereby grants to Medtronic a right of
         first refusal to purchase all or part of its pro rata share of any New
         Securities (as defined below) that the Company may, from time to time,
         propose to sell and issue, subject to the terms and conditions set
         forth below. Medtronic's pro rata share, for purposes of this Section
         3.1, shall equal a fraction, the numerator of which is the number of
         issued and outstanding shares of Common Stock then held by Medtronic or
         into which the shares of Preferred Stock then held by Medtronic are
         convertible and the denominator of which is the total number of shares
         of Common Stock then issued and outstanding and/or into which the
         shares of all preferred stock of the Company then issued and
         outstanding are convertible.

                  (b)      "New Securities" means any Capital Stock, whether or
         not now authorized, and rights, options, or warrants to purchase
         Capital Stock, and securities of any kind whatsoever that are, or may
         become, convertible into Capital Stock; provided, however, that the
         term "New Securities" does not include:

                           (i)      Shares of Common Stock issuable upon
                  conversion of outstanding shares of Preferred Stock;

                           (ii)     Shares of Series F Convertible Preferred
                  Stock currently being offered to investors by the Company, any
                  warrants to purchase Common Stock issued to any agents in
                  connection with such offering, and any shares of Common Stock
                  issued to any agent in lieu of commissions in connection with
                  such offering;

                           (iii)    Shares of Common Stock issuable to officers,
                  directors, or employees of or consultants to the Company
                  granted pursuant to the Company's 1993 Stock Plan, as it has
                  been, and may be, amended from time to time;

                           (iv)     Shares of Common Stock issued or issuable
                  upon exercise of warrants to purchase shares of Common Stock
                  outstanding on the date hereof;

                           (v)      Shares of Common Stock issued upon
                  conversion of the Company's bridge notes outstanding on the
                  date hereof;

                           (vi)     Shares of Common Stock sold to the public
                  pursuant to a registration statement filed under the
                  Securities Act; or

                           (vii)    Securities issued as a result of any stock
                  split, stock dividend, or reclassification of Common Stock,
                  distributable on a pro rata basis to all holders of Common
                  Stock.

                  (c)      In the event the Company intends to issue New
         Securities, it shall give Medtronic written notice of such intention,
         describing the type of New Securities to be issued, the price thereof,
         the proposed

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       4
<PAGE>

         offeree(s), and the general terms upon which the Company proposes to
         effect such issuance. Medtronic shall have 15 days from the date of
         receipt of such notice to agree to purchase all or part of its pro rata
         share of such New Securities for the price and upon the general terms
         and conditions specified in the Company's notice by giving written
         notice to the Company stating the quantity of New Securities to be so
         purchased.

                  (d)      In the event that Medtronic fails to exercise the
         foregoing right of first refusal with respect to any New Securities
         within such 15-day period, the Company may within 120 days thereafter
         sell any or all of such New Securities not agreed to be purchased by
         Medtronic, at a price and upon general terms no more favorable to the
         purchaser(s) thereof than specified in the notice given to Medtronic
         pursuant to paragraph (c) above. In the event that the Company does not
         sell such New Securities within such 120-day period, the Company shall
         not thereafter issue or sell any New Securities without first offering
         such New Securities to Medtronic in the manner described above.

                  (e)      The rights of Medtronic described in this Section 3.1
         shall terminate upon the closing of the sale of the Company's Common
         Stock in an underwritten public offering registered under the
         Securities Act that results in aggregate gross proceeds to the Company
         of not less than $7,000,000.

         3.2      RIGHT OF FIRST OFFER/FIRST REFUSAL FOR MARKETING AND
DISTRIBUTION RIGHTS.

                  (a)      In the event that the Company or any of its
         Affiliates proposes to sell [***] in the Field anywhere in the world on
         other than a direct selling basis, the Company shall not enter, and
         shall cause each Affiliate not to enter, into any transaction of the
         general types described in Section 3.2(b) below without first giving
         the Company's Notice (as defined below) to Medtronic with respect
         thereto and complying with the terms of this Section 3.2.

                  (b)      In the event that (referred to as a "Proposed
         Transaction"):

                           (i)      the Company or any of its Affiliates
                  receives a bona fide offer from a third party regarding the
                  grant by the Company or such Affiliate of marketing,
                  distribution, or sales representative rights for [***] for use
                  in the Field, or

                           (ii)     the Company or any of its Affiliates
                  determines that it wishes to grant, or to explore the
                  possibility of granting, licenses to market, distribute, or
                  sell [***] for use in the Field (including, without
                  limitation, a determination to seek indications of interest
                  with respect to such a transaction or agreement),

         then the Company shall, within [***] days after such event, notify
         Medtronic in writing of the Company's or such Affiliate's receipt of
         such offer described in clause (i) above or the Company's or such
         Affiliate's determination described in clause (ii) above (the
         "Company's Notice"). The Company's Notice shall set forth, as
         applicable, the material terms and provisions of such offer described
         in clause (i) above or, in the case of a determination described in
         clause (ii) above, the material terms and provisions upon which the
         Company or such Affiliate would be willing to enter into any such a
         transaction with Medtronic.

                  (c)      During the [***]-day period following Medtronic's
         receipt of the Company's Notice with respect to any Proposed
         Transaction (the "Exclusive Period"), the Company shall negotiate, and
         shall cause each Affiliate to negotiate, in good faith exclusively with
         Medtronic regarding the entry into the Proposed Transaction with
         Medtronic. During the Exclusive Period, the Company will not, and will
         cause each Affiliate not to, solicit offers from, negotiate with, or
         provide information to any third party regarding the Proposed
         Transaction.

                  (d)      If Medtronic and the Company or such Affiliate fail
         to reach a mutual agreement upon the terms and provisions of the
         Proposed Transaction during the Exclusive Period, then the Company and

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       5
<PAGE>

         its Affiliates shall have [***] days from the expiration of the
         Exclusive Period in which to negotiate and enter into definitive
         agreements for the Proposed Transaction with the third party whose bona
         fide offer was described in the Company's Notice (with respect to a
         Proposed Transaction described in paragraph (b)(i) above) or with any
         third party (with respect to a Proposed Transaction described in
         paragraph (b)(ii) above); provided, however, that the Company shall not
         enter into definitive agreements with any such third party with respect
         to such Proposed Transaction unless the terms and provisions thereof
         have been found by the Company's Board in good faith to be, in the
         aggregate, more favorable to the Company than the final terms and
         provisions proposed by Medtronic during the Exclusive Period. If the
         Company fails to enter into definitive agreements with respect to such
         Proposed Transaction within such [***]-day period, then Medtronic's
         rights under this Section 3.2 shall be reinstated and the Company may
         not enter into such Proposed Transaction without first giving Medtronic
         a new Company's Notice and complying with the terms of this Section
         3.2.

                                    ARTICLE 4
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         Except as set forth on the attached Disclosure Schedule, the Company
represents and warrants to Medtronic as follows:

         4.1      ORGANIZATION, QUALIFICATION AND CORPORATE POWER. The Company
is a corporation duly incorporated, validly existing, and in good standing under
the laws of the State of Delaware and is duly licensed or qualified to transact
business as a foreign corporation and is in good standing in each jurisdiction
in which the nature of the business transacted by it or the character of the
properties owned or leased by it requires such licensing or qualification and
where the failure to be so licensed or qualified could have a material adverse
effect upon the Company or its business. The Company has the corporate power and
authority to own and hold its properties and to carry on its business as now
conducted and as proposed to be conducted, to execute, deliver and perform this
Agreement, and to issue, sell, and deliver the Purchased Shares.

         4.2      AUTHORIZATION OF AGREEMENT, ETC.

                  (a)      The execution and delivery by the Company of this
         Agreement, the performance by the Company of its obligations hereunder,
         and the issuance, sale, and delivery of the Purchased Shares have been
         duly authorized by all requisite corporate action and will not violate
         any provision of law, any order of any court or other agency of
         government, the Certificate of Incorporation or the Bylaws of the
         Company, as amended, or any provision of any indenture, agreement or
         other instrument to which the Company or any of its Affiliates,
         properties or assets is bound, or conflict with, result in a breach of
         or constitute (with due notice or lapse of time or both) a default
         under any such indenture, agreement or other instrument, or result in
         the creation or imposition of any lien, charge, restriction, claim or
         encumbrance of any nature whatsoever upon any of the properties or
         assets of the Company or its Affiliates.

                  (b)      The Purchased Shares have been duly authorized and
         validly issued, and are fully paid and nonassessable shares of Series G
         Preferred with no personal liability attaching to the ownership thereof
         and are free and clear of all Liens imposed by or through the Company.
         Neither the issuance nor the sale or delivery of the Purchased Shares
         is subject to any preemptive right of stockholders of the Company or to
         any right of first refusal or other right in favor of any person that
         has not been complied with or duly waived. Assuming, and after taking
         into account, the sale and issuance of all of the shares of Capital
         Stock described in Section 3.1(b)(ii) hereof, the Purchased Shares
         constitute approximately 6.5 percent of the issued and outstanding
         shares of Common Stock of the Company, on an as-converted and
         fully-diluted basis.

         4.3      VALIDITY. This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid, and binding obligations of the
Company, enforceable in accordance with its terms, subject, as to the

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       6
<PAGE>

enforcement of remedies, to the discretion of the courts in awarding equitable
relief and to applicable bankruptcy, reorganization, insolvency, moratorium, and
similar laws affecting the rights of creditors generally.

         4.4      FINANCIAL STATEMENTS. The Company has furnished to Medtronic
(i) the audited balance sheet of the Company as of December 31, 1997 (the
"Balance Sheet"), and the related statements of operations, shareholders'
equity, and cash flows of the Company for the year then ended, and (ii) the
unaudited balance sheet of the Company as of March 31, 1998 (the "March 31
Balance Sheet"), and the related statements of operations, shareholders' equity,
and cash flows for the month then ended. The Balance Sheet and related financial
statements for the year ended December 31, 1997 have been prepared in accordance
with generally accepted accounting principles consistently applied, and all of
the financial statements described in this Section 4.4 fairly present the
financial position of the Company as of the dates thereof and the results of its
operations for the periods then ended. Since the date of the March 31 Balance
Sheet and except as disclosed on the Disclosure Schedule, (i) there has been no
change in the assets, liabilities or financial condition of the Company from
that reflected in the March 31 Balance Sheet except for changes in the ordinary
course of business that in the aggregate have not been materially adverse, and
(ii) none of the business, prospects, financial condition, operations, property
or affairs of the Company has been materially adversely affected by any
occurrence or development, individually or in the aggregate, whether or not
insured against.

         4.5      LITIGATION; COMPLIANCE WITH LAW. There is no (i) action, suit,
claim, proceeding or investigation pending or, to the Company's knowledge,
threatened against or affecting the Company, at law or in equity, or before or
by any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) arbitration
proceeding relating to the Company pending under collective bargaining
agreements or otherwise, or (iii) governmental inquiry pending or, to the
Company's knowledge, threatened against or affecting the Company or its
Affiliates (including without limitation any inquiry as to the qualification of
the Company to hold or receive any license or permit), and there is no basis for
any of the foregoing. The Company has complied with all laws, rules,
regulations, and orders applicable to its business, operations, properties,
assets, products, and services. The Company has all necessary permits, licenses,
and other authorizations required to conduct its business as conducted, and has
no reason to believe that the Company will not obtain the same with respect to
its business as proposed to be conducted, which, if not obtained, would have,
either individually or in the aggregate, a material adverse effect on the
Company.

         4.6      PROPRIETARY INFORMATION OF THIRD PARTIES. To the Company's
knowledge, no third party has claimed or has reason to claim that any person
employed by or affiliated with the Company or its Affiliates has (a) violated or
may be violating any of the terms or conditions of his or her employment,
noncompetition or nondisclosure agreement with such third party, (b) disclosed
or may be disclosing or utilized or may be utilizing any trade secret or
proprietary information or documentation of such third party, or (c) interfered
or may be interfering in the employment relationship between such third party
and any of its present or former employees.

         4.7      TITLE TO PROPERTIES. The Company has good and marketable title
to its properties and assets reflected on the March 31 Balance Sheet or acquired
by it since the date of the March 31 Balance Sheet (other than properties and
assets disposed of in the ordinary course of business since the date of the
March 31 Balance Sheet), and all such properties and assets are free and clear
of all Liens, except for liens for current taxes not yet due and payable and
minor imperfections of title, if any, not material in nature or amount and not
materially detracting from the value or impairing the use of the property
subject thereto or impairing the operations or proposed operations of the
Company.

