Document:

<PAGE>

[*] =Certain confidential information contained in this Exhibit 4.2, marked by
brackets with asterisks, has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

                                                                     Exhibit 4.7

               RESEARCH AND DEVELOPMENT AND USE OF SPACE AGREEMENT

          THIS AGREEMENT made as of the 31st day of October, 2000

BETWEEN:

          McMASTER UNIVERSITY

          (hereinafter called "McMaster")

          - and -

          IMI INTERNATIONAL MEDICAL INNOVATIONS INC., a corporation existing
          under the laws of Canada

          (hereinafter called "IMI").

WHEREAS IMI has agreed to provide research and development funding to McMaster
for the IMI Sponsorship Program (as hereinafter defined);

AND WHEREAS in consideration of such funding, McMaster has agreed to grant to
IMI a right of first refusal for an exclusive worldwide license for the
Intellectual Property (as hereinafter defined) created as a result of research
from the IMI Sponsorship Program and a right to use certain laboratory space
located on the campus of McMaster.

AND WHEREAS the parties have entered into this Agreement for the purpose of
outlining the terms and conditions of such arrangement.

NOW THEREFORE, IN CONSIDERATION of the premises and the mutual covenants and
agreements hereinafter contained and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
covenant and agree as follows:

1.   DEFINITIONS

In this Agreement; the following definitions will apply:

<PAGE>

"Business Day" means a day other than a Saturday, Sunday, any statutory holiday
or any other day on which Canadian chartered banks are generally closed in
Toronto.

"Confidential Information" means all information and materials received from one
party from the other party pursuant to this Agreement and all information and
materials developed in the course of the parties carrying out the research
contemplated by this Agreement.

"Copyright" means any and all copyrights which arise from research conducted
pursuant to the IMI Sponsorship Program including, but not limited to, the
Patents and/or the Information.

"IMI Sponsorship Program" means the program to provide research and development
support in areas of research mutually agreeable to IMI and McMaster from time to
time with the initial support being provided in the area of research as
described in Schedule "A" attached hereto;

"Improvements" means any technical improvement; modification, invention or
discovery, whether patented or unpatented, made or acquired by or for the
benefit of McMaster from the IMI Sponsorship Program constituting additions to
and/or betterments in the Process or the Licenced Products.

"Information" means and includes, but not necessarily limited to, the technical
information, technical systems, know-how, engineering and other data, outline
and sketches, drawings, flow diagrams, standard product specification, operating
procedures, testing and inspection procedures, computer programs and analytical
methods relating to or arising out of the IMI Sponsorship Program, which
McMaster now or at any time in the future owns or has an interest in (including,
a right to licence).

"Intellectual Property" means and includes all Patents, Information, Copyright,
Processes and Improvements.

"Licenced Products" means products derived from ROFR Intellectual Property.

"Patents" means, arising out of the IMI Sponsorship Program, any and all patents
and patent applications (i) generated from work conducted or created at or under
the control and direction of, or on behalf of, McMaster or its personnel; or
(ii) which at present or in the future McMaster owns or has an interest
(including, the right to licence) in.

"Premises" those premises located at 1200 Main Street West; Suite 3N1 IB,
Hamilton, Ontario being shown in outline on Schedule "B" attached hereto.

"Processes" shall mean the processes for manufacturing Licenced Products.

"ROFR Intellectual Property" has the meaning attributed to it in subsection
3(b).

"Term" means a period of five years commencing on November 1, 2000 and ending on
the 31st day of October, 2005.

                                       2

<PAGE>

2.   FUNDING OF IMI SPONSORSHIP PROGRAM

(a)  IMI hereby covenants to pay to McMaster, during the Term, One Hundred and
     Twenty Thousand Dollars ($120,000.00) per annum, payable in quarterly
     instalments of Thirty Thousand Dollars ($30,000) in advance on the first
     day of each of November, February, May and August of each and every year of
     the Term, commencing November 1, 2000.

(b)  McMaster hereby covenants and agrees to use the funds described in
     subsection 2(a) above to support the IMI Sponsorship Program, programs
     directly related thereto, the indirect costs of such programs and for such
     other purposes as may be agreed to with the prior written consent of IMI.

(c)  Subject to the prior receipt of any necessary regulatory approval
     including, without limitation, the approval of The Toronto Stock Exchange,
     IMI hereby grants to McMaster warrants to purchase an aggregate of up to
     50,000 common shares in the capital of IMI at an exercise price equal to
     $4.50 per share. Such warrants shall be issued by IMI in five tranches of
     10,000 warrants with the first tranche of 10,000 warrants being issued on
     the date of this Agreement and with the remaining four tranches being
     issued on each of the next four anniversaries of the date of this Agreement
     provided that this Agreement is still in effect and has not been
     terminated. Each tranche of warrants will be exercisable until 5:00 p.m.
     (Toronto time) on the date which is one year from the date of its issue.
     Notwithstanding the foregoing, any warrants not yet exercised by McMaster
     may be immediately cancelled by IMI at any time after the occurrence of any
     breach by McMaster of the terms of this Agreement. The warrants shall be
     evidenced by a warrant certificate substantially in the form attached
     hereto as Schedule "C".

3.   INTELLECTUAL PROPERTY

(a)  Disclosure. McMaster hereby agrees to immediately provide IMI with
     ----------
     disclosure of any Intellectual Property which comes into existence after
     the date hereof. The disclosure of such Intellectual Property shall be in
     sufficient detail to permit IMI to determine whether it wishes to exercise
     its rights hereinafter referred to in this Section 3. No publication or
     public disclosure will be made by McMaster prior to or during the first 30
     days after disclosure to IMI.

(b)  Right of First Refusal. McMaster hereby grants IMI a right of first refusal
     ----------------------
     (the "ROFR Right") to obtain an exclusive world wide licence for the
     Intellectual Property (the "ROFR Intellectual Property") disclosed on the
     terms contemplated herein. IMI, if it chooses to, shall exercise the ROFR
     Right within 90 days (the "Option Period") of such disclosure and if the
     ROFR Right is so exercised, then the parties shall negotiate the terms and
     conditions of a licence agreement for a period of not more than 90 days
     (the "Negotiation Period") from the date of the ROFR Right being exercised.
     The licence agreement shall provide licence terms standard for agreements
     between institutions and industry, including, without limitation, clauses
     of the nature providing for reasonable objectives, payment of patent
     expenses, time limited due diligence, provisions for the development,
     commercialization and marketing of a product embodying the ROFR
     Intellectual Property disclosed and the payment to McMaster of reasonable
     royalties to be negotiated by the parties in good faith.

                                       3

<PAGE>

(c)  Third Party Offer. In the event that:
     -----------------

     (i)  IMI fails to exercise the ROFR Right during the Option Period; or

     (ii) MI exercises the ROFR Right during the Option Period but a license
          agreement is not successfully completed within the Negotiation Period,

     McMaster shall have [***] from the last day of the Option Period to reach a
     conditional agreement to [***] (failing which the provisions of this
     subsection 3(c) shall be repeated prior to any future negotiations between
     McMaster and any third party with respect to the ROFR Intellectual
     Property); provided that any person to whom McMaster shows the ROFR
     Intellectual Property signs a confidentiality agreement containing terms
     reasonably satisfactory to IMI or to which IMI has previously agreed. If
     McMaster and the Third Party propose to enter into an agreement (which form
     of agreement is herein referred to as the "Third Party Offer") in respect
     of [***] which McMaster is prepared to accept, then McMaster shall, prior
     to acceptance thereof, submit the Third Party Offer to IMI (and McMaster
     shall be deemed to have offered to [***], and IMI shall be entitled to
     consider such Third Party Offer for a period of not more than [***], at or
     before which time IMI shall be entitled to accept the Third Party Offer and
     agree to become [***] on the terms and conditions of the Third Party Offer.
     The terms and conditions of the Third Party Offer shall only include terms
     and conditions which are able to be accepted by any [***], and shall not
     include provisions which are unique to the Third Party. If IMI has not
     submitted its written agreement to McMaster to be bound by the terms of the
     Third Party Offer within such time, it shall be deemed to have rejected
     such offer and McMaster shall be free to enter into the Third Party Offer
     with the Third Party at any time during the 30 days following the date IMI
     rejects or is deemed to have rejected the Third Party Offer.

(d)  Term of ROFR Right. Except as hereinafter contemplated, the ROFR Right and
     ------------------
     other rights contemplated in this Article 3 hereof shall terminate on the
     [***]. The remaining rights and obligations hereunder (including, without
     limitation, the provisions of any [***].

(e)  Publication. Each party to this Agreement recognizes that the publication
     -----------
     of papers regarding results of Intellectual Property, including oral
     presentations and abstracts, may be beneficial to the parties provided such
     publications are subject to reasonable controls to protect Confidential
     Information (it being acknowledged that the patent and other proprietary
     rights can be jeopardized by public disclosure prior to the filing of
     suitable patent applications and without appropriate protections to protect
     other commercially valuable rights). In particular, it is the intent of the
     parties to maintain the confidentiality of any Confidential Information
     included in any patent application until such patent

                                       4

<PAGE>

     application has been filed. Accordingly, IMI shall have the right to review
     and approve any paper proposed for publication by McMaster, including oral
     presentations and abstracts, which utilizes data generated from the
     Intellectual Property with respect to which IMI may acquire rights
     hereunder and/or includes Confidential Information of IMI. Before any such
     paper, abstract, release or presentation is submitted for publication or a
     third party for assessment, McMaster shall deliver a complete copy to IMI
     at least 30 days prior to such submission. IMI shall review any such
     material and give its comments to McMaster within 30 days of the delivery
     of such paper to IMI. Upon IMI's request during such 30 day period,
     publication or submission shall be delayed for up to an additional 60 days
     from the date of the request to provide adequate time for IMI to (or for
     IMI to request McMaster to) prepare and file patent applications related to
     the inventions that are proposed for publication or presentation and for
     the other party to remove any Confidential Information from such
     publication or presentation. With respect to oral presentation materials
     and abstracts, IMI shall make reasonable efforts to expedite review of such
     materials and abstracts, and shall return such items as soon as practicable
     to the publishing party with appropriate comments. McMaster shall comply
     with IMI's reasonable request to delete references to IMI's Confidential
     Information in any such paper and agrees to withhold publication of same in
     accordance with the foregoing in order to permit IMI to (or to permit IMI
     to request IMI to) obtain patent protection, if IMI deems it necessary, in
     accordance with the terms of this Agreement. If IMI fails to respond within
     such periods, IMI shall be deemed to have approved the paper or abstract
     for publication or presentation, as the case maybe. For greater certainty,
     this subsection shall only apply to publications which relate to the IMI
     Sponsorship Program.

4.   LICENCE TO USE PREMISES

(a)  Licence. McMaster hereby grants a licence to IMI to use the Premises, on
     the terms and conditions as set forth in this Section 4.

(b)  Possession
     ----------

     (i)  IMI shall have the non-exclusive possession and use of the Premises
          during the term on the terms and conditions contained herein and
          subject to any other rule, regulation, procedure or practice in force
          for this type of space at McMaster University.

     (ii) Subject to McMaster's rights under this Agreement, and as long as this
          Agreement is in good standing, McMaster covenants that IMI shall have
          quiet enjoyment of the Premises during the Term without any
          interruption or disturbance from McMaster or any other person or
          persons lawfully claiming through McMaster.

(c)  Use
     ---

     (i)  During the Term, the Premises shall not be used for any purpose other
          than as a research laboratory and related uses.

                                       5

<PAGE>

     (ii) IMI shall not knowingly do or permit to be done at the Premises
          anything which may:

          (A)  constitute a nuisance;

          (B)  cause damage to the Premises;

          (C)  cause injury or annoyance to occupants of neighbouring premises;

          (D)  make void or voidable any insurance upon the Premises; and

          (E)  constitute a breach of any by-law, statute, order or regulation
               of any municipal, provincial or other competent authority
               relating to the Premises.

     (iii)(A)  IMI shall comply with WSIB, Health & Safety, Hazardous Material
               and other reasonable workplace requirements for personnel; and

          (B)  IMI will maintain at least [***] in liability insurance naming
               McMaster as beneficiary.

(d)  Repair and Maintenance. IMI covenants that during the Term and any renewal
     ----------------------
     thereof it shall keep the Premises in good condition.

(e)  Utilities and Other Charges. McMaster and IMI agree that IMI shall not be
     ---------------------------
     obligated to pay any additional charges or expenses relating to the
     Premises including, without limitation, any realty taxes, utilities,
     maintenance fees, operating costs.

(f)  Signage. IMI shall be entitled to place signage on the door to the Premises
     -------
     in accordance with the normal signage policies that may be applicable at
     the relevant time.

(g)  Option to Renew. Provided IMI is not in default pursuant to the terms of
     ---------------
     this Agreement, IMI shall have the right to extend the licence to use the
     Premises for an additional period of five (5) years on payment terms to be
     negotiated in good faith and on the other terms and conditions as contained
     in this Section 4, provided IMI gives McMaster sixty (60) days written
     notice of its intention to do so prior to the expiration of the Term. The
     said payment terms shall be based on the payment terms contained in this
     agreement including cash payments pursuant to section 2(a) and, subject to
     the prior receipt of any necessary approval including, without limitation,
     The Toronto Stock Exchange, the issuance of warrants (with an exercise
     price based upon the then current market price of the common shares of IMI)
     pursuant to section 2(c).

(h)  Termination. IMI shall have the right, on making the payments referred to
     -----------
     in this subsection 4(h), to terminate the licence to use the Premises
     contained in subsection 4(a) at any time during the Term (or any extension
     thereof), provided IMI delivers written notice to McMaster not less than
     ninety (90) days prior to the date it intends to do so. On such
     termination, the amounts payable under subsection 2(a) shall be pro-rated,
     and the

                                       6

<PAGE>

     payment thereof accelerated to the date of such termination, to the shorter
     of the following two periods:

     (i)  six months following such date of termination; and

     (ii) the period from the date of such notice of termination until the end
          of the "Term" as such term is defined in section 1.

     On the making of the said payments, IMI shall be released from all
     obligations under this Section 4 from and after the date of such
     termination.

(i)  Expansion. Provided IMI is not in default of its obligations under this
     ---------
     Agreement and provided McMaster is prepared to offer any premises located
     in suite 3N11B (the "Expansion Space") for lease to a third party, McMaster
     shall deliver notice to IMI as to the availability of the Expansion Space,
     whereupon IMI shall have thirty (30) days in which to provide notice to
     McMaster that it intends to occupy the Expansion Space. In the event IMI
     exercises its right to occupy such space, it shall do so: (A) on the same
     terms as contained in subsections 2(a) and 2(b), the amounts to be paid and
     the number of warrants to be issued being pro-rated based on the actual
     area of the Expansion Space (provided however that the issuance of any
     additional warrants shall be subject to the prior receipt of any necessary
     regulatory approvals and shall have an exercise price based upon the then
     current market value of the common shares of IMI); and (B) on the same
     terms and conditions as contained in this Section 4.

5.   GENERAL

(a)  All notices, requests, demands or other communications by the terms hereof
required or permitted to be given by one party to another shall be given in
writing by personal delivery, facsimile transmission or by registered mail,
postage prepaid, addressed to such other party or delivered to such other party
as follows:

(i)  to McMaster:        McMaster University
                         1280 Main Street West
                         Hamilton, Ontario
                         L8S 4L8

                         Attention:     Executive Director, Office of Research
                                        Contracts and Intellectual Property

                                        - and -

                                        Dean and Vice President, Faculty of
                                        Health Sciences

                         Facsimile:     (905) 570-0742

                                       7

<PAGE>

(ii) to IMI:             4211 Yonge Street
                         Suite 300
                         Toronto, Ontario
                         M2P 2A9

                         Attention:     Dr. H.B. Brent Norton

                         Facsimile:     (416) 222-3449

     with a copy to:     Aird&Berlis
                         BCE Place
                         Suite 1800
                         181 Bay Street
                         Toronto, Ontario
                         M5J 219

                         Attention:     Jay A. Lefton or Richard M. Kimel

                         Facsimile:     (416) 863-1515

or at such other address as may be given by any of them to the others in writing
from time to time and such notices, requests, demands or other communications
shall be deemed to have been received, if sent by facsimile, on the first
Business Day after sending or, if sent by registered mail, on the fifth Business
Day after mailing or, if delivered, upon the date of delivery.

(b)  The parties hereto agree to execute and deliver to each other such further
instruments and other written assurances and to do or cause to be done such
further acts or things as any of the parties may reasonably request in order to
carry out the transactions contemplated herein.

(c)  This Agreement sets forth the entire agreement among the parties hereto
pertaining to the specific subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties hereto, and there are no warranties, representations or
other agreements between the parties hereto in accordance with the subject
matter hereof except as specifically set forth herein. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby.

(d)  This Agreement shall be governed by the laws of the Province of Ontario and
the federal laws of Canada applicable therein.

(e)  Time shall be of the essence of this Agreement.

(f)  The insertion of headings and the division of this Agreement into articles
and sections are for convenience and reference only and shall not affect the
interpretation hereof.

(g)  Each provision of this Agreement is severable, and in the event that any
one or more thereof may be declared invalid, the remainder of the provisions of
this Agreement shall nevertheless remain in full force and effect.

                                       8

<PAGE>

(h)  The parties may at any time terminate this Agreement by written agreement
executed by each of the parties.

(i)  Promptly following termination or expiration of this Agreement, each of the
parties shall return to the other party all of such other party's Confidential
Information.

(j)  This Agreement may be executed by the parties hereto in separate
counterparts each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.

(k)  This Agreement or any rights thereunder may be assigned by either party
with the prior written consent of the other party, which consent shall not be
unreasonably withheld, provided however that no consent will be required for the
assignment by IMI to an affiliate (as such term is defined in the Canada
Business Corporations Act) thereof.

(l)  This Agreement shall be binding upon and shall enure to the benefit of the
parties' respective successors and assigns.

                                       9

<PAGE>

     IN WITNESS of the foregoing covenants, McMaster and IMI have executed this
Agreement.

                                        MCMASTER UNIVERSITY

                                        Per: /s/ Gehard E. Gerber
                                             --------------------
                                        Name: Gehard E. Gerber
                                        Title: VP Research & Int'l Affairs
                                        Authorized Signing Officer

                                        Per: /s/ John Capone
                                             ---------------
                                        Name: John Capone
                                        Title: Assoc. Dean Research FHS
                                        Authorized Signing Officer

                                        IMI INTERNATIONAL MEDICAL
                                        INNOVATIONS INC.

                                        Per: /s/ Brent Norton
                                             ----------------
                                             Name:  Brent Norton
                                             Title:  President
                                             Authorized Signing Officer

     [execution page of Research and Development and Use of Space Agreement]

                                       10

<PAGE>

                                  Schedule "A"

                     Description of IMI Sponsorship Program

Scientists at IMI have extensive experience in the design and development of
diagnostic procedures which can be used to detect [***]As part of the [***] and
in collaboration with other members of the [***] McMaster is [***] McMaster will
make use of the collaboration with IMI to [***] The research to be performed
under this agreement will be under the supervision of Drs. Mark McDermott and
Jack Gauldie who shall have authority for the scope and direction of the
research funded by IMI.

It is expected that the bulk of the expenses to be incurred will be for the
payment of post-doctoral fellows and the supplies required by them.

Reports will be provided to IMI as appropriate and, in any event, at no less
than annual intervals.

                                      A-1

<PAGE>

                                  Schedule "B"

                               Diagram of Premises

                  Suite 3N11B - 1200 Main Street West, Hamilton

                        Cross-hatched area shows premises

                             [DIAGRAM APPEARS HERE]

                                      B-1

<PAGE>

                                  Schedule "C"

                                PURCHASE WARRANT

                           To Acquire Common Shares of

                   IMI INTERNATIONAL MEDICAL INNOVATIONS INC.

        THE RIGHT TO PURCHASE COMMON SHARES UNDER THIS WARRANT EXPIRES AT
                  5:00 P.M. TORONTO TIME ON OCTOBER 31, 2001.

   Warrant Certificate No. MC1    CERTIFICATE FOR 10,000 Purchase Warrants

   THIS CERTIFIES that, for value received, McMaster University (the "Holder")
   is entitled, subject to the terms and conditions set forth in this Warrant
  Certificate, to purchase from IMI International Medical Innovations Inc., a
  corporation existing under the laws of Canada (the "Corporation"), one fully
   paid and non-assessable common share in the capital of the Corporation, as
 constituted on the date hereof (the "Common Shares"), for each whole purchase
 warrant (a "Warrant") at any time commencing on the date hereof and continuing
 up to 5:00p.m. (Toronto time) on October 31, 2001 (the "Time of Expiry") upon
  the payment of $4.50 per Share (the "Exercise Price"). The number of Common
Shares which the Holder is entitled to acquire upon exercise of each Warrant and
      the Exercise Price are subject to adjustment as hereafter provided.

