Document:

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                                                                   EXHIBIT 10.18

                                                              as amended through
                                                                  August 4, 2000

                              KPMG CONSULTING, INC.

                          2000 LONG-TERM INCENTIVE PLAN

                                 I. INTRODUCTION

     1.1 PURPOSES. The purposes of the 2000 Long-Term Incentive Plan (this
"Plan") of KPMG Consulting, Inc., a Delaware corporation (the "Company"), are
(i) to align the interests of the Company's stockholders and the recipients of
awards under this Plan by providing a means to increase the proprietary interest
of such recipients in the Company's growth and success, (ii) to advance the
interests of the Company by increasing its ability to attract and retain highly
competent officers, other employees and non-employee directors and (iii) to
motivate such persons to act in the long-term best interests of the Company and
its stockholders.

     1.2 CERTAIN DEFINITIONS.

     "AGREEMENT" shall mean the written agreement evidencing an award hereunder
between the Company and the recipient of such award.

     "BOARD" shall mean the Board of Directors of the Company.

     "BONUS STOCK" shall mean shares of Common Stock which are not subject to a
Restriction Period or Performance Measures.

     "BONUS STOCK AWARD" shall mean an award of Bonus Stock under this Plan.

     "CHANGE IN CONTROL" shall have the meaning set forth in Section 6.8(b).

     "CODE" shall mean the Internal Revenue Code of 1986, as amended.

     "COMMITTEE" shall mean the committee designated by the Board which,
following an IPO, shall consist of two or more members of the Board, each of
whom may be a "Non-Employee Director" within the meaning of Rule 16b-3 under the
Exchange Act.

     "COMMON STOCK" shall mean the common stock, $0.01 par value, of the
Company.

     "COMPANY" shall have the meaning set forth in Section 1.1.

     "DISABILITY" shall mean the inability of the recipient of an award to
perform substantially such recipient's duties and responsibilities for a
continuous period of at least six months, as determined solely by the Committee.

     "DISCRETIONARY DIRECTOR OPTIONS" shall have the meaning set forth in
Section 5.4.

     "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

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     "FAIR MARKET VALUE" shall mean the last sale price of a share of Common
Stock as reported on the Nasdaq National Market on the date as of which such
value is being determined or, if there shall be no reported transactions on
such date, on the next preceding date for which a transaction was reported;
provided, however, that if the Common Stock is not traded on the Nasdaq
National Market, Fair Market Value may be determined by the Committee by
whatever means or method as the Committee, in the good faith exercise of its
discretion, shall at such time deem appropriate.

     "FREE-STANDING SAR" shall mean an SAR which is not issued in tandem with,
or by reference to, an option, which entitles the holder thereof to receive,
upon exercise, shares of Common Stock (which may be Restricted Stock), cash or a
combination thereof with an aggregate value equal to the excess of the Fair
Market Value of one share of Common Stock on the date of exercise over the base
price of such SAR, multiplied by the number of such SARs which are exercised.

     "INCENTIVE STOCK OPTION" shall mean an option to purchase shares of Common
Stock that meets the requirements of Section 422 of the Code, or any successor
provision, which is intended by the Committee to constitute an Incentive Stock
Option.

     "INCUMBENT BOARD" shall have the meaning set forth in Section 6.8(b)(3).

     "IPO" shall mean an initial public offering of Common Stock pursuant to an
effective registration statement under the Securities Act of 1933, as amended.

     "MATURE SHARES" shall mean previously-acquired shares of Common Stock for
which the holder thereof has good title, free and clear of all liens and
encumbrances and which such holder either (i) has held for at least six months
or (ii) has purchased on the open market.

     "NON-EMPLOYEE DIRECTOR" shall mean any director of the Company who is not
an officer or employee of the Company or any Subsidiary and who is not a
partner, principal or employee of KPMG LLP.

     "NON-STATUTORY STOCK OPTION" shall mean an option to purchase shares of
Common Stock which is not an Incentive Stock Option.

     "PERFORMANCE MEASURES" shall mean the criteria and objectives, established
by the Committee, which shall be satisfied or met (i) as a condition to the
exercisability of all or a portion of an option or SAR, (ii) as a condition to
the grant of a Stock Award or (iii) during the applicable Restriction Period or
Performance Period as a condition to the holder's receipt, in the case of a
Restricted Stock Award, of the shares of Common Stock subject to such award, or,
in the case of a Performance Share Award, of the shares of Common Stock subject
to such award and/or of payment with respect to such award. Such criteria and
objectives may include one or more of the following: the attainment by a share
of Common Stock of a specified Fair Market Value for a specified period of time,
earnings per share, return to stockholders (including dividends), return on
equity, earnings of the Company, revenues, market share, cash flow or cost
reduction goals, or any combination of the foregoing. In the sole discretion of
the Committee, the Committee may amend or adjust the Performance Measures or
other terms and conditions of

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an outstanding award in recognition of unusual or nonrecurring events affecting
the Company or its financial statements or changes in law or accounting
principles.

     "PERFORMANCE PERIOD" shall mean any period designated by the Committee
during which the Performance Measures applicable to a Performance Share Award
shall be measured.

     "PERFORMANCE SHARE" shall mean a right, contingent upon the attainment of
specified Performance Measures within a specified Performance Period, to receive
one share of Common Stock, which may be Restricted Stock or, in lieu of all or a
portion thereof, the Fair Market Value of such share of Common Stock in cash.

     "PERFORMANCE SHARE AWARD" shall mean an award of Performance Shares under
this Plan.

     "PERSON" shall have the meaning set forth in Section 6.8(b)(3).

     "RESTRICTED STOCK" shall mean shares of Common Stock which are subject to a
Restriction Period.

     "RESTRICTED STOCK AWARD" shall mean an award of Restricted Stock under this
Plan.

     "RESTRICTION PERIOD" shall mean any period designated by the Committee
during which the Common Stock subject to a Restricted Stock Award may not be
sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or
disposed of, except as provided in this Plan or the Agreement relating to such
award.

     "RETIREMENT" shall mean termination of employment with or service to the
Company by reason of retirement on or after age 65.

     "SAR" shall mean a stock appreciation right which may be a Free-Standing
SAR or a Tandem SAR.

     "STOCK AWARD" shall mean a Restricted Stock Award or a Bonus Stock Award.

     "SUBSIDIARY" and "SUBSIDIARIES" shall have the meanings set forth in
Section 1.4.

     "TANDEM SAR" shall mean an SAR which is granted in tandem with, or by
reference to, an option (including a Non-Statutory Stock Option granted prior to
the date of grant of the SAR), which entitles the holder thereof to receive,
upon exercise of such SAR and surrender for cancellation of all or a portion of
such option, shares of Common Stock (which may be Restricted Stock), cash or a
combination thereof with an aggregate value equal to the excess of the Fair
Market Value of one share of Common Stock on the date of exercise over the base
price of such SAR, multiplied by the number of shares of Common Stock subject to
such option, or portion thereof, which is surrendered.

     "TAX DATE" shall have the meaning set forth in Section 6.5.

     "TEN PERCENT HOLDER" shall have the meaning set forth in Section 2.1(a).

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     1.3 ADMINISTRATION. This Plan shall be administered by the Committee. Any
one or a combination of the following awards may be made under this Plan to
eligible persons: (i) options to purchase shares of Common Stock in the form of
Incentive Stock Options or Non-Statutory Stock Options, (ii) SARs in the form of
Tandem SARs or Free-Standing SARs, (iii) Stock Awards in the form of Restricted
Stock or Bonus Stock and (iv) Performance Shares. The Committee shall, subject
to the terms of this Plan, select eligible persons for participation in this
Plan and determine the form, amount and timing of each award to such persons
and, if applicable, the number of shares of Common Stock, the number of SARs and
the number of Performance Shares subject to such an award, the exercise price or
base price associated with the award, the time and conditions of exercise or
settlement of the award and all other terms and conditions of the award,
including, without limitation, the form of the Agreement evidencing the award.
The Committee may, in its sole discretion and for any reason at any time, take
action such that (i) any or all outstanding options and SARs shall become
exercisable in part or in full, (ii) all or a portion of the Restriction Period
applicable to any outstanding Restricted Stock Award shall lapse, (iii) all or a
portion of the Performance Period applicable to any outstanding Performance
Share Award shall lapse and (iv) the Performance Measures applicable to any
outstanding award (if any) shall be deemed to be satisfied at the maximum or any
other level. The Committee shall, subject to the terms of this Plan, interpret
this Plan and the application thereof, establish rules and regulations it deems
necessary or desirable for the administration of this Plan and may impose,
incidental to the grant of an award, conditions with respect to the award, such
as limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be final, binding and
conclusive.

     The Committee may delegate some or all of its power and authority hereunder
to the Board or either of the Co-Chief Executive Officers or other executive
officer of the Company as the Committee deems appropriate; provided, however,
that the Committee may not delegate its power and authority to either of the
Co-Chief Executive Officers or other executive officer of the Company with
regard to the selection for participation in this Plan of an officer or other
person subject to Section 16 of the Exchange Act or decisions concerning the
timing, pricing or amount of an award to such an officer or other person.

     No member of the Board or Committee, and neither a Co-Chief Executive
Officer nor any other executive officer to whom the Committee delegates any of
its power and authority hereunder, shall be liable for any act, omission,
interpretation, construction or determination made in connection with this Plan
in good faith, and the members of the Board and the Committee and the Co-Chief
Executive Officers or other executive officer shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including attorneys' fees) arising therefrom to the full
extent permitted by law, except as otherwise may be provided in the Company's
Certificate of Incorporation and/or By-laws, and under any directors' and
officers' liability insurance that may be in effect from time to time.

     A majority of the Committee shall constitute a quorum. The acts of the
Committee shall be either (i) acts of a majority of the members of the Committee
present at any meeting at which a quorum is present or (ii) acts approved in
writing by all of the members of the Committee without a meeting.

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     1.4 ELIGIBILITY. Participants in this Plan shall consist of such officers
and other employees, and persons expected to become officers and other
employees, of the Company and its subsidiaries from time to time (individually a
"Subsidiary" and collectively the "Subsidiaries") as the Committee in its sole
discretion may select from time to time. For purposes of this Plan, references
to employment by the Company shall also mean employment by a Subsidiary. The
Committee's selection of a person to participate in this Plan at any time shall
not require the Committee to select such person to participate in this Plan at
any other time. Non-Employee Directors of the Company shall be eligible to
participate in this Plan in accordance with Article V.

     1.5 SHARES AVAILABLE. Subject to adjustment as provided in Section 6.7,
80,000,000 shares of Common Stock shall be available for grants of awards under
this Plan, reduced by the sum of the aggregate number of shares of Common Stock
which become subject to outstanding options, including Discretionary Director
Options, outstanding Free-Standing SARs, outstanding Stock Awards and
outstanding Performance Share Awards. To the extent that shares of Common Stock
subject to an outstanding option (except to the extent shares of Common Stock
are issued or delivered by the Company in connection with the exercise of a
Tandem SAR), Free-Standing SAR, Stock Award or Performance Share Award are not
issued or delivered by reason of the expiration, termination, cancellation or
forfeiture of such award or by reason of the delivery or withholding of shares
of Common Stock to pay all or a portion of the purchase price of an award, if
any, or to satisfy all or a portion of the tax withholding obligations relating
to an award, then such shares of Common Stock shall again be available under
this Plan. Subject to adjustment as provided in Section 6.7, the total number of
shares of Common Stock available under this Plan pursuant to all Stock Awards
and Performance Share Awards shall not exceed 2,000,000 of the total number of
shares of Common Stock available under this Plan.

     Shares of Common Stock shall be made available from authorized and unissued
shares of Common Stock, or authorized and issued shares of Common Stock
reacquired and held as treasury shares or otherwise or a combination thereof.

                 II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

     2.1 STOCK OPTIONS. The Committee may, in its discretion, grant options to
purchase shares of Common Stock to such eligible persons as may be selected by
the Committee. Each option, or portion thereof, that is not an Incentive Stock
Option shall be a Non-Statutory Stock Option. An Incentive Stock Option may not
be granted to any person who is not an employee of the Company or any parent or
subsidiary (as defined in Section 424 of the Code). Each Incentive Stock Option
shall be granted within ten years of the date this Plan is adopted by the Board.
To the extent that the aggregate Fair Market Value (determined as of the date of
grant) of shares of Common Stock with respect to which options designated as
Incentive Stock Options are exercisable for the first time by a participant
during any calendar year (under this Plan or any other plan of the Company or
any parent or subsidiary as defined in Section 424 of the Code) exceeds the
amount (currently $100,000) established by the Code, such options shall
constitute Non-Statutory Stock Options.

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     Options shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem advisable:

     (a) Number of Shares and Purchase Price. The number of shares of Common
Stock subject to an option and the purchase price per share of Common Stock
purchasable upon exercise of the option shall be determined by the Committee;
provided, however, that the purchase price per share of Common Stock purchasable
upon exercise of the option shall not be less than 100% of the Fair Market Value
of a share of Common Stock on the date of grant of such option; and provided
further, that if an Incentive Stock Option shall be granted to any person who,
at the time such option is granted, owns capital stock possessing more than ten
percent of the total combined voting power of all classes of capital stock of
the Company (or of any parent or subsidiary as defined in Section 424 of the
Code) (a "Ten Percent Holder"), the purchase price per share of Common Stock
shall not be less than the price (currently 110% of Fair Market Value) required
by the Code in order to constitute an Incentive Stock Option.

     (b) Exercise Period and Exercisability. The period during which an option
may be exercised shall be determined by the Committee; provided, however, that
no Incentive Stock Option shall be exercised later than ten years after its date
of grant; and provided further, that if an Incentive Stock Option shall be
granted to a Ten Percent Holder, such option shall not be exercised later than
five years after its date of grant. The Committee may, in its discretion,
establish Performance Measures which shall be satisfied or met as a condition to
the grant of an option or to the exercisability of all or a portion of an
option. The Committee shall determine whether an option shall become exercisable
in cumulative or non-cumulative installments and in part or in full at any time.
An exercisable option, or portion thereof, may be exercised only with respect to
whole shares of Common Stock.

     (c) Method of Exercise. An option may be exercised (i) by giving written
notice to the Company specifying the number of whole shares of Common Stock to
be purchased and by accompanying such notice with payment therefor in full (or
by arranging for such payment to the Company's satisfaction) either (A) in cash,
(B) by delivery (either actual delivery or by attestation procedures established
by the Company) of Mature Shares having an aggregate Fair Market Value,
determined as of the date of exercise, equal to the aggregate purchase price
payable by reason of such exercise, (C) in cash by a broker-dealer acceptable to
the Company to whom the optionee has submitted an irrevocable notice of exercise
or (D) a combination of (A) and (B), in each case to the extent set forth in the
Agreement relating to the option, (ii) if applicable, by surrendering to the
Company any Tandem SARs which are cancelled by reason of the exercise of the
option and (iii) by executing such documents as the Company may reasonably
request. The Company shall have sole discretion to disapprove of an election
pursuant to any of clauses (i)(B)-(D). Any fraction of a share of Common Stock
which would be required to pay such purchase price shall be disregarded and the
remaining amount due shall be paid in cash by the optionee. No certificate
representing Common Stock shall be delivered until the full purchase price
therefor and any withholding taxes thereon, as described in Section 6.5, have
been paid (or arrangement made for such payment to the Company's satisfaction).

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     2.2 STOCK APPRECIATION RIGHTS. The Committee may, in its discretion, grant
SARs to such eligible persons as may be selected by the Committee. The Agreement
relating to an SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.

     SARs shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem advisable:

     (a) Number of SARs and Base Price. The number of SARs subject to an award
shall be determined by the Committee. Any Tandem SAR related to an Incentive
Stock Option shall be granted at the same time that such Incentive Stock Option
is granted. The base price of a Tandem SAR shall be the exercise price per share
of Common Stock of the related option. The base price of a Free-Standing SAR
shall be determined by the Committee; provided, however, that such base price
shall not be less than 100% of the Fair Market Value of a share of Common Stock
on the date of grant of such SAR.

     (b) Exercise Period and Exercisability. The Agreement relating to an award
of SARs shall specify whether such award may be settled in shares of Common
Stock (including shares of Restricted Stock) or cash or a combination thereof.
The period for the exercise of an SAR shall be determined by the Committee;
provided, however, that no Tandem SAR shall be exercised later than the
expiration, cancellation, forfeiture or other termination of the related option.
The Committee may, in its discretion, establish Performance Measures which shall
be satisfied or met as a condition to the grant of an SAR or to the
exercisability of all or a portion of an SAR. The Committee shall determine
whether an SAR may be exercised in cumulative or non-cumulative installments and
in part or in full at any time. An exercisable SAR, or portion thereof, may be
exercised, in the case of a Tandem SAR, only with respect to whole shares of
Common Stock and, in the case of a Free-Standing SAR, only with respect to a
whole number of SARs. If an SAR is exercised for shares of Restricted Stock, a
certificate or certificates representing such Restricted Stock shall be issued
in accordance with Section 3.2(c) and the holder of such Restricted Stock shall
have such rights of a stockholder of the Company as determined pursuant to
Section 3.2(d). Prior to the exercise of an SAR for shares of Common Stock,
including Restricted Stock, the holder of such SAR shall have no rights as a
stockholder of the Company with respect to the shares of Common Stock subject to
such SAR.

     (c) Method of Exercise. A Tandem SAR may be exercised (i) by giving written
notice to the Company specifying the number of whole SARs which are being
exercised, (ii) by surrendering to the Company any options which are cancelled
by reason of the exercise of the Tandem SAR and (iii) by executing such
documents as the Company may reasonably request. A Free-Standing SAR may be
exercised (i) by giving written notice to the Company specifying the whole
number of SARs which are being exercised and (ii) by executing such documents as
the Company may reasonably request.

     2.3 TERMINATION OF EMPLOYMENT OR SERVICE. Subject to the requirements of
the Code, all of the terms relating to the exercise, cancellation or other
disposition of an option or SAR upon a termination of employment with or service
to the Company of the recipient of such option or SAR, as the case may be,
whether by reason of Disability, Retirement, death or any other reason, shall be
determined by the Committee.

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                                III. STOCK AWARDS

     3.1 STOCK AWARDS. The Committee may, in its discretion, grant Stock Awards
to such eligible persons as may be selected by the Committee. The Agreement
relating to a Stock Award shall specify whether the Stock Award is a Restricted
Stock Award or Bonus Stock Award.

     3.2 TERMS OF STOCK AWARDS. Stock Awards shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem advisable.

     (a) Number of Shares and Other Terms. The number of shares of Common Stock
subject to a Restricted Stock Award or Bonus Stock Award and the Performance
Measures (if any) and Restriction Period applicable to a Restricted Stock Award
shall be determined by the Committee. Bonus Stock Awards shall not be subject to
any Performance Measures or Restriction Periods.

     (b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock
Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of the
shares of Common Stock subject to such award (i) if specified Performance
Measures are satisfied or met during the specified Restriction Period or

(ii) if the holder of such award remains continuously in the employment of or
service to the Company during the specified Restriction Period and for the
forfeiture of all or a portion of the shares of Common Stock subject to such
award (x) if specified Performance Measures are not satisfied or met during the
specified Restriction Period or (y) if the holder of such award does not remain
continuously in the employment of or service to the Company during the specified
Restriction Period.

     (c) Share Certificates. During the Restriction Period, a certificate or
certificates representing a Restricted Stock Award may be registered in the
holder's name or a nominee name at the discretion of the Company and may bear a
legend, in addition to any legend which may be required pursuant to Section 6.6,
indicating that the ownership of the shares of Common Stock represented by such
certificate is subject to the restrictions, terms and conditions of this Plan
and the Agreement relating to the Restricted Stock Award. As determined by the
Committee, all certificates registered in the holder's name shall be deposited
with the Company, together with stock powers or other instruments of assignment
(including a power of attorney), each endorsed in blank with a guarantee of
signature if deemed necessary or appropriate by the Company, which would permit
transfer to the Company of all or a portion of the shares of Common Stock
subject to the Restricted Stock Award in the event such award is forfeited in
whole or in part. Upon termination of any applicable Restriction Period (and the
satisfaction or attainment of applicable Performance Measures), or upon the
grant of a Bonus Stock Award, in each case subject to the Company's right to
require payment of any taxes in accordance with Section 6.5, a certificate or
certificates evidencing ownership of the requisite number of shares of Common
Stock shall be delivered to the holder of such award.