         4.8      LEASEHOLD INTERESTS. Each material lease or agreement to which
the Company is a party under which it is a lessee of any property, real or
personal, is a valid and existing agreement without any default of the Company
thereunder and, to the Company's knowledge, without any default thereunder of
any other party thereto. No event has occurred and is continuing that, with due
notice or lapse of time or both, would constitute a default or event of default
by the Company under any such material lease or agreement or, to the Company's
knowledge, by any other party thereto.

                                       7
<PAGE>

         4.9      TAXES. The Company has filed all tax returns, federal, state,
county, and local, required to be filed by it, and the Company has paid all
taxes shown to be due by such returns as well as all other taxes, assessments,
and governmental charges that have become due or payable, including without
limitation all taxes that the Company is obligated to withhold from amounts
owing to employees, creditors, and third parties. All such taxes with respect to
which the Company has become obligated pursuant to elections made by the Company
in accordance with generally accepted practice have been paid and adequate
reserves have been established for all taxes accrued but not yet payable. The
federal income tax returns of the Company have never been audited by the
Internal Revenue Service. No deficiency assessment with respect to or proposed
adjustment of the Company's federal, state, county or local taxes is pending or,
to the Company's knowledge, threatened.

         4.10     NO DEFAULTS. The Company and, to the Company's knowledge, each
other party thereto have in all material respects performed all the obligations
required to be performed by them to date, have received no notice of default and
are not in default (with due notice or lapse of time or both) under any lease,
agreement or contract now in effect to which the Company is a party or by which
it or its property may be bound. The Company has no present expectation or
intention of not fully performing all its obligations under each such lease,
contract or other agreement, and the Company has no knowledge of any breach or
anticipated breach by the other party to any contract or commitment to which the
Company is a party. The Company is in full compliance with all of the terms and
provisions of its Certificate of Incorporation and Bylaws, as amended.

         4.11     PATENTS, TRADEMARKS, ETC. To the Company's knowledge, the
Company owns or possesses licenses or other rights to use all Intellectual
Property necessary or desirable to the conduct of its business as conducted and
as proposed to be conducted, and no claim is pending or threatened to the effect
that the operations of the Company infringe upon or conflict with the asserted
rights of any other person under any Intellectual Property, and there is no
basis for any such claim. No claim is pending or threatened to the effect that
any such Intellectual Property owned or licensed by the Company, or which the
Company otherwise has the right to use, is invalid or unenforceable by the
Company, and there is no basis for any such claim (whether or not pending or
threatened). To the Company's knowledge, all technical information developed by
and belonging to the Company that has not been patented has been kept
confidential.

         4.12     BROKERS. The Company has no contract, arrangement or
understanding with any broker, finder or similar agent with respect to the
transactions contemplated by this Agreement.

         4.13     TRANSACTIONS WITH AFFILIATES. No director, officer, employee
or stockholder of the Company, or member of the family of any such person, or
any corporation, partnership, trust or other entity in which any such person, or
any member of the family of any such person, has a substantial interest or is an
officer, director, trustee, partner or holder of more than 5% of the outstanding
capital stock thereof, is a party to any transaction with the Company, including
any contract, agreement or other arrangement providing for the employment of,
furnishing of services by, rental of real or personal property from or otherwise
requiring payments to any such person or firm.

         4.14     DISCLOSURE. Neither this Agreement, nor any other statements,
documents, certificates or other items prepared or supplied by the Company with
respect to the transactions contemplated hereby contains an untrue statement of
a material fact or omits a material fact necessary to make the statements
contained therein not misleading. There is no fact that the Company has not
disclosed to Medtronic and its counsel in writing and of which the Company is
aware that materially and adversely affects or could materially and adversely
affect the business, prospects, financial condition, operations, property or
affairs of the Company.

                                       8
<PAGE>

                                    ARTICLE 5
                   REPRESENTATIONS AND WARRANTIES OF MEDTRONIC

         Medtronic represents and warrants to the Company as follows:

         5.1      PURCHASE OF SHARES. Medtronic is an "accredited investor"
within the meaning of Rule 501 under the Securities Act and was not organized
for the specific purpose of acquiring the Purchased Shares. Medtronic has
sufficient knowledge and experience in investing in companies similar to the
Company in terms of the Company's stage of development so as to be able to
evaluate the risks and merits of Medtronic's investment in the Company, and
Medtronic is able financially to bear the risks thereof. Medtronic has had an
opportunity to discuss the Company's business, management, and financial affairs
with the Company's management. The Purchased Shares are being acquired for
Medtronic's own account for the purpose of investment and not with a view to or
for sale in connection with any distribution thereof. Medtronic understands that
(i) the Purchased Shares have not been registered under the Securities Act by
reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof or Rule 505
or 506 promulgated under the Securities Act, (ii) the Purchased Shares must be
held indefinitely unless a subsequent disposition thereof is registered under
the Securities Act or is exempt from such registration, (iii) the Purchased
Shares will bear a legend to such effect, and (iv) the Company will make a
notation on its transfer books to such effect.

         5.2      CORPORATE AUTHORITY. The execution, delivery, and performance
by Medtronic of this Agreement and the transactions contemplated hereby has been
duly and validly authorized and approved by all requisite corporate action on
the part of Medtronic, and the execution and the delivery of this Agreement and
consummation of the transactions contemplated hereby and compliance with and
fulfillment of the terms and provisions hereof will not (i) conflict with or
result in a breach of the terms, conditions or provisions of or constitute a
default under the Articles of Incorporation or Bylaws of Medtronic, or (ii)
require any affirmative approval, consent, authorization or other order or
action of any court, governmental authority, regulatory body, creditor or any
other person. Medtronic has all requisite power and authority to do and perform
all acts and things required to be done by it under this Agreement and the
agreements contemplated hereby. This Agreement constitutes the valid and binding
obligation of Medtronic enforceable in accordance with its terms except as may
be limited by laws affecting creditors' rights generally or by judicial
limitations on the right to specific performance.

                                    ARTICLE 6
                   CONDITIONS TO THE OBLIGATIONS OF MEDTRONIC

         The obligations of Medtronic to purchase and pay for the Purchased
Shares pursuant to Section 2.1 are, at its option, subject to the satisfaction
on or before the Closing Date of the conditions set forth in Sections 6.1
through 6.8 below, inclusive. References in this Article 6 to the "Closing Date"
shall mean and refer to the date set forth in Section 2.4, unless the parties
agree to consummate the transactions contemplated by this Agreement as of a date
other than the date set forth therein.

         6.1      REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The
representations and warranties of the Company contained in Article 4 shall be
true, complete, and correct on and as of the Closing Date with the same effect
as though such representations and warranties had been made on and as of such
date, and the Chairman of the Board and the President of the Company shall have
certified to such effect to Medtronic in writing.

         6.2      PERFORMANCE. The Company shall have performed and complied
with all agreements contained herein required to be performed or complied with
by it prior to or at the Closing Date, and the Chairman of the Board and the
President of the Company shall have certified to Medtronic in writing to such
effect and to the further effect that all of the conditions set forth in Section
6.1 through 6.8, inclusive, have been satisfied.

         6.3      ALL PROCEEDINGS TO BE SATISFACTORY. All corporate and other
proceedings to be taken by the Company in connection with the transactions
contemplated hereby and all documents incident thereto shall be

                                       9
<PAGE>

satisfactory in form and substance to Medtronic and its counsel, and Medtronic
and its counsel shall have received all such counterpart originals or certified
or other copies of such documents as they reasonably may request.

         6.4      SUPPORTING DOCUMENTS. Medtronic and its counsel shall have
received copies of the following documents:

                  (a)      a certificate of the Secretary of State of the State
         of Delaware dated as of a date within five days prior to the Closing
         Date as to the good standing of the Company and the payment of all
         excise taxes by the Company and listing all documents of the Company on
         file with said Secretary of State, and evidence satisfactory to
         Medtronic of the filing of the Certificate of Designation described in
         Section 2.1;

                  (b)      a certificate of the Secretary of the Company dated
         as of the Closing Date certifying: (i) that the Company's Certificate
         of Incorporation and Bylaws have not been amended since the date of the
         copies thereof previously delivered to Medtronic; (ii) that attached
         thereto is a true and complete copy of all resolutions adopted by the
         Board of Directors of the Company authorizing the execution, delivery,
         and performance of this Agreement and the issuance, sale, and delivery
         of the Purchased Shares, and that all such resolutions are in full
         force and effect and are all the resolutions adopted in connection with
         the transactions contemplated by this Agreement; and (iii) to the
         incumbency and specimen signature of each officer of the Company
         executing this Agreement, the stock certificates representing the
         Purchased Shares, and any certificate or instrument furnished pursuant
         hereto, and a certification by another officer of the Company as to the
         incumbency and signature of the officer signing the certificate
         referred to in this paragraph (b); and

                  (c)      such additional supporting documents and other
         information with respect to the operations and affairs of the Company
         as Medtronic or its counsel reasonably may request.

         6.5      REQUIRED CONSENTS. The Company shall have obtained the written
consent or approval of each person whose consent or approval Medtronic
reasonably believes is required in connection with this Agreement.

         6.6      LITIGATION AFFECTING CLOSING. No suit, action or other
proceeding shall be pending or threatened by any third party or by or before any
court or governmental agency seeking to restrain or prohibit or to obtain
damages or other relief in connection with this Agreement, or the consummation
of the transactions contemplated hereby or thereby, and no investigation that
might result in any such suit, action or other proceeding shall be pending or
threatened.

         6.7      NO MATERIAL ADVERSE CHANGES. Since the date hereof, no events
shall have occurred or circumstances arisen that are reasonably expected to have
or result in a material adverse effect upon the Company or its business or
prospects. The Company shall fully cooperate to enable Medtronic to determine
that this condition has been satisfied.

         6.8      REGISTRATION RIGHTS AGREEMENT. The Company shall have executed
and delivered to Medtronic the Registration Rights Agreement.

                                    ARTICLE 7
                  COVENANTS OF THE COMPANY AND THE SHAREHOLDERS

         So long as Medtronic is the legal or beneficial owner of at [***] of
the issued and outstanding shares of Common Stock of the Company, on an
as-converted basis:

         7.1      FINANCIAL STATEMENTS, REPORTS, ETC. The Company shall furnish
to Medtronic:

                  (a)      within 120 days after the end of each fiscal year of
         the Company, a balance sheet of the Company as of the end of such
         fiscal year and the related consolidated statements of income,
         stockholders'

                                       10
<PAGE>

         equity, and cash flows for the fiscal year then ended, prepared in
         accordance with generally accepted accounting principles and certified
         by a firm of independent public accountants selected by the Board of
         Directors of the Company;

                  (b)      within 30 days after the end of each month, an
         unaudited balance sheet of the Company and the related statement of
         income, prepared on a basis consistent with the Company's past practice
         and in accordance with its books and records;

                  (c)      within 30 days prior to the start of each fiscal
         year, any Company-wide forecasts or budgets prepared by the Company in
         respect of such fiscal year, and forecasts or budgets [***];

                  (d)      promptly after the commencement thereof, notice of
         all actions, suits, claims, proceedings, investigations, and inquiries
         that could materially adversely affect the Company;

                  (e)      promptly upon sending, making available or filing the
         same, all press releases, reports, and financial statements that the
         Company sends or makes available to its stockholders or directors or
         files with the SEC, the NASD, or any national securities exchange; and

                  (f)      promptly, from time to time, such other information
         regarding the Company's overall financial condition [***]as Medtronic
         reasonably may request.

         7.2      INSPECTION, CONSULTATION, AND ADVICE. The Company shall permit
and cause any Affiliates of the Company to permit Medtronic and such persons as
it may designate, at Medtronic's expense, to visit and inspect any of the
properties of the Company and its Affiliates, examine their books and take
copies and extracts therefrom, discuss [***] the finances of the Company and its
Affiliates with their officers, employees, and public accountants (and the
Company hereby authorizes said accountants to discuss with Medtronic and such
designees such information), and consult with and advise the management of the
Company and its Affiliates as to the Company's finances and [***], all at
reasonable times and upon reasonable notice. All such information shall be
subject to Section 9.2 hereof.

         7.3      TRANSACTIONS WITH AFFILIATES. Except for transactions
contemplated by this Agreement or as otherwise approved by the Board of
Directors, neither the Company nor any of its subsidiaries shall enter into any
transaction with any director, officer, employee or holder of more than 5% of
the outstanding capital stock of any class or series of capital stock of the
Company or any of its subsidiaries, member of the family of any such person, or
any corporation, partnership, trust or other entity in which any such person, or
member of the family of any such person, is a director, officer, trustee,
partner or holder of more than 5% of the outstanding capital stock thereof,
except for transactions on customary terms related to such person's employment.

         7.4      BOARD MEETINGS. The Company shall use its best efforts to
ensure that meetings of its Board of Directors are held at least four times each
year and at least once each quarter.