            [the remainder of this page is left intentionally blank]

                                       C-1

<PAGE>

                             1. Exercise of Warrants
                                --------------------

(a) Election to Purchase. The right to purchase Common Shares evidenced by this
    --------------------
 Warrant certificate may be exercised by the Holder in whole or in part and in
accordance with the provisions hereof by delivery of an Election to Purchase in
    the form substantially the same as that attached hereto as Schedule "A",
properly completed and executed, together with payment of the Exercise Price for
    the number of Common Shares specified in the Election to Purchase at the
 principal office of the Corporation at 4211 Yonge Street, Suite 300, Toronto,
Ontario, M23P 2A9 or such other address in Canada as may be notified in writing
                              by the Corporation.

  (b) Exercise. The Corporation shall, on the date it receives a duly executed
      --------
  E1ection to Purchase and the Exercise Price for the number of Common Shares
 specified in the Election to Purchase (the "Exercise Date"), issue that number
    of Common Shares specified in the Election to Purchase as fully paid and
                         non-assessable Common Shares.

(c) Share Certificates. As promptly as practicable after the Exercise Date, the
    ------------------
Corporation shall issue and deliver to the Holder, registered in the name of the
Holder, a certificate or certificates for the number of Common Shares specified
in the Election to Purchase. To the extent permitted by law, such exercise shall
be deemed to have been effected immediately prior to 5:00 p.m. (Toronto time) on
the Exercise Date, and at such time the rights of the Holder with respect to the
number of Warrants which have been exercised as such shall cease, and the person
  or persons in whose name or names any certificate or certificates for Common
Shares shall then be issuable upon such exercise shall be deemed to have become
   the holder or holders of record of the Common Shares represented thereby.

 (d) Fractional Common Shares. No fractional Common Shares shall be issued upon
     ------------------------
  exercise of any Warrant and no payments or adjustment shall be made upon any
exercise on account of any cash dividends on the Common Shares issued upon such
  exercise. If any fractional interest in a Common Share would, except for the
 provisions of the first sentence of this Subsection 1(d), be deliverable upon
  the exercise of a Warrant, the Corporation shall, in lieu of delivering the
fractional share therefor, pay to the Holder an amount in cash equal to the Fair
       Market Value (as hereinafter defined) of such fractional interest.

                             (e) Corporate Changes
                                 -----------------

(i) Subject to subparagraph 1(e)(ii) hereof, if the Corporation shall be a party
 to any reorganization, merger, dissolution or sale of all or substantially all
  of its assets, whether or not the Corporation is the surviving entity, each
unexercised Warrant shall be adjusted so as to apply to the securities to which
 the holder of that number of Common Shares of the Corporation subject to each
 unexercised Warrant would have been entitled by reason of such reorganization,
     merger, dissolution or sale of all or substantially all of its assets
(collectively, the "Event"), and the Exercise Price shall be adjusted to be the
amount determined by multiplying the Exercise Price in effect immediately prior
                                to the Event by

                                      C-2

<PAGE>

the number of Common Shares subject to the unexercised Warrant immediately prior
 to the Event, and dividing the product thereof by the number of securities to
  which the holder of that number of Common Shares subject to the unexercised
          Warrant would have been entitled to by reason of such Event.

 (ii) If the Corporation is unable to deliver securities to the Holder pursuant
     to the proper exercise of a Warrant, the Corporation may satisfy such
    obligations to the Holder hereunder by paying to the Holder in cash the
difference between the Exercise Price of such Warrant and the Fair Market Value
of the securities to which the Holder would be entitled to upon exercise of such
Warrant. Adjustments under this paragraph (e) or (subject to paragraph (n)) any
 determinations as to the Fair Market Value of any securities shall be made by
the board of directors of the Corporation, or any committee thereof specifically
    designated by the board of directors to be responsible therefor, and any
   reasonable determination made by such board or committee thereof shall be
   binding and conclusive, subject only to any disputes being resolved by the
  Corporation's auditors, whose determination shall be binding and conclusive.

                (f) Subdivision or Consolidation of Common Shares
                    ---------------------------------------------

 (i) In the event the Corporation shall subdivide its outstanding Common Shares
into a greater number of Common Shares, the Exercise Price in effect immediately
 prior to such subdivision shall be proportionately reduced, and conversely, in
case the outstanding Common Shares of the Corporation shall be consolidated into
  a smaller number of Common Shares, the Exercise Price in effect immediately
        prior to such consolidation shall be proportionately increased.

 (ii) Upon each adjustment of the Exercise Price as provided herein, the Holder
  of a Warrant shall thereafter be entitled to acquire, at the Exercise Price
 resulting from such adjustment, the number of Common Shares (calculated to the
 nearest tenth of a Share) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Common Shares which may be
acquired upon the exercise of such Warrant immediately prior to such adjustment
   and dividing the product thereof by the Exercise Price resulting from such
                                  adjustment.

 (g) Change or Reclassification of Common Shares. In the event the Corporation
     -------------------------------------------
shall change or reclassify its outstanding Common Shares into a different class
 of securities, each Warrant shall be adjusted as follows so as to apply to the
                         successor class of securities:

 (i) the number of the successor class of securities which the Holder shall be
 entitled to acquire shall be that number of the successor class of securities
     which a holder of that number of Common Shares subject to each Warrant
immediately prior to the change or reclassification would have been entitled to
               by reason of such change or reclassification; and

(ii) the Exercise Price shall be determined by multiplying the Exercise Price in
  effect immediately prior to the change or reclassification by the number of
Common Shares subject to the unexercised Warrant immediately prior to the change
                            or reclassification, and

                                      C-3

<PAGE>

    dividing the product thereof by the number of Common Shares determined in
                          subparagraph l(g)(i) hereof.

 (h) Offering to Shareholders. If and whenever at any time prior to the Time of
     ------------------------
 Expiry, the Corporation shall fix a record date or if a date of entitlement to
receive is otherwise established (any such date being hereinafter referred to in
 this Subsection 1(h) as the "record date") for the issuance of rights, options
 or warrants to all or substantially all the holders of the outstanding Common
Shares of the Corporation entitling them, for a period expiring not more than 45
   days after such record date, to subscribe for or purchase Common Shares or
  securities convertible into or exchangeable for Common Shares at a price per
 share or, as the case may be, having a conversion or exchange price per share
 less than 90% of the Fair Market Value (as hereinafter defined) on such record
date, the Exercise Price shall be adjusted immediately after such record date so
 that it shall equal the price determined by multiplying the Exercise Price in
 effect on such record date by a fraction, of which the numerator shall be the
  total number of Common Shares outstanding on such record date plus a number
    equal to the number arrived at by dividing the aggregate subscription or
   purchase price of the total number of additional Common Shares offered for
  subscription or purchase or, as the case maybe, the aggregate conversion or
exchange price of the convertible or exchangeable securities so offered by such
  Fair Market Value, and of which the denominator shall be the total number of
     Common Shares outstanding on such record date plus the total number of
     additional Common Shares so offered (or into which the convertible or
  exchangeable securities so offered are convertible or exchangeable); Common
Shares owned by or held for the account of the Corporation or any subsidiary of
  the Corporation shall be deemed not to be outstanding for the purpose of any
  such computation; such adjustment shall be made successively whenever such a
 record date is fixed; and to the extent that any rights or warrants are not so
issued or any such rights or warrants are not exercised prior to the expiration
thereof, the Exercise Price shall then be readjusted to the Exercise Price which
    would then be in effect if such record date had not been fixed or to the
  Exercise Price which would then be in effect based upon the number of Common
Shares or conversion or exchange rights contained in convertible or exchangeable
securities actually issued upon the exercise of such rights or warrants, as the
                                  case may be.

(i) Carry Over of Adjustments. No adjustment of the Exercise Price shall be made
    -------------------------
if the amount of such adjustment shall be less than 1% of the Exercise Price in
 effect immediately prior to the event giving rise to the adjustment, provided,
however, that in such case any adjustment that would otherwise be required then
    to be made shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with any adjustment
     so carried forward, shall amount to at least 1% of the Exercise Price.

(j) Notice of Adjustment. Upon any adjustment of the number of Common Shares and
    --------------------
   upon any adjustment of the Exercise Price, then and in each such case the
Corporation shall give written notice thereof to the Holder, which notice shall
  state the Exercise Price and the number of Common Shares or other securities
                          subject to each unexercised

                                      C-4

<PAGE>

Warrant resulting from such adjustment, and shall set forth in reasonable detail
 the method of calculation and the facts upon which such calculation is based.
Upon the request of the Holder there shall be transmitted promptly to the Holder
a statement of the firm of independent certified public accountants retained to
 audit the financial statements of the Corporation to the effect that such firm
            concurs in the Corporation's calculation of the change.

                    (k) Other Notices. In case at any time:
                        -------------

(i) the Corporation shall declare any dividend upon its Common Shares payable in
                                 Common Shares;

(ii) the Corporation shall offer for subscription pro rata to the holders of its
    Common Shares any additional Common Shares of any class or other rights;

   (iii) there shall be any capital reorganization or reclassification of the
 capital stock of the Corporation, or consolidation, amalgamation or merger of
  the Corporation with, or sale of all or substantially all of its assets to,
                            another corporation; or

   (iv) there shall be a voluntary or involuntary dissolution, liquidation or
                         winding-up of the Corporation,

then, in any one or more of such cases, the Corporation shall give to the Holder
 (i) at least 10 days' prior written notice of the date on which a record shall
     be taken for such dividend, distribution or subscription rights or for
       determining rights to vote in respect of any such reorganization,
   reclassification, consolidation, merger, amalgamation, sale, dissolution,
   liquidation or winding-up and (ii) in the case of any such reorganization,
   reclassification, consolidation, merger, sale, dissolution, liquidation or
  winding-up, at least 10 days' prior written notice of the date when the same
shall take place. Such notice in accordance with the foregoing clause (i) shall
  also specify, in the case of any such dividend, distribution or subscription
    rights, the date on which the holders of Common Shares shall be entitled
thereto, and such notice in accordance with the foregoing clause (ii) shall also
  specify the date on which the holders of Common Shares shall be entitled to
 exchange their Common Shares for securities or other property deliverable upon
  such reorganization, reclassification, consolidation, merger, amalgamation,
       sale, dissolution, liquidation or winding-up, as the case may be.

    (l) Common Shares to be Reserved. The Corporation will at all times keep
        ----------------------------
 available, and reserve if necessary under Canadian law, out of its authorized
 Common Shares, solely for the purpose of issue upon the exercise of Warrants,
such number of Common Shares as shall then be issuable upon the exercise of all
   unexercised Warrants. The Corporation covenants and agrees that all Common
 Shares which shall be so issuable will, upon issuance, be duly authorized and
issued, fully paid and non-assessable. The Corporation will take all such action
   as may be necessary to assure that all such Common Shares may be so issued
without violation of any applicable requirements of any exchange upon which the
    Common Shares may be listed or in respect of which the Common Shares are
 qualified for unlisted trading privileges. The Corporation will take all such
                            action as is within its

                                      C-5

<PAGE>

 power to assure that all such Common Shares may be so issued without violation
                             of any applicable law.

(m) Issue Tax. The issuance of certificates for Common Shares upon the exercise
    ---------
of each Warrant shall be made without charge to the Holder for any issuance tax
 in respect thereto, provided that the Corporation shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
    and delivery of any certificate in a name other than that of the Holder.

(n) Fair Market Value. For the purposes of any computation hereunder, the "Fair
    -----------------
Market Value" at any date shall be the weighted average sale price per share for
    the Common Shares of the Corporation for the 20 consecutive trading days
 immediately before such date on The Toronto Stock Exchange, or, if the Common
 Shares in respect of which a determination of Fair Market Value is being made
  are not listed on The Toronto Stock Exchange or any stock exchange, the Fair
Market Value shall be determined by the directors, which determination shall be
   conclusive. The weighted average price shall be determined by dividing the
aggregate sale price of all such Common Shares sold on the said exchange during
 the said 20 consecutive trading days by the total number of such Common Shares
                                    so sold.

                        2. Transfer of Purchase Warrants
                           -----------------------------

(a) By completing the form of transfer attached hereto, the Holder may, subject
  to compliance with applicable laws, transfer the Purchase Warrants evidenced
 hereby either in whole or in part. Every transfer of Purchase Warrants must be
     in writing under the hand of the Holder or the Holder's legal personal
   representatives or the attorney authorized in writing of such Holder with
 signatures guaranteed by a Canadian chartered bank, a trust company, a member
  firm of The Toronto Stock Exchange or The Investment Dealers Association of
  Canada and in compliance with such other requirements as the Corporation may
prescribe. Any such transfer, accompanied by this Purchase Warrant certificate,
  must be delivered to the Corporation at its principal office in the City of
Toronto, together with such evidence of identity or title as the Corporation may
reasonably require, whereupon the transfer will be registered and duly noted by
   endorsement hereon signed by the Corporation. If part only of the Purchase
 Warrants evidenced hereby is transferred, the Corporation will deliver to the
      Holder and the transferee replacement Purchase Warrants certificates
                 substantially in the form of this certificate.

   (b) Transfers of the Purchase Warrants evidenced hereby may be subject to
restrictions under applicable securities law. The Holder should consult its own
professional advisers in order to assess the legal aspects of a transfer of the
                      Purchase Warrants evidenced hereby.

(c) The Corporation shall not register a transfer if the Corporation has reason
to believe that the transferee is a person in the United States or is acquiring
the Purchase Warrants evidenced hereby for the account or benefit of a person in
 the United States or if the transfer is not in accordance. with all applicable
                                securities laws.

                                      C-6

<PAGE>

                                 3. Replacement
                                    -----------

  Upon receipt of evidence satisfactory to the Corporation of the loss, theft,
     destruction or mutilation of this Certificate and, if requested by the
     Corporation, upon delivery of a bond of indemnity satisfactory to the
Corporation (or, in the case of mutilation, upon surrender of this Certificate),
 the Corporation will issue to the Holder a replacement Certificate (containing
          the same terms and conditions as this Warrant certificate).

                                 4. Expiry Date
                                    -----------

 Each unexercised Warrant shall expire and all rights to purchase Common Shares
hereunder shall cease and become null and void at 5:00 p.m. Toronto time on the
                                Time of Expiry.

                      5. Inability to Deliver Common Shares
                         ----------------------------------

    If for any reason, other than the failure or default of the Holder, the
Corporation is unable to issue and deliver the Common Shares or other securities
as contemplated herein to the Holder upon the proper exercise by the Holder of a
Warrant, the Corporation may pay, at its option and in complete satisfaction of
   its obligations hereunder, to the Holder, in cash, an amount equal to the
 difference between the Exercise Price and the Fair Market Value of such Common
                Shares or other securities on the Exercise Date.

                                6. Governing Law
                                   -------------

 The laws of the Province of Ontario and the laws of Canada applicable therein
                           shall govern this Warrant.

                                  7. Successors
                                     ----------

  The rights under this Warrant certificate shall enure to the benefit of and
   shall be binding upon the Holder and the Corporation and their respective
                            successors and assigns.

                                      C-7

<PAGE>

  IN WITNESS WHEREOF the Corporation has caused this Warrant certificate to be
   signed by a duly authorized officer and its corporate seal hereto affixed.

                      DATED the 31St day of October, 2000.

                   IMI INTERNATIONAL MEDICAL INNOVATIONS INC.

                              Per: /s/ Brent Norton

                               Name: Brent Norton

                                Title: President-

                           Authorized Signing Officer

                                      C-8

<PAGE>

                                  Schedule "A"

                              Election to Purchase

                 TO: IMI INTERNATIONAL MEDICAL INNOVATIONS INC.

   The undersigned holder of the within Warrant certificate hereby exercises
    _______ purchase warrants (the "Warrants") of IMI International Medical
Innovations Inc. (or such number of Warrants or other securities or property to
   which such exercise entitles him in lieu thereof or in addition thereto in
 accordance with the provisions of the within Warrant certificate) at the price
  determined under, and on the terms specified in, the Warrant certificate and
 encloses herewith a bank draft, certified cheque or money order payable at par
  to or to the order of IMI International Medical Innovations Inc. in payment
                                   therefor.

     The Common Shares subscribed for will be issued to the undersigned and
                 will be mailed to the address set forth below.

            DATED this _____ day of______________________, ________.

                         __________          __________

                       Witness     Signature of Subscriber

                               Signature of Holder

                                 Guaranteed by:

                                       _____

                                         *
                                       _____
                                       _____

                          * Authorized Signature Number

<PAGE>

NOTE: If the signature of the person executing this form is to be guaranteed, it
must be guaranteed by a Canadian chartered bank or trust company or by a member
  firm of The Toronto, Stock Exchange of The Investment Dealers Association of
                                    Canada.

 Print below the address in full of the person in whose name the Common Shares
                        subscribed for are to be issued.

                          Address: ____________________

                                   ____________________

                                   ____________________

<PAGE>

                                FORM OF TRANSFER

  Any transfer will require compliance with applicable securities legislation.
Transferors and transferees are urged to contact legal counsel before effecting
                               any such transfer.

 FOR VALUE RECEIVED the undersigned holder of the Warrants of IMI INTERNATIONAL
  MEDICAL INNOVATIONS INC. evidenced by the within Warrant certificate hereby
        sells, assigns and transfers ___________ of such Warrants unto:

                                   __________

                                     (name)

                                   __________

                                    (address)

                                   __________

                  DATED THIS ____day of_______________, ______

                         __________          __________

                          Witness      Signature of Holder

                                   __________

                                 Name of Holder

                                   __________

                                Address of Holder

                                   __________

                           Signature of Guaranteed by:

                                       _____

                                         *
                                       _____
                                       _____

                          * Authorized Signature Number

    NOTE: 1. The signature to this transfer must correspond with the name as
     recorded on the within Warrant certificate in every particular without
               alteration or enlargement or any change whatever.

 2. If the signature of the person executing this form Is to be guaranteed, It
must be guaranteed by a Canadian chartered bank or trust company or by a member
  firm of The Toronto Stock Exchange or The Investment Dealers Association of
                                    Canada.