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     (d) Rights with Respect to Restricted Stock Awards. Unless otherwise set
forth in the Agreement relating to a Restricted Stock Award, and subject to the
terms and conditions of the Agreement relating to a Restricted Stock Award, the
holder of such award shall have all rights as a stockholder of the Company,
including, but not limited to, voting rights, the right to receive dividends and
the right to participate in any capital adjustment applicable to all holders of
Common Stock; provided, however, that a distribution with respect to shares of
Common Stock, other than a regular cash dividend, shall be deposited with the
Company and shall be subject to the same restrictions as the shares of Common
Stock with respect to which such distribution was made.

     3.3 TERMINATION OF EMPLOYMENT OR SERVICE. All of the terms relating to the
satisfaction of Performance Measures and the termination of the Restriction
Period relating to a Restricted Stock Award, or any forfeiture and cancellation
of such award upon a termination of employment with or service to the Company of
the recipient of such award, whether by reason of Disability, Retirement, death
or any other reason, shall be determined by the Committee.

                          IV. PERFORMANCE SHARE AWARDS

     4.1 PERFORMANCE SHARE AWARDS. The Committee may, in its discretion, grant
Performance Share Awards to such eligible persons as may be selected by the
Committee.

     4.2 TERMS OF PERFORMANCE SHARE AWARDS. Performance Share Awards shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable.

     (a) Number of Performance Shares and Performance Measures. The number of
Performance Shares subject to any award and the Performance Measures and
Performance Period applicable to such award shall be determined by the
Committee.

     (b) Vesting and Forfeiture. The Agreement relating to a Performance Share
Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of such
award, if specified Performance Measures are satisfied or met during the
specified Performance Period, and for the forfeiture of all or a portion of such
award, if specified Performance Measures are not satisfied or met during the
specified Performance Period.

     (c) Settlement of Vested Performance Share Awards. The Agreement relating
to a Performance Share Award (i) shall specify whether such award may be settled
in shares of Common Stock (including shares of Restricted Stock) or cash or a
combination thereof and (ii) may specify whether the holder thereof shall be
entitled to receive, on a current or deferred basis, dividend equivalents, and,
if determined by the Committee, interest on or the deemed reinvestment of any
deferred dividend equivalents, with respect to the number of shares of Common
Stock subject to such award. If a Performance Share Award is settled in shares
of Restricted Stock, a certificate or certificates representing such Restricted
Stock shall be issued in accordance with Section 3.2(c) and the holder of such
Restricted Stock shall have such rights of a stockholder of the Company as
determined pursuant to Section 3.2(d). Prior to the settlement of a Performance
Share Award in shares of Common Stock, including Restricted Stock, the

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     holder of such award shall have no rights as a stockholder of the Company
with respect to the shares of Common Stock subject to such award.

     4.3 TERMINATION OF EMPLOYMENT OR SERVICE. All of the terms relating to the
satisfaction of Performance Measures and the termination of the Performance
Period relating to a Performance Share Award, or any forfeiture and cancellation
of such award upon a termination of employment with or service to the Company of
the recipient of such award, whether by reason of Disability, Retirement, death
or other termination, shall be determined by the Committee.

                V. PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS

     5.1 ELIGIBILITY. Each Non-Employee Director shall be granted options to
purchase shares of Common Stock in accordance with this Article V. All options
granted under this Article V shall constitute Non-Statutory Stock Options.

     5.2 AUTOMATIC GRANTS OF STOCK OPTIONS. Each Non-Employee Director shall
automatically be granted Non-Statutory Stock Options as follows:

     (a) Time of Grant. Automatic grants of Non-Statutory Stock Options shall be
made on the dates specified below:

     (1) Each person who is serving as a Non-Employee Director as of January 31,
2000 shall automatically be granted, on such date, an option to purchase 40,000
shares of Common Stock.

     (2) Each person who is first elected or first begins to serve as a
Non-Employee Director after January 31, 2000 other than by reason of termination
of employment shall automatically be granted, on the date of such initial
election or service, an option to purchase 40,000 shares of Common Stock.

     (3) Each person who is a Non-Employee Director immediately following any
annual meeting of stockholders of the Company held after 2000 shall
automatically be granted, on the date of such meeting, an option to purchase
10,000 shares of Common Stock.

     (b) Purchase Price. The purchase price per share of Common Stock
purchasable upon exercise of an option granted under this Section 5.2 shall be
100% of the Fair Market Value of a share of Common Stock on the date of grant of
such option.

     (c) Exercise Period and Exercisability. Each option granted under Section
5.2(a)(1) or Section 5.2(a)(2) shall be fully exercisable on and after the one
year anniversary of its date of grant and each option granted under Section
5.2(a)(3) shall be fully exercisable on and after the day preceding the day of
the next annual meeting of stockholders of the Company following its date of
grant. Each option granted under this Section 5.2 shall expire 10 years after
its date of grant. An exercisable option, or portion thereof, may be exercised
in whole or in part only with respect to whole shares of Common Stock. Options
granted under this Section 5.2 shall be exercisable in accordance with Section
2.1(c).

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     5.3 TERMINATION OF DIRECTORSHIP. (a) Disability. If the recipient of an
option granted under Section 5.2 ceases to be a director of the Company by
reason of Disability, each such option held by the holder thereof shall be
exercisable only to the extent such option is exercisable on the effective date
of such recipient's ceasing to be a director and may thereafter be exercised by
such holder (or such holder's legal representative or similar person) until and
including the earlier to occur of the (i) date which is one year after the
effective date of such recipient's ceasing to be a director and (ii) the
expiration date of the term of such option.

     (b) Retirement. If the recipient of an option granted under Section 5.2
ceases to be a director of the Company by reason of Retirement, each such option
held by the holder thereof shall be exercisable only to the extent such option
is exercisable on the effective date of such recipient's ceasing to be a
director and may thereafter be exercised by such holder (or such holder's legal
representative or similar person) until and including the earlier to occur of
the (i) date which is three months after the effective date of such recipient's
ceasing to be a director and (ii) the expiration date of the term of such
option.

     (c) Death. If the recipient of an option granted under Section 5.2 ceases
to be a director of the Company by reason of death, each such option held by the
holder thereof shall be exercisable only to the extent such option is
exercisable on the effective date of such recipient's ceasing to be a director
and may thereafter be exercised by such holder's executor, administrator, legal
representative, beneficiary or similar person until and including the earlier to
occur of the (i) date which is one year after the date of such recipient's death
and (ii) the expiration date of the term of such option.

     (d) Other Termination. If the recipient of an option granted under Section
5.2 ceases to be a director of the Company for any reason other than Disability,
Retirement or death, each such option held by the holder thereof shall be
exercisable only to the extent such option is exercisable on the effective date
of such recipient's ceasing to be a director and may thereafter be exercised by
such holder (or such holder's legal representative or similar person) until and
including the earlier to occur of the (i) date which is three months after the
effective date of such recipient's ceasing to be a director and (ii) the
expiration date of the term of such option.

     (e) Death Following Termination of Directorship. If the recipient of an
option granted under Section 5.2 dies during the period set forth in Section
5.3(a) following such recipient's ceasing to be a director of the Company by
reason of Disability, or if such recipient dies during the period set forth in
Section 5.3(b) following such recipient's Retirement, or if such a recipient
dies during the period set forth in Section 5.3(d) following such recipient's
ceasing to be a director for any reason other than by reason of Disability or
Retirement, each such option held by the holder thereof shall be exercisable
only to the extent that such option is exercisable on the date of the
recipient's death and may thereafter be exercised by such holder's executor,
administrator, legal representative, beneficiary or similar person until and
including the earlier to occur of the

(i) date which is one year after the date of such recipient's death and (ii) the
expiration date of the term of such option.

                                       11

<PAGE>   12

     5.4 DISCRETIONARY GRANTS OF STOCK OPTIONS. The Committee may, in its
discretion, grant additional options to purchase shares of Common Stock
("Discretionary Director Options") to all Non-Employee Directors or to any one
or more of them. Each Discretionary Director Option shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem advisable:

     (a) Number of Shares and Purchase Price. The number of shares of Common
Stock subject to a Discretionary Director Option and the purchase price per
share of Common Stock purchasable upon exercise of the option shall be
determined by the Committee; provided, however, that the purchase price per
share of Common Stock purchasable upon exercise of the option shall not be less
than 100% of the Fair Market Value of a share of Common Stock on the date of
grant of such option.

     (b) Exercise Period and Exercisability. The period during which a
Discretionary Director Option may be exercised shall be determined by the
Committee. The Committee may, in its discretion, establish Performance Measures
which shall be satisfied or met as a condition to the grant of a Discretionary
Director Option or to the exercisability of all or a portion of a Discretionary
Director Option. The Committee shall determine whether a Discretionary Director
Option shall become exercisable in cumulative or non-cumulative installments and
in part or in full at any time. An exercisable Director Discretionary Option, or
portion thereof, may be exercised only with respect to whole shares of Common
Stock. Each Discretionary Director Option shall be exercisable in accordance
with Section 2.1(c).

     (c) Termination of Directorship. All of the terms relating to the exercise,
cancellation or other disposition of a Discretionary Director Option upon a
termination of service as a director of the Company of the recipient of a
Discretionary Director Option, whether by reason of Disability, Retirement,
death or any other reason, shall be determined by the Committee.

                                   VI. GENERAL

     6.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted to the
stockholders of the Company for approval within 12 months following its adoption
by the Board and, if approved, shall become effective as of the date of such
adoption by the Board. No option may be exercised prior to the date of such
stockholder approval. This Plan shall terminate 10 years after its effective
date, unless terminated earlier by the Board. Termination of this Plan shall not
affect the terms or conditions of any award granted prior to such termination.

     6.2 AMENDMENTS. The Board may amend this Plan as it shall deem advisable,
subject to any requirement of stockholder approval required by applicable law,
rule or regulation, including Section 422 of the Code; provided, however, that
no amendment shall be made without stockholder approval if such amendment would
(a) increase the maximum number of shares of Common Stock available under this
Plan (subject to Section 6.7), (b) effect any change inconsistent with Section
422 of the Code or (c) extend the term of this Plan. No amendment may impair the
rights of a holder of an outstanding award without the consent of such holder.

                                       12

<PAGE>   13

     6.3 AGREEMENT. No award shall be valid until an Agreement is executed by
the Company and the recipient of such award and, upon execution by each party
and delivery of the Agreement to the Company, such award shall be effective as
of the effective date set forth in the Agreement.

     6.4 NON-TRANSFERABILITY OF AWARDS. Unless the Committee provides for the
transferability of a particular award and such transferability is specified in
the Agreement relating to such award, no award shall be transferable other than
by will, the laws of descent and distribution or pursuant to beneficiary
designation procedures stated in Section 6.11 or otherwise approved by the
Company. Except to the extent permitted by the foregoing sentence or the
Agreement relating to the Award, each award may be exercised or settled during
the recipient's lifetime only by the recipient or the recipient's legal
representative or similar person. Except to the extent permitted by the second
preceding sentence or the Agreement relating to the Award, no award may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of any such award, such award
and all rights thereunder shall immediately become null and void.

     6.5 TAX WITHHOLDING. The Company shall have the right to require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash pursuant to an award made hereunder, payment by the holder of such award of
any federal, state, local or other taxes which may be required to be withheld or
paid in connection with such award. An Agreement may provide that (i) the
Company shall withhold whole shares of Common Stock which would otherwise be
delivered to a holder, having an aggregate Fair Market Value determined as of
the date the obligation to withhold or pay taxes arises in connection with an
award (the "Tax Date"), or withhold an amount of cash which would otherwise be
payable to a holder, in the amount necessary to satisfy any such obligation or
(ii) the holder may satisfy any such obligation by any of the following means:
(A) a cash payment to the Company, (B) delivery (either actual delivery or by
attestation procedures established by the Company) to the Company of Mature
Shares having an aggregate Fair Market Value, determined as of the Tax Date,
equal to the amount necessary to satisfy any such obligation, (C) authorizing
the Company to withhold whole shares of Common Stock which would otherwise be
delivered having an aggregate Fair Market Value, determined as of the Tax Date,
or withhold an amount of cash which would otherwise be payable to a holder,
equal to the amount necessary to satisfy any such obligation, (D) in the case of
the exercise of an option, a cash payment by a broker-dealer acceptable to the
Company to whom the optionee has submitted an irrevocable notice of exercise or
(E) any combination of (A), (B) and (C), in each case to the extent set forth in
the Agreement relating to the award; provided, however, that the Company shall
have sole discretion to disapprove of an election pursuant to any of clauses
(ii)(B)-(E). Any fraction of a share of Common Stock which would be required to
satisfy such an obligation shall be disregarded and the remaining amount due
shall be paid in cash by the holder.

     6.6 RESTRICTIONS ON SHARES. Each award made hereunder shall be subject to
the requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any

                                       13

<PAGE>   14

other action is necessary or desirable as a condition of, or in connection with,
the exercise or settlement of such award or the delivery of shares thereunder,
such award shall not be exercised or settled and such shares shall not be
delivered unless such listing, registration, qualification, consent, approval or
other action shall have been effected or obtained, free of any conditions not
acceptable to the Company. The Committee may provide for such restrictions upon
the transferability of shares of Common Stock delivered pursuant to any award
made hereunder as it deems appropriate and such restrictions shall be specified
in the Agreement relating to such award. The Company may require that
certificates evidencing shares of Common Stock delivered pursuant to any award
made hereunder bear a legend indicating that the sale, transfer or other
disposition thereof by the holder is prohibited except in compliance with the
Securities Act of 1933, as amended, and the rules and regulations thereunder and
such other restrictions, if any, specified in the Agreement relating to the
award pursuant to which such shares were delivered.

     6.7 ADJUSTMENT. In the event of any stock split, reverse stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a regular cash dividend, the number and class of securities available under
this Plan, the maximum number of shares available for Stock Awards and
Performance Share Awards, the number and class of securities subject to each
outstanding option and the purchase price per security, the number and class of
securities subject to each option to be granted to Non-Employee Directors
pursuant to Section 5.2, the terms of each outstanding SAR, the number and class
of securities subject to each outstanding Stock Award or Performance Share
Award, and the terms of each outstanding Restricted Stock Award or Performance
Share Award shall be appropriately adjusted by the Committee, such adjustments
to be made in the case of outstanding options and SARs without an increase in
the aggregate purchase price or base price. The decision of the Committee
regarding any such adjustment shall be final, binding and conclusive. If any
such adjustment would result in a fractional security being (a) available under
this Plan, such fractional security shall be disregarded, or (b) subject to an
award under this Plan, the Company shall pay the holder of such award, in
connection with the first vesting, exercise or settlement of such award in whole
or in part occurring after such adjustment, an amount in cash determined by
multiplying (i) the fraction of such security (rounded to the nearest hundredth)
by (ii) the excess, if any, of (A) the Fair Market Value on the vesting,
exercise or settlement date over (B) the exercise or base price, if any, of such
award.

     6.8 CHANGE IN CONTROL.

     (a) (1) Notwithstanding any provision in this Plan or any Agreement, in the
event of a Change in Control in connection with which the holders of Common
Stock receive shares of common stock that are registered under Section 12 of the
Exchange Act, (i) all outstanding options and SARS shall immediately become
exercisable in full, (ii) the Restriction Period applicable to any outstanding
Restricted Stock Award shall lapse, (iii) the Performance Period applicable to
any outstanding Performance Share Award shall lapse, (iv) the Performance
Measures applicable to any outstanding award shall be deemed to be satisfied at
the maximum level and (v) there shall be substituted for each share of Common
Stock available under this Plan, whether or not then subject to an outstanding
award, the number and class of shares into which each outstanding share of
Common Stock shall be converted pursuant to such Change in Control. In the event
of any such substitution, the purchase price per share in the case of an

                                       14

<PAGE>   15

option and the base price in the case of an SAR shall be appropriately adjusted
by the Committee (whose determination shall be final, binding and conclusive),
such adjustments to be made in the case of outstanding options and SARs without
an increase in the aggregate purchase price or base price.

     (2) Notwithstanding any provision in this Plan or any Agreement, in the
event of any Change in Control other than a Change in Control in connection with
which the holders of Common Stock receive shares of common stock that are
registered under Section 12 of the Exchange Act, each outstanding award shall be
surrendered to the Company by the holder thereof, and each such award shall
immediately be cancelled by the Company, and the holder shall receive, within
ten days of the occurrence of a Change in Control, a cash payment from the
Company in an amount equal to (i) in the case of an option, the number of shares
of Common Stock then subject to such option, multiplied by the excess, if any,
of the greater of (A) the highest per share price offered to stockholders of the
Company in any transaction whereby the Change in Control takes place or (B) the
Fair Market Value of a share of Common Stock on the date of occurrence of the
Change in Control, over the purchase price per share of Common Stock subject to
the option, (ii) in the case of a Free-Standing SAR, the number of shares of
Common Stock then subject to such SAR, multiplied by the excess, if any, of the
greater of (A) the highest per share price offered to stockholders of the
Company in any transaction whereby the Change in Control takes place or (B) the
Fair Market Value of a share of Common Stock on the date of occurrence of the
Change in Control, over the base price of the SAR, (iii) in the case of a
Restricted Stock Award or Performance Share Award, the number of shares of
Common Stock or the number of Performance Shares, as the case may be, then
subject to such award, multiplied by the greater of (A) the highest per share
price offered to stockholders of the Company in any transaction whereby the
Change in Control takes place or (B) the Fair Market Value of a share of Common
Stock on the date of occurrence of the Change in Control. In the event of such a
Change in Control, each Tandem SAR shall be surrendered by the holder thereof
and shall be cancelled simultaneously with the cancellation of the related
option. The Company may, but is not required to, cooperate with any person who
is subject to Section 16 of the Exchange Act to assure that any cash payment in
accordance with the foregoing to such person is made in compliance with Section
16 and the rules and regulations thereunder.

     (b) "Change in Control" shall mean:

     (1) a sale or transfer of all or substantially all of the assets of the
Company on a consolidated basis in any transaction or series of related
transactions;

     (2) any merger, consolidation or reorganization to which the Company is a
party, except for a merger, consolidation or reorganization in which the Company
is the surviving corporation and, after giving effect to such merger,
consolidation or reorganization, the holders of the Company's outstanding equity
(on a fully diluted basis) immediately prior to the merger, consolidation or
reorganization will own in the aggregate immediately following the merger,
consolidation or reorganization the Company's outstanding equity (on a fully
diluted basis) either (i) having the ordinary voting power to elect a majority
of the members of the Company's board of directors to be elected by the holders
of Common Stock and any other class which votes together with the Common Stock
as a single class or (ii) representing at least 50% of the equity value of the
Company as reasonably determined by the Board;

                                       15

<PAGE>   16

     (3) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
such Board; provided, however, that any individual who becomes a director of the
Company subsequent to the date hereof whose election, or nomination for election
by the holders of the Company's equity, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board shall be deemed to
have been a member of the Incumbent Board; and provided further, that no
individual who was initially elected as a director of the Company as a result of
an actual or threatened election contest, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any
individual, entity or group (a "Person"), including any "person" within the
meaning of Section 13(d) of the Exchange Act, other than the Board shall be
deemed to have been a member of the Incumbent Board; or

     (4) any Person other than KPMG LLP or its affiliates, acquires beneficial
ownership of 30% or more of the outstanding equity of the Company generally
entitled to vote on the election of directors.

     6.9 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any right
to participate in this Plan. Neither this Plan nor any award made hereunder
shall confer upon any person any right to continued employment by the Company,
any Subsidiary or any affiliate of the Company or affect in any manner the right
of the Company, any Subsidiary or any affiliate of the Company to terminate the
employment of any person at any time without liability hereunder.

     6.10 RIGHTS AS STOCKHOLDER. No person shall have any right as a stockholder
of the Company with respect to any shares of Common Stock or other equity
security of the Company which is subject to an award hereunder unless and until
such person becomes a stockholder of record with respect to such shares of
Common Stock or equity security.