         7.5      MEDTRONIC BOARD OBSERVER. Medtronic shall have the right to
designate an observer to the Company's Board. Medtronic's designee shall receive
all notices, documents, and other information in the same time and manner as
such information is supplied to members of the Board. All such information shall
be subject to Section 9.2 hereof. The Company shall make reasonable efforts to
permit Medtronic's designee to participate or observe Board meetings by
telephone if such designee is unable to attend in person. The parties agree that
Medtronic's observer to the Company's Board shall be present solely for the
purpose of observation and shall have no power to exert "control" on behalf of
Medtronic as that term is defined in Rule 405 under the Securities Act.

         7.6      PROPRIETARY INFORMATION AND EMPLOYEE INVENTIONS AGREEMENTS.
The Company shall use its best efforts to obtain confidentiality and assignment
of inventions agreements from all officers, key employees, and other employees,
consultants or independent contractors who will have access to confidential
information of the Company.

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       11
<PAGE>

         7.7      COMPLIANCE WITH LAWS. The Company shall comply, and cause each
Affiliate to comply, with all applicable laws, rules, regulations, and orders,
noncompliance with which could materially adversely affect the Company's
business or condition, financial or otherwise.

         7.8      KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company shall
keep, and cause each Affiliate to keep, adequate records and books of account,
in which complete entries will be made in accordance with generally accepted
accounting principles consistently applied, reflecting all financial
transactions of the Company and such subsidiary, and in which, for each fiscal
year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts, and other purposes in connection with its
business shall be made.

         7.9      USE OF MEDTRONIC NAME. Except for any joint public
announcement described in Section 9.8 and the information contained therein, the
Company shall not, except with the written consent of Medtronic, publicly use
Medtronic's name or disclose Medtronic's relationship with the Company.

                                    ARTICLE 8
                                 INDEMNIFICATION

         8.1      INDEMNIFICATION OF MEDTRONIC. The Company shall indemnify,
defend, and hold harmless Medtronic and each of its subsidiaries, officers,
directors, shareholders, employees, agents, and affiliates (Medtronic and such
other indemnities are referred to in this Article 8 as "Medtronic") from and
against and in respect of any and all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, interest and penalties,
costs, and expenses (including, without limitation, reasonable legal fees and
disbursements incurred in connection therewith and in seeking indemnification
therefor, and any amounts or expenses required to be paid or incurred in
connection with any action, suit, proceeding, claim, appeal, demand, assessment
or judgment) ("Indemnifiable Losses") resulting from, arising out of, or imposed
upon or incurred by any person to be indemnified hereunder by reason of any
breach of any representation, warranty, covenant or agreement of the Company
contained in this Agreement or any agreement, certificate or document executed
and delivered by the Company pursuant hereto or in connection with any of the
transactions contemplated by this Agreement.

         8.2      INDEMNIFICATION OF THE COMPANY. Medtronic shall indemnify,
defend, and hold harmless the Company and each of its subsidiaries, officers,
directors, shareholders, employees, agents, and affiliates (the Company and such
other indemnities referred to in this Article 8 as "the Company") from and
against and in respect of any and all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, interest and penalties,
costs, and expenses (including, without limitation, reasonable legal fees and
disbursements incurred in connection therewith and in seeking indemnification
therefor, and any amounts or expenses required to be paid or incurred in
connection with any action, suit, proceeding, claim, appeal, demand, assessment
or judgment) resulting from, arising out of, or imposed upon or incurred by any
person to be indemnified hereunder by reason of any breach of any
representation, warranty, covenant or agreement of Medtronic contained in this
Agreement or any agreement, certificate or document executed and delivered by
Medtronic pursuant hereto or in connection with the transactions contemplated by
this Agreement.

         8.3      THIRD-PARTY CLAIMS. If a claim by a third party is made
against an indemnified party and if the indemnified party intends to seek
indemnity with respect thereto under this Article 8, such indemnified party
shall promptly notify the indemnifying party of such claim; provided, however,
that failure to give timely notice shall not affect the rights of the
indemnified party so long as the failure to give timely notice does not
adversely affect the indemnifying party's ability to defend such claim against a
third party. The indemnifying party or parties shall be entitled to settle or
assume the defense of such claim, including the employment of counsel reasonably
satisfactory to the indemnified party. If the indemnifying party or parties
elect(s) to settle or defend such claim, the indemnifying party or parties shall
notify the indemnified party within 30 days (but in no event less than 20 days
before any pleading, filing or response on behalf of the indemnified party is
due) of the indemnifying party's or parties' intent to do so. If the
indemnifying party or parties elect(s) not to settle or defend such claim or
fail(s) to notify the indemnified party of the election within 30 days (or such
shorter period provided above) after receipt of the indemnified party's notice
of a claim of indemnity hereunder, the indemnified party shall have the right to
contest, settle or compromise the claim without prejudice to any rights to
indemnification hereunder. Regardless of which party is controlling the
settlement of defense of any claim, (a) both the indemnified party and
indemnifying party or parties shall act in good faith, (b) the indemnifying
party or parties shall not thereby permit to exist any lien, encumbrance or
other adverse charge upon any asset of any indemnified party or of its
subsidiaries, (c) the indemnifying party or parties shall permit the indemnified
party to participate in such settlement or defense through counsel chosen by the
indemnified party, with all fees, costs, and expenses of such counsel borne by
the indemnifying party or parties, (d) no entry of judgment or settlement of a
claim may be agreed to without the written consent of the indemnified party, and
(e) the indemnifying party or parties shall promptly reimburse the indemnified
party for the full amount of such claim and the related expenses as incurred by
the

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       12
<PAGE>

indemnified party pursuant to this Article 8. So long as the indemnifying party
or parties is (are) reasonably contesting any such third party claim in good
faith and the foregoing clause (b) is being complied with, the indemnified party
shall not pay or settle any such claim. The controlling party shall upon request
deliver, or cause to be delivered, to the other party copies of all
correspondence, pleadings, motions, briefs, appeals or other written statements
relating to or submitted in connection with the settlement or defense of any
such claim, and timely notices of any hearing or other court proceeding relating
to such claim.

         8.4      COOPERATION AS TO INDEMNIFIED LIABILITY. Each party hereto
shall cooperate fully with the other parties with respect to access to books,
records, or other documentation within such party's control, if deemed
reasonably necessary or appropriate by any party in the defense of any claim
that may give rise to indemnification hereunder.

                                    ARTICLE 9
                                OTHER PROVISIONS

         9.1      PURCHASE OF PURCHASED SHARES BY MEDTRONIC AFFILIATE.
Notwithstanding any other provisions of this Agreement, Medtronic shall have the
right at its option to designate and permit an affiliate of Medtronic to acquire
and hold the Purchased Shares pursuant to this Agreement. In the event that
Medtronic elects to do so, references in this Agreement to "Medtronic" shall, in
the context of the acquisition and ownership of the Purchased Shares, mean and
refer to such affiliate.

         9.2      NONDISCLOSURE. Each party agrees not to disclose or use
(except as permitted or required for performance by the party receiving such
Confidential Information of its rights or duties hereunder) any Confidential
Information of the other party obtained during the during the term of this
Agreement until, as to any such Confidential Information, the date as of which
such Confidential Information has been in the possession of the receiving party,
as a result of disclosure under this Agreement, for a period of seven years.
Each party further agrees to take appropriate measures to prevent any such
prohibited disclosure by its present and future employees, officers, agents,
subsidiaries, or consultants during such period.

         9.3      FURTHER ASSURANCES. At such time and from time to time on and
after the date hereof upon request by Medtronic, the Company will execute,
acknowledge, and deliver, or will cause to be done, executed, acknowledged, and
delivered, all such further acts, certificates, and assurances that may be
required for the better conveying, transferring, assigning, delivering,
assuring, and confirming to Medtronic, or to its respective successors and
assigns, all of the Purchased Shares or to otherwise carry out the purposes of
this Agreement.

         9.4      ENTIRE AGREEMENT. The Schedules and Exhibits to this Agreement
shall be construed as an integral part of this Agreement to the same extent as
if they had been set forth verbatim herein. This Agreement and the Registration
Rights Agreement, and the Schedules and Exhibits hereto and thereto, constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersede all prior agreements whether written or oral
relating hereto, except for that certain Agreement for Mutual Exchange of
Confidential Information dated December 11, 1997, between the Company and
Medtronic, which shall remain in effect.

         9.5      SURVIVAL. The representations, warranties, covenants, and
agreements contained herein shall survive the purchase of the Purchased Shares
and remain in full force and effect, except that the representations and
warranties contained in Articles 4 and 5 hereof shall expire on the date that is
two years after the date hereof. No independent investigation of the Company by
Medtronic, its counsel, or any of its agents or employees shall in any way limit
or restrict the scope of the representations and warranties made by the Company
in this Agreement.

         9.6      WAIVER, DISCHARGE, AMENDMENT, ETC. The failure of either party
to enforce at any time any of the provisions of this Agreement shall in no way
be construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part of it or the right of either party after
any such failure to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to be a waiver of any other or subsequent
breach. This Agreement may be amended only by the Company and Medtronic, by
mutual action approved by their respective Boards of Directors or their
respective officers authorized by such Board of Directors. Any amendment to this
Agreement shall be in writing and signed by the Company and Medtronic.

         9.7      NOTICES. All notices or other communications to a party
required or permitted hereunder shall be in writing and shall be delivered
personally or by telecopy (receipt confirmed) to such party (or, in the case of
an entity, to an executive officer of such party) or shall be sent by a
reputable express delivery service or by certified mail, postage prepaid with
return receipt requested, addressed as follows:

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       13
<PAGE>

if to Medtronic to:

         Medtronic, Inc.
         Corporate Center
         7000 Central Avenue N.E.
         Minneapolis, Minnesota 55432
         FAX (612) 572-5404

         with separate copies thereof addressed to:

                  Attention:        General Counsel
         and

                  Attention:        Vice President, Corporate Development
                                    and Associate General Counsel

if to the Company to:

         BioNebraska, Inc.
         3820 NW 46th Street
         Lincoln, Nebraska  68524
         FAX (402) 470-2345
         Attention:        Thomas R. Coolidge
                           Chairman of the Board and CEO

         Any party may change the above-specified recipient and/or mailing
address by notice to all other parties given in the manner herein prescribed.
All notices shall be deemed given on the day when actually delivered as provided
above (if delivered personally or by telecopy) or on the day shown on the return
receipt (if delivered by mail or delivery service).

         9.8      PUBLIC ANNOUNCEMENT. In the event any party proposes to issue
any press release or public announcement concerning any provisions of this
Agreement or the transactions contemplated hereby, such party shall so advise
the other parties hereto, and the parties shall thereafter use their best
efforts to cause a mutually agreeable release or announcement to be issued.
Neither party will publicly disclose or divulge any provisions of this Agreement
or the transactions contemplated hereby without the other parties' written
consent, except as may be required by applicable law or stock exchange
regulation, and except for communications to employees.

         9.9      EXPENSES. The Company and Medtronic shall each pay their own
expenses incident to this Agreement and the preparation for, and consummation
of, the transactions provided for herein.

         9.10     GOVERNING LAW. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of
Minnesota, without giving effect to principles of conflict or choice of laws.

         9.11     TITLES AND HEADINGS; CONSTRUCTION. The titles and headings to
the Articles and Sections herein are inserted for the convenience of reference
only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement. This Agreement shall be construed without
regard to any presumption or other rule requiring construction hereof against
the party causing this Agreement to be drafted.

         9.12     BENEFIT. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties to this Agreement, or
their respective successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

         9.13     COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed as original and all of which
together shall constitute one instrument, and may be delivered in person or by
facsimile transmission.

         9.14     SEVERABILITY. If any provision of this Agreement is held
invalid by a court of competent jurisdiction, the remaining provisions shall
nonetheless be enforceable according to their terms. Further, if any provision
is held to be overbroad as written, such provision shall be deemed amended to
narrow its application to the extent necessary to make the provision enforceable
according to applicable law and shall be enforced as amended.

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       14
<PAGE>

         9.15     PARTIES IN INTEREST. All representations, covenants, and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto, whether so expressed or not. Without limiting the
generality of the foregoing, all representations, covenants, and agreements
benefiting Medtronic shall inure to the benefit of any and all subsequent
holders from time to time of the Purchased Shares.

         IN WITNESS WHEREOF, each of the parties has caused this Investment
Agreement to be executed in the manner appropriate for each, and to be dated as
of the date first above written.

                                BIONEBRASKA, INC.

                                By:_____________________________________________
                                Name:    Thomas R. Coolidge
                                Title:   Chairman of the Board and Chief
                                         Executive Officer

                                MEDTRONIC, INC.