<PAGE>

   3. If this transfer form is signed by a trustee, executor, administrator,
curator, guardian, attorney, officer of a corporation or any other person acting
 in a fiduciary or representative capacity, the certificate must be accompanied
       by evidence of authority to sign satisfactory to the Corporation.<PAGE>
                                                                   EXHIBIT 10.14

                             BENTHOS, INC. EMPLOYEE
                              STOCK OWNERSHIP PLAN

                             As Amended and Restated
                         Effective as of October 1, 2002

<PAGE>

                             BENTHOS, INC. EMPLOYEE
                              STOCK OWNERSHIP PLAN

                                TABLE OF CONTENTS

                                                                            PAGE

                                    ARTICLE I

                             NAME AND EFFECTIVE DATE

1.1      NAME OF PLAN                                                        1
1.1      EFFECTIVE DATE                                                      1

                                   ARTICLE II

                                  DEFINITIONS                                1

                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

3.1      EMPLOYEES ELIGIBLE TO PARTICIPATE                                   7
3.2      REINSTATEMENT OF PARTICIPATION                                      8
3.3      PARTICIPATION FOLLOWING A LEAVE OF ABSENCE                          8

                                   ARTICLE IV

                              COMPANY CONTRIBUTIONS

4.1      DISCRETIONARY CONTRIBUTIONS                                         8
4.2      SUPPLEMENTAL CONTRIBUTIONS                                          9
4.3      PAYMENT OF CONTRIBUTIONS                                            10

                                    ARTICLE V

                           ALLOCATION OF CONTRIBUTIONS
                       FORFEITURES AND INVESTMENT EARNINGS

5.1      ALLOCATING CONTRIBUTIONS AND FORFEITURES                            10
5.2      VALUATION OF TRUST ASSETS                                           11
5.3      DIVIDENDS ON COMPANY SHARES                                         12
5.4      ADJUSTMENT OF ACCOUNTS                                              12
5.5      DIVERSIFICATION OF ACCOUNTS BY PARTICIPANTS                         12
5.6      ANNUAL STATEMENTS                                                   13

                                       i

<PAGE>

                                   ARTICLE VI

                            PARTICIPANT CONTRIBUTIONS

6.1      VOLUNTARY CONTRIBUTIONS                                            13

                                   ARTICLE VII

                      CONTRIBUTION AND BENEFIT LIMITATIONS

7.1      DEFINITIONS                                                        13
7.2      ANNUAL ADDITIONS LIMITATION                                        15

7.3      CORRECTING EXCESS AMOUNTS                                          17

                                  ARTICLE VIII

                       RETIREMENT AND DISABILITY BENEFITS

8.1      COMMENCEMENT OF BENEFITS                                           18
8.2      ALTERNATE FORM OF BENEFIT PAYMENTS                                 19
8.3      MINIMUM RETIREMENT DISTRIBUTIONS                                   19

                                   ARTICLE IX

                                 DEATH BENEFITS

9.1      DEATH BENEFITS                                                     20
9.2      DEATH BENEFIT WAIVER                                               20
9.3      FORM OF DEATH BENEFIT PAYMENTS                                     21
9.4      MINIMUM DEATH BENEFIT DISTRIBUTIONS                                22
9.5      BENEFICIARY DESIGNATION                                            22

                                    ARTICLE X

                              TERMINATION BENEFITS

10.1     VESTED BENEFITS                                                    23
10.2     DISTRIBUTION OF BENEFITS                                           24
10.3     REINSTATEMENT OF VESTING SERVICE                                   25
10.4     VESTING AMENDMENTS                                                 26

                                       ii

<PAGE>

                                   ARTICLE XI

                            APPLICATION FOR BENEFITS

11.1       APPLYING FOR BENEFITS                                          26
11.2       RETIREMENT BENEFITS                                            26
11.3       DISABILITY BENEFITS                                            27
11.4       DEATH BENEFITS                                                 27
11.5       TERMINATION BENEFITS                                           27
11.6       DENIAL OF BENEFITS                                             27
11.7       MISSING PARTICIPANTS AND BENEFICIARIES                         28
11.8       PAYMENTS TO INCOMPETENTS OR MINORS                             28
11.9       ELIGIBLE ROLLOVER DISTRIBUTIONS                                28

                                   ARTICLE XII

                             RIGHTS OF PARTICIPANTS

12.1       PARTICIPANT STATUS                                             29
12.2       LEAVE OF ABSENCE                                               29
12.3       ASSIGNMENT AND ALIENATION                                      30
12.4       QUALIFIED DOMESTIC RELATIONS ORDERS                            30
12.5       DISTRIBUTION OF SHARES                                         31
12.6       VOTING OF SHARES                                               33

                                  ARTICLE XIII

                           ADMINISTRATION OF THE PLAN

13.1       ADMINISTRATIVE COMMITTEE                                       34
13.2       ORGANIZATION AND PROCEDURES                                    35
13.3       DUTIES AND POWERS                                              35
13.4       CONSULTATION BY THE COMMITTEE                                  36
13.5       FINALITY OF ACTIONS                                            37
13.6       INDEMNIFICATION                                                37
13.7       COMPENSATION AND EXPENSES OF EMPLOYEES                         37

                                   ARTICLE XIV

                                 THE TRUST FUND

14.1       THE TRUSTEE                                                    37
14.2       THE TRUST FUND                                                 37
14.3       PURCHASES OF SHARES AND LOANS TO THE TRUST FUND                38
14.4       REVERSION OF ASSETS                                            39

                                      iii

<PAGE>

                                   ARTICLE XV

                                PLAN FIDUCIARIES

15.1       NAMED FIDUCIARIES                                              40
15.2       BONDING REQUIREMENTS                                           40
15.3       PROHIBITED TRANSACTIONS                                        40
15.4       FIDUCIARY RESPONSIBILITIES                                     41
15.5       INVESTMENT MANAGERS                                            42

                                   ARTICLE XVI

                        AMENDMENT, TERMINATION AND MERGER

16.1       PLAN AMENDMENT                                                 42
16.2       PLAN TERMINATION                                               43
16.3       PLAN MERGER                                                    44

                                  ARTICLE XVII

                            MISCELLANEOUS PROVISIONS

17.1       INTERPRETATION                                                 44
17.2       LIABILITY FOR EMPLOYEE REPRESENTATIONS                         45
17.3       DESCRIPTIVE HEADINGS                                           45
17.4       CONSTRUCTION                                                   45
17.5       MULTIPLE ORIGINALS                                             45
17.6       REVISION OF THE PLAN AND APPLICABILITY OF
              PLAN PROVISIONS                                             45

                                  ARTICLE XVIII

                              TOP-HEAVY PROVISIONS

18.1       TOP-HEAVY DEFINITIONS                                          47
18.2       TOP-HEAVY BENEFITS                                             50
18.3       ADJUSTED BENEFIT LIMITATIONS                                   50
18.4       ELIGIBILITY FOR ALLOCATIONS                                    50

                                       iv

<PAGE>

                   BENTHOS, INC. EMPLOYEE STOCK OWNERSHIP PLAN

      Pursuant to a resolution of its Board of Directors, Benthos, Inc., a
corporation duly organized under the laws of the Massachusetts and having its
principal place of business in North Falmouth, Massachusetts (hereinafter
referred to as the "Company"), has adopted this Amendment to its Employee Stock
Ownership Plan, said Amendment to be in the form of a completely restated Plan,
for the purpose of recognizing the contribution made to the successful operation
of the Company by its Employees, and to reward such contribution for those
Employees who qualify as Participants hereunder by investing primarily in
Company securities as defined in section 409(l) of the Internal Revenue Code of
1986, as amended ("Code"). This Plan is intended to be an employee stock
ownership plan within the meaning of section 4975(e)(7) of the Code.

      Effective as of October 1, 2002, the Plan is amended and restated in its
entirety to comply with current legislation including the General Agreement of
Tariffs and Trade ("GATT"), the Uniformed Services Employment and Reemployment
Rights of 1994 ("USERRA"), the Small Business Job Protection Act of 1996
("SBJPA"), the Taxpayer Relief Act of 1997 (TRA `97"), the IRS Restructuring and
Reform Act of 1998 and the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA"), as well as any other federal legislation affecting the Plan.

<PAGE>

                                    ARTICLE I

                             NAME AND EFFECTIVE DATE

     SECTION 1.1 NAME OF PLAN

     This Plan shall be known as the "Benthos, Inc. Employee Stock Ownership
Plan".

     SECTION 1.2 EFFECTIVE DATE

     This Plan became effective as of August 17, 1979. The Plan was amended and
restated effective as of October 1, 1987. This Amendment restating the Plan
shall be effective as of October 1, 2002, except as otherwise expressly provided
herein.

                                       2

<PAGE>

                                   ARTICLE II

                                   DEFINITIONS

     When used in this Plan, the following terms have the meanings set forth
below unless a different meaning is plainly required by the context:

     "Account" means the individual account established in the name of each
Participant reflecting his portion of the Company's contributions, and the net
earnings or losses thereon, and any Shares of the Company allocated to the
Participant's Account.

     "Administrative Committee", "Committee" or "ESOP Committee" means the
committee appointed by the Board of Directors of the Company to administer the
Plan as set forth in Article XIII.

     "Affiliated Group" means any group of corporations or other business
organizations of which the Company is a member, determined by using tests
established under sections 414(b), (c), (m) and (o) of the Code, modified for
purposes of section 415 of the Code only by section 415(h).

     "Application for Benefits" means the form provided by the Administrative
Committee in order to receive benefits hereunder.

     "Beneficiary" means any individual, trust, estate, or other recipient
entitled to receive death benefits payable hereunder, on either a primary or
contingent basis.

     "Benefit Starting Date" means the first day of the first period for which a
Participant, Inactive Participant, or Beneficiary is considered to have received
benefit payments under the Plan or the first date on which such benefit payments
are paid or are payable.

     "Board of Directors" means the board of directors of Benthos, Inc. as shall
be serving from time to time.

     "Break in Service" means the failure of an Employee to complete more than
500 Hours of Service during the 12-month computation period used for purposes of
determining whether the Employee has completed a Year of Service.

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

     "Company" means Benthos, Inc. and includes any corporation or business
organization which shall assume the obligations of this Plan with respect to its
Employees. The term "Company" shall also include any predecessor business
organization.

                                       3

<PAGE>

         "Compensation" means all of an Employee's "wages" within the meaning of
section 3401 (a) of the Code in connection with income tax withholding at the
source, and all other compensation paid to the Employee by the Company in the
course of its trade or business, for which the Company is required to furnish
the Employee with a written statement under sections 6041(d), 6051(a)(3) and
6052 of the Code, determined without regard to exclusions based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in section 3401(a)(2) of the Code). Compensation shall
include only amounts actually paid to the Employee during the Plan Year, except
that (1) Compensation shall exclude bonuses, commissions, and compensation for
services of a type customarily performed by outside contractors (but shall
include overtime pay); and (2) in an Employee's initial year of participation in
the Plan, Compensation shall include only amounts actually paid to the Employee
from the Employee's effective date of participation pursuant to Section 3.1 to
the end of the Plan Year, or, if earlier, to the date on which the Employee
ceases to be a Participant. In addition, Compensation shall include any amount
which is contributed to an employee benefit plan for the Employee by the Company
pursuant to a salary reduction agreement, and which is not otherwise includible
in the gross income of the Employee under section 401(k), 125, 402(e)(3),
402(h)(1)(B), SARSEP or 403(b) of the Code, or pursuant to a "qualified
transportation fringe" (as defined under Section 132(f) of the Code and its
applicable regulations).

         In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the plan to the contrary, for Plan Years
beginning on or after January 1, 2002, the annual Compensation of each employee
taken into account under the plan shall not exceed the EGTRRA `01 annual
compensation limit. The EGTRRA `01 annual compensation limit is $200,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the EGTRRA `01
annual Compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.

         For Plan Years beginning on or after January 1, 2002, any reference in
this plan to the limitation under section 401(a)(17) of the Code shall mean the
EGTRRA `01 annual compensation limit set forth in this provision. For Plan Years
beginning prior to January 1, 2002, the annual Compensation of each employee
taken into account under the Plan shall not exceed the OBRA `93 annual
compensation limit. The OBRA `93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Code.

         "Disabled Participant" means a Participant who has become permanently
and totally incapable of performing the duties he was previously performing for
the Company for physical or mental reasons. Such disability shall be deemed to
exist only when an Application for Benefits

                                       4

<PAGE>

has been filed with the Administrative Committee by or on behalf of such
Participant within one year following his separation from service with the
Company and when such disability is thereafter certified to the Committee by a
licensed physician approved by the Committee.

         "Entry Date" means each day of each Plan Year.

         "Employee" means an individual employed by the Company as a common-law
employee. Anything herein to the contrary notwithstanding, the term "Employee"
shall not include:

                (a) any non-resident alien who receives no earned income from
the Company which constitutes income from sources within the United States;

                (b) any individual included in a unit of employees covered by a
collective bargaining agreement with the Company with respect to which
retirement benefits were the subject of good faith negotiation; and

                (c) any Leased Employee of the Company.

                (d) any person classified as an independent contractor or
consultant by the Company regardless of such person's reclassification for such
period by the Internal Revenue Service for tax withholding purposes.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
now in effect and as thereafter amended, and any regulations issued thereunder.

         "Exempt Loan" means any loan to the Trust Fund which satisfies the
requirements of Section 14.3.

         "Fair Market Value" shall mean the value of the Shares of the Company
as determined by the Administrative Committee by resorting to the first
available of the following sources:

                (a) the closing price of the Shares on a recognized securities
exchange as of any date of reference;

                (b) the mean of the bid and asked prices of the Shares published
as of any date of reference;

                (c) for Shares acquired prior to January 1, 1987, the market
value of the Shares based upon an appraisal prepared by an independent appraiser
selected by the Committee, and upon such other factors affecting value as the
Committee deems appropriate; or

                (d) for Shares acquired on or after January 1, 1987, the market
value of the Shares based upon an appraisal prepared by an independent appraiser
selected by the Committee

                                       5

<PAGE>

meeting requirements similar to those contained in Regulations under section
170(a)(1) of the Code.

         "Fiscal Year" means the twelve-month period ending on September 30 each
year.

         "Hour of Service" means:

                (a) Each hour for which an Employee is directly or indirectly
compensated, or entitled to be compensated, by the Company for the performance
of duties.

                (b) Each hour, to a maximum of 501 hours for any single
continuous period, for which an Employee is directly or indirectly compensated,
or entitled to be compensated, by the Company for reasons other than the
performance of duties (irrespective of whether the employment relationship has
terminated) such as vacation, holidays, incapacity, layoff, jury duty, military
duty, or leave of absence. Hours shall not be credited for payment to an
Employee from a plan required by workmen's compensation, unemployment
compensation, or disability insurance law, nor shall hours be credited for
reimbursement of an Employee for his medical or medically related expenses.

                (c) Each hour for which back pay, irrespective of mitigation of
damages, has been awarded or agreed to by the Company, provided that if such
award or agreement of back pay is for reasons other than the performance of
duties, such hours shall be subject to the restrictions of paragraph (b).

                (d) For purposes of determining whether a Break in Service has
occurred, each hour to a maximum of 501 hours, for any single continuous period
of absence, regardless of whether the Employee is compensated for such absence,
if such absence occurs by reason of pregnancy of the Employee, birth of a child
of the Employee, adoption of a child by the Employee, or the Employee caring for
a child for the period beginning immediately following such birth or adoption if
such Hours of Service would otherwise have been credited to the Employee but for
such absence. Hours of Service credited under this subsection (d) will be
credited in the computation period in which such absence commences or, if not
necessary to prevent a Break in Service in such period, in the immediately
following computation period. Hours of Service credited to the Employee under
this subsection (d) shall only be credited upon receipt by the Administrative
Committee of such timely information as may be reasonably required to establish
the existence and duration of such absence.

The same Hours of Service shall not be credited under more than one of the
paragraphs above. All Hours of Service shall be computed and credited to
computation periods in accordance with sections 2530.200b-2(b) and (c) of the
Department of Labor regulations. In determining an Employee's Hours of Service,
he shall receive credit for all Hours of Service performed for any member of the
Affiliated Group and any predecessor business organization of the Company.

                                       6

<PAGE>

         "Inactive Participant" means a former Participant who has died or
otherwise terminated his employment with the Company or incurred a Break in
Service and who has a balance remaining in his Account.

         "Investment Account" means the individual account established in the
name of each Participant reflecting his portion of the Company's contributions
and the net earnings or losses thereon, other than any Shares allocated to his
Share Account.

         "Investment Manager" means an individual, firm or corporation appointed
pursuant to Article XV to manage the investments of all or a portion of Trust
Fund assets which are not invested in Shares.

         "Leased Employee" means any individual (other than a common law
employee of the Company) who, pursuant to an agreement between the Company and
any other person ("leasing organization"), has performed services for the
Company or any related persons determined in accordance with section 414(n)(6)
of the Code on a substantially full-time basis for a period of at least one year
and such services are performed under the primary direction of or control by the
Company. In the case of any person who is a Leased Employee before or after a
period of service as an Employee, the entire period during which he has
performed services as a Leased Employee shall be counted as service as an
Employee for all purposes of the Plan, except that he shall not, by reason of
that status, become a Participant in the Plan. The term "Leased Employee" shall
not include any individual who is a participant in a nonintegrated money
purchase pension plan sponsored by the leasing organization providing immediate
participation and vesting and a contribution rate of 10% of Earnings, as defined
in Section 7.1, provided the number of Leased Employees, determined without
regard to this sentence, do not constitute more than 20% of the Company's
nonhighly compensated work force as defined in section 414(n) of the Code.

         "Leave of Absence" means an interruption of service authorized in
accordance with Article XII.

         "Normal Retirement Age" means age 59 1/2.

         "Normal Retirement Date" means a Participant's 59 1/2 birthday.

         "Participant" means an Employee who is eligible under the terms of
Article III of this Plan, but unless otherwise indicated, shall not include an
Inactive Participant or a Participant who has become ineligible for any reason.

         "Plan" means the Benthos, Inc. Employee Stock Ownership Plan as of its
original effective date, including any subsequent amendments thereto.

         "Plan Year" means the 12-month period ending on September 30 of each
year. For years prior to the effective date of the Plan, the corresponding
12-month period shall be the Plan Year

                                       7

<PAGE>

solely for purposes of determining an Employee's eligibility to participate and
his nonforfeitable benefit.

        "Regulation" means any rule or regulation promulgated under section 7805
of the Code by the Secretary of the Department of the Treasury, or his delegate.

        "Required Distribution Date" means April lst of the calendar year
following the year in which an active Participant who is a 5 percent owner or an
Inactive Participant attains age 70 1/2.

        "Retired Participant" means an individual who has been a Participant but
who has commenced receiving retirement benefits under Article VIII following his
Normal Retirement Age.

        "Share" means any stock of the Company which shall qualify as an
employer security as defined in section 409(l) of the Code.

        "Share Account" means the individual account established in the name of
each Participant reflecting his interest in the Shares of the Company allocated
as provided in Section 5.1.

        "Suspense Account" means the account established to reflect any Shares
purchased with the proceeds of an Exempt Loan pending allocation to
Participants' Share Accounts.

        "Trust Agreement" means the Benthos, Inc. Employee Stock Ownership Trust
Agreement providing for the Trust Fund in which Plan contributions are held by
the Trustee.

        "Trust Fund" means all of the assets held under the Trust Agreement.

        "Trustee" means the trustee or trustees by whom the assets of the Plan
are held pursuant to the Trust Agreement as provided in Article XIV.

        "Valuation Date" means the date as of which the Trust Fund is valued and
the Account maintained on behalf of each Participant, Inactive Participant or
Beneficiary is adjusted as provided hereunder. The Trust Fund shall be valued on
the last day of each Plan Year and on such additional dates as the
Administrative Committee shall deem appropriate.

        "Year of Service" means:

                (a) For purposes of determining an Employee's eligibility to
participate in this Plan, the completion of at least 1,000 Hours of Service in
(i) the 12-month period commencing on the date the Employee is first credited
with an Hour of Service, plus (ii) any Plan Years, beginning with the Plan Year
that includes the first anniversary of the date the Employee is first credited
with an Hour of Service, in which the Employee completes at least 1,000 Hours of
Service. If an Employee is credited with a least 1,000 Hours of Service in the
12-month period

                                       8

<PAGE>

commencing on the date he is first credited with an Hour of Service and the Plan
Year that includes the first anniversary of such date, he shall be credited with
two Years of Service for purposes of his eligibility to participate in this
Plan.

                (b) For purposes of determining an Employee's non-forfeitable
Account balance attributable to Company contributions, the completion of at
least 1,000 Hours of Service in any Plan Year. An Employee who completes 1,000
Hours of Service in both his first twelve months of employment and in the Plan
Year during which the first anniversary of his date of employment occurs shall
be credited with two years of service for vesting purposes.

                (c) Years of Service shall also include past service with
Datasonics, Inc., which shall be credited in accordance with paragraphs (a) and
(b) as though it were service with the Company.

                                       9

<PAGE>

                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

         SECTION 3.1 EMPLOYEES ELIGIBLE TO PARTICIPATE

                 (a) Every Employee of the Company shall become a Participant
hereunder on the later of the effective date or the date on which he shall have
completed a Year of Service and shall have attained 19 years of age.

                 (b) In the event that a Participant who has not incurred a
Break in Service becomes ineligible to participate in the Plan because he is no
longer a member of the eligible class of Employees entitled to participate, such
individual shall participate immediately upon his return to such eligible class.
If such Participant incurs a Break in Service, his eligibility to participate
will be governed by Section 3.2.

                 (c) In the event that an individual who is not a member of the
eligible class of Employees becomes a member of such class, such individual
shall participate immediately if he would have previously become a Participant
had he been in the class of Employees entitled to participate.

                 (d) Each former employee of Datasonics, Inc. who was an
Employee on October 1, 1999, will be eligible to participate in the Plan as long
as the Employee has met the eligibility requirements in subsection (a).

         SECTION 3.2 REINSTATEMENT OF PARTICIPATION

         If an Inactive Participant incurs a Break in Service, his subsequent
eligibility hereunder shall be determined as follows:

                (a) If he had a vested interest in any Company contributions
allocated to his Account before he incurred the Break in Service, his subsequent
eligibility to participate shall be determined under Section 3.1 by aggregating
his prior Years of Service and without regard to such Break in Service.

                (b) If he did not have a vested interest in any Company
contributions allocated to his Account prior to incurring a Break in Service,
his subsequent eligibility to participate shall be determined under Section 3.1
by aggregating his prior Years of Service and without regard to such Break in
Service, provided that the number of his consecutive Breaks in Service is either
less than (i) five years, or (ii) his aggregate number of Years of Service prior
to the Break in Service.