     6.11 DESIGNATION OF BENEFICIARY. If permitted by the Company, a holder of
an award may file with the Committee a written designation of one or more
persons as such holder's beneficiary or beneficiaries (both primary and
contingent) in the event of the holder's death. To the extent an outstanding
option or SAR granted hereunder is exercisable, such beneficiary or
beneficiaries shall be entitled to exercise such option or SAR. Each beneficiary
designation shall become effective only when filed in writing with the Committee
during the holder's lifetime on a form prescribed by the Committee. The spouse
of a married holder domiciled in a community property jurisdiction shall join in
any designation of a beneficiary other than such spouse. The filing with the
Committee of a new beneficiary designation shall cancel all previously filed
beneficiary designations. If a holder fails to designate a beneficiary, or if
all designated beneficiaries of a holder predecease the holder, then each
outstanding option and SAR hereunder held by such holder, to the extent
exercisable, may be exercised by such holder's executor, administrator, legal
representative or similar person.

     6.12 GOVERNING LAW. This Plan, each award hereunder and the related
Agreement, and all determinations made and actions taken pursuant thereto, to
the extent not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of Delaware and construed in
accordance therewith without giving effect to principles of conflicts of laws.

                                       16

<PAGE>   17

     6.13 FOREIGN EMPLOYEES. Without the amendment of this Plan, the Committee
may grant awards to eligible persons who are subject to the laws of foreign
countries or jurisdictions on such terms and conditions different from those
specified in this Plan as may in the judgment of the Committee be necessary or
desirable to foster and promote achievement of the purposes of this Plan and, in
furtherance of such purposes the Committee may make such modifications,
amendments, procedures, subplans and the like as may be necessary or advisable
to comply with provisions of laws of other countries or jurisdictions in which
the Company or its Subsidiaries operate or have employees.

     6.14 ADDITIONAL PROVISIONS APPLICABLE TO OPTIONS GRANTED PRIOR TO IPO. In
order to comply with certain requirements of the California Corporate Securities
Law of 1968, as amended, this Section shall apply to options granted under this
Plan prior to an IPO (a "Pre-IPO Option"). The terms set forth in the Agreements
pursuant to which Pre-IPO Options are granted on January 31, 2000 (the "January
31, 2000 Options") relating to (i) the period during which an option may be
exercised, (ii) the exercise, cancellation or other disposition of an option
upon a termination of employment with the Company of the recipient of such
option, whether by reason of Disability, Retirement, death or any other reason,
(iii) restrictions on the transferability of an option and (iv) the providing of
annual financial statements to the holder of an option are hereby incorporated
into this Plan by reference as if set forth herein verbatim and shall apply in
all respects only to all Pre-IPO Options granted to employees; provided,
however, that Pre-IPO Options may be granted under this Plan having exercise
periods different from those of the January 31, 2000 Options so long as each
such Pre-IPO Option becomes exercisable at a rate of at least 20% per year
during the five-year period commencing on the date of grant of such Pre-IPO
Option.

                                       17

<PAGE>   18
[INSERT DATE]

[NAME AND ADDRESS OF OPTIONEE]

                           Re:      Award Notice of Stock Option Grant

Dear [NAME OF OPTIONEE]:

We are pleased to notify you that in recognition of your contributions toward
the future success of KPMG Consulting, Inc., you have been awarded an option to
purchase shares of common stock of KPMG Consulting, Inc.
(the "Company").  Certain terms of your award follow:

Option:                    You have been awarded a non-statutory stock option to
                           purchase from the Company [INSERT NUMBER] shares of
                           its common stock, $0.01 par value, subject to
                           adjustment, as provided in Section 3.4 of the KPMG
                           Consulting, Inc. Stock Option Agreement for Employees
                           (the "Agreement").

Option Date:               January 31, 2000

Exercise Price:            [INSERT PRICE] per share, subject to adjustment, as
                           provided in Section 3.4 of the Agreement.

Exercise Schedule:         Except as otherwise provided in Section 2.2 of the
                           Agreement and in Section 6.8 of the KPMG Consulting,
                           Inc. 2000 Long-Term Incentive Plan (the "Plan"), the
                           Option shall become exercisable (i) on the first
                           anniversary of the Option Date with respect to 25% of
                           the number of shares subject thereto on the Option
                           Date, (ii) on the second anniversary of the Option
                           Date with respect to an additional 25% of the number
                           of shares subject thereto on the Option Date, (iii)
                           on the third anniversary of the Option Date with
                           respect to an additional 25% of the number of shares
                           subject thereto on the Option Date and (iv) on the
                           fourth anniversary of the Option Date with respect to
                           the remaining 25% of the number of shares subject
                           thereto on the Option Date.

Expiration Date:           Except to the extent earlier terminated pursuant
                           to Section 2.2 or 2.5 of the Agreement or
                           earlier exercised pursuant to Section 2.3 of the
                           Agreement, the Option shall terminate at 5:00 p.m.,
                           New York time, on January 30, 2010.

In addition to the terms stated in this Award Notice, the Option shall be
subject to the terms and conditions of the Agreement and the Plan, copies of
which are attached hereto.

<PAGE>   19
We congratulate you on this recognition of your importance to our organization
and its future.

                                             KPMG CONSULTING, INC.

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

Acknowledgment, Acceptance and Agreement:

By signing below and returning this Award Notice to KPMG Consulting, Inc., c/o
Morgan Stanley Dean Witter at the address stated herein, I hereby acknowledge
receipt of the Agreement and the Plan, accept the Option granted to me and agree
to be bound by the terms and conditions of this Award Notice, the Agreement and
the Plan.

------------------------------              ----------------------
Optionee                                    Date

                                       2
<PAGE>   20

                           CONSULTING/QUALIFIED FORM

                                       #1

<PAGE>   21

                              KPMG CONSULTING, INC.

                             STOCK OPTION AGREEMENT

                                  FOR EMPLOYEES

               KPMG Consulting, Inc., a Delaware corporation (the "Company"),
hereby grants to the individual (the "Optionee") named in the award notice
attached hereto (the "Award Notice") as of the date set forth in the Award
Notice (the "Option Date"), pursuant to the provisions of the KPMG Consulting,
Inc. 2000 Long-Term Incentive Plan (the "Plan"), a non-statutory stock option to
purchase from the Company the number of shares of its common stock, $0.01 par
value ("Stock"), set forth in the Award Notice (the "Option"), at the price per
share set forth in the Award Notice, upon and subject to the terms and
conditions set forth below, in the Award Notice and in the Plan. Capitalized
terms not defined herein shall have the meanings specified in the Plan.

               1.      Option Subject to Acceptance of Agreement. The Option
shall be null and void unless the Optionee shall accept this Agreement by
executing the Award Notice in the space provided therefore and returning an
original execution copy of the Award Notice to the Company.

               2.      Time and Manner of Exercise of Option.

               2.1.    Maximum Term of Option. In no event may the Option be
exercised, in whole or in part, after the expiration date set forth in the Award
Notice (the "Expiration Date").

               2.2.    Exercise of Option. (a) The Option shall become
exercisable in accordance with the exercise schedule set forth in the Award
Notice (the "Exercise Schedule").

               (b) If the Optionee's employment with the Company terminates
by reason of Disability, the Option shall be exercisable only to the extent it
is exercisable on the effective date of the Optionee's termination of employment
and may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
one year after the effective date of the Optionee's termination of employment
and (ii) the Expiration Date.

               (c) If the Optionee's employment with the Company terminates
by reason of Retirement, the Option shall be exercisable only to the extent it
is exercisable on the effective date of the Optionee's termination of employment
and may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
three months after the effective date of the Optionee's termination of
employment and (ii) the Expiration Date.

               (d) If the Optionee's employment with the Company terminates
by reason of death, the Option shall be exercisable only to the extent it is
exercisable on the date of death and may thereafter be exercised by the
Optionee's Legal Representative or Permitted Transferees, as

                                       2

<PAGE>   22

the case may be, until and including the earlier to occur of (i) the date which
is one year after the date of death and (ii) the Expiration Date.

               (e) If the Optionee's employment with the Company terminates
for any reason other than Disability, Retirement or death, the Option shall be
exercisable only to the extent it is exercisable on the effective date of the
Optionee's termination of employment and may thereafter be exercised by the
Optionee or the Optionee's Legal Representative until and including the earlier
to occur of (i) the date which is three months after the effective date of the
Optionee's termination of employment and (ii) the Expiration Date.

               (f) If the Optionee dies during the period set forth in
Section 2.2(b) following termination of employment by reason of Disability, or
if the Optionee dies during the period set forth in Section 2.2(c) following
termination of employment by reason of Retirement, or if the Optionee dies
during the period set forth in Section 2.2(e) following termination of
employment for any reason other than Disability or Retirement, the Option shall
be exercisable only to the extent it is exercisable on the date of death and may
thereafter be exercised by the Optionee's Legal Representative or Permitted
Transferees, as the case may be, until and including the earlier to occur of (i)
the date which is one year after the date of death and (ii) the Expiration Date.

               (g) Notwithstanding Sections 2.1 and 2.4 and the exercise
periods set forth in the Award Notice and in subsections (b), (c), (d), (e) and
(f) of this Section 2.2, in the event the Company is involved in a business
combination, including a business combination which is intended to be treated as
a pooling of interests for financial accounting purposes (a "Pooling
Transaction"), in connection with which the Optionee receives a substitute
option to purchase securities of any entity, including an entity directly or
indirectly acquiring the Company:

               (1) if the acquisition of the substitute option by the
         Optionee may be treated as a purchase for purposes of Section 16(b) of
         the Exchange Act and the Optionee's employment with the Company is
         terminated for any reason during the nine-month period beginning three
         months prior to the consummation of such business combination, then the
         Option (or option in substitution thereof) shall be exercisable to the
         extent set forth in the Award Notice and above in this Section 2.2
         until and including the latest to occur of (i) the date determined
         pursuant to the then applicable subsection (b), (c), (d), (e) or (f) of
         this Section 2.2, (ii) the date which is seven months after the
         consummation of such business combination and (iii) the Expiration
         Date; or

               (2) if the Optionee is restricted from disposing of a security
         (or security underlying a security) issued in connection with the
         Pooling Transaction and the purpose of such restriction is to ensure
         that the Pooling Transaction is accounted for as a pooling of interests
         (the "Pooling Restriction") and the Optionee's employment with the
         Company is terminated for any reason during the nine-month period
         beginning three months prior to the consummation of such business
         combination, then the Option (or option in substitution thereof) shall
         be exercisable to the extent set forth in the Award Notice and above in
         this Section 2.2 until and including the latest to occur of (i) the
         date determined pursuant to the then applicable subsection (b), (c),
         (d), (e) or (f) of this Section 2.2, (ii) the date which is one month
         after the date of expiration of the Pooling Restriction and (iii) the
         Expiration Date.

                                       3

<PAGE>   23

               2.3.    Method of Exercise. Subject to the limitations set forth
in this Agreement, the Option may be exercised by the Optionee (a) by giving
written notice to the Company specifying the number of whole shares of Stock to
be purchased and by accompanying such notice with payment therefor in full (or
by arranging for such payment to the Company's satisfaction) either (i) in cash,
(ii) by delivery to the Company (either actual delivery or by attestation
procedures established by the Company) of Mature Shares having an aggregate Fair
Market Value, determined as of the date of exercise, equal to the aggregate
purchase price payable pursuant to the Option by reason of such exercise, (iii)
in cash by a broker-dealer acceptable to the Company to whom the Optionee has
submitted an irrevocable notice of exercise or (iv) by a combination of (i) and
(ii), and (b) by executing such documents as the Company may reasonably request.
The Company shall have sole discretion to disapprove of an election pursuant to
any of clauses (ii) - (iv). Any fraction of a share of Stock which would be
required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the Optionee. No certificate representing a
share of Stock shall be delivered until the full purchase price therefor and any
withholding taxes thereon, as described in Section 3.3, have been paid.

               2.4.    Termination of Option. (a) Subject to Section 2.2(g), in
no event may the Option be exercised after it terminates as set forth in this
Section 2.4. The Option shall terminate, to the extent not earlier terminated
pursuant to Sections 2.2 or 2.5 or exercised pursuant to Section 2.3, on the
Expiration Date.

               (b) In the event that rights to purchase all or a portion of
the shares of Stock subject to the Option expire or are exercised, cancelled or
forfeited, the Optionee shall, upon the Company's request, promptly return this
Agreement to the Company for full or partial cancellation, as the case may be;
provided, however, that such cancellation shall be effective regardless of
whether the Optionee returns this Agreement. If the Optionee continues to have
rights to purchase shares of Stock hereunder, the Company shall, within 10 days
of the Optionee's delivery of this Agreement to the Company, either (i) mark
this Agreement to indicate the extent to which the Option has expired or been
exercised, cancelled or forfeited or (ii) issue to the Optionee a substitute
option agreement applicable to such rights, which agreement shall otherwise be
substantially similar to this Agreement in form and substance.

               2.5.    Termination of Option and Forfeiture of Option Gain.  (a)
  If the Optionee:

               (1) breaches (i) any of the provisions of Sections 8.1(a) and
(b), 8.2, 8.5, 8.6 and 8.7(a) of the Member Distribution Agreement by and among
KPMG Consulting, LLC, KPMG Consulting, Inc., KPMG LLP and the Optionee while any
such provisions remain in full force and effect or (ii) any other covenants
concerning noncompetition or nonsolicitation of clients, prospective clients or
personnel of the Company and its affiliates to which the Optionee may become a
party in the future; or

               (2) directly or indirectly engages in any activity which is
contrary, inimical or harmful to the interests of the Company, including but not
limited to (i) violations of Company policies to the extent then applicable to
the Optionee, including the Company's insider trading policies, and (ii)
participation in any activity not approved by the Board which could reasonably
be foreseen as contributing to or resulting in a Change in Control of the
Company,

                                       4

<PAGE>   24

then, in addition to and without in any way limiting any remedies under the
aforementioned Member Distribution Agreement or otherwise and any other provable
damages, the Option shall terminate automatically (if not previously terminated)
on the date the Optionee commits such breach or engages in such activity and the
Optionee shall pay the Company, within five business days of receipt by the
Optionee of a written demand therefor, an amount in cash determined by
multiplying the number of shares of Stock purchased pursuant to each exercise of
the Option occurring within three months prior to the date the Optionee commits
such breach or engages in such activity (without reduction for any shares of
Stock delivered by the Optionee or withheld by the Company pursuant to Section
2.3 or Section 3.3) by the difference between (i) the Fair Market Value of a
share of Stock on the date of such exercise and (ii) the purchase price per
share of Stock set forth in the Award Notice.

               (b) The Optionee may be released from the Optionee's
obligations under Section 2.5(a) only if and to the extent the Committee
determines in its sole discretion that such a release is in the best interests
of the Company.

               (c) The Optionee agrees that by executing the Award Notice the
Optionee authorizes the Company and its Subsidiaries to deduct any amount or
amounts owed by the Optionee pursuant to Section 2.5(a) from any amounts payable
by the Company or any Subsidiary to the Optionee, including, without limitation,
any amount payable to the Optionee as salary, wages, vacation pay or bonus. This
right of setoff shall not be an exclusive remedy and the Company's or a
Subsidiary's election not to exercise this right of setoff with respect to any
amount payable to the Optionee shall not constitute a waiver of this right of
setoff with respect to any other amount payable to the Optionee or any other
remedy.

               3.    Additional Terms and Conditions of Option.

               3.1.  Nontransferability of Option; Restriction on Transfer of
Stock. (a) The Option may not be transferred by the Optionee other than by will
or the laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted by the
foregoing sentence, during the Optionee's lifetime the Option is exercisable
only by the Optionee or the Optionee's Legal Representative. Except to the
extent permitted by the second preceding sentence, the Option may not be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and
all rights hereunder shall immediately become null and void.

               (b) The shares of Stock purchased upon exercise of the Option
may not be transferred by the Optionee prior to the termination of the Lock-Up
Period other than by will or the laws of descent and distribution or pursuant to
beneficiary designation procedures approved by the Company. Except to the extent
permitted by the foregoing sentence, prior to the termination of the Lock-Up
Period the shares of Stock purchased upon exercise of the Option may not be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process.

                                       5

<PAGE>   25

               3.2.    Investment Representation. The Optionee hereby represents
and covenants that (a) any shares of Stock purchased upon exercise of the Option
will be purchased for investment and not with a view to the distribution thereof
within the meaning of the Securities Act unless such purchase has been
registered under the Securities Act and any applicable state securities laws;
(b) any subsequent sale of any such shares shall be made in compliance with
Section 3.1(b) either pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to an
exemption from registration under the Securities Act and such state securities
laws; and (c) if requested by the Company, the Optionee shall submit a written
statement, in a form satisfactory to the Company, to the effect that such
representation (x) is true and correct as of the date of any purchase of any
shares hereunder or (y) is true and correct as of the date of any sale of any
such shares, as applicable. As a further condition precedent to any exercise of
the Option, the Optionee shall comply with all regulations and requirements of
any regulatory authority having control of or supervision over the issuance or
delivery of the shares and, in connection therewith, shall execute any documents
which the Board or the Committee shall in its sole discretion deem necessary or
advisable.

               3.3.    Withholding Taxes. (a) As a condition precedent to the
delivery of Stock upon exercise of the Option, the Optionee shall, upon request
by the Company, pay to the Company in addition to the purchase price of the
shares, such amount as the Company may be required, under all applicable
federal, state, local or other laws or regulations, to withhold and pay over as
income or other withholding taxes (the "Required Tax Payments") with respect to
such exercise of the Option. If the Optionee shall fail to advance the Required
Tax Payments after request by the Company, the Company may, in its discretion,
deduct any Required Tax Payments from any amount then or thereafter payable by
the Company to the Optionee.

               (b) The Optionee may elect to satisfy his or her obligation to
advance the Required Tax Payments by any of the following means: (1) a cash
payment to the Company, (2) delivery to the Company (either actual delivery or
by attestation procedures established by the Company) of Mature Shares having an
aggregate Fair Market Value, determined as of the Tax Date, equal to the
Required Tax Payments, (3) authorizing the Company to withhold whole shares of
Stock which would otherwise be delivered to the Optionee upon exercise of the
Option having an aggregate Fair Market Value, determined as of the Tax Date,
equal to the Required Tax Payments, (4) a cash payment by a broker-dealer
acceptable to the Company to whom the Optionee has submitted an irrevocable
notice of exercise or (5) any combination of (1), (2) and (3). The Company shall
have sole discretion to disapprove of an election pursuant to any of clauses (2)
- (5). Shares of Stock to be delivered or withheld may not have a Fair Market
Value in excess of the minimum amount of the Required Tax Payments. Any fraction
of a share of Stock which would be required to satisfy any such obligation shall
be disregarded and the remaining amount due shall be paid in cash by the
Optionee. No certificate representing a share of Stock shall be delivered until
the Required Tax Payments have been satisfied in full.

               3.4.    Adjustment. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event, or any distribution to holders of
Stock other than a regular cash dividend, the number and class of securities
subject to the Option and the purchase price per security shall be appropriately
adjusted by the Committee without an increase in the aggregate purchase price.
If any adjustment would result

                                       6

<PAGE>   26

in a fractional security being subject to the Option, the Company shall pay the
Optionee, in connection with the first exercise of the Option occurring after
such adjustment, an amount in cash determined by multiplying (i) the fraction of
such security (rounded to the nearest hundredth) by (ii) the excess, if any, of
(A) the Fair Market Value on the exercise date over (B) the exercise price of
the Option. The decision of the Committee regarding any such adjustment shall be
final, binding and conclusive.

               3.5.    Compliance with Applicable Law. The Option is subject to
the condition that if the listing, registration or qualification of the shares
subject to the Option upon any securities exchange or under any law, or the
consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the purchase
or delivery of shares hereunder, the Option may not be exercised, in whole or in
part, and such shares may not be delivered, unless such listing, registration,
qualification, consent, approval or other action shall have been effected or
obtained, free of any conditions not acceptable to the Company. The Company
agrees to use reasonable efforts to effect or obtain any such listing,
registration, qualification, consent, approval or other action.

               3.6.    Delivery of Certificates. Upon the exercise of the
Option, in whole or in part, the Company shall deliver or cause to be delivered,
subject to the conditions of this Article 3, one or more certificates
representing the number of shares purchased against full payment therefor. The
Company shall pay all original issue or transfer taxes and all fees and expenses
incident to such delivery, except as otherwise provided in Section 3.3.