                                By:_____________________________________________
                                   Its:_________________________________________

* Confidential portions of this document indicated by [***] have been omitted
and filed separately with the Commission.

                                       15<PAGE>
                                                                  EXHIBIT 10.53

                               EARLE M. JORGENSEN

                          EMPLOYEE STOCK OWNERSHIP PLAN

              AS AMENDED AND RESTATED EFFECTIVE AS OF APRIL 1, 1999

<PAGE>

<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

SECTION                                                                                                       PAGE
-------                                                                                                       ----
<S>                                                                                                           <C>
 1.  Nature of the Plan..........................................................................................1
 2.  Definitions.................................................................................................2
 3.  Eligibility and Participation...............................................................................8
 4.  Employer Contributions.....................................................................................11
 5.  Investment of Trust Assets.................................................................................12
 6.  Allocations to Participants' Accounts......................................................................13
 7.  Allocation Limitations.....................................................................................17
 8.  Voting Company Stock.......................................................................................18
 9.  Disclosure to Participants.................................................................................19
10.  Vesting and Forfeitures....................................................................................21
11.  Credited Service and Break in Service......................................................................23
12.  When Capital Accumulation Will Be Distributed..............................................................24
13.  In-Service Distributions...................................................................................27
14.  How Capital Accumulation Will Be Distributed...............................................................29
15.  Rights, Options and Restrictions on Company Stock..........................................................31
16.  No Assignment of Benefits..................................................................................32
17.  Administration.............................................................................................32
18.  Claims Procedure...........................................................................................37
19.  Limitation on Participants' Rights.........................................................................37
20.  Future of the Plan.........................................................................................38
21.  "Top-Heavy" Contingency Provisions.........................................................................39
22.  Governing Law..............................................................................................41
23.  Execution..................................................................................................41

</TABLE>

<PAGE>

                               EARLE M. JORGENSEN

                          EMPLOYEE STOCK OWNERSHIP PLAN

              AS AMENDED AND RESTATED EFFECTIVE AS OF APRIL 1, 1999

Section 1.  NATURE OF THE PLAN.

         The purpose of this Plan is to enable participating Employees to share
in the growth and prosperity of Earle M. Jorgensen Holding Company, Inc. (the
"Company"), to provide Participants with an opportunity to accumulate capital
for their future economic security, and to enable Participants to acquire stock
ownership interests in the Company. Therefore, a significant portion of the
assets under the Plan shall be invested in Company Stock.

         The Plan, originally adopted effective as of May 3, 1990, as an
employee stock ownership plan under Section 4975(e)(7) of the Internal Revenue
Code of 1986, as amended (the "Code"), is hereby amended and restated effective
as of April 1, 1999. The Plan is amended and restated to be a stock bonus plan
under Section 401(a) of the Code, and an eligible individual account plan under
Section 407(d)(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").

         The Kilsby-Roberts Employee Stock Ownership Plan was consolidated with
and into the Plan in 1990, and portions of the Earle M. Jorgensen Company
Employee Capital Accumulation Plan were transferred to the Plan in 1991.
Effective as of April 1, 1999, no further Employer Contributions shall be made
under the portion of the Plan which was a money purchase pension plan and such
portion of the Plan is merged with and into the portion of the Plan which is a
stock bonus plan.

<PAGE>

         In order to satisfy applicable requirements of the Code, as amended by
the Small Business Job Protection Act of 1996 and the Taxpayer Relief Act of
1997, the definitions of "Compensation," "Employee" and "Highly Compensated
Employee" in Section 2 are amended effective as of April 1, 1997, the definition
of "Statutory Compensation" in Section 2 is amended effective as of April 1,
1998, the third sentence of Section 3(c) is amended effective as of December 12,
1994, and the second sentence of Section 12(c) is amended effective as of
January 1, 1997.

         All Trust Assets held under the Plan will be administered, distributed,
forfeited and otherwise governed by the provisions of this Plan and the related
Trust Agreement. The Plan is administered by a Benefits Committee for the
exclusive benefit of Participants (and their Beneficiaries).

Section 2.  DEFINITIONS.

         In this Plan, whenever the context so indicates, the singular or plural
number and the masculine, feminine or neuter gender shall be deemed to include
the other, the terms "he," "his" and "him" shall refer to a Participant, and the
capitalized terms shall have the following meanings:

<TABLE>

         <S>                                         <C>
         Account ................................    One of several accounts maintained to record the interest
                                                     of a Participant under the Plan.  See Section 6.

</TABLE>

                                      -2-
<PAGE>

<TABLE>

         <S>                                         <C>
         Affiliate ................................  Any corporation which is a member of a controlled group of
                                                     corporations (within the meaning of Section 414(b) of the Code) of
                                                     which an Employer is also a member or any trade or business (whether
                                                     or not incorporated) which is under common control with the Company
                                                     (within the meaning of Section 414(c) of the Code) or any
                                                     organization which is a member of an affiliated service group
                                                     (within the meaning of Section 414(m) of the Code) of which the
                                                     Company is also a member.

         Allocation Date ..........................  March 31st of each year (the last day of each Plan Year).

         Approved Absence .........................  A leave of absence (without pay) granted to an Employee by
                                                     the Employer, in accordance with rules uniformly applied to all
                                                     Employees, for reasons of health or public service or for other
                                                     reasons determined by the Employer to be in its best interests,
                                                     including unpaid leave under the Family and Medical Leave Act of
                                                     1993.  See Section 3(c).

         Beneficiary ..............................  The person (or persons) entitled to receive any benefit
                                                     under the Plan in the event of a Participant's death.  See
                                                     Section 14(b).

         Board of Directors .......................  The Board of Directors of the Company.

         Break in Service .........................  A Plan Year in which an Employee is not credited with more
                                                     than 500 Hours of Service as a result of his termination of
                                                     Service.  See Section 11(b).

         Capital Accumulation......................  A Participant's vested, nonforfeitable interest in his
                                                     Accounts under the Plan.  Each Participant's Capital Accumulation
                                                     shall be determined in accordance with the provisions of Section 10
                                                     and distributed as provided in Sections 12, 13 and 14.

         Code .....................................  The Internal Revenue Code of 1986, as amended.

         Committee ................................  The Benefits Committee appointed by the Board of Directors
                                                     to administer the Plan.  See Section 17.
</TABLE>

                                      -3-
<PAGE>

<TABLE>

         <S>                                         <C>
         Company ..................................  Earle M. Jorgensen Holding Company, Inc., a Delaware corporation.

         Company Stock ............................  Shares of any class of capital stock issued by the Company.

         Company Stock Account ....................  The Account which reflects each Participant's interest in
                                                     Company Stock held under the Plan attributable to Employer
                                                     Contributions and Forfeitures.  See Section 6.

         Compensation..............................  The total current cash compensation paid to an Employee by
                                                     the Employer in each Plan Year before reductions for salary
                                                     reductions, but excluding (1) the Management Shareholders Bonus,
                                                     (2) the Quarterly Supplemental Salary Adjustment for certain former
                                                     senior managers of the Jorgensen Division of the Employer, (3) auto
                                                     allowance, (4) relocation allowance, (5) the special management
                                                     bonus, (6) group term-life insurance, (7) moving expense,
                                                     (8) payment for cancellation of options to purchase capital stock of
                                                     the Employer, (9) amounts received pursuant to "change in control
                                                     contracts," and (10) any amount in excess of $160,000 (as adjusted
                                                     after March 31, 2000, for increases in the cost of living pursuant
                                                     to Section 401(a)(17) of the Code).

         Credited Service.........................   The number of Plan Years in which an Employee is credited
                                                     with at least 1000 Hours of Service.  See Section 11.

         Disability ..............................   The total and permanent disability of an Employee,
                                                     determined by a licensed physician approved by the Committee.

         ECAP ....................................   The Earle M. Jorgensen Company Employee Capital
                                                     Accumulation Plan, a profit sharing plan and formerly also a stock
                                                     bonus plan under Section 401(a) of the Code that includes a "cash or
                                                     deferred arrangement" under Section 401(k) of the Code.
</TABLE>

                                      -4-
<PAGE>

<TABLE>
         <S>                                         <C>
         Employee ................................   An individual who is treated by an Employer as a common-law
                                                     employee; provided, however, that an independent contractor (or
                                                     other individual) who is reclassified as a common-law employee on
                                                     retroactive basis shall not be treated as having been an Employee
                                                     for purposes of the Plan for any period prior to the date that he is
                                                     so reclassified.  A leased employee is not an Employee for purposes
                                                     of the Plan.  For this purpose, a "leased employee," as described in
                                                     Section 414(n)(2) of the Code, is any individual who is not treated
                                                     as a common-law employee by an Employer and who provides services to
                                                     an Employer if (A) such services are provided pursuant to an
                                                     agreement between an Employer and a leasing organization, (B) such
                                                     individual has performed services for an Employer on a substantially
                                                     full-time basis for a period of at least one year, and (C) such
                                                     services are performed under the primary direction or control of an
                                                     Employer.

         Employer ................................   Earle M. Jorgensen Company, a Delaware corporation.

         Employer Contributions ..................   Payments made to the Trust by the Employer.  See Section 4.

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

         Fair Market Value........................   The fair market value of Company Stock, as determined by
                                                     the Committee for all purposes under the Plan based upon a valuation
                                                     by an independent appraiser using the enterprise basis of valuation.

         Forfeiture ..............................   Any portion of a Participant's Accounts which does not
                                                     become a part of his Capital Accumulation and which is forfeited
                                                     under Section 10(b).

         Highly Compensated

</TABLE>

                                      -5-
<PAGE>

<TABLE>

         <S>                                         <C>
         Employee ................................   An Employee who (1) was a "5% owner" (as defined in Section
                                                     416(i)(1)(B)(i) of the Code) at any time during the Plan Year or the
                                                     preceding Plan Year, or (2) has Statutory Compensation in excess of
                                                     $80,000 in the preceding Plan Year and, if so elected by the
                                                     Company, was in the top-paid 20% group of Employees for such
                                                     preceding Plan Year; provided, however, that if such "top-paid
                                                     group" election is made by the Company for any Plan Year, the
                                                     "top-paid group" election must also be applied to all employee
                                                     benefit plans maintained by the Company or its Affiliates.  The
                                                     $80,000 amount shall be adjusted after March 31, 2000, for increases
                                                     in the cost of living pursuant to Section 414(q)(1) of the Code.

         Hour of Service .........................   Each hour of Service for which an Employee is credited
                                                     under the Plan, as described in Section 3(d).

         Investment Manager ......................   A person appointed pursuant to Section 402(c)(3) of ERISA
                                                     to manage and direct the investment of Trust Assets other than
                                                     Company Stock, provided that such person acknowledges in writing
                                                     that it is a fiduciary with respect to the Plan.

         Kilsby ESOP .............................   The Kilsby-Roberts Employee Stock Ownership Plan, a
                                                     combination of a stock bonus plan and a money purchase pension plan
                                                     (each of which is qualified under Section 401(a) of the Code) that
                                                     constitutes an employee stock ownership plan under
                                                     Section 4975(e)(7) of the Code and that includes a tax credit
                                                     employee stock ownership plan under Section 409 of the Code.

         Matching Account ........................   The Account which reflects a Participant's interest under
                                                     the Plan attributable to his Participant Matched Contributions
                                                     Account under the ECAP.  See Section 6.

         Other Investments
         Account..................................   The Account which reflects each Participant's interest
                                                     under the Plan attributable to Trust Assets

</TABLE>

                                      -6-
<PAGE>

<TABLE>

         <S>                                         <C>
                                                     other than Company Stock
                                                     and attributable to Employer Contributions and Forfeitures.  See
                                                     Section 6.

         Participant .............................   Any Employee or former Employee who has met the applicable
                                                     eligibility requirements of Section 3(a) and who has not yet
                                                     received a complete distribution of his Capital Accumulation.

         PAYSOP Account ..........................   The Account which reflects a Participant's interest under
                                                     the Plan attributable to his PAYSOP Account under the Kilsby ESOP or
                                                     under the ECAP.  See Section 6.

         Pension Plan ............................   The Earle M. Jorgensen Salaried Employees Pension Plan or
                                                     the Earle M. Jorgensen Hourly Employees Pension Plan, each of which
                                                     is a defined benefit pension plan qualified under Section 401(a) of
                                                     the Code.

         Plan ....................................   The Earle M. Jorgensen Employee Stock Ownership Plan, which
                                                     includes this Plan and the Trust Agreement.

         Plan Year ...............................   The 12-month period ending on each Allocation Date (and
                                                     coinciding with each fiscal year of the Company), which period shall
                                                     also be the "limitation year" for purposes of Section 415 of the
                                                     Code.