                                       10

<PAGE>

                (c) If he did not have a vested interest in any Company
contributions allocated to his Account prior to incurring a Break in Service and
the number of his consecutive Breaks in Service both equals or exceeds (i) five
years, and (ii) his aggregate number of Years of Service and (iii) exceeds his
aggregate number of Years of Service prior to the Break in Service, his
subsequent eligibility hereunder shall be determined in accordance with the
provisions of Section 3.1, taking into account any Years of Service occurring
prior to the Break in Service, but only after completion of one Year of Service
after the date of his reemployment. If any Years of Service are not required to
be taken into account by reason of a period of consecutive Breaks in Service,
such years shall not be taken into account in applying this Section 3.2 to a
subsequent period of Breaks in Service.

        SECTION 3.3 PARTICIPATION FOLLOWING A LEAVE OF ABSENCE

      For the purposes of this Article III, any period of employment interrupted
solely by a Leave of Absence as provided for in Article XII shall be considered
as a period of continuous employment.

                                       11

<PAGE>

                                   ARTICLE IV

                              COMPANY CONTRIBUTIONS

        SECTION 4.1 DISCRETIONARY CONTRIBUTIONS

                (a) Subject to the provisions of this Plan and the Trust
Agreement, the Company shall make, for each Plan Year, such contribution for the
Fiscal Year in which such Plan Year ends as the Board of Directors may direct by
resolution, provided no such annual contribution shall exceed the lesser of the
following:

                            (i)    At the discretion of the Company, an amount
                                   equal to 1% to 25% of the aggregate annual
                                   gross compensation, including all payments
                                   reportable for Federal income tax purposes,
                                   paid or accrued by the Company to, or for,
                                   all eligible Participants hereunder for the
                                   Company's Fiscal Year for which the
                                   contribution is made. This amount shall be
                                   increased to not greater than 25% of
                                   Participants' annual gross compensation to
                                   the extent that Company contributions made
                                   for Fiscal Years beginning prior to 2002 were
                                   less than the deduction limitations
                                   applicable to those years. If the Company
                                   maintains any qualified profit sharing plans
                                   or stock bonus plans in addition to this
                                   Plan, this Plan and such other plans shall be
                                   treated as a single plan for purposes of
                                   applying the preceding limits and the maximum
                                   contribution to this Plan under this
                                   subparagraph (i) shall be reduced to the
                                   extent of the contributions to such other
                                   qualified plans.

                            (ii)   An amount equal to 25% of the aggregate
                                   annual gross compensation for the Company's
                                   Fiscal Year for which the contribution is
                                   made, including all payments reportable for
                                   Federal income tax purposes, paid or accrued
                                   by the Company to, or for, all eligible
                                   Participants hereunder and all eligible
                                   participants under any other qualified
                                   defined contribution plan and under any
                                   qualified defined benefit retirement plans
                                   for which a deduction is allowed under
                                   section 404 of the Code, less the
                                   contributions to such other qualified plans.

                (b) Notwithstanding the limitations of subsection (a), if the
contributions of the Company for the applicable Plan Year are applied to the
repayment of the principal balance on an Exempt Loan as described in Section
14.3, the maximum amount contributed to this Plan by the Company for any Plan
Year shall be increased by such principal payment, but not in excess of 25% of
the aggregate annual gross compensation paid or accrued by the Company to,

                                       12

<PAGE>

or for, all eligible Participants for the Company's Fiscal Year for which the
contribution is made, plus any contributions of the Company applied to the
payment of interest on such Exempt Loan for the year.

                (c) The Company's contribution shall not be reduced by any
amounts forfeited under Article X or XI, and such forfeitures shall be
reallocated among the Accounts of remaining Participants as provided in Article
V.

        SECTION 4.2 SUPPLEMENTAL CONTRIBUTIONS

                In addition to contributions made pursuant to Section 4.1, the
Company shall make any contributions necessary to restore to Account balances
the amounts previously forfeited by individuals described in Article X and
Article XI.

        SECTION 4.3 PAYMENT OF CONTRIBUTIONS

                Company contributions for the year may be paid in cash or in
Shares of the Company. Company contributions shall be made as of the last day of
the Plan Year, and shall be paid to the Trustee within the time allowed by the
Code for tax deductible contributions. Contributions in Shares of the Company
shall be valued as of the day of the contribution for purposes of determining
the maximum allowable contribution to the Plan pursuant to this Article IV. At
its discretion, the Company may make contributions at any time during the Plan
Year. Such advance contributions shall be held in the Trust Fund and, to the
extent not utilized to purchase Shares, shall be invested by the Trustee in
accordance with the Trust Agreement pending allocation to Participants' Accounts
as provided in Section 5.1.

                                       13

<PAGE>

                                    ARTICLE V

                    ALLOCATION OF CONTRIBUTIONS, FORFEITURES
                             AND INVESTMENT EARNINGS

        SECTION 5.1 ALLOCATING CONTRIBUTIONS AND FORFEITURES

                The Administrative Committee shall maintain a Share Account and
an Investment Account in the name of each Participant.

Subject to the limits of Article VII, the Administrative Committee shall credit
to the Account of each Participant described in Section 5.1(d) that portion of
the Company's contributions under Section 4.1 and forfeitures to which he is
entitled, determined as follows:

                (a) If the Company's contribution or forfeitures for the Plan
Year include Shares, including Shares purchased with Company contributions
pending allocation to Participants' Accounts, the Administrative Committee
shall, as of the last day of each Plan Year, allocate the Company's Share
contribution for such Plan Year and any forfeitures of Shares to the Share
Accounts of the eligible Participants proportionately, including fractional
Shares, in accordance with the ratio which the Compensation of each eligible
Participant for the Plan Year bears to the aggregate Compensation paid to, or
for, all eligible Participants for the Plan Year.

                (b) Except as provided in subsection (c) below, if the Company's
contribution or forfeitures for the Plan Year include cash or assets other than
Shares, the Administrative Committee shall, as of the last day of each Plan
Year, allocate the Company's contribution for such Plan Year and any
forfeitures to the Investment Accounts of the eligible Participants
proportionately in accordance with the ratio which the Compensation of each
eligible Participant for the Plan Year bears to the aggregate Compensation paid
to, or for, all eligible Participants for the Plan Year.

                (c) If any portion of the Company's contribution or forfeitures
for a given Plan Year are used to repay an Exempt Loan, the total contribution
and forfeitures otherwise credited to the Investment Accounts of Participants
for the Plan Year under subsection (b) above shall be reduced by the amount
applied to repay the Exempt Loan, including interest, and the Administrative
Committee shall instead, as of the last day of the Plan Year, allocate the
number of Shares released from encumbrance as provided in Section 14.3(c) as a
result of such contribution and forfeitures to eligible Participants
proportionately, including fractional Shares, in accordance with the ratio which
the Compensation of each eligible Participant bears to the aggregate
Compensation paid to, or for, all eligible Participants for the Plan Year.

                (d) Participants eligible for an allocation under this Section
5.1 shall include (i) each Participant who was employed by the Company on the
last day of the Plan Year, and (ii) each Inactive Participant who shall have
died or become a Retired Participant or a Disabled

                                       14

<PAGE>

Participant during the Plan Year. Anything herein to the contrary
notwithstanding, to the extent that any shareholder of the Company sells Shares
to the Trustee and elects not to recognize the gain from such sale under section
1042 of the Code, no portion of the Shares acquired in such transaction, or any
assets attributable to such Shares, may be directly or indirectly allocated for
ten years after the date of the sale (or, if later, the allocation date
attributable to the final payment of an Exempt Loan incurred in connection with
the sale) for the benefit of:

       (i)    the selling shareholder;

       (ii)   his spouse, brothers or sisters (whether by the whole or half
              blood), ancestors or lineal descendants; or

       (iii)  any shareholder owning (as determined under section 318(a) of the
              Code) more than 25% in value of any class of stock of the Company.

       SECTION 5.2 VALUATION OF TRUST ASSETS

                (a) As of each Valuation Date, the Trustee shall determine the
net worth of the Trust Fund which has not been invested in Shares of the Company
and deliver a statement of valuation to the Administrative Committee. In
determining the net worth of the Trust Fund, the Trustee shall value such assets
of the Trust Fund, exclusive of any contributions that are payable to the Trust
Fund, after having subtracted therefrom the amount of any forfeitures which have
occurred since the preceding Valuation Date. The valuation of the Trust Fund
shall be at its fair market value as of the Valuation Date.

                (b) As of each Valuation Date, the Administrative Committee
shall determine the Fair Market Value of that portion of the Trust Fund that has
been invested in Shares of the Company. The Administrative Committee shall
promptly notify the Trustee in writing of each such valuation.

        SECTION 5.3 DIVIDENDS ON COMPANY SHARES

                (a) Except as provided in subsection (b), cash dividends
received by the Trustee on Shares of the Company that have been allocated to the
Share Accounts of Participants on the record date for the dividend shall be
allocated as of each Valuation Date to each Participant's Investment Account on
the basis of the balance of Shares in his Share Account. Cash dividends received
by the Trustee on Shares of the Company that are allocated to the Suspense `
Account on the record date for the dividend by reason of an Exempt Loan shall be
used to repay such Loan, and any amount in excess of the outstanding Loan
balance shall be treated as investment earnings of the Trust Fund and allocated
as provided in Section 5.2. Any stock dividends on Company Shares shall be
credited to the respective Share Accounts of Participants or the Suspense
Account with respect to which such dividends were issued on the record date for
the dividend.

                                       15

<PAGE>

                (b) At the election of the Administrative Committee, any cash
dividends that have been received by the Trustee with respect to Shares of the
Company and that are otherwise allocable to the Investment Accounts of
Participants for the Plan Year as provided in subsection (a) may be distributed
in cash to Participants, or their Beneficiaries, not later than 90 days after
the close of the Plan Year in which paid, or utilized to repay any outstanding
balance, including interest, on an Exempt Loan. If, pursuant to this subsection
(b), cash dividends are applied to repay an Exempt Loan, the Share Account of
each Participant shall be credited with such additional Shares of the Company
from the Suspense Account as are equal in value to amount of the dividend that
would have been allocated to the Participant's Investment Account pursuant to
subsection (a).

        SECTION 5.4 ADJUSTMENT OF ACCOUNTS

                The Administrative Committee shall adjust each Account to
reflect any increase or decrease in the net worth of the Trust Fund as of each
Valuation Date. Such adjustment shall be made to the Account in proportion to
its balance as of the Valuation Date bears to the aggregate values of all
Accounts; provided, however, that in accordance with nondiscriminatory
procedures established by the Administrative Committee, the allocation of any
increase or decrease in the net worth of the Trust Fund shall be adjusted for
amounts credited to Accounts since the preceding Valuation Date with appropriate
credit given for the period during which such contributions were credited to the
Account.

        SECTION 5.5 DIVERSIFICATION OF ACCOUNTS BY PARTICIPANTS

                (a) A Participant who has attained age 55 and completed 10 years
of participation in the Plan shall, by providing written instructions to the
Administrative Committee during the 90-day period beginning with the first day
of each of the six Plan Years immediately following the Plan Year in which such
age and service requirements are satisfied, be entitled to direct the Trustee to
distribute in cash to Participant up to 25 percent (50 percent in the case of a
Participant's final election year) of the value of his Share Account on the
Valuation Date preceding or coinciding with such election. As soon as practical
after receipt of the Participant's written directions, but in no event later
than 90 days after each election period, the Administrative Committee shall
direct the Trustee, in writing, to distribute the funds in accordance therewith
following receipt by the Trustee of the Participant's instructions. Any expense
incurred in connection with a Participant's election shall be charged against
the Participant's Account.

                (b) The Administrative Committee shall from time to time
establish rules and procedures which it determines to be necessary or
appropriate for the proper administration of the distribution option available
to Participants.

        SECTION 5.6 ANNUAL STATEMENTS

                                       16

<PAGE>

                The Administrative Committee shall furnish on an annual basis,
or in more frequent intervals as determined by the Committee, a statement to
each Participant, Inactive Participant, and Beneficiary of the net earnings or
losses and Shares credited to or charged against his Account, the amount of any
annual contributions and forfeitures and Shares allocated to such Account, and
the total value of such Account.

                                       17

<PAGE>

                                   ARTICLE VI

                            PARTICIPANT CONTRIBUTIONS

       SECTION 6.1 VOLUNTARY CONTRIBUTIONS

       The Trustee shall not accept voluntary contributions from any
Participant.

                                       18

<PAGE>
                                   ARTICLE VII

                      CONTRIBUTION AND BENEFIT LIMITATIONS

        SECTION 7.1 DEFINITIONS

        For purposes of this Article VII, the terms set forth herein shall be
defined as follows:

                (a) "Annual Additions" means, for each Limitation Year, the
sum of:

                         (i)    The contributions by the Company and other
                                members of the Affiliated Group to this Plan or
                                any other qualified defined contribution
                                retirement plan other than contributions that
                                are used to pay interest on an Exempt Loan if no
                                more than 1/3 of the contributions to this Plan
                                are credited during the Limitation Year to the
                                Accounts of highly compensated employees
                                described in section 414(q) of the Code;

                         (ii)   Any forfeitures allocated to a Participant under
                                such a plan other than forfeitures of Shares
                                acquired with the proceeds of an Exempt Loan if
                                no more than 1/3 of the contributions to this
                                Plan are credited to the Accounts of highly
                                compensated employees described in section
                                414(q) of the Code;

                        (iii)   Any contribution to such a plan by the
                                Participant; and

                         (iv)   For purposes of the dollar limitation on Annual
                                Additions, any contributions by the Company and
                                other members of the Affiliated Group allocated
                                in years beginning after March 31, 1984 to an
                                individual medical expense reimbursement account
                                which is established under section 401(h) of the
                                Code for a Participant under any pension or
                                annuity plan, or, in the case of a key employee
                                as defined in section 416 of the Code, any
                                contribution by the Company and other members of
                                the Affiliated Group allocated in Limitation
                                Years beginning after 1985 on his behalf to a
                                separate account in a funded welfare benefit
                                plan established for the purpose of providing
                                post-retirement medical benefits.

In determining a Participant's Annual Additions, forfeitures and contributions
of Shares shall be determined at the fair market value of the Shares as of the
date of allocation. Anything herein to the contrary notwithstanding, the term
"Annual Additions" shall not include any investment earnings allocable to a
Participant, any rollover contributions or amounts transferred directly to a
trustee from another qualified plan, recontributions of amounts previously
distributed to

                                       19

<PAGE>

terminated employees who are reemployed, or payments of principal and interest
on any plan loans made to a Participant.

                (b) "Earnings" means amounts paid or made available to a
Participant by the Company and other members of the Affiliated Group for a
Limitation Year, including salary and wages, overtime pay, bonuses, commissions,
non-qualified stock options includible in income in the year granted, and
taxable fringe benefits; but shall not include amounts contributed by the
Company (including elected amounts deferred under an arrangement described in
section 401(k) of the Code) under the Plan or any other plan of the Affiliated
Group or any nonqualified fringe benefits which are nontaxable or not currently
taxable to employees.

                (c) "Excess Amount" means the amount credited or allocated to a
Participant in excess of the limits allowable under Section 7.2.

                (d) "Limitation Year" means the Plan Year.

                (e) "Minimum Accrued Benefit" means a Participant's accrued
benefit under a defined benefit retirement plan maintained by the Company or
other members of the Affiliated Group in which he is a participant determined as
of the end of the last Limitation Year of such plan beginning before 1987,
computed without regard to any changes in the provisions of such plan after May
5, 1986, and without regard to any subsequent cost of living adjustments under
the plan.

                (f) "Projected Annual Retirement Benefit" means the annual
benefit, actuarially adjusted in the case of a benefit that is payable in a form
other than a life annuity or qualified joint and survivor annuity, to which a
Participant would be entitled under the provisions of a defined benefit
retirement plan maintained by the Company or any member of the Affiliated Group
in which he is a participant, based on the assumptions that he continues
employment until his normal retirement age, that his Earnings continue at the
same rate as in effect in the plan's Limitation Year under consideration until
his normal retirement age, and that all other relevant factors used to determine
benefits under the plan as of the current Limitation Year of such plan remain
constant for all such future Limitation Years.

                (g) "Social Security Retirement Age" means a Participant's
retirement age under section 216(l) of the Social Security Act determined
without regard to the age increase factor under that Section as if the early
retirement age under paragraph (2) thereof were 62.

        SECTION 7.2 ANNUAL ADDITIONS LIMITATION

        The maximum Annual Additions credited to any Participant for any
Limitation Year beginning after 2001, under this Plan and any other qualified
defined contribution retirement plan maintained by the Company or any other
members of the Affiliated Group, shall not exceed an amount equal to the lesser
of: (a) 100% of the Participant's Compensation or (b) $40,000, as

                                       20

<PAGE>

adjusted pursuant to Code section 415(d). The maximum Annual Additions credited
to any Participant for any Limitation Year beginning after 1997 and before 2002,
under this Plan and any other qualified defined contribution retirement plan
maintained by the Company or any other members of the Affiliated Group, shall
not exceed an amount equal to the lesser of: (a) 25% of the Participant's
Compensation for the Limitation Year; or (b) $30,000, as adjusted pursuant to
Code section 415(d). Anything herein to the contrary notwithstanding, for
Limitation Years beginning prior to July 12, 1989 the dollar limit referred to
in the preceding sentence shall be increased by the Annual Additions credited on
behalf of a Participant, but not in excess of twice such dollar limit, provided
not more than 1/3 of the aggregate Annual Additions for such Limitation Year are
credited on behalf of highly compensated participants described in section
414(q) of the Code.

        SECTION 7.3 CORRECTING EXCESS AMOUNTS

        If an Excess Amount is determined for any Limitation Year due to an
erroneous estimation of Compensation, forfeitures or such other reasons as
permitted by Regulations, such Excess Amount shall be treated as follows:

                (a) First, any non-deductible voluntary contributions made to
any qualified retirement plan maintained by any member of the Affiliated Group,
to the extent that the return thereof would reduce such Excess Amount, shall be
returned to the Participant.

                (b) Any remaining Excess Amount shall be attributed to, and
treated in accordance with provisions of, the qualified retirement plan or plans
maintained by the Company or other members of the Affiliated Group in the
following order:

                     (i)     any qualified defined benefit plan;

                     (ii)    any qualified 401(k) plan;

                     (iii)   any qualified stock bonus plan;

                     (iv)    any qualified profit sharing plan;

                     (v)     any qualified money purchase plan.

                (c) Any Excess Amount which is attributed to this Plan shall be
treated as follows:

                     (i)      If the Company's contribution for the Limitation
                              Year has not been made, the amount that would
                              otherwise be contributed to the Plan shall be
                              reduced by such Excess Amount;

                                       21

<PAGE>

                     (ii)     If the Company's contribution for the Limitation
                              Year has been made, any remaining excess amount
                              which is contributed under conditions described in
                              Article XIV shall be returned to the Company in
                              accordance with said Article XIV. Any Excess
                              Amount which remains attributed to this Plan after
                              the return of contributions to the Company shall
                              be set aside in a separate account. The amount
                              placed in the such account and any earnings or
                              losses thereon shall be allocated to the Plan
                              Participants during the next Limitation Year, and
                              for each succeeding Limitation Year, as necessary,
                              until exhausted.

                                       22

<PAGE>

                                  ARTICLE VIII

                       RETIREMENT AND DISABILITY BENEFITS

        SECTION 8.1 COMMENCEMENT OF BENEFITS

                (a) Upon a Participant's attaining his Normal Retirement Age, or
upon his becoming a Disabled Participant, he shall become entitled to the total
value of his Account. The amount to which the Participant is entitled shall be
paid as provided in this Article VIII in the form specified in Section 8.2 as
soon as practicable following his Normal Retirement Date, or if later, his
actual retirement date, but in no event shall commence later than the earlier of
(i) 60 days after the end of the Plan Year in which he retires, unless the
Participant elects to defer the payment of his benefit pursuant to subsection
(b) or (ii) his Required Distribution Date. Any additional amounts to which a
retired or Disabled Participant who has received a distribution shall become
entitled (for example, as a result of an additional Company contribution or
allocation of forfeiture) shall be paid to him as soon as practicable following
the end of the Plan Year in which such distribution was made.

                (b) A Participant who retires on or after attaining his Normal
Retirement Age may file an election with the Administrative Committee on an
Application for Benefits to defer the commencement of his benefit payments
until, at the latest, his Required Distribution Date. A Participant whose
Benefit Starting Date is deferred pursuant to this subsection may at any time
file an Application for Benefits with the Administrative Committee directing
that benefits commence on the date specified by the Participant, but not earlier
than 60 days after the Application is submitted to the Committee. If the
Participant fails to submit an Application for Benefits at least 60 days prior
to the date that benefits must commence, the Administrative Committee shall
distribute the Participant's benefit in a lump sum in whole Shares with
fractional Shares paid in cash.