               3.7.    Option Confers No Rights as Stockholder. The Optionee
shall not be entitled to any privileges of ownership with respect to shares of
Stock subject to the Option unless and until such shares are purchased and
delivered upon the exercise of the Option, in whole or in part, and the Optionee
becomes a stockholder of record with respect to such delivered shares. The
Optionee shall not be considered a stockholder of the Company with respect to
any such shares not so purchased and delivered.

               3.8.    Option Confers No Rights to Continued Employment. In no
event shall the granting of the Option or its acceptance by the Optionee, or any
provision of this Agreement or the Plan, give or be deemed to give the Optionee
any right to continued employment by the Company or any affiliate of the
Company.

               3.9.    Decisions of Board or Committee. The Board or the
Committee shall have the right to resolve all questions which may arise in
connection with the Option or its exercise. Any interpretation, determination or
other action made or taken by the Board or the Committee regarding the Plan or
this Agreement shall be final, binding and conclusive.

               3.10.   Company to Reserve Shares. The Company shall at all
times prior to the expiration or termination of the Option reserve and keep
available, either in its treasury or out of its authorized but unissued shares
of Stock, the full number of shares of Stock subject to the Option from time to
time.

               3.11.   Agreement Subject to Plan. This Agreement is subject to
the provisions of the Plan, including Section 6.8 relating to a Change in
Control, and shall be interpreted in accordance therewith. The Optionee hereby
acknowledges receipt of a copy of the Plan.

                                       7

<PAGE>   27

               4.      Miscellaneous Provisions.

               4.1.    Designation as Non-Statutory Stock Option. The Option is
hereby designated as not constituting an Incentive Stock Option. This Agreement
shall be interpreted and treated consistently with such designation.

               4.2.    Meaning of Certain Terms. (a) As used herein, employment
by the Company shall include employment by a Subsidiary.

               (b) As used herein, the following terms shall have the
meanings set forth below:

               "Legal Representative" shall include an executor,
         administrator, legal representative, guardian or similar person.

               "Lock-Up Period" shall mean the period required by the
         underwriters of an IPO following an IPO during which individuals
         holding shares of Common Stock shall be prohibited from selling,
         offering, contracting to sell or otherwise transferring or disposing of
         such shares of Common Stock, directly or indirectly.

               "Securities Act" shall mean the Securities Act of 1933, as
         amended, and the rules and regulations thereunder.

               "Permitted Transferee" shall include any transferee designated
         as the Optionee's beneficiary in the event of the Optionee's death
         pursuant to beneficiary designation procedures approved by the Company.

               4.3.    Successors. This Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Company and any
person or persons who shall, upon the death of the Optionee, acquire any rights
hereunder in accordance with this Agreement or the Plan.

               4.4.    Notices. All notices, requests or other communications
provided for in this Agreement shall be made, if to the Company, to KPMG
Consulting, Inc., c/o Morgan Stanley Dean Witter, Stock Plan Administration,
Harborside Financial Center, Plaza Two, 7th Floor, Jersey City, NJ 07311 and if
to the Optionee, to the last known mailing address of the Optionee contained in
the records of the Company. All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by personal
delivery, (b) by facsimile with confirmation of receipt, (c) by mailing in the
United States mails or (d) by express courier service. The notice, request or
other communication shall be deemed to be received upon personal delivery, upon
confirmation of receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier service; provided,
however, that if a notice, request or other communication sent to the Company is
not received during regular business hours, it shall be deemed to be received on
the next succeeding business day of the Company.

               4.5.    Governing Law. This Agreement, the Option and all
determinations made and actions taken pursuant hereto and thereto, to the extent
not governed by the Code or the laws of the United States, shall be governed by
the laws of the State of Delaware and construed in accordance therewith without
giving effect to principles of conflicts of laws.

                                       8

<PAGE>   28

               4.6.   Counterparts. This Award Notice may be executed in two
counterparts, each of which shall be deemed an original and both of which
together shall constitute one and the same instrument.

               4.7.   Information to Optionees. Prior to the IPO, the Company
shall provide to the Optionee, at least annually, copies of annual financial
statements required to be provided under Rule 260.140.46 of the California
Corporate Securities Law of 1968, as amended. The Company shall not be required
to provide such statements to key employees whose duties in connection with the
Company assure their access to equivalent information.

                                       9
<PAGE>   29
[INSERT DATE]

[NAME AND ADDRESS OF OPTIONEE]

                 Re: Award Notice of Initial Stock Option Grant

Dear [NAME OF OPTIONEE]:

We are pleased to notify you that in recognition of your contributions toward
the future success of KPMG Consulting, Inc., you have been awarded an option to
purchase shares of common stock of KPMG Consulting, Inc.
(the "Company").  Certain terms of your award follow:

Option:                    You have been awarded a non-statutory stock option to
                           purchase from the Company 40,000 shares of its common
                           stock, $0.01 par value, subject to adjustment, as
                           provided in Section 3.3 of the KPMG Consulting, Inc.
                           Stock Option Agreement for Non-Employee Directors
                           (the "Agreement").

Option Date:               January 31, 2000

Exercise Price:            [INSERT PRICE] per share, subject to adjustment, as
                           provided in Section 3.3 of the Agreement.

Exercise Schedule:         Except as otherwise provided in Section 2.2 of the
                           Agreement and in Section 6.8 of the KPMG Consulting,
                           Inc. 2000 Long-Term Incentive Plan (the "Plan"), the
                           Option shall become fully exercisable on and after
                           the one year anniversary of the Option Date.

Expiration Date:           Except to the extent earlier terminated pursuant to
                           Section 2.2 of the Agreement or earlier exercised
                           pursuant to Section 2.3 of the Agreement, the Option
                           shall terminate on the tenth anniversary of the
                           Option Date.

In addition to the terms stated in this Award Notice, the Option shall be
subject to the terms and conditions of the Agreement and the Plan, copies of
which are attached hereto.

<PAGE>   30

We congratulate you on this recognition of your importance to our organization
and its future.

                                        KPMG CONSULTING, INC.

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

Acknowledgment, Acceptance and Agreement:

By signing below and returning this Award Notice to KPMG Consulting, Inc., c/o
Morgan Stanley Dean Witter, at the address stated herein, I hereby acknowledge
receipt of the Agreement and the Plan, accept the Option granted to me and agree
to be bound by the terms and conditions of this Award Notice, the Agreement and
the Plan.

------------------------------                       ----------------------
Optionee                                                      Date

                                       2
<PAGE>   31

                              KPMG CONSULTING, INC.

                             STOCK OPTION AGREEMENT

                           FOR NON-EMPLOYEE DIRECTORS

                  KPMG Consulting, Inc., a Delaware corporation (the "Company"),
hereby grants to the individual (the "Optionee") named in the award notice
attached hereto (the "Award Notice") as of the date set forth in the Award
Notice (the "Option Date"), pursuant to the provisions of the KPMG Consulting,
Inc. 2000 Long-Term Incentive Plan (the "Plan"), a non-statutory stock option to
purchase from the Company the number of shares of its common stock, $0.01 par
value ("Stock"), set forth in the Award Notice (the "Option"), at the price per
share set forth in the Award Notice, upon and subject to the terms and
conditions set forth below, in the Award Notice and in the Plan. Capitalized
terms not defined herein shall have the meanings specified in the Plan.

                  1.   Option Subject to Acceptance of Agreement. The Option
shall be null and void unless the Optionee shall accept this Agreement by
executing the Award Notice in the space provided therefore and returning an
original execution copy of the Award Notice to the Company.

                  2.   Time and Manner of Exercise of Option.

                  2.1. Maximum Term of Option. In no event may the Option be
exercised, in whole or in part, after the expiration date set forth in the Award
Notice (the "Expiration Date").

                  2.2. Exercise of Option. (a) The Option shall become
exercisable in accordance with the exercise schedule set forth in the Award
Notice (the "Exercise Schedule").

                  (b) If the Optionee ceases to be a director of the Company by
reason of Disability, the Option shall be exercisable only to the extent it is
exercisable on the effective date of the Optionee's ceasing to be a director and
may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
one year after the effective date of the Optionee's ceasing to be a director and
(ii) the Expiration Date.

                  (c) If the Optionee ceases to be a director of the Company by
reason of Retirement, the Option shall be exercisable only to the extent it is
exercisable on the effective date of the Optionee's ceasing to be a director and
may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
three months after the effective date of the Optionee's ceasing to be a director
and (ii) the Expiration Date.

                  (d) If the Optionee ceases to be a director of the Company by
reason of death, the Option shall be exercisable only to the extent it is
exercisable on the date of death and may

<PAGE>   32

thereafter be exercised by the Optionee's Legal Representative or Permitted
Transferees, as the case may be, until and including the earlier to occur of (i)
the date which is one year after the date of death and (ii) the Expiration Date.

                  (e) If the Optionee ceases to be a director of the Company for
any reason other than Disability, Retirement or death, the Option shall be
exercisable only to the extent it is exercisable on the effective date of the
Optionee's ceasing to be a director and may thereafter be exercised by the
Optionee or the Optionee's Legal Representative until and including the earlier
to occur of (i) the date which is three months after the effective date of the
Optionee's ceasing to be a director and (ii) the Expiration Date.

                  (f) If the Optionee dies during the period set forth in
Section 2.2(b) following such Optionee's ceasing to be a director of the Company
by reason of Disability, or if the Optionee dies during the period set forth in
Section 2.2(c) following such Optionee's ceasing to be a director of the Company
by reason of Retirement, or if the Optionee dies during the period set forth in
Section 2.2(e) following such Optionee's ceasing to be a director of the Company
for any reason other than Disability or Retirement, the Option shall be
exercisable only to the extent it is exercisable on the date of death and may
thereafter be exercised by the Optionee's Legal Representative or Permitted
Transferees, as the case may be, until and including the earlier to occur of (i)
the date which is one year after the date of death and (ii) the Expiration Date.

                  (g) Notwithstanding Sections 2.1 and 2.4 and the exercise
periods set forth in the Award Notice and in subsections (b), (c), (d), (e) and
(f) of this Section 2.2, in the event the Company is involved in a business
combination, including a business combination which is intended to be treated as
a pooling of interests for financial accounting purposes (a "Pooling
Transaction"), in connection with which the Optionee receives a substitute
option to purchase securities of any entity, including an entity directly or
indirectly acquiring the Company:

                  (1) if the acquisition of the substitute option by the
         Optionee may be treated as a purchase for purposes of Section 16(b) of
         the Exchange Act and the Optionee's service as a director of the
         Company is terminated for any reason during the nine-month period
         beginning three months prior to the consummation of such business
         combination, then the Option (or option in substitution thereof) shall
         be exercisable to the extent set forth in the Award Notice and above in
         this Section 2.2 until and including the latest to occur of (i) the
         date determined pursuant to the then applicable subsection (b), (c),
         (d), (e) or (f) of this Section 2.2, (ii) the date which is seven
         months after the consummation of such business combination and (iii)
         the Expiration Date; or

                  (2) if the Optionee is restricted from disposing of a security
         (or security underlying a security) issued in connection with the
         Pooling Transaction and the purpose of such restriction is to ensure
         that the Pooling Transaction is accounted for as a pooling of interests
         (the "Pooling Restriction") and the Optionee's service as a director of
         the Company is terminated for any reason during the nine-month period
         beginning three months prior to the consummation of such business
         combination, then the Option (or option in substitution thereof) shall
         be exercisable to the extent set forth in the Award Notice and above in
         this Section 2.2 until and including the latest to occur of (i) the
         date determined pursuant to the then applicable subsection (b), (c),
         (d), (e) or (f) of this

                                       2

<PAGE>   33

         Section 2.2, (ii) the date which is one month after the date of
         expiration of the Pooling Restriction and (iii) the Expiration Date.

                  2.3. Method of Exercise. Subject to the limitations set forth
in this Agreement, the Option may be exercised by the Optionee (a) by giving
written notice to the Company specifying the number of whole shares of Stock to
be purchased and by accompanying such notice with payment therefor in full (or
by arranging for such payment to the Company's satisfaction) either (i) in cash,
(ii) by delivery to the Company (either actual delivery or by attestation
procedures established by the Company) of Mature Shares having an aggregate Fair
Market Value, determined as of the date of exercise, equal to the aggregate
purchase price payable pursuant to the Option by reason of such exercise, (iii)
in cash by a broker-dealer acceptable to the Company to whom the Optionee has
submitted an irrevocable notice of exercise or (iv) by a combination of (i) and
(ii), and (b) by executing such documents as the Company may reasonably request.
The Company shall have sole discretion to disapprove of an election pursuant to
any of clauses (ii) - (iv). Any fraction of a share of Stock which would be
required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the Optionee. No certificate representing a
share of Stock shall be delivered until the full purchase price therefor has
been paid.

                  2.4. Termination of Option. (a) Subject to Section 2.2(g), in
no event may the Option be exercised after it terminates as set forth in this
Section 2.4. The Option shall terminate, to the extent not earlier terminated
pursuant to Section 2.2 or exercised pursuant to Section 2.3, on the Expiration
Date.

                  (b)  In the event that rights to purchase all or a portion of
the shares of Stock subject to the Option expire or are exercised, cancelled or
forfeited, the Optionee shall, upon the Company's request, promptly return this
Agreement to the Company for full or partial cancellation, as the case may be;
provided, however, that such cancellation shall be effective regardless of
whether the Optionee returns this Agreement. If the Optionee continues to have
rights to purchase shares of Stock hereunder, the Company shall, within 10 days
of the Optionee's delivery of this Agreement to the Company, either (i) mark
this Agreement to indicate the extent to which the Option has expired or been
exercised, cancelled or forfeited or (ii) issue to the Optionee a substitute
option agreement applicable to such rights, which agreement shall otherwise be
substantially similar to this Agreement in form and substance.

                  3.   Additional Terms and Conditions of Option.

                  3.1. Nontransferability of Option; Restriction on Transfer of
Stock. (a) The Option may not be transferred by the Optionee other than by will
or the laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted by the
foregoing sentence, during the Optionee's lifetime the Option is exercisable
only by the Optionee or the Optionee's Legal Representative. Except to the
extent permitted by the second preceding sentence, the Option may not be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and
all rights hereunder shall immediately become null and void.

                                       3
<PAGE>   34

                  (b)  The shares of Stock purchased upon exercise of the Option
may not be transferred by the Optionee prior to the termination of the Lock-Up
Period other than by will or the laws of descent and distribution or pursuant to
beneficiary designation procedures approved by the Company. Except to the extent
permitted by the foregoing sentence, prior to the termination of the Lock-Up
Period the shares of Stock purchased upon exercise of the Option may not be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process.

                  3.2. Investment Representation. The Optionee hereby represents
and covenants that (a) any shares of Stock purchased upon exercise of the Option
will be purchased for investment and not with a view to the distribution thereof
within the meaning of the Securities Act unless such purchase has been
registered under the Securities Act and any applicable state securities laws;
(b) any subsequent sale of any such shares shall be made in compliance with
Section 3.1(b) either pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to an
exemption from registration under the Securities Act and such state securities
laws; and (c) if requested by the Company, the Optionee shall submit a written
statement, in a form satisfactory to the Company, to the effect that such
representation (x) is true and correct as of the date of any purchase of any
shares hereunder or (y) is true and correct as of the date of any sale of any
such shares, as applicable. As a further condition precedent to any exercise of
the Option, the Optionee shall comply with all regulations and requirements of
any regulatory authority having control of or supervision over the issuance or
delivery of the shares and, in connection therewith, shall execute any documents
which the Board or the Committee shall in its sole discretion deem necessary or
advisable.

                  3.3. Adjustment. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event, or any distribution to holders of
Stock other than a regular cash dividend, the number and class of securities
subject to the Option and the purchase price per security shall be appropriately
adjusted by the Committee without an increase in the aggregate purchase price.
If any adjustment would result in a fractional security being subject to the
Option, the Company shall pay the Optionee, in connection with the first
exercise of the Option occurring after such adjustment, an amount in cash
determined by multiplying (i) the fraction of such security (rounded to the
nearest hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on
the exercise date over (B) the exercise price of the Option. The decision of the
Committee regarding any such adjustment shall be final, binding and conclusive.

                  3.4. Compliance with Applicable Law. The Option is subject to
the condition that if the listing, registration or qualification of the shares
subject to the Option upon any securities exchange or under any law, or the
consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the purchase
or delivery of shares hereunder, the Option may not be exercised, in whole or in
part, and such shares may not be delivered, unless such listing, registration,
qualification, consent, approval or other action shall have been effected or
obtained, free of any conditions not

                                       4
<PAGE>   35

acceptable to the Company. The Company agrees to use reasonable efforts to
effect or obtain any such listing, registration, qualification, consent,
approval or other action.

                  3.5.  Delivery of Certificates. Upon the exercise of the
Option, in whole or in part, the Company shall deliver or cause to be delivered,
subject to the conditions of this Article 3, one or more certificates
representing the number of shares purchased against full payment therefor. The
Company shall pay all original issue or transfer taxes and all fees and expenses
incident to such delivery.

                  3.6.  Option Confers No Rights as Stockholder. The Optionee
shall not be entitled to any privileges of ownership with respect to shares of
Stock subject to the Option unless and until such shares are purchased and
delivered upon the exercise of the Option, in whole or in part, and the Optionee
becomes a stockholder of record with respect to such delivered shares. The
Optionee shall not be considered a stockholder of the Company with respect to
any such shares not so purchased and delivered.

                  3.7.  Option Confers No Rights to Continue to Serve as a
Director. In no event shall the granting of the Option or its acceptance by the
Optionee, or any provision of this Agreement or the Plan, give or be deemed to
give the Optionee any right to continue to serve, to be elected or reelected to
serve or to be nominated to serve as a director of the Company.

                  3.8.  Decisions of Board or Committee. The Board or the
Committee shall have the right to resolve all questions which may arise in
connection with the Option or its exercise. Any interpretation, determination or
other action made or taken by the Board or the Committee regarding the Plan or
this Agreement shall be final, binding and conclusive.

                  3.9.  Company to Reserve Shares. The Company shall at all
times prior to the expiration or termination of the Option reserve and keep
available, either in its treasury or out of its authorized but unissued shares
of Stock, the full number of shares of Stock subject to the Option from time to
time.

                  3.10. Agreement Subject to Plan. This Agreement is subject to
the provisions of the Plan, including Section 6.8 relating to a Change in
Control, and shall be interpreted in accordance therewith. The Optionee hereby
acknowledges receipt of a copy of the Plan.

                  4.    Miscellaneous Provisions.

                  4.1.  Designation as Non-Statutory Stock Option. The Option is
hereby designated as not constituting an Incentive Stock Option. This Agreement
shall be interpreted and treated consistently with such designation.

                  4.2.  Meaning of Certain Terms. As used herein, the following
terms shall have the meanings set forth below:

                  "Legal Representative" shall include an executor,
         administrator, legal representative, guardian or similar person.

                                       5
<PAGE>   36

                  "Lock-Up Period" shall mean the period required by the
         underwriters of an IPO following an IPO during which individuals
         holding shares of Common Stock shall be prohibited from selling,
         offering, contracting to sell or otherwise transferring or disposing of
         such shares of Common Stock, directly or indirectly.

                  "Securities Act" shall mean the Securities Act of 1933, as
         amended, and the rules and regulations thereunder.

                  "Permitted Transferee" shall include any transferee designated
         as the Optionee's beneficiary in the event of the Optionee's death
         pursuant to beneficiary designation procedures approved by the Company.

                  4.3. Successors. This Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Company and any
person or persons who shall, upon the death of the Optionee, acquire any rights
hereunder in accordance with this Agreement or the Plan.

                  4.4. Notices. All notices, requests or other communications
provided for in this Agreement shall be made, if to the Company, to KPMG
Consulting, Inc., c/o Morgan Stanley Dean Witter, Stock Plan Administration,
Harborside Financial Center, Plaza Two, 7th Floor, Jersey City, NJ 07311 and if
to the Optionee, to the last known mailing address of the Optionee contained in
the records of the Company. All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by personal
delivery, (b) by facsimile with confirmation of receipt, (c) by mailing in the
United States mails or (d) by express courier service. The notice, request or
other communication shall be deemed to be received upon personal delivery, upon
confirmation of receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier service; provided,
however, that if a notice, request or other communication sent to the Company is
not received during regular business hours, it shall be deemed to be received on
the next succeeding business day of the Company.