         Republic ESOP ...........................   The Republic Supply Employee Stock Ownership Plan, a
                                                     combination of a stock bonus plan and a money purchase pension plan
                                                     (each of which was qualified under Section 401(a) of the Code) that
                                                     constituted an employee stock ownership plan under
                                                     Section 4975(e)(7) of the Code, that included a tax credit employee
                                                     stock ownership plan under Section 409 of the Code and that was
                                                     merged into the Kilsby ESOP effective as of December 1, 1989.

         Retirement ..............................   Termination of Service (1) after attaining age 65, or
                                                     (2) after attaining age 55 and completing at least five years of
                                                     Credited Service.

</TABLE>

                                      -7-
<PAGE>

<TABLE>

         <S>                                         <C>
         Rollover Account ........................   The Account which reflects a Participant's interest
                                                     attributable to his Rollover Account under the Kilsby ESOP.  See
                                                     Section 6.

         Service .................................   Employment with the Employer or employment with any other
                                                     person that is required to be treated as employment with the
                                                     Employer under Section 414(b), (c), (m) (n) or (o) of the Code.

         Statutory Compensation ..................   The total remuneration paid to an Employee by the Employer
                                                     during the Plan Year for personal services rendered to the Employer,
                                                     excluding employer contributions to a plan of deferred compensation,
                                                     amounts realized in connection with stock options and amounts which
                                                     receive special tax benefits, and including any Company Salary
                                                     Reduction Contributions made on behalf of an Employee for the Plan
                                                     Year to the ECAP.

         Trust ...................................   The Earle M. Jorgensen Employee Stock Ownership Trust,
                                                     which is governed by the Trust Agreement entered into between the
                                                     Company and the Trustee.

         Trust Agreement .........................   The Agreement between the Company and the Trustee
                                                     specifying the duties of the Trustee.

         Trust Assets ............................   The Company Stock (and other assets) held in the Trust for
                                                     the benefit of Participants.  See Section 5.

         Trustee .................................   The Trustee (and any successor Trustee) appointed by the
                                                     Board of Directors to hold the Trust Assets.

</TABLE>

Section 3.  ELIGIBILITY AND PARTICIPATION.

         (a) Each Employee who is a Participant on April 1, 1999, shall
continue to be a Participant. Each other Employee shall become a Participant in
the Plan on his initial date of Service.

                                      -8-
<PAGE>

         An Employee of the Forge Division of the Employer who is not a salaried
Employee shall not be eligible to participate in the Plan. An Employee whose
terms of Service are covered by a collective bargaining agreement shall not be
eligible to participate in the Plan unless the terms of such agreement
specifically provide for coverage under the Plan. A Participant who ceases to be
an eligible Employee is entitled to share in the allocation of Employer
Contributions and Forfeitures for the Plan Year in which he ceases to be an
eligible Employee if he is an Employee on the Allocation Date, but his
Compensation shall include only amounts paid to him while he was an eligible
Employee. An Employee who becomes an eligible Employee shall become a
Participant on the date he becomes an eligible Employee, and his Compensation
shall include only amounts paid to him while he is an eligible Employee.

         (b) A Participant is entitled to share in the allocation of
Employer Contributions and Forfeitures under Section 6(a) for each Plan Year in
which he is credited with at least 1000 Hours of Service and in which he is an
eligible Employee (or on Approved Absence) on the Allocation Date. A Participant
is also entitled to share in the allocation of Employer Contributions and
Forfeitures for the Plan Year of his Retirement, Disability or death.

         (c) A former Participant who is reemployed by the Employer shall become
a Participant as of the date of his reemployment, if he is then an eligible
Employee. A Participant who is on an Approved Absence shall continue as a
Participant during the period of his Approved Absence. Notwithstanding any
provision of this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with Section 414(u) of the Code.

                                      -9-
<PAGE>

         (d) HOURS OF SERVICE - For purposes of determining the Hours of Service
to be credited to an Employee under the Plan, the following rules shall be
applied:

                  (1)      Hours of Service shall include each hour of Service
                           for which an Employee is paid (or entitled to
                           payment) for the performance of duties; each hour of
                           Service for which an Employee is paid (or entitled to
                           payment) for a period during which no duties are
                           performed due to vacation, holiday, illness,
                           incapacity (including disability), layoff, jury duty,
                           military duty or paid leave of absence; and each
                           additional hour of Service for which back pay is
                           either awarded or agreed to (irrespective of
                           mitigation of damages); provided, however, that not
                           more than 501 Hours of Service shall be credited for
                           a single continuous period during which an Employee
                           does not perform any duties.

                  (2)      The crediting of Hours of Service shall be determined
                           in accordance with the rules set forth in paragraphs
                           (b) and (c) of Section 2530.200b-2 of the regulations
                           prescribed by the Department of Labor, which rules
                           shall be consistently applied with respect to all
                           Employees within the same job classification.

                  (3)      Hours of Service shall not be credited to an Employee
                           for a period during which no duties are performed if
                           payment is made or due under a plan maintained solely
                           for the purpose of complying with applicable worker's
                           compensation, unemployment compensation or disability
                           insurance laws, and Hours of Service shall not be
                           credited on account of any payment made or due an
                           Employee solely in reimbursement of medical or
                           medically-related expenses.

                  (4)      An Employee compensated on an hourly basis shall be
                           credited for each Hour of Service as described above.
                           Unless the Employer maintains records of actual Hours
                           of Service, a salaried Employee who completes at
                           least one Hour of Service during a semi-monthly pay
                           period shall be credited with 95 Hours for each such
                           period of Service.

Section 4.  EMPLOYER CONTRIBUTIONS.

                                      -10-
<PAGE>

         (a) AMOUNT OF EMPLOYER CONTRIBUTIONS - Employer Contributions shall be
paid to the Trustee for each Plan Year in such amounts (or under such formula)
as may be determined by the Board of Directors.

         (b) PAYMENT OF EMPLOYER CONTRIBUTIONS - Employer Contributions for each
Plan Year shall be paid to the Trustee not later than the due date (including
extensions) for filing the Company's Federal income tax return for that Plan
Year. Employer Contributions may be paid in cash and/or in shares of Company
Stock, as determined by the Board of Directors. The amount of any Employer
Contributions that are paid in the form of shares of Company Stock shall be
based upon Fair Market Value as of the date such shares are issued to the Trust.

         (c) ADDITIONAL PROVISIONS - Employer Contributions shall not be made
for any Plan Year in amounts which can be allocated to no Participant's Accounts
by reason of the allocation limitations described in Section 7 or in amounts
which are not deductible under Section 404(a) of the Code. Any Employer
Contributions which are not deductible under Section 404(a) of the Code shall be
returned to the Employer by the Trustee (upon the direction of the Company)
within one year after the deduction is disallowed or after it is determined that
the deduction is not available. In the event that Employer Contributions are
paid to the Trust by reason of a mistake of fact, such Employer Contributions
may be returned to the Employer by the Trustee (upon the direction of the
Company) within one year after the payment to the Trust.

         (d) No Participant shall be required or permitted to make contributions
to the Trust.

Section 5.  INVESTMENT OF TRUST ASSETS.

                                      -11-
<PAGE>

         (a) IN GENERAL - Trust Assets (other than Trust Assets attributable to
Rollover Accounts) will be invested by the Trustee in accordance with directions
from the Committee. Employer Contributions (and other Trust Assets, except Trust
Assets attributable to Rollover Accounts) may be used to acquire shares of
Company Stock from any Company stockholder or from the Company. Except as
otherwise provided in Section 5(c), the Trustee may also invest Trust Assets in
such other prudent investments as the Committee or an Investment Manager deems
to be desirable for the Trust, or Trust Assets may be held temporarily in cash.
All purchases of Company Stock by the Trustee shall be made only as directed by
the Committee and only at prices which do not exceed Fair Market Value. The
Committee may direct the Trustee to invest and hold up to 100% of the Trust
Assets (other than Trust Assets attributable to Rollover Accounts) in Company
Stock.

         (b) SALES OF COMPANY STOCK - With the written approval of the Board of
Directors, the Committee may direct the Trustee to sell shares of Company Stock
to any person (including the Company), provided that any such sale must be made
at a price not less than Fair Market Value as of the date of the sale. Any
decision by the Committee to direct the Trustee to sell Company Stock under this
Section 5(b) must comply with the fiduciary duties applicable under Section
404(a)(1) of ERISA.

         (c) ROLLOVER ACCOUNTS - Subject to the provisions of Sections 12, 13
and 14, the Trustee shall retain any shares of Company Stock which have been
allocated to Participants' Rollover Accounts.

Section 6.  ALLOCATIONS TO PARTICIPANTS' ACCOUNTS.

                                      -12-
<PAGE>

         A Company Stock Account and an Other Investments Account shall be
maintained to reflect the interest of each Participant under the Plan (including
certain amounts allocated to him under the Kilsby ESOP and the ECAP). A Rollover
Account, a PAYSOP Account and a Matching Account shall be maintained to reflect
the interest of a Participant under the Plan attributable to certain amounts
allocated to him under the Kilsby ESOP or the ECAP.

         COMPANY STOCK ACCOUNT - The Company Stock Account maintained for each
Participant contains the former balances in his Company Stock Accounts under the
Kilsby ESOP or the Stock Balance in his ESOP Account under the ECAP. Such
Account will be credited as of each Allocation Date with his allocable share of
Company Stock (including fractional shares) purchased and paid for by the Trust
or contributed in kind to the Trust as an Employer Contribution, with any
Forfeitures from Company Stock Accounts and with any stock dividends on Company
Stock allocated to his Company Stock Account.

         OTHER INVESTMENTS ACCOUNT - The Other Investments Account maintained
for each Participant contains the former balances in his Other Investments
Accounts under the Kilsby ESOP or the Cash Balance in his ESOP Account under the
ECAP. Such Account will be credited as of each Allocation Date with his
allocable share of Employer Contributions that are not in the form of Company
Stock and with any Forfeitures from Other Investments Accounts. Such Account
will thereafter be credited as of the last day of each calendar quarter with any
cash dividends on Company Stock allocated to his Company Stock Account and any
net income (or loss) of the Trust. Such Account will be debited for the
Participant's share of any cash payments made by the Trustee for the acquisition
of Company Stock.

                                      -13-
<PAGE>

         ROLLOVER ACCOUNT - The Rollover Account maintained for a Participant
contains the former balance in his Rollover Account under the Kilsby ESOP (if
any). Such Account will be credited as of the last day of each calendar quarter
with its share of the net income (or loss) of the Trust and any dividends on
Company Stock allocated to that Rollover Account.

         PAYSOP ACCOUNT - The PAYSOP Account maintained for a Participant
contains the former balance in his PAYSOP Account under the Kilsby ESOP or under
the ECAP. Such Account will be credited as of the last day of each calendar
quarter with any dividends on Company Stock allocated to his PAYSOP Account and
any net income (or loss) of the Trust attributable to PAYSOP Accounts.

         MATCHING ACCOUNT - The Matching Account maintained for a Participant
contains the former balance in his Participant Matched Contributions Account
under the ECAP. Such Account will be credited as of the last day of each
calendar quarter with any dividends on Company Stock allocated to his Matching
Account and any net income (or loss) of the Trust attributable to Matching
Accounts.

         The allocations to Participants' Accounts for each Plan Year will be
made as follows:

         (a) EMPLOYER CONTRIBUTIONS AND FORFEITURES - Employer Contributions
under Section 4(a) and Forfeitures under Section 10(b) for each Plan Year will
be allocated as of the Allocation Date among the Accounts of Participants so
entitled under Section 3(b) in the ratio

                                      -14-
<PAGE>

that the Compensation of each such Participant bears to the total Compensation
of all such Participants, subject to the allocation limitations described in
Section 7.

         (b) NET INCOME (OR LOSS) OF THE TRUST - The net income (or loss) of the
Trust for each calendar quarter will be determined as of the last day of the
calendar quarter. Each Participant's share of any net income (or loss) will be
allocated to his Other Investments Account in the ratio that the balance of his
Other Investments Account on the last day of the preceding calendar quarter
(reduced by any distribution of Capital Accumulation from such Account since the
last day of the preceding calendar quarter) bears to the sum of such Account
balances for all Participants as of that date. The allocation of any net income
(or loss) for a calendar quarter ending on an Allocation Date shall occur prior
to the allocation of Employer Contributions and Forfeitures as of that
Allocation Date. The net income (or loss) of the Trust for a calendar quarter
includes the increase (or decrease) in the fair market value of Trust Assets
(other than Company Stock), interest income, dividends and other income and
gains (or losses) attributable to Trust Assets (other than any dividends on
allocated Company Stock) since the last day of the preceding calendar quarter,
reduced by any expenses charged to the Trust Assets since the last day of the
preceding calendar quarter.