                (c) The amount to which a Disabled Participant is entitled shall
be distributed in accordance with the provisions of this Article VIII as soon as
practical after the approval of an Application for Benefits as though the last
day of the month in which he terminated employment had been his Normal
Retirement Date.

        SECTION 8.2 ALTERNATE FORM OF BENEFIT PAYMENTS

      The total amount which a Participant is entitled to receive shall be
valued on the Valuation Date immediately preceding or coinciding with his
Benefit Starting Date and applied for his benefit paid in a single lump sum
payment, in whole Shares, with the value of any fractional Shares to be paid in
cash.

        SECTION 8.3 MINIMUM RETIREMENT AND DISABILITY DISTRIBUTIONS

                                       23

<PAGE>

         (a) Applicability and Effective Date. The provisions of this Section
8.3 will apply for purposes of determining required minimum distributions for
Participants and Inactive Participants subject to the requirements of Code
section 401(a)(9) and the Regulations issued thereunder effective for calendar
years beginning in 2002. For the 2001 calendar year, the provisions in the
proposed Regulations issued January 17, 2001 shall apply.

         (b) Precedence   The requirements of this Section 8.3 will take
precedence over any inconsistent provisions of the Plan.

         (c) Requirements Of Regulations Incorporated   All distributions
required under this Section 8.3 will be determined and made in accordance with
Regulations under Code section 401(a)(9) [or the proposed Regulations issued
January 17, 2001, as the case may be].

         (d) Required Distribution Date   The Participant's entire interest will
be distributed, or begin to be distributed, to the Participant no later than the
Participant's Required Distribution Date.

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

                  (i)      If the Participant's surviving spouse is the
                           Participant's sole Designated Beneficiary, then the
                           Participant's entire interest will be distributed to
                           the surviving spouse by December 31 of the calendar
                           year containing the fifth anniversary of the
                           Participant's death, or by December 31 of the
                           calendar year in which the Participant would have
                           attained age 70 1/2, if later.

                  (ii)     If the Participant's surviving spouse is not the
                           Participant's sole Designated Beneficiary, then the
                           Participant's entire interest will be distributed to
                           the Designated Beneficiary by December 31 of the
                           calendar year containing the fifth anniversary of the
                           Participant's death.

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

                  (iv)     If the Participant's surviving spouse is the
                           Participant's sole Designated Beneficiary and the
                           surviving spouse dies after the Participant but
                           before distributions to the surviving spouse begin,
                           this paragraph (e) will apply as if the surviving
                           spouse were the Participant.

For purposes of this Section 8.3(e), distributions are considered to begin on
the Participant's Required Distribution Date.

                                       24

<PAGE>

       (f) Forms Of Distributions   During a Participant's empoyment with the
Company, all distributions required under this Section 8.3 shall be made in the
form of installment payment. All other distributions shall be in the form of a
lump sum distribution.

       (g) Amount of Required Minimum Distribution For Each Distribution
Calendar Year   During the Participant's lifetime, the minimum amount that will
be distributed for each Distribution Calendar Year is the lesser of:

                  (i)      the quotient obtained by dividing the Participant's
                           Account Balance by the distribution period in the
                           Uniform Lifetime Table set forth in section
                           1.401(a)(9)-9 of the Regulations, using the
                           Participant's age as of the Participant's birthday in
                           the Distribution Calendar Year; or

                  (ii)     if the Participant's sole Designated Beneficiary for
                           the Distribution Calendar Year is the Participant's
                           spouse, the quotient obtained by dividing the
                           Participant's Account Balance by the number in the
                           Joint and Last Survivor Table set forth in section
                           1.401(a)(9)-9 of the Regulations, using the
                           Participant's and spouse's attained ages as of the
                           Participant's and spouse's birthdays in the
                           Distribution Calendar Year.

       (h) Lifetime Required Minimum Distributions Continue Through Year Of
Participant's Death   Required minimum distributions will be determined under
this paragraph (h) and paragraph (e) above beginning with the first Distribution
Calendar Year and up to and including the Distribution Calendar Year that
includes the Participant's date of death.

       (i) Death On Or After Distributions Begin

                  (i)      Participant Survived By Designated Beneficiary- If
                           the Participant dies on or after the date
                           distributions begin and there is a Designated
                           Beneficiary, the minimum amount that will be
                           distributed for each Distribution Calendar Year after
                           the year of the Participant's death is the quotient
                           obtained by dividing the Participant's Account
                           Balance by the longer of the remaining life
                           expectancy of the Participant or the remaining life
                           expectancy of the Participant's Designated
                           Beneficiary, determined as follows:

                           (A)      The Participant's remaining life expectancy
                                    is calculated using the age of the
                                    Participant in the year of death, reduced by
                                    one for each subsequent year.

                           (B)      If the Participant's surviving spouse is the
                                    Participant's sole Designated Beneficiary,
                                    the remaining life expectancy of the
                                    surviving spouse is calculated for each
                                    Distribution Calendar Year

                                       25

<PAGE>

                                    after the year of the Participant's death
                                    using the surviving spouse's age as of the
                                    spouse's birthday in that year. For
                                    Distribution Calendar Years after the year
                                    of the surviving spouse's death, the
                                    remaining life expectancy of the surviving
                                    spouse is calculated using the age of the
                                    surviving spouse as of the spouse's birthday
                                    in the calendar year of the spouse's death,
                                    reduced by one for each subsequent calendar
                                    year.

                           (C)      If the Participant's surviving spouse is not
                                    the Participant's sole Designated
                                    Beneficiary, the Designed Beneficiary's
                                    remaining life expectancy is calculated
                                    using the age of the Beneficiary in the year
                                    following the year of the Participant's
                                    death, reduced by one for each subsequent
                                    year.

                 (ii)      No Designated Beneficiary   If the Participant dies
                           on or after the date distributions begin and there is
                           no Designated Beneficiary as of September 30 of the
                           year after the year of the Participant's death, the
                           minimum amount that will be distributed for each
                           distribution calendar year after the year of the
                           Participant's death is the quotient obtained by
                           dividing the Participant's Account Balance by the
                           Participant's remaining life expectancy calculated
                           using the age of the Participant in the year of
                           death, reduced by one for each subsequent year.

         (j)     Death Before Date Distributions Begin

                 (i)      Participant Survived By Designated Beneficiary- Except
                          as provided herein, if the Participant dies before the
                          date distributions begin and there is a Designated
                          Beneficiary, the minimum amount that will be
                          distributed for each Distribution Calendar Year after
                          the year of the Participant's death is the quotient
                          obtained by dividing the Participant's Account Balance
                          by the remaining life expectancy of the Participant's
                          Designated Beneficiary, determined as provided in
                          paragraph (e) above.

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

                 (iii)    Death Of Surviving Spouse Before Distributions To
                          Surviving Spouse Are Required To Begin- If the
                          Participant dies before the date distributions begin,
                          the Participant's surviving spouse is the
                          Participant's sole Designated Beneficiary, and the
                          surviving spouse dies before

                                       26

<PAGE>

                           distributions are required to begin to the surviving
                           spouse under paragraph (e)(i), this paragraph (j)
                           will apply as if the surviving spouse were the
                           Participant.

                (k) Definitions. For purposes of this Section 8.3, the following
terms used herein shall have the following meanings:

                           (i)      Designated Beneficiary   The individual who
                                    is designated as the Beneficiary under
                                    Article II and is the designated Beneficiary
                                    under Code section 401(a)(9) and section
                                    1.401(a)(9)-1, Q&A-4, of the Regulations.

                           (ii)     Distribution Calendar Year   A calendar
                                    year for which a minimum distribution is
                                    required. For distributions beginning before
                                    the Participant's death, the First
                                    Distribution Calendar Year is the calendar
                                    year immediately preceding the calendar year
                                    which contains the Participant's Required
                                    Distribution Date. For distributions
                                    beginning after the Participant's death, the
                                    First Distribution Calendar Year is the
                                    calendar year in which distributions are
                                    required to begin under paragraph (e) above.
                                    The required minimum distribution for the
                                    Participant's First Distribution Calendar
                                    Year will be made on or before the
                                    Participant's Required Distribution Date.
                                    The required minimum distribution for other
                                    Distribution Calendar Years, including the
                                    required minimum distribution for the
                                    Distribution Calendar Year in which the
                                    Participant's Required Distribution Date
                                    occurs, will be made on or before December
                                    31 of that Distribution Calendar Year.

                           (iii)    Life Expectancy   Life expectancy as compu-
                                    ted by use of the Single Life Table in
                                    section 1.401(a)(9)-9 of the Regulations.

                           (iv)     Participant's Account Balance   The account
                                    balance as of the last Valuation Date in the
                                    calendar year immediately preceding the
                                    Distribution Calendar Year (Valuation
                                    Calendar Year) increased by the amount of
                                    any contributions made and allocated or
                                    forfeitures allocated to the account balance
                                    as of dates in the Valuation Calendar Year
                                    after the Valuation Date and decreased by
                                    distributions made in the Valuation Calendar
                                    Year after the Valuation Date. The account
                                    balance for the Valuation Calendar year
                                    includes any amounts rolled over or
                                    transferred to the Plan either in the
                                    Valuation Calendar Year or in the
                                    Distribution

                                       27

<PAGE>
                           Calendar Year if distributed or transferred in the
                           Valuation Calendar Year.

                  (l)      Election to Allow Participants or Beneficiaries to
                           Elect 5-Year Rule   Participants or Beneficiaries may
                           elect on an individual basis whether the 5-year rule
                           or the life expectancy rule in paragraphs (e) and (j)
                           above applies to distributions after the death of a
                           Participant who has a Designated Beneficiary. The
                           election must be made no later than the earlier of
                           September 30 of the calendar year in which
                           distribution would be required to begin under
                           paragraph (e), or by September 30 of the calendar
                           year which contains the fifth anniversary of the
                           Participant's (or, if applicable, surviving spouse's)
                           death. If neither the Participant nor Beneficiary
                           makes an election under this paragraph, distributions
                           will be made as soon as practicable, but in no event
                           later than the date set forth in paragraphs (e) and
                           (j) above.

                  (m)      Transition Rule. No minimum distribution payments
                           will be made to a Participant while in service under
                           the provisions of section 401(a)(9) of the Code on or
                           after January 1, 1999 if the Participant is not a 5
                           percent owner and attains age 70 1/2 in 1998 or
                           later. In the event a Participant, other than a
                           Participant who is a 5 percent owner, was receiving
                           minimum distribution payments while in service in
                           accordance with the provisions of section 401(a)(9)
                           of the Code on December 31, 1998, the Participant may
                           elect to suspend payments due on and after April 1,
                           1999 while the Participant remains in service in
                           accordance with such uniform rules as the
                           Administrative Committee shall adopt.

                                       28

<PAGE>

                                   ARTICLE IX

                                 DEATH BENEFITS

        SECTION 9.1 DEATH BENEFITS

                (a) If a Participant dies before his Benefit Starting Date while
employed by the Company, the Participant's Beneficiary shall be entitled to
receive 100% of the value of his Account. If an Inactive Participant dies before
his Benefit Starting Date, such Participant's Beneficiary shall be entitled to
receive an amount equal to the vested percentage of his Account. The value of
the death benefit shall be determined as of the Valuation Date preceding or
coinciding with the Benefit Starting Date.

                (b) The Beneficiary of a married Participant or a married
Inactive Participant shall be the surviving spouse. If there is no surviving
spouse or if the surviving spouse consents to the designation of another
Beneficiary in the manner required under Section 9.2, the individual's
designated Beneficiary shall be entitled to the death benefit.

        SECTION 9.2 DEATH BENEFIT WAIVER

                (a) The spouse of a married Participant or a married Inactive
Participant must consent to the designation of any other Beneficiary, except a
contingent Beneficiary. The spouse's consent must be in writing, acknowledge the
effect of the designation and payment election, and be witnessed by a notary
public.

                (b) Spousal consent shall not be required if it is established
to the satisfaction of the Administrative Committee that it cannot be obtained
because there is no spouse, the spouse cannot be located, or because of such
other circumstances as may be prescribed by Regulations.

                (c) A Beneficiary designation may be revoked in writing at any
time before the Benefit Starting Date without spousal consent.

                (d) The death benefit shall be paid to or applied for the
surviving spouse in accordance with Section 9.3 in the absence of a nonspousal
Beneficiary designation or, if there is no surviving spouse, the death benefit
shall be paid to the Participant's estate in a lump sum.

                (e) The Administrative Committee shall provide each Participant
with a written explanation of the spousal death benefit containing the
information described above at the time an Employee becomes a Participant and at
the request of any Participant or Inactive Participant.

        SECTION 9.3 FORM OF DEATH BENEFIT PAYMENTS

                                       29

<PAGE>

                (a) Except as provided in Section 12.5, death benefits payable
under this Article IX shall be paid or applied for the Beneficiary in a single
lump sum payment in whole Shares with fractional Shares paid in cash. In the
event that the Company's contribution for the Plan Year in which death occurs is
allocated after payment of the above benefits, the amount of such contribution
to which the Participant is entitled shall be paid to his Beneficiary in a lump
sum in whole Shares with fractional shares paid in cash as soon as practical.

                (b) The amount to which the Beneficiary is entitled shall be
available for distribution to the Beneficiary as soon as practical following the
death of the Participant. The Beneficiary shall designate the time that the
benefit to which the Beneficiary is entitled shall be paid on an Application for
Benefits within 90 days following the end of the Plan Year in which the
Participant's death occurs in accordance with the distribution requirements of
Section 9.4. If the Beneficiary fails to file a timely Application for Benefits
indicating the time at which the death benefit shall commence, the
Administrative Committee shall direct the Trustee to distribute the entire value
of the deceased Participant's Account in a lump sum in whole Shares with
fractional Shares paid in cash as soon as practical following the end of the
Plan Year in which the Participant's death occurs. Anything herein to the
contrary notwithstanding, if the value of the death benefit payable under this
Article IX does not exceed $5,000, the Administrative Committee shall direct the
Trustee to distribute the entire value of the deceased Participant's Account in
a lump sum payment in whole Shares with fractional Shares paid in cash as soon
as practical following the end of the Plan Year in which the Participant's death
occurs.

        SECTION 9.4 MINIMUM DEATH BENEFIT DISTRIBUTIONS

                Notwithstanding any other provision of this Article IX,
distribution of any death benefits payable hereunder shall satisfy the
requirements of Section 8.3.

        SECTION 9.5 BENEFICIARY DESIGNATION

                (a) Subject to the spousal death benefit requirements of
Sections 9.1 and 9.2, each Participant shall have the unrestricted right to
designate the Beneficiary to receive the death benefits which are payable
hereunder and the manner in which such death benefits shall be paid, and to
change any such designations on a form furnished by and filed with the
Administrative Committee.

                (b) Death benefit payments may not be based on the life
expectancy of the Beneficiary unless the Beneficiary is one or more individuals
or a trust that satisfies the following: (i) the trust is a valid trust under
applicable state law; (ii) the trust is irrevocable; (iii) the Beneficiary of
the trust who would be a Beneficiary with respect to the trust's interest under

                                       30

<PAGE>

this Plan is identifiable from the trust instrument; and (iv) a copy of the
trust instrument is provided to the Administrative Committee.

                (c) If more than one individual is designated as a Beneficiary,
then the individual with the shortest life expectancy will be considered the
Beneficiary for purposes of determining the applicable life expectancy.

                                       31

<PAGE>

                                    ARTICLE X

                              TERMINATION BENEFITS

        SECTION 10.1 VESTED BENEFITS

                (a) An Inactive Participant whose employment is terminated for
any reason other than death, disability or retirement at or after attaining his
Normal Retirement Age shall receive only those benefits provided in this Article
X.

                (b) A Participant shall be vested with the following percentages
of the value of his Investment Account and Share Account attributable to the
Company's contributions:

             For Participants Who Do Not Perform an Hour of Service
                       in Plan Years Beginning After 1988:
                       -----------------------------------

                  Less than 2 Years of Service..........................     0%
                  At least 2 Years of Service...........................    15%
                  At least 3 Years of Service...........................    30%
                  At least 4 Years of Service...........................    40%
                  At least 5 Years of Service...........................    50%
                  At least 6 Years of Service...........................    60%
                  At least 7 Years of Service...........................    70%
                  At least 8 Years of Service...........................    80%
                  At least 9 Years of Service...........................    90%
                  At least 10 Years of Service..........................    100%

                 For Participants Who Perform an Hour of Service
                       in Plan Years Beginning After 1988:
                       -----------------------------------

                  Less than 1 Year of Service...........................     0%
                  At least 1 Year of Service............................    20%
                  At least 2 Years of Service...........................    40%
                  At least 3 Years of Service...........................    60%
                  At least 4 Years of Service...........................    80%
                  At least 5 Years of Service...........................    100%

An Inactive Participant whose employment is terminated for reasons other than
those specified in subsection (a) and who is not 100% vested shall forfeit
immediately upon termination of employment an amount equal to the nonvested
portion of his Account attributable to Company contributions. Any such
forfeitures shall be charged against the Participant's Share Account only after
the balance of his Investment Account has been exhausted. Subject to the
provisions of

                                       32

<PAGE>

Section 10.2(b), if an Inactive Participant is reemployed prior to the
occurrence of five consecutive Breaks in Service, such forfeited amounts shall
be restored to his Accounts.

                (c) The vested portion of an Inactive Participant's Account
attributable to Company contributions shall be determined in accordance with the
formula P(A+D)-D if such Participant received a distribution from the Plan while
employed by the Company at a time when he was less than 100% vested in his
Account. For purposes of applying this formula, "A" is the portion of the
current value of the Account attributable to Company Contributions, "D" is the
amount of the prior distribution, and "P" is the vested percentage of the
Participant's Account determined in accordance with subsection (b).

        SECTION 10.2 DISTRIBUTION OF BENEFITS

                (a) If the vested value of the Account of an Inactive
Participant whose employment terminated before attaining Normal Retirement Age
does not exceed $5,000 ($3,500 for Plan Years prior to October 1, 1997), the
Administrative Committee shall direct the Trustee to distribute the vested value
to such Participant in a lump sum in whole Shares with fractional Shares paid in
cash without the consent of the Participant. Subject to the requirements of
Section 12.5, this distribution shall be made as soon as practical following the
termination of the Inactive Participant's employment. If the vested value of the
Account of an Inactive Participant whose employment terminated before attaining
his Normal Retirement Age exceeds $5,000 ($3,500 for Plan Years prior to October
1, 1997), the individual may elect to have the vested value paid to him or
applied to his benefit in accordance with the provisions of Article VIII as soon
as practical following his termination of employment or at any time thereafter.
The vested value of the Inactive Participant's Account shall be determined as of
the Valuation Date immediately preceding or coinciding with his Benefit Starting
Date.

                (b) If an Inactive Participant who has received a lump sum
distribution pursuant to subsection (a) resumes his employment, he shall be
given the opportunity (to be exercised before the earlier of (i) five years
after the date of reemployment, or (ii) the close of the first period of five
consecutive Breaks in Service commencing after the lump sum distribution) to
recontribute the full amount of the distribution. If the individual fails to
recontribute the full amount of the lump sum distribution, any previously
forfeited amounts which would otherwise be restored to his Account pursuant to
the provisions of Section 10.1(b) shall not be restored.

                (c) The vested value of an Inactive Participant's Account that
is not distributed pursuant to the provisions of subsection (a) shall be held by
the Trustee until the individual's Normal Retirement Age, and shall be paid in
accordance with the provisions of Article VIII at that time unless an election
is made to defer the commencement of benefits pursuant to Section 8.1(b).

                (d) Notwithstanding any other provision of this Section 10.2,
all distributions from this Plan shall conform to the regulations issued under
section 401(a)(9) of the Code,

                                       33

<PAGE>

including the incidental death benefit provisions of section 401(a)(9)(G) of the
Code. Further, such regulations shall override any Plan provision that is
inconsistent with section 401(a)(9) of the Code.

       SECTION 10.3 REINSTATEMENT OF VESTING SERVICE

       Except as otherwise provided herein, an Inactive Participant's
nonforfeitable Account balance shall be determined on the basis of all of his
Years of Service. If an Inactive Participant again becomes a Participant after
five or more consecutive Breaks in Service, all Years of Service after such
Breaks in Service shall be disregarded for purposes of determining the vested
portion of his Account attributable to Company contributions that accrued before
such Breaks in Service. The vested portion of such Participant's Account
attributable to Company contributions that accrue after a Break in Service shall
be determined in accordance with the following provisions:

                (a) If the Inactive Participant had achieved any percentage of
vesting in his Account attributable to Company contributions prior to his Break
in Service, all of his Years of Service shall be aggregated for purposes of
determining his vested benefit pursuant to this Article X.