                  4.5. Governing Law. This Agreement, the Option and all
determinations made and actions taken pursuant hereto and thereto, to the extent
not governed by the Code or the laws of the United States, shall be governed by
the laws of the State of Delaware and construed in accordance therewith without
giving effect to principles of conflicts of laws.

                  4.6. Counterparts. This Award Notice may be executed in two
counterparts, each of which shall be deemed an original and both of which
together shall constitute one and the same instrument.

                  4.7. Information to Optionees. Prior to the IPO, the Company
shall provide to the Optionee, at least annually, copies of annual financial
statements required to be provided under Rule 260.140.46 of the California
Corporate Securities Law of 1968, as amended.

                                       6<PAGE>   1

                                                                   EXHIBIT 10.20

                        KPMG CONSULTING, INC. 401(K) PLAN

                        Effective as of February 1, 2000

<PAGE>   2

                        KPMG CONSULTING, INC. 401(k) PLAN

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      ----

<S>               <C>                                                                                 <C>
ARTICLE 1         TITLE AND PURPOSE......................................................................1
ARTICLE 2         DEFINITIONS............................................................................1
ARTICLE 3         PARTICIPATION..........................................................................5
                  Section 3.1.  Eligibility for Participation............................................5
                  Section 3.2.  Transfer to Affiliates...................................................5
ARTICLE 4         EMPLOYER CONTRIBUTIONS.................................................................6
                  Section 4.1.  Salary Reduction Contributions...........................................6
                  Section 4.2.  Employer Matching Contributions..........................................8
                  Section 4.3.  Profit Sharing Contributions.............................................8
ARTICLE 5         EMPLOYEE AND ROLLOVER CONTRIBUTIONS....................................................9
                  Section 5.1.  Voluntary Contributions..................................................9
                  Section 5.2.  Requirements for Rollover Contributions.................................10
                  Section 5.3.  Delivery of Rollover Contributions......................................10
ARTICLE 6         LIMITATIONS ON CONTRIBUTIONS..........................................................11
                  Section 6.1.  Annual Limit on Salary Reduction Contributions..........................11
                  Section 6.2.  Maximum Annual Additions Under
                                    Section 415 of the Code.............................................12
                  Section 6.3.  Limits on Contributions for Highly
                                    Compensated Employees...............................................14
                  Section 6.4.  Other Limitations on Employer Contributions.............................20
ARTICLE 7         TRUST AND INVESTMENT FUNDS............................................................21
                  Section 7.1.  Trust...................................................................21
                  Section 7.2.  Investment Funds........................................................22
ARTICLE 8         PARTICIPANT ACCOUNTS AND INVESTMENT ELECTIONS.........................................22
                  Section 8.1.  Participant Accounts and Investment Elections...........................22
</TABLE>

                                        i

<PAGE>   3

<TABLE>

<S>             <C>                                                                                   <C>
                  Section 8.2.  Allocation of Fluctuation in Value of Investment
                                    Fund Assets.........................................................25
                  Section 8.3.  Determination of Net Worth of Investment Funds..........................25
                  Section 8.4.  Allocations of Contributions Among
                                    Participants' Accounts..............................................26
                  Section 8.5.  Correction of Error.....................................................27
ARTICLE 9         WITHDRAWALS, LOANS AND DISTRIBUTIONS..................................................28
                  Section 9.1.  Withdrawals Prior to Termination of Employment..........................28
                  Section 9.2.  Loans to Participants...................................................31
                  Section 9.3.  Distribution upon Termination of Employment.............................34
                  Section 9.4. Payment of Small Account Balances........................................37
                  Section 9.5.  Direct Rollover Option..................................................38
                  Section 9.6.  Designation of Beneficiary..............................................38
                  Section 9.7.  Missing Persons.........................................................40
                  Section 9.8.  Distributions to Minor and Disabled Distributees........................40
ARTICLE 10        SPECIAL PARTICIPATION AND DISTRIBUTION RULES RELATING TO
                  REEMPLOYMENT OF TERMINATED EMPLOYEES AND EMPLOYMENT
                  BY RELATED ENTITIES...................................................................41
                  Section 10.1.  Change of Employment Status............................................41
                  Section 10.2.  Reemployment of a Terminated Participant...............................41
                  Section 10.3.  Employment by Related Entities.........................................42
                  Section 10.4.  Leased Employees.......................................................43
                  Section 10.5.  Reemployment of Veterans...............................................43
ARTICLE 11        SHAREHOLDER RIGHTS WITH RESPECT
                  TO COMPANY STOCK......................................................................45
                  Section 11.1.  Voting Shares of Company Stock.........................................45
                  Section 11.2.  Tender Offers..........................................................46
ARTICLE 12        ADMINISTRATION........................................................................48
                  Section 12.1.  The Committee..........................................................48
                  Section 12.2.  Claims Procedure.......................................................52
                  Section 12.3.  Procedures for Domestic Relations Orders...............................53
</TABLE>

                                       ii

<PAGE>   4
<TABLE>

<S>               <C>                                                                                  <C>
                  Section 12.4.  Information from Participants and Beneficiaries........................54
                  Section 12.5.  Notices to Participants, Etc...........................................54
                  Section 12.6.  Notices to Committee...................................................54
                  Section 12.7.  Records................................................................54
                  Section 12.8.  Reports of Trustee and Accounting to Participants......................55
ARTICLE 13        PARTICIPATION BY OTHER EMPLOYERS......................................................55
                  Section 13.1.  Adoption of Plan.......................................................55
                  Section 13.2.  Exclusion from Participation...........................................55
                  Section 13.3.  Company as Agent for Employers.........................................55
                  Section 13.4.  Successor Employer.....................................................56
ARTICLE 14        MISCELLANEOUS.........................................................................56
                  Section 14.1.  Expenses...............................................................56
                  Section 14.2.  Non-Assignability......................................................56
                  Section 14.3.  Employment Non-Contractual.............................................57
                  Section 14.4.  Limitation of Rights...................................................54
                  Section 14.5.  Merger or Consolidation with Another Plan..............................54
                  Section 14.6.  Transfer of Assets from Trust..........................................54
                  Section 14.7.  Transfer of Prior Plan Account Balances................................54
                  Section 14.8.  Gender and Plurals.....................................................59
                  Section 14.9.  Applicable Law.........................................................59
                  Section 14.10.  Severability..........................................................59
                  Section 14.11.  No Guarantee..........................................................59
                  Section 14.12.  Plan Voluntary........................................................60
ARTICLE 15        TOP-HEAVY PLAN REQUIREMENTS...........................................................60
                  Section 15.1.  Top-Heavy Plan Determination...........................................60
                  Section 15.2.  Definitions and Special Rules..........................................61
                  Section 15.3.  Minimum Contribution for Top-Heavy Years...............................61
                  Section 15.4.  Special Rules for Applying Statutory
                                    Limitations on Benefits.............................................62
</TABLE>

                                      iii

<PAGE>   5

<TABLE>

<S>               <C>                                                                                  <C>
ARTICLE 16        AMENDMENT, ESTABLISHMENT OF SEPARATE PLAN AND TERMINATION.............................63
                  Section 16.1.  Amendment..............................................................63
                  Section 16.2.  Establishment of Separate Plan.........................................63
                  Section 16.3.  Full Vesting upon Termination of Participation or Partial
                                 Termination of the Plan................................................64
                  Section 16.4.  Distribution upon Termination of the Plan..............................64
                  Section 16.5.  Trust Fund to Be Applied Exclusively for Participants and Their
                                 Beneficiaries..........................................................65
</TABLE>

                                       iv

<PAGE>   6

                                   ARTICLE 1

                                TITLE AND PURPOSE

                  The title of this Plan shall be the "KPMG Consulting Inc.
401(k) Plan" (the "Plan"). This Plan is designated as a "profit sharing plan"
within the meaning of section 1.401-1(a)(2)(ii) of the Regulations.

                                    ARTICLE 2

                                   DEFINITIONS

                  As used herein, the following words and phrases shall have the
following respective meanings when capitalized:

                   (1) Account. The aggregate of a Participant's Salary
               Reduction Account, Matching Account, Profit Sharing Account,
               Voluntary Contribution Account and Rollover Account, including
               any loan subaccount established pursuant to Section 9.2.

                   (2) Affiliate. (a) A corporation that is a member of the same
               controlled group of corporations (within the meaning of section
               414(b) of the Code) as an Employer, (b) a trade or business
               (whether or not incorporated) under common control (within the
               meaning of section 414(c) of the Code) with an Employer, (c) any
               organization (whether or not incorporated) that is a member of an
               affiliated service group (within the meaning of section 414(m) of
               the Code) that includes an Employer, a corporation described in
               clause (a) of this subdivision or a trade or business described
               in clause (b) of this subdivision, or (d) any other entity that
               is required to be aggregated with the Employer pursuant to
               Regulations promulgated under section 414(o) of the Code.

                   (3) Authorized Absence. Absence without pay authorized by an
               Employer under its then effective personnel policy or special
               authorization if the Employee's name is retained on the
               Employer's current payroll records.

                   (4) Beneficiary. The person or persons entitled under Section
               9.6 to receive benefits in the event of the death of a
               Participant.

                   (5) Code. The Internal Revenue Code of 1986, as amended.

                   (6) Committee. The Committee that is appointed by the Company
               pursuant to Section 12.1 to administer the Plan.

<PAGE>   7

                   (7) Company. KPMG Consulting, Inc., a Delaware corporation,
               and any successor to such corporation that adopts the Plan
               pursuant to Section 13.4.

                   (8) Company Stock. Common stock of the Company.

                   (9) Compensation. The total earnings paid in cash to an
               Employee by an Employer while such person is an Eligible Employee
               and properly reportable on Form W-2 for a Plan Year including
               bonuses and overtime, increased by amounts that would have been
               so paid and reported but for the Employee's election to have his
               compensation reduced pursuant to a qualified cash or deferred
               arrangement described in section 401(k) of the Code, a cafeteria
               plan as defined in section 125 of the Code or a qualified
               transportation fringe under section 132(f) of the Code. An
               Employee's Compensation in excess of (i) for the Plan Year
               commencing February 1, 2000, $160,000 (or a pro-rated portion if
               such Plan Year is less than 12 months) and (ii) for all
               subsequent Plan Years, the amount prescribed by section
               401(a)(17) of the Code (as adjusted for increases in the cost of
               living in accordance with section 401(a)(17)(B) of the Code),
               shall not be taken into account for any purposes under the Plan.

                   (10) Effective Date. The effective date of the Plan with
               respect to the Company shall be February 1, 2000, and in the case
               of any other Employer shall be the effective date as of which the
               Plan is adopted by such Employer.

                   (11) Eligible Employee. Except as provided below, an Employee
               (i) the terms of whose employment are not subject to a collective
               bargaining agreement and (ii) who is not a nonresident alien
               (within the meaning of section 7701(b)(1)(B) of the Code).
               Notwithstanding the foregoing, an individual shall not be an
               Eligible Employee (regardless of such individual's status under
               common law) if such individual (a) is compensated solely by
               retainer fee or by any form of compensation other than salary,
               wages, bonuses or profit participation, (b) is on temporary
               assignment from an Affiliate (c) is a leased employee, (d) is
               classified as an intern or (e) performs services for an Employer
               pursuant to an agreement (written or oral) that classifies such
               individual as an independent contractor or as an employee of
               another entity, or that otherwise contains a waiver of
               participation in this Plan.

                   (12) Employee. An individual whose relationship with an
               Employer is, under common law, that of an employee.

                   (13) Employer. The Company and any other entity that, with
               the consent of the Company, elects to participate in the Plan in
               the manner described in Section 13.1 and any successor entity
               that adopts the Plan pursuant to Section 13.4. If any such entity
               withdraws or is excluded from participation in the Plan pursuant
               to Section 13.2, or terminates its participation in the Plan
               pursuant to Section 16.4, such entity shall thereupon cease to be
               an Employer.

                   (14) Entry Date. The first day of each calendar quarter.

                                       2
<PAGE>   8

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

                   (16) Matching Account. The account established pursuant to
               Section 8.1 to which any employer matching contributions made on
               behalf of a Participant pursuant to Section 4.2 and earnings (or
               losses) thereon are credited.

                   (17) Military Service. (a) Service on active duty, in time of
               national or local emergency, in the armed forces of the United
               States or of any State thereof; (b) service in the armed forces
               of the United States or of any State thereof under any compulsory
               service law; or (c) service in the armed forces of the United
               States or any of its allies in time of war in which the United
               States is engaged.

                   (18) One-Year Break in Service. An eligibility or vesting
               computation period in which an Employee has not completed more
               than 500 Hours of Service. Solely for the purpose of determining
               whether an Employee has incurred a One-Year Break in Service,
               Hours of Service shall be counted for a temporary leave of
               absence or a maternity or paternity absence.

                   Temporary leave of absence" means an unpaid temporary
cessation from active employment pursuant to a temporary layoff, illness,
disability, military service or leave of absence granted under a
nondiscriminatory leave policy, whether occasioned by illness, military service,
or any other reason.

                   A "maternity or paternity absence" shall mean an absence from
work for any period by reason of the Employee's pregnancy, birth of Employee's
child, placement of a child with the Employee in connection with the adoption of
such child, or any absence for the purpose of caring for such child for a period
immediately following such birth or placement.

                   Hours of Service shall be credited for the Plan Year in which
the absence from work begins only if credit therefor is necessary to prevent the
Employee from incurring a One-Year Break in Service, or, in any other case, in
the immediately following Plan Year. The Hours of Service credited for a
maternity or paternity absence shall e those which would normally have been
credited but for such absence, or, in any case in which the Trustee is unable to
determine such hours normally credited, eight (8) Hours of Service per day. The
total Hours of Service required to be credited for a maternity or paternity
absence shall not exceed 501.

                    (19) Participant. An Eligible Employee who has satisfied the
               requirements set forth in Article 3. An individual shall cease to
               be a Participant upon the complete distribution of the
               Participant's Account under the Plan.

                    (20) Plan. The plan herein set forth, as from time to time
               amended.

                    (21) Plan Year. The period commencing on February 1, 2000
               and ending on April 30, 2000, and each subsequent 12 consecutive
               month period beginning on May 1, and ending on the next April 30.

                                       3

<PAGE>   9

                    (22) Prior Plan. The KPMG 401(k) Plan, as in effect on
               February 1, 2000.

                    (23) Prior Plan Participant. A participant in the KPMG
               401(k) Plan who, on the Effective Date, became an Employee of an
               Employer.

                    (24) Profit Sharing Account. The account established
               pursuant to Section 8.1 to which any profit sharing contributions
               made on behalf of a Participant pursuant to Section 4.3, if any,
               and any earnings (or losses) thereon are credited.

                    (25) Regulations. Written promulgations of the Department of
               Labor construing Title I of ERISA or the Internal Revenue Service
               construing the Code.

                    (26) Rollover Account. The account established pursuant to
               Section 8.1 to which a Participant's rollover contributions
               pursuant to Section 5.2, if any, and any earnings (or losses)
               thereon are credited.

                    (27) Salary Reduction Account. The account established
               pursuant to Section 8.1 to which a Participant's salary reduction
               contributions pursuant to Section 4.1, if any, and any earnings
               (or losses) thereon are credited.

                    (28) Trust. The Trust created by agreement between the
               Company and the Trustee, as from time to time amended.

                    (29) Trust Fund. All money and property of every kind of the
               Trust held by the Trustee pursuant to the terms of the agreement
               governing the Trust.

                    (30) Trustee. The trustee provided for in Article 6, or any
               successor trustee or, if there is more than one trustee acting at
               any time, all of such trustees collectively.

                    (31) Valuation Date. Each day on which the New York Stock
               Exchange is open for trading.

                    (32) Voluntary Contribution Account. The account established
               pursuant to Section 8.1 to which a Participant's after-tax
               voluntary employee contributions pursuant to Section 5.1, if any,
               and any amounts recharacterized as after-tax contributions
               pursuant to Section 6.3(e)(1)(B) and any earnings (or losses)
               thereon are credited.

                    (33) Year of Service. A twelve (12) consecutive-month period
               during which an Employee is credited with at least one thousand
               (1,000) Hours of Service, including periods prior to the
               effective date of the Plan. For purposes of determining an
               Employee's eligibility for participation in the Plan and vesting,
               the initial twelve (12) consecutive-month period shall begin on
               the first day on which such Employee is credited with an Hour of
               Service, and subsequent twelve (12) consecutive-month periods
               shall begin on anniversaries thereof.

                                       4
<PAGE>   10

                  If prior to becoming a Participant, an Employee incurs a
         One-Year Break in Service and if his number of consecutive One-Year
         Breaks in Service exceeds the greater of the number of Years of Service
         he was credited with prior to such Breaks in Service, and five (5),
         then if he again becomes an Employee, his prior service shall be
         disregarded, and the initial computation period for determining his
         eligibility for participation following such One-Year Breaks in Service
         begin on the date such Employee first completes an Hour of Service
         following such One-Year Breaks in Service.

                  Notwithstanding the foregoing, a Prior Plan Participant's
         Years of Service shall include Years of Service as determined under the
         Prior Plan as in effect immediately prior to the Effective Date.

                                   ARTICLE 3

                                  PARTICIPATION

                  Section 3.1. Eligibility for Participation. An Eligible
Employee shall become a Participant in the Plan as of the first Entry Date next
following the date on which the Eligible Employee commences employment;
provided, however, that each individual who is an Eligible Employee on the
Effective Date and who was a Prior Plan Participant immediately before the
Effective Date shall become a Participant in the Plan as of the Effective Date.

                  Section 3.2. Transfer to Affiliates. If a Participant is
transferred from one Employer to another Employer or from an Employer to an
Affiliate that is not an Employer, such transfer shall not terminate the
Participant's participation in the Plan and such Participant shall continue to
participate in the Plan until an event occurs that would have terminated his
participation had he continued in the service of an Employer until the
occurrence of such event; provided, however, that a Participant shall not be
entitled to make salary reduction contributions to the Plan during any period of
employment by any Affiliate that is not a participating Employer. Periods of
employment with an Affiliate that is not a participating Employer shall be taken
into account only to the extent set forth in Section 10.3. Payments received by
a

                                       5

<PAGE>   11

Participant from an Affiliate that is not a participating Employer shall not be
treated as Compensation for any purposes under the Plan.

                                   ARTICLE 4

                             EMPLOYER CONTRIBUTIONS

                  Section 4.1. Salary Reduction Contributions. (a) Initial
Election. A Participant who is an Eligible Employee may elect to have salary
reduction contributions made under the Plan on his behalf by filing a written
application with the Participant's Employer, or by enrolling through such other
means as the Committee may prescribe, specifying his chosen rate of such
contributions, which shall be a whole percentage not less than 2% nor more than
20% of the Participant's Compensation, and specifying the Participant's
investment elections as described in Section 8.1(b). The Committee shall
prescribe rules regarding the date and time by which any such election must be
made in order to be applicable for a particular payroll period. Such election
shall authorize the Participant's Employer to reduce the Participant's
Compensation by the percentage specified by the Participant in such election.

                  Notwithstanding the foregoing, an Eligible Employee who is a
Prior Plan Participant immediately before the Effective Date and for whom a
salary reduction agreement was then in effect under the Prior Plan shall be
deemed to have elected to have salary reduction contributions made on the
Employee's behalf as of the Effective Date at a rate equal to the "Prior
Deferral Amount" and to have his or her Compensation reduced by such amount. For
purposes of this paragraph, the "Prior Deferral Amount" means: (i) in the case
of such a Prior Plan Participant who was an employee of KPMG LLP immediately
before the Effective Date, the percentage of Compensation specified in such
Participant's salary reduction agreement as in

                                       6

<PAGE>   12

effect prior the Effective Date pursuant to Section 3.03 of the Prior Plan, and
(ii) in the case of such a Prior Plan Participant who was a Member of KPMG LLP
immediately before the Effective Date, 5% of the Participant's Compensation.

                  (b) Changes in the Rate or Suspension of Salary Reduction
Contributions. A Participant's salary reduction contributions shall continue in
effect at the rate designated or deemed to have been designated by a Participant
pursuant to subsection (a) until the Participant changes such designation or
suspends such contributions. A Participant may elect to change such designation
or suspend contributions as of such time and in such manner as may be prescribed
by the Committee. The Committee shall prescribe rules regarding the date and
time by which any such election to change or suspend must be made in order to be
applicable for a particular payroll period. A Participant who has ceased salary
reduction contributions pursuant to this subsection may resume salary reduction
contributions by making an election in the time and manner prescribed by the
Committee.