         The net income (or loss) of the Trust attributable to Rollover Accounts
invested among the investment funds described in Section 5(c) for each calendar
quarter will be determined separately for each investment fund and allocated
among such Accounts in proportion to the respective balances of such Accounts
invested in each investment fund (after taking into consideration any
distributions from such Accounts since the last day of the preceding calendar
quarter). If a Participant has directed the Committee to appoint an Investment
Manager to

                                      -15-
<PAGE>

manage the investment of a portion of his Rollover Account, the net income (or
loss) attributable to such investment will be allocated to his Rollover Account.

         The net income (or loss) of the Trust attributable to PAYSOP Accounts
and Matching Accounts will be determined separately and allocated among such
Accounts in proportion to the respective balances thereof.

         (d) DIVIDENDS ON COMPANY STOCK - Any cash dividends received on shares
of Company Stock allocated to Participants' Company Stock Accounts will be
allocated to the respective Other Investments Accounts of such Participants. Any
cash dividends received on shares of Company Stock allocated to Participants'
Rollover Accounts, PAYSOP Accounts and Matching Accounts will be allocated to
the Accounts to which such Company Stock was allocated. Any cash dividends
received on unallocated shares of Company Stock shall be included in the
computation of the net income (or loss) of the Trust. Any stock dividends
received on Company Stock shall be credited to the Accounts to which such
Company Stock was allocated.

         (e) ACCOUNTING FOR ALLOCATIONS - The Committee shall establish
accounting procedures for the purpose of making the allocations to Participants'
Accounts provided for in this Section 6. The Committee shall maintain adequate
records of the aggregate cost basis of Company Stock allocated to each
Participant's Accounts. From time to time, the Committee may modify the
accounting procedures for the purposes of achieving equitable and
nondiscriminatory allocations among the Accounts of Participants in accordance
with the general concepts of the Plan, the provisions of this Section 6 and the
requirements of the Code and ERISA.

                                      -16-
<PAGE>

Section 7.  ALLOCATION LIMITATIONS.

         The Annual Additions for each Plan Year with respect to any Participant
may not exceed the lesser of:

                  (1)      25% of his Statutory Compensation; or

                  (2)      $30,000, as adjusted for increases in the cost of
                           living pursuant to Section 415(d)(1)(C) of the Code.

For this purpose, "Annual Additions" shall be the total of the Employer
Contributions and Forfeitures (including any income attributable to Forfeitures)
allocated to the Accounts of a Participant for the Plan Year, plus any Company
Salary Reduction Contributions made on his behalf for the Plan Year to the ECAP.
In determining such Annual Additions, Forfeitures of Company Stock shall be
included at the Fair Market Value as of the Allocation Date. Annual Additions
shall include any Company Salary Reduction Contributions distributed to the
Participant pursuant to the ECAP and Sections 401(k)(8) and 402(g)(2)(A) of the
Code, but shall exclude any amounts paid to the Participant pursuant to the ECAP
in order to avoid exceeding the limitation described in Section 415(c) of the
Code. Annual Additions shall also include any contributions allocated to an
individual medical benefit account described in Sections 401(h) and 415(l)(2) of
the Code or any amount attributable to post-retirement medical benefits
allocated to an account for a "key employee" (as defined in Section 416(i) of
the Code) under Sections 419(e) and 419A(d) of the Code.

                                      -17-
<PAGE>

         In addition, for any Participant who is covered under a Pension Plan,
Employer Contributions and Forfeitures may not be allocated to his Accounts
(under this Plan) in amounts which would cause the limitations described in
Section 415(e) of the Code to be exceeded for any Plan Year beginning prior to
April 1, 2000.

         If the aggregate amount that would be allocated to the Accounts of a
Participant in the absence of these limitations would exceed the amount set
forth in these limitations, the following is the order in which his benefits
will be reduced to the extent necessary to avoid exceeding these limitations:
(1) Pension Plan; (2) ECAP; and (3) this Plan. Any Forfeitures which can be
allocated to no Participant's Accounts by reason of these limitations shall be
credited to a "Forfeiture Suspense Account" and allocated as Forfeitures under
Section 6(a) for the next succeeding Plan Year (prior to the allocation of
Employer Contributions for such succeeding Plan Year).

Section 8.  VOTING COMPANY STOCK.

         To the extent that shares of Company Stock have voting rights, such
shares shall be voted as provided in this Section 8.

         Shares of Company Stock in the Trust that are not allocated to Rollover
Accounts shall be voted by the Trustee only in such manner as shall be directed
by the Committee. With respect to any corporate matter which involves the voting
of shares by stockholders and which constitutes a merger, consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business or a similar transaction
specified in regulations under Section 409(e)(3) of the Code, however, each
Participant (or Beneficiary) will

                                      -18-
<PAGE>

be entitled to give confidential instructions to the Trustee as to the voting of
shares of Company Stock then allocated to his Company Stock Account, PAYSOP
Account and Matching Account. In that event, any allocated Company Stock with
respect to which voting instructions are not received from Participants (or
Beneficiaries) and any shares of Company Stock held by the Trust which are not
then allocated to Participants' Company Stock Accounts, PAYSOP Accounts,
Matching Accounts and Rollover Accounts shall be voted by the Trustee in the
manner determined by the Committee.

         Each Participant (or Beneficiary) will be entitled to give confidential
instructions to the Trustee as to the voting of shares of Company Stock that are
allocated to his Rollover Account on all corporate matters involving the voting
of such shares, including instructions to the Trustee to give irrevocable
proxies with respect to such shares. Any such shares with respect to which
voting directions are not given shall not be voted.

Section 9.  DISCLOSURE TO PARTICIPANTS.

         (a) SUMMARY PLAN DESCRIPTION - Each Participant shall be furnished with
the summary plan description of the Plan required by Sections 102(a)(1) and
104(b)(1) of ERISA. Such summary plan description shall be updated from time to
time as required under ERISA and U.S. Department of Labor regulations
thereunder.

         (b) SUMMARY ANNUAL REPORT - Within two months after the due date for
the filing of the annual return/report (Form 5500) for the Plan with the
Internal Revenue Service, each Participant shall be furnished with the summary
annual report of the Plan required by

                                      -19-
<PAGE>

Section 104(b)(3) of ERISA, in the form prescribed in regulations of the U.S.
Department of Labor.

         (c) ANNUAL STATEMENT - Following each Allocation Date, each Participant
shall be furnished with a statement reflecting the following information:

                  (1)      The balances (if any) in his Accounts as of the
                           beginning of the Plan Year.

                  (2)      The amount of Employer Contributions and Forfeitures
                           allocated to his Accounts for that Plan Year.

                  (3)      The adjustments to his Accounts to reflect his share
                           of dividends (if any) on Company Stock and any net
                           income (or loss) of the Trust for that Plan Year.

                  (4)      The new balances in his Accounts, including the
                           number of shares of Company Stock allocated to his
                           Accounts and the Fair Market Value as of that
                           Allocation Date.

                  (5)      His vested percentage in his Account balances (under
                           Section 10) as of that Allocation Date.

         (d) ADDITIONAL DISCLOSURE - The Company shall make available for
examination by any Participant copies of the Plan, the Trust Agreement and the
latest annual report of the Plan filed (on Forms 5500) with the Internal Revenue
Service. Upon written request of any Participant, the Company shall furnish
copies of such documents and may make a reasonable charge to cover the cost of
furnishing such copies, as provided in regulations of the U.S. Department of
Labor.

Section 10.  VESTING AND FORFEITURES.

                                      -20-
<PAGE>

         (a)      VESTING -

                  (1) A Participant's interest in his Company Stock Account and
Other Investments Account shall become 100% vested and nonforfeitable without
regard to his Credited Service if he (A) is employed by the Employer on or after
his 65th birthday, (B) terminates Service by reason of Disability, (C) dies
while employed by the Employer, or (D) was an employee of an Employer under the
Kilsby ESOP or an employee of Earle M. Jorgensen Company on May 2, 1990.

                  (2) Except as otherwise provided in Section 10(a)(1), the
interest of each Participant in his Company Stock Account and Other Investments
Account shall become vested and nonforfeitable in accordance with the following
schedule:

<TABLE>
<CAPTION>

                  Credited Service                              Nonforfeitable
                  Under Section 11                               Percentage
                  ----------------                              --------------
                  <S>                                           <C>
                  Less than One Year                                    0%

                  One Year                                             20%

                  Two Years                                            40%

                  Three Years                                          60%

                  Four Years                                           80%

                  Five Years or More                                  100%

</TABLE>

                  (3) A Participant's interest in his Rollover Account, PAYSOP
Account and Matching Account shall be 100% vested and nonforfeitable at all
times.

                                      -21-

<PAGE>

         (b) FORFEITURES - Any portion of the final balances in a Participant's
Accounts which is not vested (and does not become part of his Capital
Accumulation) will become a Forfeiture upon the occurrence of a
five-consecutive-year Break in Service. Forfeitures shall first be charged
against a Participant's Other Investments Account, with any balance charged
against his Company Stock Account (at Fair Market Value). All Forfeitures will
be reallocated to the Accounts of remaining Participants, as provided in Section
6(a), as of the Allocation Date of the Plan Year in which a
five-consecutive-year Break in Service occurs.

         (c) VESTING UPON REEMPLOYMENT - If a Participant who is not 100% vested
receives a distribution of his Capital Accumulation prior to the occurrence of a
five-consecutive-year Break in Service and he is reemployed prior to the
occurrence of such a Break in Service, the portion of his Accounts which was not
vested shall be maintained separately until he becomes 100% vested. His vested
and nonforfeitable percentage in such separate Accounts upon his subsequent
termination of Service shall be equal to:

                                      X-Y
                                     ------
                                     100%-Y

For purposes of applying this formula, X is the vested percentage at the time of
the subsequent termination, and Y is the vested percentage at the time of the
prior termination.

Section 11.  CREDITED SERVICE AND BREAK IN SERVICE.

                                      -22-
<PAGE>

         (a) CREDITED SERVICE - An Employee's Credited Service shall be the
number of Plan Years (beginning with the Plan Year ending March 31, 1991) in
which he is credited with at least 1000 Hours of Service. Credited Service shall
also include an Employee's Credited Service as defined under the Kilsby ESOP
prior to May 3, 1990, and an Employee's Years of Service as defined under the
ECAP prior to May 3, 1990. All determinations of Credited Service shall be made
in accordance with the regulations prescribed by the U.S. Department of Labor.

         (b) BREAK IN SERVICE - A one-year Break in Service shall occur in a
Plan Year in which an Employee is not credited with more than 500 Hours of
Service as a result of his termination of Service. A five-consecutive-year Break
in Service shall be five consecutive one-year Breaks in Service.

         For purposes of determining whether a Break in Service has occurred, if
an Employee begins a maternity/paternity absence described in Section
411(a)(6)(E)(i) of the Code, or any unpaid leave covered under the Family and
Medical Leave Act of 1993, the computation of his Hours of Service shall include
the Hours of Service that would have been credited if he had not been so absent.
An Employee shall be credited for such Hours of Service (up to a maximum of 501
Hours of Service) in the Plan Year in which such absence begins (if such
crediting will prevent him from incurring a Break in Service in such Plan Year)
or in the next following Plan Year. For the purposes of this paragraph, a
"maternity/paternity absence" means an Employee's absence (A) by reason of the
(i) pregnancy of the Employee, (ii) birth of a child of the Employee or (iii)
placement of a child with the individual in connection with the adoption of such
child by

                                      -23-
<PAGE>

such Employee, or (B) for purposes of caring for a child described in clause (A)
for a period beginning immediately following such birth or placement.

         (c) REEMPLOYMENT - If a former Employee is reemployed after a one-year
Break in Service, new Accounts will be established to reflect his interests in
the Plan attributable to Service after the Break in Service and the following
special rules shall apply in determining his Credited Service:

                  (1)      If he is reemployed after the occurrence of a
                           five-consecutive-year Break in Service, Credited
                           Service after the Break in Service will not increase
                           his vested interest in his Accounts attributable to
                           Service prior to the Break in Service.

                  (2)      After he completes one Plan Year of Credited Service
                           following reemployment, his Credited Service with
                           respect to his new Accounts will include his Credited
                           Service accumulated prior to the Break in Service. In
                           the case of an Employee who is reemployed after a
                           five-consecutive-year Break in Service and who has
                           not attained a vested interest under the Plan,
                           Credited Service prior to the Break in Service shall
                           not be included in determining his Credited Service.

Section 12.  WHEN CAPITAL ACCUMULATION WILL BE DISTRIBUTED.