                (b) If the Inactive Participant had not achieved any percentage
of vesting in his Account attributable to Company contributions prior to
incurring a Break in Service, and if the number of consecutive years of his
Breaks in Service is either less than (i) five years, or (ii) his aggregate
Years of Service prior to such Breaks in Service, all of his Years of Service
shall be aggregated for purposes of determining his vested benefit pursuant to
this Article X.

                (c) If the Inactive Participant had not achieved any percentage
of vesting in his Account attributable to Company contributions prior to
incurring a Break in Service, and if the number of consecutive years of his
Breaks in Service equals or exceeds both (i) five years, and (ii) his aggregate
Years of Service prior to such Breaks in Service, all of his Years of Service
prior to such Breaks in Service shall be disregarded for purposes of this
Article X. If any Years of Service are not required to be taken into account by
reason of a period of Breaks in Service, such years shall not be taken into
account in applying this Section to a subsequent period of Breaks in Service.

         In addition, if a Participant is absent from the service of the Company
or any Affiliate because of service in the uniformed services of the United
States and he returns to service with the Company or an Affiliate having applied
to return while his reemployment rights were protected by law, that absence
shall be included in his Service.

        SECTION 10.4 VESTING AMENDMENTS

                                       34

<PAGE>

        In the event the Company shall adopt an amendment changing the vesting
schedule described in Section l0.l(b), or any other amendment which directly or
indirectly affects the computation of a Participant's vested Account, any
Participant who has completed at least three Years of Service may elect to have
his vested Account determined in accordance with the vesting schedule in effect
immediately prior to the effective date of the amendment. Notwithstanding the
preceding sentence, no election need be provided for any Participant whose
vested Account under the Plan, as amended, at any time cannot be less than such
Account determined without regard to such amendment. Such election must be in
writing and be filed with the Administrative Committee by the latest of (a) 60
days after the amendment is adopted, (b) 60 days after the amendment becomes
effective, or (c) 60 days after written notice of the amendment is issued to the
Participant by the Administrative Committee. The Participant must have completed
the required three Years of Service by the latest date on which an election may
be filed hereunder. Anything in Section 10.1(b) to the contrary notwithstanding,
an Inactive Participant's vested Account shall be at least equal to that which
he would have been entitled had he terminated employment immediately prior to
the date such amendment is adopted or the effective date of such amendment,
whichever is later.

                                       35

<PAGE>

                                   ARTICLE XI

                            APPLICATION FOR BENEFITS

        SECTION 11.1 APPLYING FOR BENEFITS

                (a) An Application for Benefits must be filed with the
Administrative Committee as provided in this Article XI so that benefits may be
paid to a Participant, Inactive Participant, or Beneficiary in the manner
selected by or on behalf of such individual.

                (b) No less than 30 days and no more than 90 days prior to an
individual's Benefit Starting Date, the Administrative Committee shall provide
the individual with an Application for Benefits. At the same time, the
individual shall be provided with an explanation and general description of the
material features and the relative values of the available methods of
distribution under Articles VIII and IX. If benefits are to be paid to an
individual who has attained his Normal Retirement Age and the individual fails
to file an Application for Benefits, the total amount to which he is entitled
shall be paid as soon as practical following his Normal Retirement Date as
provided in Article VIII.

       SECTION 11.2 RETIREMENT BENEFITS

       The Application for Benefits required for the payment of retirement
benefits under Article VIII must be filed within 90 days prior to the Benefit
Starting Date. The election regarding the method of benefit payment on the
Application for Benefits may be revised by filing a new Application for Benefits
up to the Benefit Starting Date.

       SECTION 11.3 DISABILITY BENEFITS

       The Application for Benefits required for the payment of disability
benefits under Article VIII must be filed no later than one year following a
Participant's separation from service with the Company. In addition, proof of
disability in the form of a written certification by a licensed physician
approved by the Administrative Committee, and such other proof required by the
Committee, must be filed with the Committee within a reasonable time thereafter.

       SECTION 11.4 DEATH BENEFITS

       The Application for Benefits required for the payment of death benefits
under Article IX must be filed by the Beneficiary of a deceased Participant or
the legal representative of his estate and must be accompanied by a death
certificate.

       SECTION 11.5 TERMINATION BENEFITS

                                       36

<PAGE>

        If the payment of termination benefits under Article X is to be made at
an individual's election prior to his Normal Retirement Age, an Application for
Benefits must be filed no later than 90 days following the individual's receipt
of an Application from the Administrative Committee. If the individual does not
then file an Application for Benefits in any case in which his vested benefits
exceed $5,000, his failure to file an Application shall be treated as an
election to defer the commencement of benefits until his Normal Retirement Date.

        SECTION 11.6 DENIAL OF BENEFITS

                (a) If any person claiming benefits under the Plan is denied
benefits by the Administrative Committee, no later than 90 days after the
receipt of his claim by the Committee (or within 180 days if special
circumstances require an extension of time for processing the claim and if
written notice of such extension and circumstances is given to such person
within the initial 90-day period), he shall be furnished with written
notification from the Committee stating: (i) the specific reason(s) for the
denial; (ii) specific references to pertinent Plan provisions on which the
denial is based; (iii) a description of any additional material or information
necessary for the claimant to perfect his claim and the reason why such material
or information is necessary; and (iv) the procedure for submitting his claim for
review.

                (b) After denial of his claim, a claimant shall be entitled to
review pertinent documents and to submit to the Administrative Committee in
writing any issues or comments he may have regarding his claim for benefits
under the Plan. If the claimant cannot settle his dispute with a representative
of the Committee, he may request a review of his claim by the full
Administrative Committee. Such request must be made by the claimant in writing
within 60 days after receipt of notice that his claim has been rejected by the
Committee. Within 60 days days after filing such request, the claimant, at the
discretion of the Administrative Committee, may be granted a hearing. The
Administrative Committee shall advise the claimant in writing of the disposition
of his appeal within 60 days (or within 120 days if special circumstances
require an extension of time for processing the request, such as an election by
the Administrative Committee to hold a hearing, and if written notice of such
extension and circumstances is give to such person within the initial 60-day
period after the request for a review of the claim is first received by the
Committee), and shall give specific reasons for its decision and specific
references to the pertinent Plan provisions on which the decision is based.

        SECTION 11.7 MISSING PARTICIPANTS AND BENEFICIARIES

                (a) An individual for whom benefits are being held by the
Trustee shall keep the Administrative Committee notified of his current mailing
address. The Administrative Committee and the Company shall be discharged from
any liability resulting from the failure to pay benefits as they become due if
reasonable effort has been made to contact the individual at his last address of
record.

                                       37

<PAGE>

                (b) If benefits are to be paid under this Plan to an individual
who cannot be located, the individual's Account shall be forfeited and applied
as provided in Article IV. if the individual is located after the forfeiture,
the vested portion of the Account will be reinstated and distributed in
accordance with the terms of the Plan.

        SECTION 11.8 PAYMENTS TO INCOMPETENTS OR MINORS

        If the Administrative Committee receives satisfactory evidence that any
person entitled to receive a benefit is, at any time when such benefit becomes
payable, either a minor or physically or mentally incompetent to receive such a
benefit, and that any other person or institution is then maintaining or has
custody of said person, and that no guardian, committee or other representative
of the estate of such person shall have been duly appointed, the Administrative
Committee may authorize the payment of the benefit, otherwise payable to such
person, to such other person or institution, and the release of such other
person or institution shall constitute a valid and complete discharge for the
payment of such benefit. Furthermore, if the Administrative Committee receives,
on behalf of a Participant, a power of attorney with respect to such Participant
valid under state law, the Administrative Committee shall comply with the
instructions of the named attorney to the extent that the Committee would comply
with such instructions if given by the Participant and such instructions are
consistent with the power of attorney.

        SECTION 11.9 ELIGIBLE ROLLOVER DISTRIBUTIONS

                (a) This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this Section 11.9, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover.

                  (b)      Definitions.

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

                                       38

<PAGE>

                                    without regard to the exclusion for net
                                    unrealized appreciation with respect to
                                    employer securities).

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

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

                           (iv)     Direct Rollover: A Direct Rollover is a
                                    payment by the Plan to the Eligible
                                    Retirement Plan specified by the
                                    Distributee.

                (c) If a distribution is one to which sections 401(a)(11) and
417 of the Code do not apply, such distribution may commence less than 30 days
after the notice required under section 1.411(a)-ii(c) of the Regulations is
given, provided that:

                           (i)      the Plan Administrator clearly informs the
                                    Participant that the Participant has a right
                                    to a period of at least 30 days after
                                    receiving the notice to consider the
                                    decision of whether or not to elect a
                                    distribution (and, if applicable, a
                                    particular distribution option), and

                           (ii)     the Participant, after receiving the notice,
                                    affirmatively elects a distribution.

                                       39

<PAGE>

                                   ARTICLE XII

                             RIGHTS OF PARTICIPANTS

        SECTION 12.1 PARTICIPANT STATUS

                (a) The adoption and maintenance of this Plan shall not be
construed as creating any contract of employment between the Company and any
Employee. This Plan shall not affect the right of the Company to deal with its
Employees in all respects, including their hiring, discharge, compensation, and
conditions of employment.

                (b) The sole rights of a Participant, or Inactive Participant,
under this Plan shall be to have this Plan administered according to its
provisions, to receive whatever benefits he may be entitled to hereunder, and,
subject to any spousal death benefit requirements, to name the Beneficiary to
receive any death benefits to which such person may be entitled.

                (c) No individual shall be discharged, fired, suspended,
expelled, disciplined, or discriminated against for exercising any right under
this Plan or for giving information or testimony in any inquiry or proceeding
relating to the administration of this Plan.

        SECTION 12.2 LEAVE OF ABSENCE

                (a) An Employee may be granted a Leave of Absence under policies
established by the Board of Directors. Any such Leave of Absence must be given
in advance and may be cancelled at any time in the discretion of the Company. In
granting or canceling any such Leave of Absence, the Company shall treat all
individuals in similar circumstances alike.

                (b) For purposes of this Plan, any Employee shall be deemed not
to have incurred a Break in Service during the period of his Leave of Absence.
Any contributions of the Company on behalf of a Participant who is on a Leave of
Absence shall be based on the Compensation paid by the Company to the
Participant for the periods during which his Leave of Absence continues. He
shall continue to share proportionately in the net earnings and the losses and
expenses of the Trust Fund during his Leave of Absence. Notwithstanding any
provision of this Plan to the contrary, Company contributions with respect to
qualified uniformed service duty will be provided in accordance with section
414(u) of the Code. All such Company contributions are considered "annual
additions" as defined in section 415(c)(2) of the Code and shall be limited in
accordance with the provisions of Section 7.2 with respect to Plan Years or
Years to which such contributions relate rather than the Plan Year in which
payment is made.

                           (i)      If an Employee expects to commence service
                                    with a corporation or other entity which is
                                    not an Employer for the purpose of obtaining
                                    experience or performing services which the
                                    Company considers is beneficial to and in
                                    the best interest of the Company and if such
                                    Employee has a right to reemployment on the
                                    termination of his

                                       40

<PAGE>

                                    leave for such purpose by written agreement,
                                    the Company may designate such leave as a
                                    Leave of Absence.

                If an individual fails to return to employment with the Company
immediately following the termination of his Leave of Absence, his employment
with the Company shall be considered terminated as of the first day of his Leave
of Absence.

                (d) Notwithstanding the foregoing, unpaid time granted to an
Employee by the Company as a Leave of Absence under the Family and Medical Leave
Act shall be recognized for vesting purposes.

       SECTION 12.3 ASSIGNMENT AND ALIENATION

       The Trust Fund is established for the purpose of providing for the
support of the Participants upon their retirement and for the support of their
families. Except as provided in a Qualified Domestic Relations Order, no right
or interest of any individual in any part of the Trust Fund shall be
transferable or assignable or be subject to alienation, anticipation, or
encumbrance, and no such right or interest shall be subject to garnishment,
attachment, execution, or levy of any kind. A Participant's benefit under the
Plan shall be offset or reduced by the amount the Participant is required to pay
to the Plan under the circumstances set forth in section 401(a)(13)(C) of the
Code.

        SECTION 12.4 QUALIFIED DOMESTIC RELATIONS ORDERS

                (a) The requirements of Section 12.3 shall not apply to a
Qualified Domestic Relations Order. A "Qualified Domestic Relations Order" shall
mean any judgment, decree, or order (including approval of a property settlement
agreement) which creates or recognizes the existence of an alternate payee's
right to receive all or a portion of the benefits of a Participant, or Inactive
Participant, hereunder pursuant to a state's domestic relations law relating to
the provision of child support, alimony payments, or marital property rights to
a spouse, former spouse, child or other dependent of such individual; provided,
however, that such order specifically provide:

                           (i)      The name and last known mailing address of
                                    the Participant, or Inactive Participant,
                                    and of each alternate payee covered by such
                                    order;

                           (ii)     The amount or percentage of the
                                    Participant's, or Inactive Participant's,
                                    benefits to be paid by the Plan to each
                                    alternate payee or the manner in which such
                                    amount or percentage is to be determined;

                                       41

<PAGE>

                           (iii)    The number of payments or the period to
                                    which such order applies; and

                           (iv)     The name of each Plan to which such payment
                                    applies.

                (b) The Administrative Committee shall establish reasonable
written procedures to determine the qualified status of domestic relations
orders and to administer distributions made thereunder in a manner consistent
with the following requirements:

                           (i)      The Administrative Committee shall promptly
                                    notify the Participant, or Inactive
                                    Participant, and any named alternate payee
                                    of the receipt of a domestic relations order
                                    and the Plan procedures used for determining
                                    whether such order is a Qualified Domestic
                                    Relations Order.

                           (ii)     The Plan Administrative Committee shall,
                                    within a reasonable period following
                                    receipt, determine whether such order is
                                    qualified and notify the Participant, or
                                    Inactive Participant, and each alternate
                                    payee of such determination.

                           (iii)    During the period beginning when the order
                                    is received and ending with the earlier of
                                    the date of determination of its qualified
                                    status or the expiration of 18 months, the
                                    Administrative Committee shall separately
                                    account for the amounts which will be
                                    payable to the alternate payee if the
                                    domestic relations order is determined to be
                                    qualified.

                           (iv)     If, within 18 months of receipt, the order
                                    is determined to be qualified, the
                                    Administrative Committee shall pay the
                                    amounts described in subparagraph (iii) to
                                    the alternate payee pursuant to the terms of
                                    the order. If, within 18 months of receipt,
                                    the order is determined not to be qualified
                                    or the order's status is unresolved, the
                                    Administrative Committee shall pay the
                                    amounts described in subparagraph (iii) to
                                    the person or persons who would be entitled
                                    to such amounts if no order had been
                                    received.

                           (v)      A determination that a domestic relations
                                    order is qualified which is made later than
                                    18 months after the receipt of such order
                                    shall operate prospectively only.

                (c) Distributions made pursuant to this Section 12.4 shall
completely discharge the Plan of its obligations with respect to the
Participant, or Inactive Participant, and each alternate payee to the extent of
any such distributions.

                                       42

<PAGE>

      SECTION 12.5 DISTRIBUTION OF SHARES

      The Trustee will make distributions from the Trust Fund to Participants
and their Beneficiaries as provided in Articles VIII, IX and X as directed by
the Administrative Committee. Distributions from a Participant's Account shall
normally be made in whole Shares with the value of any fractional Shares paid in
cash. Anything herein to the contrary notwithstanding, if the Company's Shares
are not readily tradable on an established market on the Benefit Starting Date
and the charter or by-laws of the Company restrict the ownership of
substantially all stock of the Company to current employees and the Trustee, a
Participant or Beneficiary shall not be entitled to receive a distribution of
Shares of the Company under any circumstances. To the extent that the
distribution of Shares is permitted, the following rules shall apply:

                (a) Before any Participant, Beneficiary or other owner of Shares
distributed hereunder sells such Shares to a third party from whom he has
received a bona fide offer for the purchase of such Shares, he shall first
notify the Administrative Committee in writing of the price and terms of the
proposed sale. The Company may purchase, or the Administrative Committee may
direct the Trustee to purchase, all or part of such Shares at such price and
upon such terms which are not less favorable than those offered by the
prospective purchaser, provided. that the Company's right to purchase and the
Committee's right to direct the Trustee to purchase such Shares shall lapse
unless, no later than 14 days after the Administrative Committee receives notice
of the proposed sale, the Committee gives notice to the prospective seller that
such right to purchase or to direct the Trustee to purchase is to be exercised.
If this right of first refusal is exercised, the purchase of the Shares by the
Company or the Trustee shall be consummated within 30 days following the
Committee's notice to the seller of intention to exercise the right. To the
extent such notice is not given within such 14 days, the proposed sale may be
consummated, but the Shares so sold shall continue to be subject to this
subsection (a). If such sale to a third party is not consummated within 30 days
following the first date on which it may be consummated, such Shares shall
continue to be subject to this subsection (a), and neither the proposed sale nor
any other sale may be consummated unless and until the owner complies with the
provisions of this subsection (a) as if he had not previously done so. This
subsection (a) shall not apply to Shares that are publicly traded at the time
the Company's right may be exercised. The amount paid for such Shares by the
Company or the Trustees shall not be less than the Fair Market Value of the
Shares on the date of the transaction.

                (b) Shares distributed to a Participant or Beneficiary hereunder
shall be subject to a put option if they are not publicly traded when
distributed or if they are subject to a trading limitation when distributed. A
Share is subject to a trading limitation if it is subject to a restriction under
any Federal or state securities law, any regulation thereunder, or an agreement
(not otherwise prohibited by this subsection (b)) affecting the Share which
would make the Share not as freely tradable as ones not subject to such
restriction. The put option with respect to a Share shall be exercisable only by
a Participant, by his donees, or by a person (including an estate

                                       43

<PAGE>

or its distributes) to whom the Share passes by reason of the Participant's
death. Under the put option, the Participant, Beneficiary or other holder shall
have the right to sell his Shares to the Company; provided, that the duty of the
Company with respect to the put option may be exercised by any other person
designated by the Company (including the Trustee if the purchase of such Shares
would otherwise be appropriate). The put option shall be exercisable during the
15-month period that begins on the date the Shares subject to the put option are
distributed by the Plan. In the case of Shares that are publicly traded without
restriction when distributed, but cease to be so traded within 15 months after
distribution, such Shares shall become subject to a put option as described
above for the duration of the 15-month period that began on the date the Shares
were distributed (or such longer period designated by the Company). The
Administrative Committee shall notify each person holding such Shares in writing
on or before the tenth day after the date the Shares becomes subject to a
trading limitation that the Shares are subject to such a put option. If such
notice is not given by such tenth day, the number of days between such tenth day
and the date notice is actually given shall be added to the period of the put
option (to the extent such option does not already extend beyond the 15-month
period described above). The period during which a put option is exercisable
does not include any time when a distributee is unable to exercise it because
the party bound by the put option is prohibited from honoring it by applicable
Federal or state law. To exercise the put option, the holder shall notify the
Administrative Committee in writing that the put option is being exercised and
the transaction shall be consummated within 30 days next succeeding such notice
of exercise. The price at which a put option shall be exercisable shall be the
Fair Market Value of the Shares as of the Valuation Date immediately preceding
exercise of the put option; provided, however, if a put option is exercised by
an individual who is a disqualified person within the meaning of section
4975(e)(2) of the Code, the price at which the put option shall be exercisable
is the Fair Market Value as of the date of the transaction. The provisions for
payment under the put option shall be determined by the Administrative
Committee, shall be reasonable and may include deferral of payment if adequate
security and a reasonable interest rate are provided and if the cumulative
payments at any time are no less than the aggregate of reasonable periodic
payments as of such time. Payments will generally be made in substantially equal
annual installments, beginning within 30 days after the date the put option is
exercised, and extend over a period of not more than 5 years after the date the
put option is exercised. The put option described in this Subsection (b) shall
continue to apply to Shares distributed by the Plan even if the Exempt Loan is
repaid or the Plan ceases to be an employee stock ownership plan.

                (c) The certificate evidencing ownership of any Shares
distributed from the Trust Fund shall bear a legend stating, as applicable, that
transferability of the Shares is restricted and that the Shares are subject to a
right of first refusal.