                  (c) Employer Contributions. Subject to the limitations set
forth in Article 6, each Employer shall contribute on behalf of each Participant
who is an Employee of such Employer and who has elected to have salary reduction
contributions made hereunder an amount equal to the percentage of such
Participant's Compensation for each payroll period as designated by the
Participant in accordance with his election made pursuant to subsection (a) or
(b) of this Section. Salary reduction contributions pursuant to this Section
shall be delivered to the Trustee during the month, or as soon as practicable
(but in no event later than the 15th business day) after the end of the month in
which such contribution would otherwise have been paid to the Participant as
cash compensation.

                                       7
<PAGE>   13

                  Section 4.2. Employer Matching Contributions. Subject to the
limitations set forth in Article 6, an Employer, in its sole discretion, may
elect contribute for each Plan Year on behalf of each Participant who (i) made
salary reduction contributions for the Plan Year and (ii) is employed on the
last day of such Plan Year, such amount as the Employer may determine.

                  Employer matching contributions shall be made in cash or in
the form of shares of Company Stock, or both, as the case may be. At such time
as the Company determines, Employer Matching Contributions shall be invested
exclusively in the Company Stock Fund and after such time, any such
contributions in the form of cash shall be applied by the Trustee to purchase
units of the Company Stock Fund. If any such Employer matching contributions are
made by the delivery of certificates of shares of Company Stock, such stock
shall be valued as of the day preceding the day on which such Employer matching
contributions are delivered to the Trustee at the closing sales price of the
Company Stock as reflected on the consolidated tape of the principal exchange on
which such stock is traded, or, if there are no sales on such date, the closing
sales price on the most recent trading day prior thereto.

                  Employer matching contributions for any Plan Year may be
delivered to the Trustee in one or more installments, and shall be delivered to
the Trustee prior to the due date, including extensions thereof, of the
Employer's federal income tax return for the fiscal year of the Employer that
ends with or within such Plan Year.

                  Section 4.3. Profit Sharing Contributions. Subject to the
limitations set forth in Article 6, each Employer in its sole discretion may
elect to contribute to the Plan on behalf of its Eligible Employees for each
Plan Year such amount as the Company may determine.

                                       8

<PAGE>   14

                  Employer profit sharing contributions for any Plan Year may be
delivered to the Trustee in one or more installments, and shall be delivered to
the Trustee prior to the due date, including extensions thereof, of the
Employer's federal income tax return for the fiscal year of the Employer that
ends with or within such Plan Year.

                                   ARTICLE 5

                       EMPLOYEE AND ROLLOVER CONTRIBUTIONS

                  Section 5.1. Voluntary Contributions. (a) Initial Election. An
Eligible Employee may elect, in the same manner and within the same time periods
set forth in Section 4.1 to make after-tax voluntary contributions under the
Plan. The aggregate amount of such contributions for all Plan Years for a
Participant shall not exceed 10% of his aggregate Compensation received while a
Participant in this Plan, the KPMG 401(k) Plan and the PMM & Co. Pension Plan
for Partners and Employees. After-tax voluntary contributions shall be effected
by payroll deductions made each pay period, on an after-tax basis.

                  (b) Changes in the Rate or Suspension of After-tax Voluntary
Contributions. A Participant's after-tax voluntary contributions shall continue
in effect at the rate designated by a Participant pursuant to subsection (a)
until the Participant changes such designation or suspends such contributions. A
Participant may elect to change such designation or suspend contributions as of
such time and in such manner as may be prescribed by the Committee. The
Committee shall prescribe rules regarding the date and time by which any such
election to change or suspend must be made in order to be applicable for a
practical payroll period. A Participant who has ceased after-tax voluntary
contributions pursuant to this subsection may resume after-tax

                                       9

<PAGE>   15

voluntary contributions by making an election in the time and manner prescribed
by the Committee.

                  Section 5.2. Requirements for Rollover Contributions. If a
Participant receives an eligible rollover distribution (within the meaning of
section 402(c)(4) of the Code) from a qualified trust (within the meaning of
section 402(c)(8)(A) of the Code, but excluding a trust which forms part of a
plan maintained by an entity with respect to which the Participant is a 5%-owner
(within the meaning of section 416(i) of the Code) at the time such distribution
is made or at any time during the five Plan Years preceding the Plan Year in
which the distribution is made), then such Participant may contribute to this
Plan an amount which does not exceed the amount of such eligible rollover
distribution. If a Participant receives a distribution or distributions from an
individual retirement account (within the meaning of section 408 of the Code)
and the amount received represents the entire amount in such account and no
amount in such account is attributable to any source other than an eligible
rollover distribution and any earnings on such a rollover contribution, then
such Participant may contribute to this Plan such distribution or distributions.

                  Section 5.3. Delivery of Rollover Contributions. Any rollover
contribution pursuant to this Section shall be delivered by the Participant to
the Committee and by the Committee to the Trustee on or before the 60th day
after the day on which the Participant receives the distribution, or on or
before such later date as may be prescribed by law. Any such contribution must
be accompanied by such information and certifications that the Committee may
require. Notwithstanding the foregoing, the Committee shall not accept a
rollover

                                       10

<PAGE>   16

contribution if in its judgment accepting such contribution would cause the plan
to violate any provision of the Code or Regulations.

                                   ARTICLE 6

                          LIMITATIONS ON CONTRIBUTIONS

                  Section 6.1. Annual Limit on Salary Reduction Contributions.
(a) General Rule. Notwithstanding the provisions of Section 4.1, a Participant's
salary reduction contributions made pursuant to such Section for any calendar
year shall not exceed (i) for the Plan Year commencing February 1, 2000, $10,000
or (ii) for each subsequent Plan Year, the dollar limit prescribed by section
402(g) of the Code (as adjusted for increases in the cost-of-living in
accordance with section 402(g)(5) of the Code).

                  (b) Distribution of Excess Salary Reduction Contributions.
With respect to any Participant, if for any calendar year the salary reduction
contributions to this Plan or the aggregate of salary reduction contributions to
this Plan plus amounts contributed under other plans or arrangements described
in sections 401(k), 403(b), 408(k) or 408(p) of the Code will exceed the limit
imposed by subsection (a) of this Section for the calendar year in which such
contributions were made ("excess deferrals"), such Participant shall, pursuant
to such rules and at such time following such calendar year as determined by the
Committee, be allowed to submit a written request that the excess deferrals,
plus any income and minus any loss allocable thereto, be distributed to the
Participant. The amount of any income or loss allocable to such excess deferrals
shall be determined pursuant to Regulations. Such amount of excess deferrals, as
adjusted for income or loss, shall be distributed to the Participant no later
than April 15 following the calendar year for which such contributions were
made. Notwithstanding the

                                       11

<PAGE>   17

provisions of this paragraph, any such excess deferrals shall be treated as
"annual additions" for purposes of Section 6.2 for the limitation year in which
such contributions were made. The amount of excess deferrals that may be
distributed under this paragraph (b) with respect to a Participant for a taxable
year shall be reduced by any amounts previously distributed or recharacterized
pursuant to Section 6.3(e) of the Plan with respect to such Participant for the
Plan Year beginning with or within such taxable year.

                  Section 6.2. Maximum Annual Additions Under Section 415 of the
Code. Notwithstanding any other provision of the Plan, the amounts allocated to
the Account of each Participant for any limitation year shall be limited so that
the aggregate annual additions for such Plan Year to the Participant's Account
in this Plan and in all other defined contribution plans in which he is a
participant shall not exceed the lesser of:

                         (I) $30,000 (as adjusted for increases in the
                    cost-of-living pursuant to section 415(d) of the Code) and

                         (II) 25% of the Participant's compensation for such
                    limitation year.

If the annual additions to a Participant's Account exceed the limitations set
forth above for any limitation year (I) as a result of a reasonable error in
estimating a Participant's annual compensation, (II) as a result of a reasonable
error in determining the amount of elective deferrals that may be made by a
Participant under section 415 of the Code or (III) under other limited facts and
circumstances as determined by the Commissioner of Internal Revenue, the
Committee shall cause to be reduced the amounts to be allocated to such
Participant's Account for such year to the extent of the excess in the manner
described below:

                  (a) first, by reducing the amount of the Participant's
         after-tax voluntary contributions plus earnings on such contributions;

                                       12

<PAGE>   18

                  (b) second, by reducing the amount of the Participant's salary
         reduction contributions and corresponding matching contributions
         allocated to his Account, plus earnings on such contributions; and

                  (c) third, by reducing the profit sharing contribution
         allocated to his Account, plus earnings on such contribution.

Any salary reduction contributions so reduced, plus earnings thereon, shall be
distributed to the Participant. Any matching contributions, and profit sharing
contributions so reduced shall be held in a segregated suspense account and
shall be treated in the next limitation year as Employer matching contributions
or profit sharing contributions, as the case may be, thereby reducing amounts
actually contributed by the Employers for such year. Upon termination of the
Plan, any balance in such suspense account shall be returned to each Employer in
the amount determined by the Committee, but only if the allocation upon Plan
termination of such amount to Participants would cause all Participants to
receive annual additions in excess of the limitations of section 415 of the
Code.

                  The "annual additions" for a Plan Year to a Participant's
Account in this Plan and in any other defined contribution plan is the sum for
such limitation year of--

                  (i) the amount of Employer contributions (including salary
               reduction contributions) allocated to such Participant's
               accounts,

                  (ii) the amount of forfeitures allocated to such Participant's
               accounts,

                  (iii) the amount allocated to any individual medical benefit
               account (as defined in section 415(l) of the Code) maintained on
               behalf of the Participant, and

                  (iv) the amount of contributions by the Participant to any
               such plan, but excluding any rollover contribution made thereto.

                  For purposes of this Section, the "limitation year" shall be
the Calendar Year, the terms "compensation," "defined contribution plan,"
"defined benefit plan" and "year of service"

                                       13

<PAGE>   19

shall have the meanings set forth in section 415 of the Code and the Regulations
promulgated thereunder, and a Participant's Employer shall include entities that
are members of the same controlled group (within the meaning of section 414(b)
of the Code as modified by section 415(h) of the Code) or affiliated service
group (within the meaning of section 414(m) of the Code) as his Employer or
under common control (within the meaning of section 414(c) of the Code as
modified by section 415(h) of the Code) with his Employer or such entities.

                  Section 6.3. Limits on Contributions for Highly Compensated
Employees. (a) Actual Deferral Percentage Test Imposed by Section 401(k)(3) of
the Code. Notwithstanding the provisions of Section 4.1, if the salary reduction
contributions made pursuant to such Section for a Plan Year fail to satisfy both
of the tests set forth in paragraphs (1) and (2) of this subsection, the
adjustments prescribed in paragraph (1) of subsection (e) of this Section shall
be made.

                  (1) The HCE average deferral percentage does not exceed the
         product of the NHCE average deferral percentage multiplied by 1.25.

                  (2) The HCE average deferral percentage (i) does not exceed
         the NHCE average deferral percentage by more than two percentage points
         and (ii) does not exceed two times the NHCE average deferral
         percentage.

                  (b) Actual Contribution Percentage Test Imposed by Section
401(m) of the Code. Notwithstanding the provisions of Sections 5.1 and 4.2, if
the after-tax voluntary contributions made pursuant to Section 5.1 and the
matching contributions made pursuant to Section 4.2 fail to satisfy both of the
tests set forth in paragraphs (1) and (2) of this subsection, the adjustments
prescribed in paragraph (2) of subsection (e) of this Section shall be made.

                  (1) The HCE average contribution percentage does not exceed
         the product of the NHCE average contribution percentage multiplied by
         1.25.

                                       14

<PAGE>   20

                  (2) The HCE average contribution percentage (i) does not
         exceed the NHCE average contribution percentage by more than two
         percentage points and (ii) does not exceed two times the NHCE average
         contribution percentage.

                  (c) Aggregate Limit on Contributions. Notwithstanding anything
herein to the contrary, if the sum of the HCE average deferral percentage (as
determined under paragraph (1) of subsection (e) of this Section after making
the adjustments required by such paragraph for the Plan Year) and the HCE
average contribution percentage (as determined under paragraph (2) of subsection
(e) of this Section after making the adjustments required by such paragraph for
the Plan Year) exceeds, or in the judgment of the Committee is likely to exceed,
the aggregate limit for such Plan Year, the adjustments prescribed in paragraph
(3) of subsection (e) of this Section shall be made.

                  (d) Definitions and Special Rules. For purposes of this
Section, the following definitions and special rules shall apply:

                  (1) The "actual deferral percentage test" refers collectively
               to the tests set forth in paragraphs (1) and (2) of subsection
               (a) of this Section relating to salary reduction contributions.
               The actual deferral percentage test shall be satisfied if either
               of such tests are satisfied.

                  (2) The "HCE average deferral percentage" for a Plan Year is a
               percentage determined for the group of Eligible Employees who are
               eligible to make salary reduction contributions for the current
               Plan Year and who are highly compensated employees for the
               current Plan Year. Such percentage shall be equal to the average
               of the ratios, calculated separately for each such Eligible
               Employee to the nearest one-hundredth of one percent, of the
               salary reduction contributions for the benefit of such Eligible
               Employee for the current Plan Year (if any) to the total
               compensation for the current Plan Year paid to such Eligible
               Employee.

                  (3) The "NHCE average deferral percentage" for a Plan Year is
               a percentage determined for the group of Eligible Employees who
               are eligible to make salary reduction contributions for the prior
               Plan Year and who were not highly compensated employees for the
               prior Plan Year. Such percentage shall be equal to the average of
               the ratios, calculated separately for each such Eligible Employee
               to the nearest one-hundredth of

                                       15
<PAGE>   21

               one percent, of the salary reduction contributions for the
               benefit of such Eligible Employee for the prior Plan Year (if
               any) to the total compensation for the prior Plan Year paid to
               such Eligible Employee.

                  (4) The "actual contribution percentage test" refers
               collectively to the tests set forth in paragraphs (1) and (2) of
               subsection (b) of this Section relating to after-tax voluntary
               contributions and matching contributions. The actual contribution
               percentage test shall be satisfied if either of such tests are
               satisfied.

                  (5) The "HCE average contribution percentage" for a Plan Year
               is a percentage determined for the group of Eligible Employees
               who are eligible to make after-tax voluntary contributions for
               the current Plan Year or share in an allocation of matching
               contributions for the current Plan Year (or both), and who are
               highly compensated employees for the current Plan Year. Such
               percentage shall be equal to the average of the ratios,
               calculated separately for each such Employee to the nearest
               one-hundredth of one percent, of the sum of the after-tax
               voluntary contributions made by such Eligible Employee for the
               current Plan Year, the matching contributions made for the
               benefit of such Eligible Employee for the current Plan Year and,
               in the Committee's sole discretion, to the extent permitted by
               Regulations, some or all of the salary reduction contributions
               made during the current Plan Year for the benefit of such
               Eligible Employee (if any), to the total compensation for the
               current Plan Year paid to such Eligible Employee.

                  (6) The "NHCE average contribution percentage" for a Plan Year
               is a percentage determined for the group of Eligible Employees
               who are eligible to make after-tax voluntary contributions for
               the prior Plan Year or share in an allocation of matching
               contributions for the prior Plan Year (or both), and who were not
               highly compensated employees for the prior Plan Year. Such
               percentage shall be equal to the average of the ratios,
               calculated separately for each such Eligible Employee to the
               nearest one-hundredth of one percent, of the sum of the after-tax
               voluntary contributions made by such Eligible Employee for the
               prior Plan Year, the matching contributions made for the benefit
               of such Eligible Employee for the prior Plan Year and, in the
               Committee's sole discretion, to the extent permitted by
               Regulations, some or all of the salary reduction contributions
               made during the prior Plan Year for the benefit of such Eligible
               Employee (if any), to the total compensation for the prior Plan
               Year paid to such Eligible Employee.

                  (7) The "aggregate limit" shall equal the greater of (A) the
               sum of (i) 1.25 times the greater of the NHCE average deferral
               percentage or the NHCE average contribution percentage plus (ii)
               the lesser of (a) the sum of two percentage points and the lesser
               of the NHCE average deferral percentage or the NHCE average
               contribution percentage and (b) 200% of the lesser of the NHCE
               average deferral percentage or the NHCE average contribution
               percentage; or (B) the sum of (i) 1.25 times the lesser of the
               NHCE average deferral percentage or the NHCE average contribution
               percentage plus (ii) two percentage points plus the greater of
               (a) the NHCE average deferral percentage or (b) the NHCE average
               contribution percentage, but not greater than 200% of the greater
               of (a) and (b) above.

                                       16
<PAGE>   22

                  (8) A "highly compensated employee" is, for a Plan Year, any
               Employee who is (a) a 5%-owner (as determined under section
               416(i) of the Code) at any time during the current Plan Year or
               the prior Plan Year or (b) was paid compensation in excess of
               $80,000 (as adjusted for increases in the cost of living in
               accordance with section 414(q)(1)(B)(ii) of the Code) from an
               Employer for the prior Plan Year. The Employees taken into
               account under clause (b) above shall be limited to those
               Employees who were members of the "top-paid group" (as defined in
               section 414(q)(3) of the Code) for the prior Plan Year.

                  (9) The term "compensation" shall have the meaning set forth
               in section 414(s) of the Code or, in the discretion of the
               Committee, any other meaning in accordance with the Code for
               these purposes.

                  (10) If the Plan and one or more other plans of the Employer
               to which elective deferrals or qualified nonelective
               contributions (as such term is defined in section 401(m)(4)(C) of
               the Code) are made are treated as one plan for purposes of
               section 410(b) of the Code, such plans shall be treated as one
               plan for purposes of this Section.

For the initial Plan Year commencing on the Effective Date, for purposes of
determining the NHCE average deferral percentage and the NHCE average
contribution percentage pursuant to the definitions of such terms contained in
paragraphs (3) and (6) of this subsection, respectively, the Committee shall
apply such definitions by substituting the phrase "for the Plan Year" for the
phrase "for the prior Plan Year" each time such phrase appears therein. For any
subsequent Plan Year, the Committee may, to the extent permitted by applicable
U.S. Treasury Regulations, elect to apply the definitions contained in
paragraphs (3) and (6) of this subsection, respectively, by substituting the
phrase "for the Plan Year" for the phrase "for the prior Plan Year" each time
such phrase appears in such paragraphs.(1)

                  (e) Adjustments to Comply with Limits. This subsection sets
forth the adjustments and correction methods which shall be used to comply with
the actual deferral

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

     (1) ALTERNATIVELY, FOR THE INITIAL PLAN YEAR, THE COMPANY MAY USE 3% FOR
ADP/ACP INSTEAD OF CURRENT PLAN YEAR DATA.

                                       17
<PAGE>   23

percentage test under section 401(k)(3) of the Code, and the
actual contribution percentage test under section 401(m) of the Code.

          (1) Adjustments to Comply with Actual Deferral Percentage Test. (A)
     Adjustment to Deferred Compensation Contributions of Highly Compensated
     Employees. The Committee shall cause to be made such periodic computations
     as it shall deem necessary or appropriate to determine whether the actual
     deferral percentage test is satisfied during a Plan Year, and, if it
     appears to the Committee that such test will not be satisfied, the
     Committee shall take such steps as it deems necessary or appropriate to
     adjust the salary reduction contributions made pursuant to Section 4.1 for
     all or a portion of such Plan Year on behalf of each Participant who is a
     highly compensated employee to the extent necessary in order for the actual
     deferral percentage test to be satisfied. If, as of the end of the Plan
     Year, the Committee determines that, notwithstanding any adjustments made
     pursuant to the preceding sentence, the actual deferral percentage test was
     not satisfied, the Committee shall calculate a total amount by which salary
     reduction contributions must be reduced in order to satisfy either such
     test, in the manner prescribed by section 401(k)(8)(B) of the Code (the
     "excess contributions amount"). The amount to be returned to each
     Participant who is a highly compensated employee shall be determined by
     first reducing the salary reduction contributions of each Participant whose
     actual dollar amount of salary reduction contributions for such Plan Year
     is highest until such reduced dollar amount equals the next highest actual
     dollar amount of salary reduction contributions made for such Plan Year on
     behalf of any highly compensated employee, or until the total reduction
     equals the excess contributions amount. If further reductions are
     necessary, then the salary reduction contributions on behalf of each
     Participant who is a highly compensated employee and whose actual dollar
     amount of salary reduction contributions made for such Plan Year is the
     highest (determined after the reduction described in the preceding
     sentence) shall be reduced in accordance with the preceding sentence. Such
     reductions shall continue to be made to the extent necessary so that the
     total reduction equals the excess contributions amount.