         (a) Except as otherwise provided in Sections 12(c) and 13, a
Participant's Capital Accumulation will be distributed following his termination
of Service, but only at the time and in the manner described in this Section 12.
If the value of a Participant's Capital Accumulation exceeds $5,000, no portion
of his Capital Accumulation may be distributed to him before he attains age 65
without his written consent.

                                      -24-
<PAGE>

         Subject to the procedures established by the Committee under Section
17(c)(5), a Participant's Capital Accumulation may be distributed in accordance
with a "qualified domestic relations order" (as defined in Section 414(p) of the
Code) without regard to whether the Participant's Service has terminated or he
has attained his "earliest retirement age" (as defined in Section 414(p) of the
Code). Unless the "qualified domestic relations order" provides otherwise, such
distribution shall be made pro rata from each of the Participant's Accounts.

         (b) If a Participant's Service terminates as a result of his
Retirement, his Disability, his death, a plant closure or job elimination by the
Employer, distribution of his Capital Accumulation shall occur in a single lump
sum as soon as practicable after the June 30th, September 30th or December 31st
coinciding with or next following his termination of Service. If a Participant's
Service terminates for any other reason, distribution of his Capital
Accumulation shall occur in a single lump sum as soon as practicable after the
Allocation Date coinciding with or next following his termination of Service.

         (c) Unless the Participant elect to defer the distribution of his
Capital Accumulation, distribution of his Capital Accumulation shall occur not
later than 60 days after the Allocation Date coinciding with or next following
his 65th birthday (or his termination of Service, if later). The distribution of
the Capital Accumulation of any Participant who attains age 70 1/2 in a calendar
year and either (1) has terminated Service or (2) is a "5% owner" (as defined in
Section 416(i)(1)(B)(i) of the Code) must occur not later than April 1st of the
next calendar year and must be made in accordance with the regulations under
Section 401(a)(9) of the Code, including Section 1.401(a)(9)-2; provided,
however, that distributions shall be offered to any other Participant who
attains age 70 1/2 before January 1, 2000. A Participant who terminates Service

                                      -25-
<PAGE>

after completing at least five years of Credited Service shall be entitled (upon
his request) to have the distribution of his Capital Accumulation occur upon his
attaining age 55. If the amount of a Participant's Capital Accumulation cannot
be determined (by the Committee) by the date on which a distribution is to
occur, or if the Participant cannot be located, distribution of his Capital
Accumulation shall occur within 60 days after the date on which his Capital
Accumulation can be determined or after the date on which the Committee locates
the Participant.

         (d) If any part of a Participant's Capital Accumulation is retained in
the Trust after his Service ends, his Accounts will continue to be treated as
described in Section 6. However, except as otherwise provided in Section 3(b),
such Accounts shall not be credited with any additional Employer Contributions
and Forfeitures. The Trustee may determine (based upon a nondiscriminatory
policy) that the Capital Accumulations of former Employees will be diversified
and invested in Trust Assets other than Company Stock.

         (e) In the case of any distribution of Capital Accumulation under this
Plan, if the Committee is unable to make such distribution within three years
after distribution is due a Participant (or Beneficiary) under Section 12(b)
because it cannot locate such Participant (or Beneficiary), the Committee shall
direct that such Capital Accumulation shall be forfeited and shall be
reallocated as a Forfeiture (as of the Allocation Date coinciding with or next
following the expiration of the aforesaid time limit) to the Accounts of those
Participants who are entitled under Section 3(b) to share in the allocation of
Employer Contributions and Forfeitures under Section 6(a) for the Plan Year
ending on that Allocation Date and the Trust Assets shall be relieved of the
liability for such distribution. If, after such forfeiture, the Participant (or

                                      -26-
<PAGE>

Beneficiary) later claims such Capital Accumulation, such Capital Accumulation
shall be reinstated from Forfeitures of Participants occurring during the Plan
Year in which such reinstatement occurs; provided, however, that if such
Forfeitures are not sufficient to provide such reinstatement, an additional
Employer Contribution shall be made for the Plan Year in which reinstatement
occurs to cover such reinstatement. Establishment of an Account through such
reinstatement shall not be deemed an "annual addition" under Section 415 of the
Code or Section 7 of the Plan.

Section 13.  IN-SERVICE DISTRIBUTIONS.

         (a) DIVERSIFICATION - A Participant who has attained age 55 and
completed at least ten years of participation in the Plan (including any years
of participation in the Kilsby ESOP, the Republic ESOP or the ECAP) shall be
notified of his right to elect to "diversify" a portion of the balances in his
Company Stock Account, PAYSOP Account and Matching Account attributable to
shares of Company Stock acquired by the Trust (including the Trusts under the
Kilsby ESOP, the Republic ESOP or the ECAP) after December 31, 1986 ("Post-1986
Shares"), as provided in Section 401(a)(28)(B) of the Code. An election to
"diversify" must be made on the prescribed form and filed with the Committee
within the 90-day period immediately following the Allocation Date of a Plan
Year in the Election Period. For purposes of this Section 13(b), the "Election
Period" means the period of six consecutive Plan Years beginning with the Plan
Year in which the Participant first becomes eligible to make an election.

         For each of the first five Plan Years in the Election Period, the
Participant may elect to "diversify" an amount which does not exceed 25% of the
number of Post-1986 Shares allocated

                                      -27-
<PAGE>

to his Company Stock Account, PAYSOP Account and Matching Account since the
inception of the Plan, the Kilsby ESOP, the Republic ESOP or the ECAP, less all
shares with respect to which amounts have previously been "diversified" under
this Section 13(b). In the case of the sixth Plan Year in the Election Period,
the Participant may elect to "diversify" an amount which does not exceed 50% of
the number of Post-1986 Shares allocated to his Company Stock Account, PAYSOP
Account and Matching Account since the inception of the Plan, the Kilsby ESOP,
the Republic ESOP or the ECAP, less all shares with respect to which amounts
have previously been "diversified" under this Section 13(b). No
"diversification" election shall be permitted if the balance of Post-1986 Shares
in a Participant's Company Stock Account, PAYSOP Account and Matching Account as
of the Allocation Date of the first Plan Year in the Election Period has a Fair
Market Value of $500 or less, unless and until the balance of Post-1986 Shares
in his Company Stock Account, PAYSOP Account and Matching Account as of a
subsequent Allocation Date in the Election Period exceeds $500.

         "Diversification" will be effected by distributing to Participants (in
shares of Company Stock, cash or a combination of both, as determined by the
Committee) the portion of their Company Stock Accounts, PAYSOP Accounts and
Matching Accounts with respect to which a "diversification" election is made.
Any distribution under this Section 13(a) shall occur within 90 days after the
90-day period in which the election may be made and shall be subject to the
provisions of Section 14(c).

         (b) ROLLOVER ACCOUNTS - A Participant may at any time withdraw all or
any portion of his Rollover Account by written request addressed to the
Committee.

                                      -28-
<PAGE>

Section 14.  HOW CAPITAL ACCUMULATION WILL BE DISTRIBUTED.

         (a) The Trustee will make distributions from the Trust only as directed
by the Committee. Distribution of a Participant's Capital Accumulation (except
his Rollover Account) will be made in shares of Company Stock. Distribution of a
Participant's Rollover Account will be made in cash; provided, however, that to
the extent a Participant's Rollover Account is invested in Company Stock,
distribution will be made in such shares of Company Stock.

         (b) Distribution of a Participant's Capital Accumulation will be made
to the Participant if living, and if not, to his Beneficiary. In the event of a
Participant's death, his Beneficiary shall be the first surviving class of the
following classes of successive preference beneficiaries: (1) his surviving
spouse, (2) his surviving children, (3) his surviving parents, (4) his surviving
brothers and sisters, or (5) his estate. A Participant (with the written consent
of his spouse, if any, acknowledging the effect of the consent and witnessed by
a notary public or Plan representative) may designate a different Beneficiary or
Beneficiaries from time to time by filing a written designation with the
Committee. A deceased Participant's entire Capital Accumulation shall be
distributed to his Beneficiary on or before the December 31st of the calendar
year that includes the fifth anniversary of his death.

         (c) The Company shall furnish the recipient of a distribution with the
tax consequences explanation required by Section 402(f) of the Code and shall
comply with the withholding requirements of Section 3405 of the Code and of any
applicable state law with respect to distributions from the Trust. If the
Committee so elects for a Plan Year, distributions to Participants may be made
less than 30 days after the notice required under Section 1.411(a)-11(c) of the
regulations under the Code is given; provided, however, that no such
distribution to

                                      -29-
<PAGE>

a Participant shall be made unless (1) the Participant is informed that he has
the right for a period of at least 30 days after receiving the notice to
consider whether or not to consent to a distribution (or a particular
distribution option), and (2) the Participant affirmatively elects to receive a
distribution after receiving the notice.

         (d) If a distribution of a Participant's Capital Accumulation is not
the minimum amount required to be distributed pursuant to the second sentence of
Section 12(c), the Committee shall notify the Participant (or any spouse or
former spouse who is his alternate payee under a "qualified domestic relations
order" (as defined in Section 414(p) of the Code)) of his right to elect to have
the "eligible rollover distribution" paid directly to an "eligible retirement
plan" (within the meaning of Section 401(a)(31) of the Code) that is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, a
qualified trust described in Section 401(a) of the Code or a qualified annuity
plan described in Section 403(a) of the Code that accepts "eligible rollover
distributions." If such an "eligible rollover distribution" is to be made to the
Participant's surviving spouse, the Committee shall notify the surviving spouse
of his right to elect to have the distribution paid directly to an "eligible
retirement plan" that is either an individual retirement account described in
Section 408(a) of the Code or an individual retirement annuity described in
Section 408(b) of the Code. Any election under this Section 14(d) shall be made
and effected in accordance with such rules and procedures as may be established
from time to time by the Committee in order to comply with Section 401(a)(31) of
the Code.

                                      -30-
<PAGE>

Section 15.  RIGHTS, OPTIONS AND RESTRICTIONS ON COMPANY STOCK.

         (a) Any shares of Company Stock distributed by the Trust shall be
subject to a "right of first refusal." The right of first refusal shall provide
that, prior to any subsequent transfer, the shares must first be offered for
purchase in writing to the Company, and then to the Trust, at the then Fair
Market Value. A bona fide written offer from an independent prospective buyer
shall be deemed to be the Fair Market Value for this purpose. The Company and
the Committee (on behalf of the Trust) shall have a total of 14 days to exercise
the right of first refusal on the same terms offered by a prospective buyer. The
Company may require that a Participant entitled to a distribution of Company
Stock execute an appropriate stock transfer agreement (evidencing the right of
first refusal) prior to receiving a certificate for Company Stock.

         (b) The Company shall provide a "put option" to any Participant (or
Beneficiary) who receives a distribution of Company Stock. The put option shall
permit the Participant (or Beneficiary) to sell such Company Stock to the
Company at any time during two option periods. The first put option period shall
be for at least 60 days beginning on the date of distribution. The second put
option period shall be for at least 60 days beginning after the new
determination of Fair Market Value (and notice to the Participant thereof) in
the following Plan Year. Partial exercise of a put option is not permitted. The
price to be paid for Company Stock sold pursuant to a put option shall be the
Fair Market Value as of the Allocation Date immediately preceding the beginning
of each put option period. The Company may allow the Committee to direct the
Trustee to purchase shares of Company Stock tendered to the Company under a put
option. The payment for any Company Stock sold under a put option shall be made
within 30 days.

                                      -31-
<PAGE>

         (c) Shares of Company Stock allocated to a Participant's Rollover
Account shall be subject to any applicable terms of the Stockholders Agreement
that was executed by him (and shall not be subject to Section 15(a) and (b)).

         (d) Shares of Company Stock held or distributed by the Trustee may
include such legend restrictions on transferability as the Company may
reasonably require in order to assure compliance with applicable Federal and
state securities laws and with the terms of any Stockholders Agreement to which
the Participant may be a party. Except as otherwise provided in this Section 15,
no shares of Company Stock held or distributed by the Trustee may be subject to
a put, call or other option, or buy-sell or similar arrangement.

Section 16.  NO ASSIGNMENT OF BENEFITS.

         A Participant's Capital Accumulation may not be anticipated, assigned
(either at law or in equity), alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process, except in accordance with
(i) a "qualified domestic relations order" (as defined in Section 414(p) of the
Code); (ii) a federal tax levy or collection by the Internal Revenue Service on
a judgment resulting from an unpaid tax assessment; or (iii) a judgment or
settlement described in Section 401(a)(13)(C) of the Code.

Section 17.  ADMINISTRATION.