        SECTION 12.6 VOTING OF SHARES

                (a) If the Company's Shares are registered under section 12 of
the Securities Exchange Act of 1934 (or would otherwise be required to be
registered except for the exemption provided in subsection (g)(2)(H) of section
12 thereof) or were acquired in connection with an

                                       44

<PAGE>

Exempt Loan, each Plan Participant (or Beneficiary of a deceased Participant)
shall have the right to direct the Trustee in writing as to the manner in which
the Shares held by the Trustee which have been allocated to his Share Account
under the Plan shall be voted at each meeting of the shareholders of the Company
and the Trustee shall vote such Shares in accordance with such directions. The
Administrative Committee shall notify each Plan Participant (or Beneficiary) and
distribute to him such information as the Company distributes to its
shareholders pertaining to the exercise of such voting rights within a
reasonable time before the time of exercise of such rights. To the extent the
Trustee does not receive instructions with respect to voting such Shares, the
Trustee shall not vote such Shares. Shares held by the Trustee which have not
been allocated to the Accounts of Plan Participants shall be voted by the
Trustee.

                (b) If the Company's Shares are not registered under section 12
of the Securities Exchange Act of 1934 (and are not exempt from registration as
provided in subsection (g)(2)(H) of section 12 thereof) and were not acquired in
connection with an Exempt Loan, the Trustee shall vote all Shares held by it,
including Shares allocated to Participant Accounts, at each meeting of the
shareholders of the Company. The foregoing provisions of this Section 12.6(b)
notwithstanding, with respect to any Company matter which requires shareholder
approval in connection with a corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of the Company, or such similar transactions as may be
prescribed by Regulations, the Administrative Committee shall establish a
procedure whereby each Participant (or Beneficiary of a deceased Participant) in
the Plan shall direct the voting of the number of Shares (including fractional
Shares, where possible, through aggregation of similarly voted fractions) equal
to the number of Shares then allocated to any Share Account under the Plan. In
such event, the Trustee shall not vote such Shares, but they shall, instead, be
voted at the direction of Participants (or Beneficiaries) in accordance with the
procedure established by the Administrative Committee. In the event a
Participant (or Beneficiary) does not give the Trustee timely instructions with
respect to the voting of any Shares allocated to his Share Account, the Trustee
shall not vote such Shares.

                (c) Each Plan Participant (or Beneficiary of a deceased
Participant) shall have the right to direct the Trustee in writing as to the
manner in which to respond to a tender or exchange offer with respect to the
number of Shares allocated to his Account under the Plan and the Trustee shall
respond in accordance with such direction. The Company shall promptly distribute
to each Plan Participant (or Beneficiary) such information as is distributed to
shareholders of the Company in connection with such tender or exchange offer.
Shares which have not been allocated to the accounts of any Plan Participant as
well as any allocated Shares with respect to which the Trustee has not received
timely instructions shall or shall not be tendered or exchanged by the Trustee
in its discretion.

                (d) The instructions received by the Trustee pursuant to
subsections (a), (b), and (c) above shall be held by the Trustee in confidence
and shall not be divulged or released to any person, including non-Trustee
officers or other employees of the Company. The Company

                                       45

<PAGE>

shall provide the Trustee with such information and assistance as the Trustee
shall reasonably request to enable it to implement the provisions of this
Section 12.6.

                (e) The Trustee shall not incur any liability or other damage on
account of any action taken by it in accordance with the written directions of
Plan Participants (and Beneficiaries) and the provisions of this Section 12.6,
each such Plan Participant (and Beneficiary) being deemed to be a named
fiduciary under the Plan for the limited purpose of directing the Trustee with
respect to the voting, tender, or exchange of the number of Shares allocated to
his Account under the Plan.

                                       46

<PAGE>

                                  ARTICLE XIII

                           ADMINISTRATION OF THE PLAN

      SECTION 13.1 ADMINISTRATIVE COMMITTEE

      The Administrative Committee shall supervise and administer the operation
of this Plan and shall have all powers necessary to accomplish that purpose,
including the power to make rules and regulations pertaining to the
administration of this Plan. The members of the Administrative Committee shall
be appointed from time to time by, and shall serve at the pleasure of, the Board
of Directors. Any member of the Administrative Committee may resign by
delivering written notice to the Board of Directors. Until such time as the
Board of Directors shall have appointed the members of the Administrative
Committee, or in the event that all Committee members have resigned, the Company
shall serve as the Committee.

       SECTION 13.2 ORGANIZATION AND PROCEDURES

                (a) The Administrative Committee shall elect from its members a
chairperson and may appoint a secretary who need not be a member of the
Committee. The Committee shall hold meetings at such times and places and upon
such notice as it shall from time to time determine. The Committee may make and
from time to time revise the rules and regulations covering the conduct of its
proceedings, it may designate one of its members to sign on behalf of the
Committee, and shall at all times maintain complete records of its proceedings
which records shall at all reasonable times be open to inspection by all members
of the Committee.

                (b) The Administrative Committee may delegate all or part of its
duties which do not involve the management of Plan assets to others. The
Administrative Committee shall not be liable for any acts or omissions of the
persons to whom such duties have been delegated, provided that the Committee
acted prudently and in the interests of the Participants and Beneficiaries in
selecting and retaining such persons.

                (c) A majority of the Administrative Committee shall constitute
a quorum for the transaction of business. No member, however, shall take part in
any action relating solely to himself or his rights or benefits under the Plan.

      SECTION 13.3 DUTIES AND POWERS

      The Administrative Committee shall have complete control of administering
the Plan, with all powers necessary to enable it to carry out its duties in that
respect. In exercising its discretion, the Committee shall do so in a uniform
and nondiscriminatory manner, treating all persons in similar circumstances
alike. Not in limitation, but in amplification of the foregoing:

                                       47

<PAGE>

                (a) The Committee shall have complete authority to determine any
question regarding an Employee's participation and benefits, to interpret and
construe in its sole discretion the provisions of the Plan, and to make
decisions in all disputes involving the rights of any person interested in the
Plan.

                (b) The Committee shall file such reports and Plan descriptions
with the Department of Labor and the Department of the Treasury as may be
required by law.

                (c) The Committee shall notify the Internal Revenue Service
and/or Department of Labor of the termination of this Plan, any change in the
name of the Plan or the name and address of the Committee, and any merger or
division of this Plan.

                (d) The Committee shall provide each Participant, Inactive
Participant and current Beneficiary with a summary of the latest annual report
of the Plan and summary Plan descriptions in the form and within the time limits
as may be required by law.

                (e) The Committee shall furnish statements of vested benefits to
each Participant, Inactive Participant or current Beneficiary in the form and
within the time limits as may be required by law.

                (f) The Committee shall make available to each Participant,
Inactive Participant and Beneficiary during business hours at its principal
office copies of this Plan and the Trust Agreement, the summary Plan
description, the latest annual report, and any other documents pertaining to the
establishment and operation of this Plan. Upon request, such individual shall be
furnished copies of any such documents, provided that he shall be required to
pay any reasonable expense incurred in duplicating such documents.

        SECTION 13.4 CONSULTATION BY THE COMMITTEE

        In carrying out its responsibilities under the Plan, the Administrative
Committee may employ counsel and agents, and obtain such clerical, accounting,
and other assistance as it may deem advisable. All administrative expenses of
the Plan, as well as expenses incurred by the Administrative Committee in the
performance of its duties hereunder, shall be paid from the Trust Fund unless
otherwise paid by the Company. Until otherwise paid, the Trustee shall at all
times be liable for the payment of all administrative expenses, and the election
of the Company to pay any such expense shall not be construed as creating any
such liability on the part of the Company.

        SECTION 13.5 FINALITY OF ACTION

        To the extent permitted by law, all acts and determinations of the
Administrative Committee shall be binding and conclusive upon Participants,
Inactive Participants, Beneficiaries,

                                       48

<PAGE>

Employees, and the Trustee. The Company may deem its records conclusively to be
correct as to the matters reflected therein with respect to information
furnished by an Employee.

        SECTION 13.6 INDEMNIFICATION

        The Company agrees to indemnify and defend to the fullest extent
permitted by law all persons who are, were, or may be employees of the Company
against any liabilities, damages, costs and expenses (including attorney's fees
and amounts paid in settlement of any claim approved by the Company) occasioned
by their occupying or having occupied an administrative position in connection
with the Plan except when due to their willful misconduct or gross negligence.

        SECTION 13.7 COMPENSATION AND EXPENSES OF EMPLOYEES

        No employee shall be compensated for his services performed in
connection with the administration of the Plan. However, all reasonable expenses
of employees incurred in connection with the administration of the Plan shall be
paid from the Trust Fund unless otherwise paid by the Company. Until otherwise
paid, the Trustee shall at all times be liable for the payment of all
administrative expenses, and the election of the Company to pay any such expense
shall not be construed as creating any such liability on the part of the
Company.

                                       49

<PAGE>

                                   ARTICLE XIV

                                 THE TRUST FUND

        SECTION 14.1 THE TRUSTEE

      The Company, by action of its Board of Directors, shall select a Trustee
to hold, invest and distribute any assets of the Plan which are held in the
Trust Fund in accordance with the terms of the Trust Agreement which shall be
executed on behalf of the Company and by the Trustee under such terms and
conditions, not in contravention of the provisions of this Plan, as the Company
may elect. The fiduciary responsibilities of the Trustee shall be as set forth
in the Trust Agreement entered into by and between the Company and the Trustee.
The Company from time to time may change the Trustee and the Trust Agreement.

        SECTION 14.2 THE TRUST FUND

      The Trust Fund shall be used only to pay benefits as provided in the Plan
and such other payments as directed by the Administrative Committee. All
reasonable and necessary expenses incurred in the administration of the Plan and
Trust Fund shall be paid from the Trust Fund to the extent that such costs and
expenses are not paid by the Company.

       SECTION 14.3 PURCHASES OF SHARES AND LOANS TO THE TRUST FUND

                (a) Trust assets will be invested by the Trustee primarily in
Shares of the Company in accordance with directions from the Administrative
Committee. Company contributions (and other Trust Fund assets) may be used to
acquire Shares of the Company from any Company shareholder or from the Company.
The Trustee may also invest Trust Fund assets in such other prudent investments
as the Administrative Committee deems to be desirable for the Trust Fund as
provided in the Trust Agreement. All purchases of Company Shares by the Trustee
shall be made only as directed by the Administrative Committee and only at
prices which do not exceed the Fair Market Value of Company Shares.

                (b) The Administrative Committee may direct the Trustee to incur
an Exempt Loan from time to time to finance the acquisition of Company Shares or
to repay a prior Exempt Loan. An installment obligation incurred in connection
with the purchase of Company Shares shall be treated as an Exempt Loan. An
Exempt Loan shall be for a specific term, shall bear a reasonable rate of
interest and shall not be payable on demand except in the event of default. An
Exempt Loan may be secured by a pledge of the Shares so acquired (or acquired
with the proceeds of a prior Exempt Loan which is being refinanced). No other
Trust Fund assets may be pledged as collateral for an Exempt Loan, and no lender
shall have recourse against Trust Fund assets other than any Shares remaining
subject to pledge. If the lender is a disqualified person as defined in section
4975(e)(2) of the Code, the Exempt Loan must provide for a transfer of Trust
Fund assets on default only upon and to the extent of the failure to meet the
payment schedule of

                                       50

<PAGE>

the Exempt Loan. Any pledge of Shares must provide for the release of the Shares
so pledged as payments on the Exempt Loan are made by the Trustee and such
Shares are allocated to Participants' Share Accounts under Article V. Payments
of principal and/or interest on any Exempt Loan shall be made by the Trustee (as
directed by the Administrative Committee) only from Company contributions paid
in cash to enable the Trustee to repay such Exempt Loan, from earnings
attributable to such Company contributions and from any cash dividends received
by the Trustee on such Shares. Except as provided in Section 12.5 herein, no
Shares acquired with an Exempt Loan shall be subject to a put, call, other
option, buy-sell or similar arrangement while held by and distributed from the
Plan whether or not the Plan remains an employee stock ownership plan. The
preceding protections shall be nonterminable and shall continue even if the
Exempt Loan is repaid or the Plan ceases to be an employee stock ownership plan.

                (c) Any Shares acquired by the Trustee with the proceeds of an
Exempt Loan shall initially be credited to a Suspense Account and will be
allocated to the Share Accounts of Participants only as payments on the Exempt
Loan are made by the Trustee. The number of Shares to be released from the
Suspense Account for allocation to Participants' Share Accounts for each Plan
Year shall be determined by the Administrative Committee (as of each allocation
date) as follows:

                        (i)     The number of Shares held in the Suspense
                                Account immediately before the release for the
                                current Plan Year shall be multiplied by a
                                fraction. The numerator of the fraction shall be
                                the amount of principal and interest paid on the
                                Exempt Loan for that Plan Year. The denominator
                                of the fraction shall be the sum of the
                                numerator plus the total payments of principal
                                and interest on the Exempt Loan projected to be
                                paid for all future Plan Years. For this
                                purpose, the interest to be paid in future years
                                is to be computed by using the interest rate in
                                effect as of the current allocation date.

                        (ii)    The Administrative Committee may elect (at the
                                time an Exempt Loan is incurred) or the
                                provisions of the Exempt Loan may provide for
                                the release of Shares from the Suspense Account
                                based solely on the ratio that the payments of
                                principal for each Plan Year bear to the total
                                outstanding principal amount of the Exempt Loan.
                                This method may be used only to the extent that:
                                (A) the Exempt Loan provides for annual payments
                                of principal and interest at a cumulative rate
                                that is not less rapid at any time than level
                                annual payments of such amounts for ten years;
                                (B) interest included in any payment on the
                                Exempt Loan is disregarded only to the extent
                                that it would be determined to be interest under
                                standard loan amortization tables; and (C) the
                                entire duration of the Exempt Loan does not
                                exceed ten years, even in the event of a
                                renewal, extension, or refinancing.

                                       51

<PAGE>

        SECTION 14.4 REVERSION OF ASSETS

                (a) Except as provided by the terms of this Section 14.4, no
assets of the Trust Fund shall ever revert to, or be used or enjoyed by, the
Company or any successor of the Company, nor shall any such funds or assets ever
be used other than for the benefit of Participants, Inactive Participants or
Beneficiaries.

                (b) In the event the Administrative Committee determines that
the Company has contributed any amount under Article IV to the Trustee by
mistake of fact, the Administrative Committee shall direct the Trustee in
writing to return to the Company, within one year after the payment of the
contribution, the lesser of the amount actually contributed by such mistake of
fact or its then current value.

                (c) All contributions hereunder are made on the condition that
this Plan and the Trust Agreement initially qualify under sections 401(a),
4975(e)(7) and 501(a) of the Code. If, pursuant to the Company's request for a
determination letter prior to the end of the remedial amendment period, the
Internal Revenue Service shall determine that this Plan and the Trust Agreement
do not initially qualify, the Administrative Committee shall direct the Trustee
to return to the Company the then current value of any contributions made by the
Company. Such contributions shall be returned within one year following the
denial of initial qualification.

                (d) All contributions hereunder are also made on the condition
that they are deductible under section 404 of the Code. If the Internal Revenue
Service shall determine that any portion of the Company's contribution under
Article IV for a Plan Year is not deductible, to the extent that the deduction
is disallowed, the Administrative Committee shall direct the Trustee to return
the lesser of such amount or its then current value to the Company within one
year following the disallowance of the deduction.

                (e) Upon termination of the Plan after satisfaction of all fixed
and contingent liabilities or obligations to persons entitled to benefits upon
termination of the Plan, any fund or property remaining in the Trust Fund shall
revert to the Company, provided such reversion does not contravene any provision
of law.

                                       52

<PAGE>

                                   ARTICLE XV

                                PLAN FIDUCIARIES

        SECTION 15.1 NAMED FIDUCIARIES

        "Named Fiduciaries" with respect to the Plan and Trust Agreement shall
be the Company, the Administrative Committee, the Trustee, and the Board of
Directors. The Fiduciaries of this Plan and Trust Agreement shall have only
those powers, duties, responsibilities and obligations as are specifically
provided for by the Plan and Trust Agreement.

        SECTION 15.2 BONDING REQUIREMENTS

      Each of the Plan Fiduciaries shall be bonded to the extent required by
ERISA. Such bond shall provide protection to the Plan and Trust Fund against
loss by reason of direct or indirect acts of fraud or dishonesty on the part of
the Plan Fiduciaries. Unless paid by the Employer, any expense incurred in
maintaining such bond shall be paid from the Trust Fund.

      SECTION 15.3 PROHIBITED TRANSACTIONS

      Except as otherwise permitted by applicable law, no Fiduciary shall
engage, or cause the Plan to engage, in any transaction in which the Trust Fund
directly or indirectly sells, exchanges, or leases any part of the Trust Fund
to; lends money or otherwise extends credit to; furnishes goods, services or
facilities to; transfers any assets of the Trust Fund to; or permits any such
assets to be used by or for the benefit of a party in interest as defined by
section 3(14) of ERISA. In addition, except as otherwise provided by this Plan
and applicable law, no Fiduciary shall deal with any assets of the Trust Fund
for his own interest or account; act in his individual capacity in any
transaction involving the Trust Fund on behalf of a party whose interests are
adverse to the interests of the Trust Fund and of the Participants; nor receive
any consideration for his own account from any party dealing with the Trust Fund
in connection with a transaction involving the assets of the Trust Fund.
Anything to the contrary notwithstanding, whenever a bank or trust company is a
Trustee hereunder, the foregoing prohibitions shall not apply to the investment
of assets of part of the Trust Fund in one or more deposits in the savings
department of said bank or trust company, provided said deposits bear a
reasonable interest rate, or to the holding of uninvested cash in its commercial
department.

        SECTION 15.4 FIDUCIARY RESPONSIBILITIES

                (a) The Trustee shall hold the assets of the Trust Fund in trust
and shall be responsible for all functions specifically assigned to it by the
Plan and Trust Agreement.

                (b) The Company shall be responsible for all functions assigned
or reserved to it under the Plan and Trust Agreement. Any authority so assigned
or reserved to the Company

                                       53

<PAGE>

shall be exercised by resolution of its Board of Directors, and shall become
effective with respect to the Trustee, upon written notice to the Trustee signed
by a majority of the Administrative Committee advising the Trustee of such
exercise. By way of illustration, and not by limitation, the Company shall have
authority and responsibility for (i) the design of the Plan; (ii) the
qualification under applicable law of the Plan and Trust Agreement and any
amendments thereto; (iii) the funding of the Plan; (iv) the designation of Named
Fiduciaries; (v) the appointment, removal and replacement of the Trustee; and
(vi) the exercise of all fiduciary functions provided in the Plan and Trust
Agreement or necessary to the operation of the Plan, except such functions as
are assigned to other Named Fiduciaries.

                (c) The Administrative Committee shall have responsibility and
authority to control the operation and administration of the Plan and as further
set forth in Article XIII.

                (d) The Board of Directors shall be responsible for all
functions assigned to it under the Plan and Trust Agreement, including the
appointment of the Administrative Committee.

                (e) This Section 15.4 is intended to allocate to each Named
Fiduciary the individual responsibility for the prudent execution of the
functions assigned to it, and none of such responsibilities or any other
responsibilities shall be shared by two or more of such Named Fiduciaries unless
such sharing is provided by a specific provision of the Plan and Trust
Agreement. Whenever one Named Fiduciary is required to follow the directions of
another Named Fiduciary, the two Named Fiduciaries shall not be deemed to have
been assigned a shared responsibility, but the responsibility of the Named
Fiduciary giving the directions shall be deemed his sole responsibility, and the
responsibility of the Named Fiduciary receiving those directions shall be to
follow them insofar as such instructions are on their face proper under
applicable law. A Named Fiduciary may employ one or more persons to render
advice concerning responsibility such Named Fiduciary has been allocated under
the Plan and Trust Agreement. The compensation of any person so employed shall
be pc?id from the Trust Fund unless, at the election of the Company, such
compensation is otherwise paid by the Company.

        SECTION 15.5 INVESTMENT MANAGERS

        The Board of Directors may appoint a qualified Investment Manager to
manage any portion or all of the assets of the Trust Fund. For the purpose of
this Plan and Trust Agreement, a qualified "Investment Manager" means an
individual, firm or corporation that has been so appointed to serve as
Investment Manager hereunder and that is and has acknowledged in writing that it
is (a) a Fiduciary with respect to the Plan, (b) bonded as required by ERISA,
and (c) is either (i) registered as an investment adviser under the Investment
Advisers Act of 1940 or (ii) a bank as defined in the Investment Advisers Act of
1940. Any such appointment shall be by a vote of the Board of Directors naming
the Investment Manager so appointed and designating the portion of the Trust
Fund to be managed and controlled by such Investment Manager. Said vote shall be
evidenced by a certificate in writing signed by the secretary of the Board of
Directors and

                                       54

<PAGE>

shall become effective on the date specified in such certificate, but not before
delivery to the Trustee of a copy of such certificate together with a written
acknowledgment by such Investment Manager of the facts specified in this Section
15.5. Any Investment Manager so appointed shall have sole responsibility for the
investment of the portion of the Trust Fund to be managed and controlled by such
Investment Manager.