          (B) Recharacterization, Corrective Distributions and Forfeitures. No
     later than 2 1/2 months after the end of the Plan Year (or if correction by
     such date is administratively impracticable, no later than the last day of
     the subsequent Plan Year), the Committee shall, in its discretion either
     (i) recharacterize the amount of such reduction as an after-tax voluntary
     contribution made pursuant to Section 5.1 or (ii) cause to be distributed
     to each affected Participant (I) the amount of salary reduction
     contributions to be returned to such Participant pursuant to subparagraph
     (A) above, plus any income and minus any loss allocable thereto, and (II)
     any corresponding matching contributions in which the Participant would be
     vested if the Participant terminated employment as of the last day of such
     Plan Year (or upon the date of the Participant's actual termination of
     employment, if earlier), plus any income and minus any loss allocable
     thereto and any corresponding matching contributions in which the
     Participant would not have been vested shall be forfeited. The amount of
     any income or loss allocable to any such reductions to be so distributed or
     forfeited, including income or loss

                                       18

<PAGE>   24

     attributable to the gap period (as defined in Regulations), shall be
     determined pursuant to applicable Regulations. The amount of salary
     reduction contributions to be distributed to a Participant hereunder shall
     be reduced by any excess deferrals previously distributed to such
     Participant pursuant to Section 6.1 in order to comply with the limitations
     of section 402(g) of the Code. The unadjusted amount of any such reductions
     so distributed shall be treated as "annual additions" for purposes of
     Section 6.2 relating to the limitations under section 415 of the Code.

          (2) Adjustments to Comply with Actual Contribution Percentage Test.
     (A) Adjustment to Matching Contributions of Highly Compensated Employees.
     If, as of the end of the Plan Year, after taking into account the
     distribution and forfeiture of matching contributions made on behalf of
     highly compensated employees pursuant to subparagraph (1)(B) above, the
     Committee determines that the actual contribution percentage test was not
     satisfied, the Committee shall calculate a total amount by which after-tax
     voluntary contributions and matching contributions made pursuant to
     Sections 5.1 and 4.2, respectively, must be reduced in order to satisfy
     such test, in the manner prescribed by section 401(m)(6)(B) of the Code
     (the "excess aggregate contributions amount"). The amount to be reduced
     with respect to each Participant who is a highly compensated employee shall
     be determined by first reducing the after-tax voluntary contributions and
     matching contributions for each Participant whose actual dollar amount of
     after-tax voluntary contributions and matching contributions for such Plan
     Year is highest until the such reduced dollar amount equals the next
     highest actual dollar amount of after-tax voluntary contributions and
     matching contributions made for such Plan Year on behalf of any highly
     compensated employee, or until the total reduction equals the excess
     aggregate contributions amount. If further reductions are necessary, then
     such after-tax voluntary contributions and matching contributions on behalf
     of each Participant who is a highly compensated employee and whose actual
     dollar amount of after-tax voluntary contributions and matching
     contributions made for such Plan Year is the highest (determined after the
     reduction described in the preceding sentence) shall be reduced in
     accordance with the preceding sentence. Such reductions shall continue to
     be made to the extent necessary so that the total reduction equals the
     excess aggregate contributions amount. Any reductions prescribed by this
     subparagraph shall be applied first to after-tax voluntary contributions
     made by a Participant and after such contributions (if any) have been
     exhausted, next to the matching contributions made on the Participant's
     behalf.

          (B) Corrective Distributions and Forfeitures. No later than 2 1/2
     months after the end of the Plan Year (or if correction by such date is
     administratively impracticable, no later than the last day of the
     subsequent Plan Year), the Committee shall cause to be distributed to the
     Participant such after-tax voluntary contributions made by such
     Participant, and if applicable, such matching contributions in which the
     Participant would have been vested had the Participant terminated
     employment as of the last day of such Plan Year (or on the date of the
     Participant's actual termination of employment, if earlier), plus any
     income and minus any loss allocable thereto. Any such matching
     contributions in which the Participant would not have been vested shall be
     forfeited. The amount of any income or loss allocable to any such
     reductions to be so

                                       19
<PAGE>   25

     distributed or forfeited, including income or loss attributable to the gap
     period (as defined in Regulations), shall be determined pursuant to
     applicable Regulations. The unadjusted amount of any such reductions so
     distributed or forfeited shall be treated as "annual additions" for
     purposes of Section 6.2 relating to the limitations under section 415 of
     the Code.

          (3) Adjustments to Comply with the Aggregate Limit. If, after making
     the adjustments required by paragraphs (1) and (2) of this subsection for a
     Plan Year, the Committee determines that the sum of the HCE average
     deferral percentage and the HCE average contribution percentage exceeds the
     aggregate limit for such Plan Year, the Committee shall within 2 1/2 months
     after the close of such Plan Year (or if correction by such date is
     administratively impracticable, no later than the last day of the
     subsequent Plan Year) adjust the salary reduction contributions made
     pursuant to Section 4.1 for such Plan Year on behalf of each Participant
     who is a highly compensated employee to the extent necessary to eliminate
     such excess. For purposes of the preceding sentence, the HCE average
     deferral percentage and HCE average contribution percentage shall be equal
     to the highest deferral percentage and contribution percentage permissible
     in determining the excess contributions amount under section 401(k)(8)(B)
     of the Code pursuant to paragraph (1) above, and the excess aggregate
     contributions amount under section 401(m)(6)(B) of the Code pursuant to
     paragraph (2) above, respectively. Such adjustment shall be effected in the
     same manner described in paragraph (1) of this subsection relating to
     reductions made to satisfy the actual deferral percentage test. In the
     event that further reductions are necessary, the Committee shall adjust the
     after-tax voluntary contributions and matching contributions made pursuant
     to Sections 5.1 and 4.2, respectively for such Plan Year on behalf of each
     Participant who is a highly compensated employee to the extent necessary to
     eliminate such excess. Such adjustment shall be effected in the same manner
     described in paragraph (2) of this subsection relating to reductions made
     to satisfy the actual contribution percentage test.

                  Section 6.4. Other Limitations on Employer Contributions. The
contributions of an Employer for any Plan Year shall not exceed the maximum
amount for which a deduction is allowable to such Employer for federal income
tax purposes for the fiscal year of such Employer that ends with or within such
Plan Year.
                  Any contribution made by an Employer by reason of a good faith
mistake of fact, or the portion of any contribution made by an Employer that
exceeds the maximum amount for which a deduction is allowable to such Employer
for federal income tax purposes by reason of a good faith mistake in determining
the maximum allowable deduction, shall upon the request of

                                       20

<PAGE>   26

such Employer be returned by the Trustee to the Employer. An Employer's request
and the return of any such contribution must be made within one year after such
contribution was mistakenly made or after the deduction of such excess portion
of such contribution was disallowed, as the case may be. The amount to be
returned to an Employer pursuant to this paragraph shall be the excess of (i)
the amount contributed over (ii) the amount that would have been contributed had
there not been a mistake of fact or a mistake in determining the maximum
allowable deduction. Earnings attributable to the mistaken contribution shall
not be returned to the Employer, but losses attributable thereto shall reduce
the amount to be so returned. If the return to the Employer of the amount
attributable to the mistaken contribution would cause the balance of any
Participant's account as of the date such amount is to be returned (determined
as if such date coincided with the close of a Plan Year) to be reduced to less
than what would have been the balance of such account as of such date had the
mistaken amount not been contributed, the amount to be returned to the Employer
shall be limited so as to avoid such reduction.

                                   ARTICLE 7

                           TRUST AND INVESTMENT FUNDS

                  Section 7.1. Trust. A Trust shall be created by the execution
of a trust agreement between the Company (acting on behalf of the Employers) and
the Trustee. All contributions under the Plan shall be paid to the Trustee. The
Trustee shall hold all monies and other property received by it and invest and
reinvest the same, together with the income therefrom, on behalf of the
Participants collectively in accordance with the provisions of the trust
agreement. The Trustee shall make distributions from the Trust Fund at such time
or times to such person or persons and in such amounts as the Committee directs
in accordance with the Plan.

                                       21
<PAGE>   27
          Section 7.2. Investment Funds. (a) In General. The Committee shall
cause the Trustee to establish and maintain two or more separate investment
funds exclusively for the collective investment and reinvestment of amounts
credited to Participants' Accounts, as directed by the Participants. Additional
investment funds may be established as determined by the Committee from time to
time, in its sole discretion.

          (b) Company Stock Fund. In addition to the investment funds
established pursuant to subsection (a), the Committee may, at such time as it
shall determine, cause the Trustee to establish, operate and maintain a Company
Stock Fund. The assets of the Company Stock Fund shall be invested primarily in
shares of Company Stock and short-term liquid investments in a commingled money
market fund maintained by the Trustee, to the extent determined by the Trustee
to be necessary to satisfy such fund's cash needs. Each Participant's
proportional interest in the Company Stock Fund shall be represented by units of
participation, each such unit representing a proportionate interest in all the
assets of such fund.

                                   ARTICLE 8

                              PARTICIPANT ACCOUNTS
                            AND INVESTMENT ELECTIONS

          Section 8.1. Participant Accounts and Investment Elections. (a)
Separate Accounts. The Committee shall establish and maintain, or cause the
Trustee or such other agent as the Committee may select to establish and
maintain, a separate Account for each Participant. Such Accounts shall be solely
for accounting purposes, and no segregation of assets of the Trust among the
separate Accounts shall be required. Each Account shall consist of the
following:

          (i) if salary reduction contributions are being made or have been made
     for a Participant, a Salary Reduction Account,

                                       22

<PAGE>   28

          (ii) if matching contributions are made or have been made for a
     Participant, a Matching Account,

          (iii) if profit sharing contributions are made or have been allocated
     to a Participant, a Profit Sharing Account,

          (iv) if a Participant makes or has made after-tax voluntary
     contributions pursuant to Section 5.1, a Voluntary Contributions Account;
     and

          (v) if a Participant makes a rollover contribution to the Plan, a
     Rollover Account.

          The Committee shall establish and maintain, or cause the Trustee or
such other agent as the Committee may select to establish and maintain,
investment subaccounts with respect to each such investment fund to which
amounts contributed under the Plan shall be credited according to each
Participant's investment elections pursuant to subsections (b) and (c) of this
Section, including any loan subaccount established pursuant to Section 9.2. All
such subaccounts shall be for accounting purposes only, and there shall be no
segregation of assets within the investment funds among the separate
subaccounts.

          (b) Investment Election. Each Participant shall make an investment
election that shall apply to the investment of contributions to be made on his
behalf (other than employer matching contributions pursuant to Section 4.2)
pursuant to Article 4 or 5 and any earnings on such contributions. Such election
shall specify that such contributions be invested either (i) wholly in one of
the funds maintained or employed by the Trustee pursuant to subsection (a) or
(ii) divided among such funds in multiples established by the Committee from
time to time. Separate investment elections with respect to different types of
contributions shall not be made. During any period in which no direction as to
the investment of a Participant's account is on file with the Committee,
contributions made by him or on his behalf to the Plan shall be invested in such
manner as the Committee shall determine.

                                       23

<PAGE>   29

          To the extent necessary to comply with federal securities laws and
Company policies regarding ownership of Company Stock as in effect from time to
time, the Committee shall prescribe rules limiting Participants' rights to
direct investment of their Plan Accounts in the Company Stock Fund.

          (c) Change of Investment Election. A Participant may elect to change
his investment election at such intervals as may be determined by the Committee,
but not less frequently than once during each calendar quarter. Such change
shall be limited to the investment choices then maintained or employed by the
Trustee pursuant to Section 8.1(a). A change in investment election made
pursuant to this Section shall apply to existing Accounts, contributions made on
behalf of or by the Participant under Article 4 or Article 5 after to such
change, or both. Any such change shall specify that such Accounts or
contributions be invested either (i) wholly in one of the funds maintained
pursuant to subsection (a) or (ii) divided among such funds in multiples
established by the Committee from time to time. A Participant's change of
investment election must be made by providing a written direction to the
Committee or through such other means as may be prescribed by the Committee. The
Committee shall prescribe rules regarding the time by which such an election
must be made in order to be effective for a particular Valuation Date.

          (d) Matching Account. Notwithstanding any provision of this Section to
the contrary, all or substantially all of a Participant's Matching Account shall
be invested in the Company Stock Fund. A Participant shall not have the right to
direct that any portion of his Matching Account be invested in any fund other
than the Company Stock Fund.

                                       24

<PAGE>   30

          Section 8.2. Allocation of Fluctuation in Value of Investment Fund
Assets. In the event that contributions, income and losses are not otherwise
specifically allocated to Participant accounts by the Trustee or at its
direction as soon as practicable after each Valuation Date, the net worth of
each investment fund as of such Valuation Date shall be determined. If the net
worth of such investment fund so determined is more or less than the total of
(a) all balances credited as of such Valuation Date to the subaccounts of
Participants invested in the investment fund as of such Valuation Date who are
Participants as of such Valuation Date, and (b) the balances of the subaccounts
of persons invested in the investment fund as of such Valuation Date whose
service has terminated prior to the Valuation Date for which the allocation is
being made, the amount of any excess or deficiency shall be prorated and
credited or charged to such subaccounts proportionally to the balances of such
subaccounts as of the preceding Valuation Date after making all allocations for
such preceding Valuation Date prescribed by this Article and increasing each
subaccount by a percentage of the contributions made after such preceding
Valuation Date and allocable to such subaccount pursuant to this Section and
decreasing each such subaccount by a percentage of any distributions from such
subaccount during such period (but not less than zero), all of such increases
and decreases to be made in such manner as the Committee determines in its
discretion to be necessary to provide an equitable allocation of any change in
the value of the adjusted net worth of the Trust Fund with respect to the period
subsequent to such preceding Valuation Date for which such contributions and
distributions were credited or debited to each such subaccount. Such allocations
shall be made as of each Valuation Date.

          Section 8.3. Determination of Net Worth of Investment Funds. (a) In
General. The net worth of an investment fund as of any Valuation Date shall be
the fair market value of

                                       25

<PAGE>   31

all assets (including any uninvested cash) held by such investment fund, as
determined by the Trustee on the basis of such evidence and information as it
may deem pertinent and reliable, reduced by any liabilities other than
Participants' Accounts.

          (b) Company Stock Fund. As soon as practicable after the close of
business on each Valuation Date, the Committee shall cause the Trustee to
determine the value of the Company Stock Fund on such Valuation Date in the
manner prescribed in subsection (a) of this Section, and the value so determined
shall be divided by the total number of participating units allocated to the
investment fund subaccounts of each Participant. The resulting quotient shall be
the value of a participating unit in the Company Stock Fund as of such Valuation
Date and shall constitute the "price" of a participating unit as of such
Valuation Date. Participating units shall be credited, at the price so
determined, to the investment fund subaccounts of Participants with respect to
moneys contributed or transferred to such subaccounts on their behalf on such
Valuation Date. The value of all participating units credited to Participants'
investment fund subaccounts shall be redetermined in a similar manner as of each
Valuation Date.

          Section 8.4. Allocations of Contributions Among Participants'
Accounts. (a) Allocation of Salary Reduction Contributions. Salary reduction
contributions made pursuant to Section 4.1 shall be allocated to the Salary
Reduction Account of each Participant for whom such contributions are made as
soon as practicable after the Valuation Date coinciding with or next following
the date on which such contribution is delivered to the Trustee and shall be
credited to such Participant's account as of such Valuation Date.

          (b) Allocation of Matching Contributions. Employer matching
contributions made pursuant to Section 4.2 for a Plan Year shall be allocated to
the Matching Account of each

                                       26

<PAGE>   32

Participant for whom such contributions are made as soon as practicable after
the close of the Plan Year for which the contribution is made or as of such
other date as the Committee may determine and shall be credited to the
Participant's Matching Account as of the Valuation Date coinciding with or next
following the date on which such contribution is delivered to the Trustee.

          (c) Allocation of Profit Sharing Contributions. Employer profit
sharing contributions made pursuant to Section 4.3 for a Plan Year shall be
allocated to the Profit Sharing Account of each Participant for whom such
contributions are made as soon as practicable after the close of the Plan Year
for which the contribution is made and shall be credited to Participants' Profit
Sharing Accounts as of the Valuation Date coinciding with or next following the
date on which such contribution is delivered to the Trustee.

          (d) Allocation of Rollover Contributions. Rollover contributions made
pursuant to Article 5 shall be allocated to the Rollover Account of each
Participant who makes such a contribution as soon as practicable after the
Valuation Date coinciding with or next following the date on which such
contribution is delivered to the Trustee and shall be credited to such
Participant's account as of such Valuation Date.

          (e) Forfeitures. As of the end of each Plan Year, after making the
adjustments described in Section 8.3, forfeitures arising under this Plan shall
be applied to fund Employer matching contributions.

          Section 8.5. Correction of Error. If it comes to the attention of the
Committee that an error has been made in any of the allocations prescribed by
this Article 8, appropriate adjustment shall be made to the accounts of all
Participants and designated Beneficiaries that are

                                       27

<PAGE>   33

affected by such error, except that no adjustment need be made with respect to
any Participant or Beneficiary whose account has been distributed in full prior
to the discovery of such error.

                                   ARTICLE 9
                      WITHDRAWALS, LOANS AND DISTRIBUTIONS

          Section 9.1. Withdrawals Prior to Termination of Employment. (a)
Withdrawals After Age 59 1/2. A Participant who has attained age 59 1/2 may
request the Committee to distribute all or any portion of such Participant's
Account to the extent such Account is vested as of any Valuation Date.

          (b) Hardship Withdrawals. A Participant who is an Employee may
withdraw as of any Valuation Date all or a portion of the balance of his Salary
Reduction Account only if the Participant has incurred a financial hardship. The
determination of the existence of financial hardship and the amount required to
be distributed to satisfy the need created by the hardship will be made by the
Committee in a uniform and non-discriminatory manner according to the following
rules:

          (1) A financial hardship shall be deemed to exist if the Participant
     certifies to the Committee that the financial need is on account of:

               (A) expenses for medical care described in section 213(d) of the
          Code previously incurred by the Participant, the Participant's spouse,
          or any dependents of the Participant (as defined in section 152 of the
          Code) or necessary for these persons to obtain medical care described
          in section 213(d) of the Code;

               (B) costs directly related to the purchase of a principal
          residence for the Participant (excluding mortgage payments);

               (C) payment of tuition, room and board and related educational
          fees for the next 12 months of post-secondary education for the
          Participant, the Participant's spouse, the Participant's children, or
          any dependents of the Participant (as so defined);

                                       28

<PAGE>   34

               (D) payments necessary to prevent the eviction of the Participant
          from the Participant's principal residence or foreclosure of the
          mortgage on that residence; or

               (E) the payment of funeral expenses incurred in respect of the
          Participant or the Participant's spouse or any dependents of the
          Participant (as so defined).

          (2) A Participant shall be required to certify to the Committee on a
     form prescribed by the Committee both the reason for the financial need and
     that such need cannot be satisfied from sources other than a withdrawal
     from the Participant's accounts. The Participant shall be required to
     submit any additional supporting documentation as may be requested by the
     Committee.

          (3) A distribution shall be treated as necessary to satisfy a
     financial need if the Participant certifies to the Committee (and if the
     Committee has no reason to believe that such certification is inaccurate)
     that such hardship cannot be relieved by or through:

               (A) reimbursement or compensation by insurance or otherwise, or

               (B) reasonable liquidation of the Participant's assets (including
          for this purpose assets of the Participant's spouse and minor children
          that are reasonably available to the Participant), to the extent such
          liquidation would not itself cause an immediate and heavy financial
          need, or

               (C) other distributions or nontaxable (at the time of the loan)
          loans from plans maintained by an Employer or by another employer, or
          by borrowing from commercial sources on reasonable commercial terms.