         (a) BENEFITS COMMITTEE - The Plan will be administered by the Benefits
Committee, which is composed of three or more individuals appointed by the Board
of Directors to serve at its pleasure and without compensation. The members of
the Committee shall be the named

                                      -32-
<PAGE>

fiduciaries with authority to control and manage the operation and
administration of the Plan. Members of the Committee need not be Employees or
Participants. Any Committee member may resign by giving notice, in writing, to
the Board of Directors.

         (b) COMMITTEE ACTION - Committee action will be by vote of a majority
of the members at a meeting or by unanimous written consent without a meeting. A
Committee member who is a Participant shall not vote on any question relating
specifically to himself.

         The Committee shall choose from its members a Chairman and a Secretary.
The Committee may authorize any one of its members to execute any certificate or
other written direction on behalf of the Committee. The Secretary shall keep a
record of the Committee's proceedings and of all dates, records and documents
pertaining to the administration of the Plan.

         (c) POWERS AND DUTIES OF THE COMMITTEE - The Committee shall have all
powers necessary to enable it to administer the Plan and the Trust Agreement in
accordance with their provisions, including without limitation the following:

                  (1)      resolving all questions relating to the eligibility
                           of Employees to become Participants;

                  (2)      determining the appropriate allocations to
                           Participants' Accounts pursuant to Section 6;

                  (3)      determining the amount of benefits payable to a
                           Participant (or Beneficiary), and the time and manner
                           in which such benefits are to be paid;

                  (4)      authorizing and directing all disbursements of Trust
                           Assets by the Trustee;

                                      -33-
<PAGE>

                  (5)      establishing procedures in accordance with Section
                           414(p) of the Code to determine the qualified status
                           of domestic relations orders and to administer
                           distributions under such qualified orders;

                  (6)      engaging any administrative, legal, accounting,
                           clerical or other services that it may deem
                           appropriate;

                  (7)      construing and interpreting the Plan and the Trust
                           Agreement and adopting rules for administration of
                           the Plan that are consistent with the terms of the
                           Plan documents and of ERISA and the Code;

                  (8)      compiling and maintaining all records it determines
                           to be necessary, appropriate or convenient in
                           connection with the administration of the Plan;

                  (9)      reviewing the performance of the Trustee with respect
                           to the Trustee's administrative duties,
                           responsibilities and obligations under the Plan and
                           Trust Agreement;

                  (10)     selecting the investment funds to be made available
                           for the investment of Rollover Accounts in accordance
                           with Section 5(c);

                  (11)     selecting an independent appraiser and determining
                           the Fair Market Value of Company Stock as of such
                           dates as it determines to be necessary or
                           appropriate; and

                  (12)     executing agreements and other documents on behalf of
                           the Plan and Trust.

         Except as otherwise provided in Section 5(c), the Committee shall be
responsible for directing the Trustee as to the investment of Trust Assets, but
may appoint an Investment Manager to manage the investment of Trust Assets other
than Company Stock. Except as otherwise provided in Section 5(c), the Committee
may also delegate to the Trustee the responsibility for investing Trust Assets
other than Company Stock. The Committee shall establish a funding policy and
method for directing the Trustee to acquire Company Stock (and

                                      -34-
<PAGE>

for otherwise investing the Trust Assets) in a manner that is consistent with
the objectives of the Plan and the requirements of ERISA.

         The Committee shall perform its duties under the Plan and the Trust
Agreement solely in the interests of the Participants (and their Beneficiaries).
Any discretion granted to the Committee under any of the provisions of the Plan
or the Trust Agreement shall be exercised only in accordance with rules and
policies established by the Committee which shall be applicable on a
nondiscriminatory basis. All decisions and interpretations of the Committee
under this Section 17 shall be conclusive and binding upon all persons with an
interest in the Plan and shall be given the greatest deference permitted by law.

         (d) EXPENSES - All reasonable expenses of administering the Plan and
Trust shall be charged to and paid out of the Trust Assets. The Company may,
however, pay all or any portion of such expenses directly, and payment of
expenses by the Company shall not be deemed to be Employer Contributions.

         (e) INFORMATION TO BE SUBMITTED TO THE COMMITTEE - To enable the
Committee to perform its functions, the Company shall supply full and timely
information to the Committee on all matters as the Committee may require, and
shall maintain such other records as the Committee may determine are necessary
or appropriate in order to determine the benefits due or which may become due to
Participants (or Beneficiaries) under the Plan.

         (f) DELEGATION OF FIDUCIARY RESPONSIBILITY - The Committee from time to
time may allocate to one or more of its members and/or may delegate to any other
persons or organizations any of its rights, powers, duties and responsibilities
with respect to the operation and administration of the Plan that are permitted
to be so delegated under ERISA (including its

                                      -35-
<PAGE>

authority to give instructions to the Trustee or others with respect to the
administration of the Plan); provided, however, that responsibility for
investment of the Trust Assets may not be allocated or delegated except as
provided in Section 17(c). Any such allocation or delegation shall be made in
writing, shall be reviewed periodically by the Committee and shall be terminable
upon such notice as the Committee in its discretion deems reasonable and proper
under the circumstances.

         (g) BONDING, INSURANCE AND INDEMNITY - To the extent required under
Section 412 of ERISA, the Company shall secure fidelity bonding for the
fiduciaries of the Plan.

         The Company (in its discretion) or the Trustee (as directed by the
Committee) may obtain a policy or policies of insurance for the Committee (and
other fiduciaries of the Plan) to cover liability or loss occurring by reason of
the act or omission of a fiduciary. If such insurance is purchased with Trust
Assets, the policy must permit recourse by the insurer against the fiduciary in
the case of a breach of a fiduciary obligation by such fiduciary. The Company
hereby agrees to indemnify each member of the Committee (to the extent permitted
by law) against any personal liability or expense resulting from his service on
the Committee, except such liability or expense as may result from his own
willful misconduct.

         (h) NOTICES, STATEMENTS AND REPORTS - The Company shall be the "Plan
Administrator" (as defined in Section 3(16)(A) of ERISA and Section 414(g) of
the Code) for purposes of the reporting and disclosure requirements of ERISA and
the Code. The Committee shall assist the Company, as requested, in complying
with such reporting and disclosure requirements. The Committee shall be the
designated agent of the Plan for the service of legal process.

                                      -36-
<PAGE>

Section 18.  CLAIMS PROCEDURE.

         A Participant (or Beneficiary) who does not receive a distribution of
benefits to which he believes he is entitled may present a claim to the
Committee. The claim for benefits must be in writing and addressed to the
Committee or to the Company. If the claim for benefits is denied, the Committee
shall notify the Participant (or Beneficiary) in writing within 90 days after
the Committee initially received the benefit claim. Any notice of a denial of
benefits shall advise the Participant (or Beneficiary) of the basis for the
denial, any additional material or information necessary for the Participant (or
Beneficiary) to perfect his claim and the steps which the Participant (or
Beneficiary) must take to have his claim for benefits reviewed.

         Each Participant (or Beneficiary) whose claim for benefits has been
denied may file a written request for a review of his claim by the Committee.
The request for review must be filed by the Participant (or Beneficiary) within
60 days after he receives the written notice denying his claim. The decision of
the Committee will be made within 60 days after receipt of a request for review
and shall be communicated in writing to the claimant. Such written notice shall
set forth the basis for the Committee's decision. If there are special
circumstances (such as the need to hold a hearing) which require an extension of
time for completing the review, the Committee's decision shall be rendered not
later than 120 days after receipt of a request for review.

Section 19.  LIMITATION ON PARTICIPANTS' RIGHTS.

                                      -37-
<PAGE>

         A Participant's Capital Accumulation will be based solely upon his
vested interest in his Accounts and will be paid only from the Trust Assets. The
Company, Employer, the Committee or the Trustee shall not have any duty or
liability to furnish the Trust with any funds, securities or other assets,
except as expressly provided in the Plan.

         The adoption and maintenance of the Plan shall not be deemed to
constitute a contract of employment or otherwise between the Employer and any
Employee, or to be a consideration for, or an inducement or condition of, any
employment. Nothing contained in this Plan shall be deemed to give an Employee
the right to be retained in the Service of the Employer or to interfere with the
right of the Employer to discharge, with or without cause, any Employee at any
time.

Section 20.  FUTURE OF THE PLAN.

         The Company reserves the right to amend or terminate the Plan (in whole
or in part) and the Trust Agreement at any time, by action of the Board of
Directors. Neither amendment nor termination of the Plan shall retroactively
reduce the vested rights of Participants or permit any part of the Trust Assets
to be diverted to or used for any purpose other than for the exclusive benefit
of the Participants (and their Beneficiaries).

         The Company specifically reserves the right to amend the Plan and the
Trust Agreement retroactively in order to satisfy any applicable requirements of
the Code and ERISA.

         If the Plan is terminated (or partially terminated), participation of
Participants affected by the termination will end. If Employer Contributions are
not replaced by contributions to a comparable plan which satisfies the
requirements of Section 401(a) of the Code, the Accounts of

                                      -38-
<PAGE>

those affected Participants will become nonforfeitable as of the termination
date. A complete discontinuance of Employer Contributions shall be deemed to be
a termination of the Plan for this purpose.

         After termination of the Plan, the Trust will be maintained until the
Capital Accumulations of all Participants have been distributed. Capital
Accumulations may be distributed following termination of the Plan or
distributions may be deferred as provided in Section 12, as the Company shall
determine. In the event that Company Stock is sold in connection with the
termination of the Plan or the amendment of the Plan to become a qualified
employee plan that is not a stock bonus plan, all Capital Accumulations will be
distributed in cash.

         In the event of the merger or consolidation of this Plan with another
plan, or the transfer of Trust Assets (or liabilities) to another plan, the
Account balances of each Participant immediately after such merger,
consolidation or transfer must be at least as great as immediately before such
merger, consolidation or transfer (as if the Plan had then terminated).

Section 21.  "TOP-HEAVY" CONTINGENCY PROVISIONS.

         (a) The provisions of this Section 21 are included in the Plan pursuant
to Section 401(a)(10)(B)(ii) of the Code and shall become applicable only if the
Plan becomes a "top-heavy plan" under Section 416(g) of the Code for any Plan
Year.

         (b) The determination as to whether the Plan becomes "top-heavy" for
any Plan Year shall be made as of the Allocation Date of the immediately
preceding Plan Year by considering the Plan together with the ECAP and the
Pension Plans. The Plan (and the ECAP and the Pension Plans) shall be
"top-heavy" only if the total of the account balances under the Plan and

                                      -39-
<PAGE>

the ECAP and the accrued benefits under the Pension Plans for "key employees" as
of the determination date exceeds 60% of the total of the account balances and
the values of the accrued benefits for all Participants. For such purpose,
account balances and accrued benefit values shall be computed and adjusted
pursuant to Section 416(g) of the Code. "Key employees" shall be certain
Participants (who are officers or shareholders of the Employer) and
Beneficiaries described in Section 416(i)(1) or (5) of the Code.

         (c) For any Plan Year in which the Plan is "top-heavy," each
Participant who is an Employee on the Allocation Date (and who is not a "key
employee") shall receive a minimum allocation of Employer Contributions and
Forfeitures which is equal to the lesser of:

                  (1)      3% of his Statutory Compensation; or

                  (2)      the same percentage of his Statutory Compensation as
                           the allocation to the "key employee" for whom the
                           percentage is the highest for that Plan Year. For
                           this purpose, the allocation to a "key employee"
                           shall include any Company Salary Reduction
                           Contributions made on his behalf for the Plan Year to
                           the ECAP.

         (d) For any Plan Year in which the Plan is "top-heavy," Statutory
Compensation of each Employee for purposes of the Plan shall not take into
account any amount in excess of $160,000 (as adjusted after March 31, 2000, for
increases in the cost of living).

                                      -40-
<PAGE>

         (e) For any Plan Year beginning prior to April 1, 2000, in which the
Plan is "top-heavy," with respect to any Participant who is covered under a
Pension Plan, the "defined benefit plan fraction" and the "defined contribution
plan fraction" referred to in Section 415(e) of the Code shall be computed by
substituting "1.0" in lieu of "1.25" in both denominators.

Section 22.  GOVERNING LAW.

         The provisions of this Plan and the Trust Agreement shall be construed,
administered and enforced in accordance with the laws of the State of
California, to the extent such laws are not superseded by ERISA.

Section 23.  EXECUTION.

         To record the amendment and restatement of this Plan, the Company and
the Employer have caused it to be executed on this 20th day of January, 2000.

EARLE M. JORGENSEN HOLDING          EARLE M. JORGENSEN COMPANY
COMPANY, INC.

BY: /S/MAURICE S. NELSON, JR.       BY: /S/WILLIAM S. JOHNSON

                                      -41-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}]]