                                       55

<PAGE>

                                   ARTICLE XVI

                        AMENDMENT, TERMINATION AND MERGER

        SECTION 16.1 PLAN AMENDMENT

                (a) The Company shall have the right to amend this Plan at any
time and from time to time by vote of its Board of Directors. Any such amendment
may be made retroactively effective to the extent permitted by applicable law.

                (b) Except to the extent required to qualify this Plan and the
Trust Agreement under sections 401(a), 4975(e)(7) and 501(a) of the Code, or as
a condition of continued qualification thereunder, no amendment shall be made
which would have any of the following effects:

                           (i)    Deprive any Participant, Inactive Participant
                                  or Beneficiary of the right to receive any
                                  benefits or options attributable to service
                                  before the amendment to which such individual
                                  may be entitled.

                           (ii)   Except as provided in Article XIV, permit
                                  any part of the Trust Fund to revert to the
                                  Company or permit any part of the Trust
                                  Fund, other than such part as may be
                                  required to pay taxes or administration
                                  expenses, to be used for or diverted for any
                                  purpose other than the exclusive benefit of
                                  Employees or their Beneficiaries.

        SECTION 16.2 PLAN TERMINATION

                (a) Although the Company expects to continue the Plan and the
contributions to the Trust Fund indefinitely, the Company may, by action of its
Board of Directors, terminate the Plan and all further contributions to the
Trust Fund for any reason and at any time. The liability of the Company shall
automatically terminate upon its being legally dissolved, upon the filing of a
petition in bankruptcy (either voluntarily or involuntarily) or upon its making
any general assignment for the benefit of creditors.

                (b) Upon the termination of the Plan, the complete
discontinuance of contributions to the Trust Fund, or the termination of the
liability of the Company to contribute to the Trust Fund, the Administrative
Committee shall so notify the Trustee of such event in writing. The Trust Fund
shall continue until all funds are distributed in accordance with the terms of
this Plan. All provisions of the Plan and Trust Agreement shall remain in force,
other than the provisions relating to Company contributions, until all funds are
distributed from the

                                       56

<PAGE>

Trust Fund.Each affected Participant shall be vested with all rights to any
funds in his Account as of the date of such termination or discontinuance.

                (c) In the event of the partial termination of the Plan, the
rights of each Participant affected by such partial termination to the amounts
credited to his Account as of the date of such partial termination shall be
nonforfeitable. Such amounts shall be distributed in accordance with the
provisions of this Plan.

                (d) Any unallocated funds held in the Trust Fund as provided in
Article VII at the time of the termination of the Plan or discontinuance of
contributions shall be allocated among the Participants for whom an Account is
being held in the manner set forth in Article V to the extent such allocation
does not exceed the limits of Article VII.

                (e) Anything herein to the contrary notwithstanding, the Trustee
and the Administrative Committee may, at any time after the Plan has been
terminated, terminate the Trust Fund. Upon termination of the Trust Fund, the
amount credited to the Account of each Participant, Inactive Participant, and
Beneficiary shall be distributed to the individual absolutely and free of trust
in accordance with the applicable provisions of Article VIII or IX. Any such
termination shall not deprive any Participant, Inactive Participant or
Beneficiary of the rights provided in Section 12.7 after such termination.

                (f) The Trustee's fees and expenses of administering the Trust
Fund and other expenses incident to the termination and distribution of the
Trust Fund incurred after the termination of this Plan and the Trust Agreement
shall be paid from the Trust Fund unless otherwise paid by the Company. Until
otherwise paid, the Trustee shall at all times remain solely liable for the
payment of all fees and expenses incident to the termination.

                (g) If any individual who is entitled to benefits cannot be
located, the Account of the individual shall be removed from the Trust Fund and
applied in accordance with the escheat provisions under the applicable laws of
the Commonwealth of Massachusetts.

        SECTION 16.3 PLAN MERGER

      Unless otherwise permitted by law or regulations, this Plan shall not be
merged into, or consolidated with, nor shall any assets or liabilities be
transferred to, any pension or retirement plan under circumstances resulting in
a transfer of assets or liabilities from this Plan to any other plan unless
immediately after any such merger, consolidation or transfer each Participant
would (if the Plan then terminated) receive a benefit after the merger,
consolidation or transfer which would be equal to or greater than the benefit he
would have been entitled to receive immediately before such merger,
consolidation or transfer (if the Plan had then terminated).

                                       57

<PAGE>

                                  ARTICLE XVII

                            MISCELLANEOUS PROVISIONS

        SECTION 17.1 INTERPRETATION

                (a) The Administrative Committee shall have complete authority
to determine any question regarding an Employee's participation and benefits, to
interpret and construe in its sole discretion the provisions of the Plan, and to
make decisions in all disputes involving the rights of any person interested in
the Plan. To the extent permitted by law, all acts and determinations of the
Administrative Committee shall be binding and conclusive upon Participants,
Inactive Participants, Beneficiaries and Employees.

                (b) If any provision of this Plan or the Trust Agreement may be
susceptible to more than one interpretation, then that one shall always be given
to such provision which will be consistent with this Plan and the Trust
Agreement being an employees' stock ownership plan and trust agreement within
the meaning of sections 401(a), 4975(e)(7) and 501 of the Code, as amended, or
as replaced by any sections of like intent and purpose.

                (c) In case any provisions of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions of this Plan, and this Plan shall be construed and enforced
as if said illegal or invalid provisions had never been inserted herein.

                (d) Unless the context otherwise requires, words denoting the
singular number may, and where necessary shall, be construed as denoting the
plural number, and pronouns in the masculine gender include the feminine gender
and pronouns in the neuter gender include the masculine and feminine gender.

        SECTION 17.2 LIABILITY FOR EMPLOYEE REPRESENTATIONS

      The Company, the Administrative Committee, and the Trustee shall be
discharged from any liability in acting upon any representations by any
individual of any fact affecting his status under this Plan or upon any notice,
request, consent, letter, telegram, or other document believed by them, or any
of them, to be genuine, and to have been signed or sent by the proper person.

        SECTION 17.3 DESCRIPTIVE HEADINGS

      The headings of the Plan are inserted for convenience of reference only
and shall have no effect upon the meaning of the provisions hereof.

        SECTION 17.4 CONSTRUCTION

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<PAGE>

        The Plan shall be construed, regulated and administered under the laws
of the Commonwealth of Massachusetts, except that if any such laws are
superseded by any applicable Federal law or statute, such Federal law or statute
shall apply.

        SECTION 17.5 MULTIPLE ORIGINALS

        This Plan is executed in several counterparts, each of which shall be
deemed an original and shall constitute but one and the same instrument and this
Plan may be evidenced by any one counterpart.

       SECTION 17.6 REVISION OF THE PLAN AND APPICABILITY OF PLAN
                    PROVISIONS

       The provisions of the Plan in effect prior to this October 1, 2002
restatement (the "Prior Plan") and certain other provisions of the Plan which
may not otherwise have been so indicated herein have the following effective
dates to conform the Plan to the requirements of GATT, USERRA, SBJPA, and TRA
`97:

        1.      The order in which Excess Amounts should be attributed to and
                treated in accordance with the provisions of other plans
                maintained by the Company under Section 7.3(b) [Section 7.5(b)
                of the Prior Plan] shall be effective as of October 1, 1996.

        2.      Section 8.1, "Commencement of Benefits", was revised effective
                October 1, 1996 to provide that any additional benefits to which
                a retired or Disabled Participant should be entitled must be
                paid to him as soon as practicable following the end of the Plan
                Year in which such distribution was made.

        3.      The first sentence of Section 9.3(c) under "Form of Death
                Benefit Payments" was revised effective October 1, 1996 to
                provide that payments to Beneficiaries should be available for
                distribution as soon as practicable following the death of the
                Participant rather than following the last day of the Plan Year
                in which the Participant's death occurs.

        4.      Sections 9.3(c), 10.2(a) and 11.5 to increase the lump sum
                cash-out threshold from $3,500 to $5,000 are effective October
                1, 1997.

        5.      Article II was changed to reflect a new definition of
                "Compensation" which shall become effective as of October 1,
                1998.

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<PAGE>

        6.      Article II was changed to reflect that the "Normal Retirement
                Age" be age 59 1/2 and that the "Normal Retirement Date" be the
                Participant's 59 1/2 birthday which shall become effective as of
                October 1, 1999.

        7.      Section 3.1, "Employees Eligible to Participate", was revised to
                include employees of Datasonics, Inc. which shall become
                effective as of October 1, 1999.

        8.      The definition of "Years of Service" under Article II was
                revised to include past service with Datasonics, Inc. This shall
                become effective as of October 1, 1999.

        9.      The family aggregation provision included in the definition of
                "Compensation" under Article II of the Prior Plan was eliminated
                for Plan Years beginning on and after October 1, 1997.

        10.     The revision of the definition of "Leased Employee" as set forth
                under Article II shall become effective as of January 1, 1997.

        11.     The provisions addressing periods of service in the uniformed
                services as set forth in Section 12.2, "Leave of Absence" and in
                Section 10.3(c), "Reinstatement of Vesting Service" are
                effective December 12, 1994.

        12.     Revisions to the age 70 1/2 provisions as set forth under the
                "Required Distribution Date" definition in Article II and
                Section 10.2(d) are effective January 1, 1997.

        13.     Section 18.3(a)(ii) under "Adjusted Benefit Limitations" is
                eliminated effective for Limitation Years beginning on and after
                October 1, 2000.

        14.     Section 7.3, "Combined Benefit Limitations" and Section 7.4,
                "Adjusted Dollar Limits" of the Prior Plan are eliminated from
                the Plan effective as of October 1, 2000.

        15.     Section 12.3, "Assignment and Alienation" is revised to permit
                the offset of a Participant's benefit in the event of a judgment
                or settlement regarding fiduciary breach which shall be
                effective as of August 5, 1997.

                                  ARTICLE XVIII

                              TOP-HEAVY PROVISIONS

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<PAGE>

        SECTION 18.1 TOP-HEAVY DEFINITIONS

For purposes of this Article XVIII, the following terms shall have the meaning
set forth below:

                (a) "Top-Heavy Plan" means this Plan for any Plan Year beginning
after 1983 in which, as of the Determination Date:

                           (i)      it is not included in an Aggregation Group
                                    and the aggregate value of all accounts for
                                    eligible Key Employees exceeds 60% of such
                                    amounts for all eligible Employees and their
                                    beneficiaries; or

                           (ii)     it is required to be included in a Top-Heavy
                                    Group.

Except as otherwise provided in this subsection, for Plan Years beginning on or
after January 1, 2002, the preceding sentence shall be applied by taking into
account distributions made to any employee or beneficiary during the one-year
period ending on the Determination Date and any amount distributed under a
terminated plan which would have been required to be included in the Aggregation
Group, but shall disregard any deductible voluntary contributions; any account
balance of a former Key Employee (or his beneficiary) for all Plan Years
beginning with the Plan Year he is no longer described as a Key Employee; for
Plan Years beginning prior to January 1, 2002 and after December 31, 1984, any
account balance of any individual who has not performed service for the
Affiliated Group at any time during the five-year period ending on the
Determination Date; any employer contributions rolled over or transferred to a
plan after December 31, 1983, provided such contributions were originally made
to a qualified retirement plan maintained by an employer other than a member of
the Affiliated Group, and were rolled over or transferred into the Trust Fund at
the discretion of the individual; and benefits paid on account of death, to the
extent such benefits exceed the present value of the individual's accrued
benefits existing immediately prior to death.

                (b) "Top-Heavy Group" means the Aggregation Group which, if
viewed as a single plan, would be a Top-Heavy Plan. In determining whether the
Aggregation Group is Top-Heavy, the accrued benefits or the account balances of
all plans shall be valued as of the Determination Dates for such plans that fall
within the same calendar year. The accrued benefit of any Non-Key Employee shall
be determined for years beginning after 1986 under the method, if any, that
uniformly applies for accrual purposes under all defined benefit plans
maintained by the Aggregation Group or, if there is no such method, as if such
benefit accrued not more rapidly than under the slowest accrual rate permitted
under the fractional accrual rate of section 411(b)(1)(C) of the Code.

                (c) "Determination Date" means, for this Plan and any other plan
included in the Aggregation Group, the last day of such plan's preceding plan
year, or in the case of the first plan year of the plan, the last day of such
plan year.

                                       61

<PAGE>

                (d)        "Aggregation Group" means:

                           (i)      Each qualified defined benefit retirement
                                    plan and defined contribution retirement
                                    plan of the Affiliated Group in which a Key
                                    Employee is or was a participant within the
                                    one-year period preceding the Determination
                                    Date;

                           (ii)     Each other qualified defined benefit
                                    retirement plan and defined contribution
                                    retirement plan of the Affiliated Group
                                    which enables any plan described in
                                    subsection (d)(i) to meet the tax
                                    qualification rules of section 410 of the
                                    Code;

                           (iii)    All other qualified defined benefit
                                    retirement plans or defined contribution
                                    retirement plans of the Affiliated Group
                                    elected by the Administrative Committee
                                    which do not cause the Aggregation Group to
                                    violate the tax qualification rules of the
                                    Code; and

                           (iv)     As used in this subsection (d), a qualified
                                    retirement plan shall include frozen plans
                                    and those terminated plans which were
                                    maintained within the one-year period ending
                                    on the Determination Date.

                (e)        "Key Employee" means any employee who, at any time
during the plan year containing the Determination Date, is:

                           (i)      An officer of any member of the Affiliated
                                    Group whose Earnings exceed $130,000 as
                                    adjusted for cost of living increases in
                                    accordance with Code section 415(d);

                           (ii)     An owner of more than a 5% interest in the
                                    Company; or

                           (iii)    An owner of more than a 1% interest in the
                                    Company whose Compensation exceeds $150,000
                                    (as adjusted for cost-of-living increases)
                                    for the plan year.

For purposes of this subsection (e), the term employee includes a terminated,
retired, disabled, deceased, leased, or part-time employee. A beneficiary of an
individual described in this subsection (e) will be considered to be a Key
Employee. For purposes of subparagraph (i) of subsection (e), if there are more
than three officers of the Affiliated Group, no more than 10% of all employees
of the Affiliated Group, based on the highest number of employees within the
one-year period preceding the Determination Date, to a maximum of 50, shall be
treated as officers. In addition, for purposes of subparagraph (i) of subsection
(e), individuals performing executive functions for sole proprietorships,
partnerships, associations and trusts which are members of the

                                       62

<PAGE>

Affiliated Group shall be treated as officers. For purposes of subparagraph (ii)
of this subsection (e), if two employees or self-employed individuals have the
same ownership interest in the Affiliated Group, the employee or self-employed
individual having the larger annual compensation for the year during any part of
which that ownership interest existed shall be treated as having a larger
ownership interest. In determining ownership, the constructive ownership
provisions of section 318 of the Code shall be applied by utilizing a 5% test in
lieu of the 50% test set forth in subsection (a)(2)(C) thereof. The aggregation
rules of section 414(b), (c), (m) or (o) of the Code shall not apply for
purposes of determining ownership.

                (f) "Non-Key Employee" means any employee who is not a Key
Employee.

                (g) "Earnings" shall be defined as amounts paid or accrued by
any member of the Affiliated Group for a Limitation Year, including salary and
wages, overtime pay, bonuses, commissions, and taxable fringe benefits; but
shall not include amounts contributed by the Company (including elected amounts
deferred under an arrangement described in section 401(k) of the Code) under the
Plan or any other plan of the Affiliated Group or any nonqualified fringe
benefits which are nontaxable to employees. Except for purposes of determining
status as a Key Employee under Section 18.1(e), an employee's Earnings shall be
deemed not to exceed $200,000, as provided under EGTRRA `01, subject to any
adjustments to reflect increases in the cost of living determined by the
Secretary of Treasury effective for Plan Years beginning on or after January 1,
2002. For Plan Years beginning prior to 2002 and after 1993, $150,000 shall be
substituted for $200,00 in the preceding sentence.

                  (h) "Average Earnings" means the average of a Participant's
Earnings for his five consecutive years of service which produce the highest
average. In determining Average Earnings, any year in the five consecutive year
period in which a Year of Service was not earned shall not be counted. If a
Participant has worked less than five Years of Service, the average of his
Earnings for his total Years of Service shall be used. All Years of Service
shall be taken into account for purposes of determining a Participant's Average
Earnings.

                  (i) "Defined Benefit Minimum" means an annual retirement
benefit (expressed as a single life annuity beginning at normal retirement age
with no ancillary benefits) derived from contributions from the Affiliated Group
equal to 2% of such Non-Key Employee's Average Earnings multiplied by the number
of his Years of Service (not to exceed 10). There shall be taken into account
only those Years of Service during which the defined benefit retirement plan or
plans in which such Non-Key Employee Participants are included in a Top-Heavy
Group.

                  (j) "Year of Service" means the period of service used to
determine the vested percentage of a Participant's benefits under a defined
benefit or defined contribution retirement plan of any member of the Affiliated
Group.

        SECTION 18.2 TOP-HEAVY BENEFITS

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<PAGE>

                (a) Subject to the provisions of subsection (b), each Non-Key
Employee who is a Participant in this Plan and who has not separated from
service at the end of the Plan Year shall, for any Plan Year in which this Plan
is a Top-Heavy Plan, have allocated to his Account Company contributions in an
amount equal to at least 3% of his Earnings for such Plan Year or, if smaller,
the percentage of Earnings required to be allocated to the Key Employee
receiving the highest such percentage for the Plan Year, including amounts
allocated to a Key Employee pursuant to his election under 402(g) of the Code,
under this and all other defined contribution retirement plans required to be
included in an Aggregation Group. This smaller percentage amount shall not be
utilized if this Plan and a defined benefit retirement plan are required to be
included in an Aggregation Group and if this Plan enables such other plan to
meet the qualification requirements of the Code. Effective for Plan Years
beginning on or after January 1, 1989, Company contributions attributable to any
amounts deferred under an arrangement described under section 401(k) of the Code
shall not be taken into account for purposes of satisfying the requirements of
this Section 18.2.

                (b) If a Non-Key Employee participates in two or more Top-Heavy
defined contribution retirement plans of the Affiliated Group, the minimum
contribution requirements of subsection (a) may be met by combining the
contributions provided under such plans. If during any Plan Year a Non-Key
Employee participates in one or more Top-Heavy defined benefit retirement plans
and one or more Top-Heavy defined contribution retirement plans of the
Affiliated Group, such Non-Key Employee will receive in lieu of the amount
indicated in subsection (a) allocations provided under such defined contribution
retirement plan or plans equal to at least 5% of his Earnings.

        SECTION 18.3 ADJUSTED BENEFIT LIMITATIONS

         (a)     The requirements of this subsection are satisfied if:

                        (i)     a Participant who participates in one or more
                                Top-Heavy defined benefit plans and one or more
                                Top-Heavy defined contribution plans of the
                                Aggregation Group does not accrue a benefit or
                                receive an Annual Addition under such plan for
                                any Limitation Year beginning or ending within
                                the Plan Year for which such plans are Top
                                Heavy, unless such accrual or Annual Addition
                                would not cause the sum of such Participant's
                                defined benefit and defined contribution
                                fractions to exceed 1.0; or

                        (ii)    (A) the present value of the combined accrued
                                benefits and account balances for all Key
                                Employees under all qualified retirement plans
                                sponsored by any member of the Aggregation Group
                                exceeds 60% of the total of such amounts for all
                                employees but does not exceed 90%; and

                                       64

<PAGE>

                                (B) 3% is substituted for 2% in subsection (i)
                                of Section 18.1, and 4% is substituted for 3% in
                                subsection (a) of Section 18.2.

        SECTION 18.4 ELIGIBILITY FOR ALLOCATIONS

        For purposes of Section 18.2, the eligibility of Non-Key Employees who
are Participants in the Plan for an allocation under said Section shall be
determined without regard to whether they (a) have completed 1,000 Hours of
Service during the applicable Plan Year or (b) are excluded from participating
or receive no benefit for a Plan Year because their Compensation is less than a
stated amount or because they fail to make mandatory contributions or elective
deferral contributions for such Plan Year. For any Plan Year beginning on or
after January 1, 2002 for which this Plan is a Top-Heavy Plan, the Compensation
of any Participant that is in excess of $200,000 shall be disregarded.

        IN WITNESS WHEREOF, the Company has caused this Plan to be executed in
the name of and on behalf of the Company by its duly authorized officer this
26th day of September, 2002.

                                                    BENTHOS, INC.

                                                    By:  Ronald L. Marsiglio
                                                         ---------------------

                                       65

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