          (4) Notwithstanding anything to the contrary, earnings credited to a
     Participant's Salary Reduction Account attributable to periods after 1988
     shall not be available for withdrawal pursuant to this subsection.
     Furthermore, the amount available for withdrawal pursuant to this
     subsection shall be reduced by the amount of any loan outstanding made
     pursuant to Section 9.2, and no withdrawal pursuant to this subsection
     shall be permitted to the extent that such withdrawal would cause the
     aggregate amount of such loan outstanding to exceed the limits described in
     Section 9.2.

          (c) Withdrawal of Matching Account. A Participant who is credited with
     at least 5 Years of Service may make a withdrawal up to an amount equal to
     the balance of his Matching Account, regardless of his age.

          (d) Other Withdrawals. A Participant may withdraw as of any Valuation
     Date an amount from

                                       29

<PAGE>   35

his Voluntary Contribution Account and his Rollover Account and an amount from
his vested Matching Account that is not greater than the balance of such account
as of the date of such withdrawal less the amount of contributions allocated to
such account within the twenty-four month period preceding the date of such
withdrawal.

          (e) Distributions After Age 70 1/2. A Participant who has attained age
70 1/2 and who is a 5%-owner (within the meaning of section 416(i) of the Code)
in the calendar year in which the Participant attains age 70 1/2, shall commence
distribution of such Participant's Account no later than April 1 of the calendar
year following the calendar year in which the Participant attains age 70 1/2.
Such distributions shall be in the time, and in the minimum amount, prescribed
by section 401(a)(9) of the Code and Regulations.

          (f) Miscellaneous Rules. Any amounts withdrawn pursuant to this
Section shall be charged to the Participant's Accounts in the following order,
as applicable:

     (i)  the Participant's Voluntary Contribution Account, to the extent
          thereof, then
     (ii) the Participant's Rollover Account, to the extent thereof, then
     (iii) the Participant's Salary Reduction Account, to the extent
          thereof, then
     (iv) the Participant's Matching Account, to the extent thereof, then
     (v)  the Participant's Profit Sharing Account, to the extent thereof.

          A Participant may request a withdrawal pursuant to this Section in the
manner prescribed by the Committee, subject to such uniform limitation as may be
prescribed by the Committee on the frequency of withdrawals. The Committee shall
prescribe uniform rules which shall govern the administrative aspects of
withdrawals such as the minimum amounts that may be withdrawn (if such minimum
does not exceed $1,000), the manner pursuant to which such withdrawals are
processed, the manner in which withdrawals are charged to a Participant's
investment subaccounts, and the Valuation Date on which a Participant's Account
shall be valued for purposes of calculating such a withdrawal. All withdrawals
made pursuant to this Section

                                       30

<PAGE>   36

shall be paid in cash; provided that, with respect to the portion of any such
withdrawal from the Participant's Account that is credited to the Company Stock
Fund, the Participant shall be provided with the opportunity to elect to receive
such portion in the form of shares of Company Stock (with cash in lieu of any
fractional shares).

          Section 9.2. Loans to Participants. (a) Making of Loans. Subject to
the restrictions set forth in this Section any Participant who is an Employee
may request, in the manner prescribed by the Committee, to borrow funds from the
Plan. The principal balance of such loan shall not exceed the lesser of (i) 50%
of the balance of the Participant's Salary Reduction Account, Voluntary
Contribution Account, Rollover Account and the vested portion of his Matching
Account as of the Valuation Date coinciding with or immediately preceding the
day on which the loan is made, and (ii) $50,000, reduced by the excess, if any,
of the highest outstanding loan balance of the Participant under all plans
maintained by the Employer during the period of time beginning one year and one
day prior to the date such loan is to be made and ending on the date such loan
is to be made over the outstanding balance of loans from all such plans on the
date on which such loan was made. No loans shall be made from a Participant's
Profit Sharing Account or Voluntary Contribution Account.

          (b) Conditions for Loans. Amounts equal to any loan made pursuant to
this Section shall be transferred first from the Participant's nonforfeitable
interest in his Matching Account, then from his Salary Reduction Account to the
extent thereof, then from his Rollover Account, if any, to the extent thereof.
Amounts so transferred from a Participant's Account shall be debited pro rata
from the investment subaccounts of such account. Any loan approved by the

                                       31

<PAGE>   37

Committee pursuant to the preceding paragraph (a) shall be made only upon the
following terms and conditions:

          (1) The period for repayment of the loan shall be determined by the
     Participant within guidelines prescribed by the Committee, but such period
     shall not exceed five years from the date of the loan; provided, however,
     that if the purpose of the loan as determined by the Committee is to
     acquire any dwelling unit that within a reasonable time is to be used as
     the principal residence of the Participant, then such period for repayment
     shall not exceed 20 years. Any loan may be prepaid, without penalty, by
     delivery to the Committee of cash in an amount equal to the entire unpaid
     balance of such loan. Any loan shall be due in full upon termination of
     employment.

          (2) No loan shall be made unless the Participant consents to have such
     loan repaid in substantially equal installments deducted from the regular
     payments of the Participant's compensation during the term of the loan.

          (3) Each loan shall be evidenced by the Participant's collateral
     promissory note for the amount of the loan, with interest, payable to the
     order of the Trustee, and shall be secured by an assignment of a portion of
     the Participant's account balances under the Plan equal to the initial
     principal amount of such loan and such other collateral as required by the
     Committee.

          (4) Each loan shall bear a fixed interest rate equal to the prime rate
     as published in the Wall Street Journal on the first business day of the
     calendar quarter during which the Participant initiates the loan, plus 1%
     (or such other rate prescribed by the Committee commensurate with the
     interest rate then being charged by persons in the business of lending
     money in the area for loans made under similar circumstances).

          (5) The Committee may, in its sole discretion, restrict the amount to
     be disbursed pursuant to any loan request to the extent it deems necessary
     to take into account any fluctuations in the value of a Participant's
     accounts since the Valuation Date immediately preceding the date on which
     such loan is to be made.

          (6) The Committee shall, in its discretion, cause a charge as an
     expense to the accounts of any Participant receiving a loan any reasonable
     administrative fee for processing or annual maintenance of such loan.

          If any loan or portion of a loan made to a Participant under the Plan,
together with the accrued interest thereon, is in default, the Trustees shall
take appropriate steps to collect on the note and foreclose on the security. The
Committee shall prescribe uniform rules regarding the circumstances under which
a Participant's loan will be considered in "default" for this

                                       32

<PAGE>   38

purpose, in a manner consistent with Regulations. Except as may be provided
below, upon a Participant's termination of employment, any loan which is
outstanding shall become immediately payable in full. If the Participant fails
to repay such loan it shall be deemed in default and the Plan Administrator
shall treat such default as a taxable event to the Participant, issue the
appropriate reporting to the tax authorities and charge such unpaid amount to
the Participant's accounts after all other adjustments required under the Plan,
but before any distribution pursuant to Section 9.3. Notwithstanding the
foregoing, if upon a Participant's termination of employment, there is a loan
outstanding that is in excess of $2,000, the Participant may elect to continue
to repay such loan, in accordance with its original term, and payments shall be
made not less frequently that quarterly. If, however, a terminated Participant
fails to make quarterly repayments, such loan shall be deemed in default and the
Plan Administrator shall treat such default as a taxable event to the
Participant, issue the appropriate reporting to the tax authorities and charge
such unpaid amount to the Participant's accounts after all other adjustments
required under the Plan, but before any distribution pursuant to Section 9.3.

          (c) Applicability. The provisions of this Section shall apply to any
person who is a Participant but who is not an Employee and any Beneficiary of a
deceased Participant if such Participant or Beneficiary is a "party in interest"
as defined in section 3(14) of ERISA. The grant of a loan pursuant to this
Section and the terms and conditions thereof shall apply to any such Participant
or Beneficiary in the same manner as to a Participant who is an Employee, except
that the requirements of Section 9.2(b)(2) shall be met with respect to each
such Participant and Beneficiary if such Participant or Beneficiary consents to
have such loan repaid in substantially equal installments as determined by the
Committee, but not less frequently than quarterly.

                                       33

<PAGE>   39

          (d) Loan Subaccount. The Committee shall cause to be established and
maintained a loan subaccount for the receipt of amounts transferred from a
Participant's Account pursuant to this Section. Appropriate accounting entries
reflecting such transfers shall be concurrent with the disbursement to the
Participant of amounts borrowed. A repayment of interest or principal received
in respect of amounts borrowed by a Participant shall be credited to the loan
subaccount of such Participant as soon as practicable after such repayment is
delivered to the Trustee. The Committee shall then cause to be credited such
repayments to the Participant's Salary Reduction Account, Voluntary Contribution
Account, Rollover Account and Matching Account in the same proportion as such
accounts were charged with the loan. Repayments so allocated to a Participant
shall then be allocated among such Participant's investment fund subaccounts in
accordance with such Participant's investment direction in effect at the time
that such repayments are credited to the Participant's accounts.

          Section 9.3. Distribution upon Termination of Employment. (a) Vesting.
(1) Termination of Employment Entitling Participant to Full Vesting. A
Participant's entire Account shall be fully vested if the Participant's
employment terminates:

          (i) on account of the Participant's retirement on or after age 60,

          (ii) on account of the Participant's total and permanent disability of
     a character which prevents the Participant, in the judgment of the
     Committee corroborated in writing by a licensed physician, from performing
     his usual duties for his Employer,

          (iii) on account of the Participant's death, or

          (iv) after completion of at least five Years of Service.

If a Participant's employment terminates under any circumstance other than those
listed above, vesting of the Participant's Account shall be determined pursuant
to paragraph (2) below.

                                       34

<PAGE>   40

          (3) Other Termination of Employment. If a Participant's employment
terminates under circumstances other than those described in paragraph (1)
above, the Participant shall be fully vested in the entire balance of the
Participant's Salary Reduction Account, Rollover Account, and Voluntary
Contribution Account, and shall be vested in a percentage of the value of his
Matching Account and Profit Sharing Account determined by reference to the
number of the Participant's Years of Service, in accordance with the following
schedule:

                                                    Percentage of Value of
                                                    Matching and Profit
Years of Service                                    Sharing Accounts

less than 5 Years of Service                                        0%
5 or more Years of Service                                         100%.

          (4) Time of Forfeiture. Upon the earlier of (i) the date on which a
Participant receives a distribution of his vested Account balance pursuant to
this Section and (ii) the date on which the Participant incurs five consecutive
One-Year Break in Service, the portion of the Participant's Matching Account and
Profit Sharing Account that is not vested (if any) shall be credited to a
special forfeiture account established on behalf of such Participant. Such
credit shall occur as of the Valuation Date as of which the adjusted balance is
determined, and such account shall not be taken into account in determining, nor
participate in, the allocations prescribed by Article 8.

          (b) Time of Distribution. A Participant or Beneficiary shall be
entitled to a distribution of his vested Account as soon as administratively
practicable after the date of the Participant's termination of employment, or,
subject to Section 9.4, may defer distribution to a later date; provided,
however, that:

                                       35

<PAGE>   41

          (i) in the case of a distribution to the Participant, distribution
     shall be made or shall commence no later than the 60th day after the
     calendar year that contains the later of the Participant's 60th birthday
     and the date of the Participant's termination of employment, unless the
     Participant makes an affirmative election to defer commencement of
     distribution to a later date which in no event shall be later than April 1
     of the calendar year following the calendar year in which the Participant
     attains age 70 1/2;

          (ii) in the case of a distribution to a Beneficiary who is a person or
     entity other than the Participant's spouse, distribution shall be made in a
     lump sum no later than December 31 of the calendar year that contains the
     fifth anniversary of the Participant's death, or shall be paid in
     installments commencing no later than December 31 of the calendar year
     containing the first anniversary of the date of the Participant's death;

          (iii) in the case of a distribution to a Beneficiary who is the
     Participant's spouse, distribution shall made or shall commence no later
     than December 31 of the calendar year in which the Participant would have
     attained age 70 1/2 (or, if later, December 31 of the calendar year
     containing the first anniversary of the Participant's death).

          (c) Form of Distribution. (1) Distribution to Participant. In the case
of distribution to the Participant, distribution of the Participant's Account
shall be in one of the following forms, as elected by the Participant, subject
to Section 9.7:

          (i) Lump Sum. A single sum payment of the Participant's entire
     Account.

          (ii) Monthly Installments. Payment of the Account in a series of
     monthly installments of approximately equal amounts over a period elected
     by the distributee not longer than the joint life expectancy of the
     Participant and his Beneficiary or, in the case of a distributee other than
     the Participant, the life expectancy of the distributee. If the
     Participant's Beneficiary is an individual or entity other than the
     Participant's spouse, the present value (as determined by the Committee) of
     the installments expected to be paid to the Participant shall not be less
     than 50% of the balance of his Account at the time distributions hereunder
     shall commence, and, to the extent required by law, shall comply with the
     incidental benefit requirement of section 401(a)(9) of the Code. The amount
     of the installment payments made to a distributee shall be adjusted on a
     regular periodic basis by the Committee to take into account the investment
     performance of the Participant's Account. The Committee shall prescribe
     rules regarding the manner in which each payment is charged against the
     Participant's investment subaccounts.

A Participant's election from among the foregoing forms of benefit shall be
subject to the election procedures described in Section 9.7.

                                       36

<PAGE>   42

          (2) Distribution to Beneficiary. In the case of distribution to a
Participant's Beneficiary after the Participant's death, the Beneficiary shall
be entitled to elect either the lump sum or installment options described in
clauses (i) and (ii) of the preceding paragraph. In the event payments had
commenced to the Participant under this Section prior to the date of his death,
payments must continue to be paid at least as rapidly as the method in which
payments were being made as of the date of the Participant's death.

          (d) Medium of Distribution. All distributions made under this Section
shall be made in cash; provided that, in the case of a Participant who elects a
lump sum distribution under this Section, the Participant can elect to have the
portion of his Account invested in the Company Stock Fund distributed in the
form of shares of Company Stock (with cash in lieu of fractional shares).

          (e) Default. If Participant fails to make an election with respect to
distribution of his account balance, distribution shall commence in the forms of
a single cash lump sum payment as soon as practicable after the end of the Plan
Year in which the Participant attains age 65 (or the Plan Year in which the
Participant terminates employment, if later).

          Section 9.4. Payment of Small Account Balances. Notwithstanding any
provision of Section 9.3 to the contrary, if the balance of the Participant's
Account to be distributed upon the Participant's termination of employment or
death does not exceed $5,000 (or such other amount prescribed by section
411(a)(11) of the Code), such amount shall be distributed as soon as practicable
after the Participant's termination of employment or death in the form of a
single lump sum cash payment to the Participant or his Beneficiary, as the case
may be.

                                       37

<PAGE>   43

          Section 9.5. Direct Rollover Option. In the case of a distribution
that is an "eligible rollover distribution" within the meaning of section
402(c)(4) of the Code, a Participant (or a surviving spouse of a Participant)
may elect that all or any portion of such distribution to which he is entitled
shall be directly transferred from the Plan to an individual retirement account
or annuity described in section 408 of the Code, to another retirement plan
qualified under section 401(a) of the Code (the terms of which permit the
acceptance of rollover distributions) or to an annuity plan described in section
403(a) of the Code; provided, however, that a surviving spouse of a Participant
may not elect to have such distribution so transferred to another such
retirement plan or annuity plan. Notwithstanding the foregoing, a Participant
(or his surviving spouse) shall not be entitled to elect to have an eligible
rollover distribution transferred pursuant to this Section if (i) the total of
all eligible rollover distributions with respect to such Participant for the
Plan Year is not reasonably expected to equal at least $200 or (ii) the amount
to be so transferred is less than the total of any such distribution unless such
amount equals at least $500.

          Section 9.6. Designation of Beneficiary. Each Participant shall have
the right to designate a Beneficiary or Beneficiaries (who may be designated
contingently or successively and that may be an entity other than a natural
person) to receive any distribution to be made under this Article upon the death
of such Participant or, in the case of a Participant who dies subsequent to
termination of his employment but prior to the distribution of the entire amount
to which he is entitled under the Plan, any undistributed balance to which such
Participant would have been entitled; provided, however, that no such
designation (or change thereof) shall be effective if the Participant was
married through the one-year period ending on the date of the Participant's
death unless such designation (or change thereof) was consented to at the time
of such designation (or change thereof) by the person who was the Participant's
spouse during such

                                       38

<PAGE>   44

period, in writing, acknowledging the effect of such consent and witnessed by a
notary public or a Plan representative, or it is established to the satisfaction
of the Committee that such consent could not be obtained because the
Participant's spouse cannot be located or such other circumstances as may be
prescribed in Regulations. Subject to the preceding sentence, a Participant may
from time to time, without the consent of any Beneficiary, change or cancel any
such designation. Such designation and each change therein shall be made in the
form prescribed by the Committee and shall be filed with the Committee. If (i)
no Beneficiary has been named by a deceased Participant, (ii) such designation
is not effective pursuant to the proviso contained in the first sentence of this
section, or (iii) the designated Beneficiary has predeceased the Participant,
any undistributed balance of the deceased Participant shall be distributed by
the Trustee at the direction of the Committee (a) to the surviving spouse of
such deceased Participant, if any, or (b) if there is no surviving spouse, to
the executor or administrator of the estate of such deceased Participant. The
marriage of a Participant shall be deemed to revoke any prior designation of a
Beneficiary made by him effective upon the first anniversary of such marriage
and a divorce shall be deemed to revoke any prior designation of the
Participant's divorced spouse if written evidence of such marriage or divorce
shall be received by the Committee before distribution shall have been made in
accordance with such designation.

          Notwithstanding the foregoing, for purposes of this Section 9.6, a
Prior Plan Participant's beneficiary designation as in effect immediately prior
to the Effective Date pursuant to Section 12.06 of the Prior Plan, shall remain
in effect until such Participant cancels or changes such designation, as
described above.

                                       39

<PAGE>   45

          Section 9.7. Missing Persons. If within a period of three years
following the death or other termination of employment of any Participant the
Committee in the exercise of reasonable diligence has been unable to locate the
person or persons entitled to benefits under this Article, the rights of such
person or persons shall be forfeited, and, subject to the following sentence,
the balance of the Participant's Account shall be forfeited; provided, however,
that the Plan shall reinstate and pay to such person or persons the amount so
forfeited upon a claim for such amount made by such person or persons. The
amount to be so reinstated shall be obtained from the total amount that shall
have been forfeited pursuant to this Section 9.8 during the Plan Year that the
claim for such forfeited benefit is made. If the amount to be reinstated exceeds
the amount of such forfeitures, the Employer in respect of whose Employee the
claim for forfeited benefit is made shall make a contribution in an amount equal
to the remainder of such excess.

          Section 9.8. Distributions to Minor and Disabled Distributees. Any
distribution under this Article that is payable to a distributee who is a minor
or to a distributee who has been legally determined to be unable to manage his
affairs by reason of illness or mental incompetency may be made to, or for the
benefit of, any such distributee at such time consistent with the provisions of
Section 9.3 and in such of the following ways as the legal representative of
such distributee shall direct: (a) directly to any such minor distributee if, in
the opinion of such legal representative, he is able to manage his affairs, (b)
to such legal representative, (c) to a custodian under a Uniform Gifts to Minors
Act for any such minor distributee, or (d) as otherwise directed by such legal
determination. Neither the Committee nor the Trustee shall be required to
oversee the application by any third party other than the legal representative
of a distributee of any distribution made to or for the benefit of such
distributee pursuant to this Section.

                                       40
<PAGE>   46
                                   ARTICLE 10

                     SPECIAL PARTICIPATION AND DISTRIBUTION
                        RULES RELATING TO REEMPLOYMENT OF
                            TERMINATED EMPLOYEES AND
                         EMPLOYMENT BY RELATED ENTITIES

                  Section 10.1. Change of Employment Status. If an Employee who
is not a Participant becomes eligible to participate because of a change in his
employment status to that of an Eligible Employee, such Employee shall become a
Participant as of the first Entry Date next following the date of such change.

                  Section 10.2. Reemployment of a Terminated Participant. If a
terminated Participant is reemployed, the Participant shall again become a
Participant upon the first Entry Date next following the date of his
reemployment; provided that, if the Participant terminates employment and is
reemployed in the same Plan Year, the Participant's Compensation earned during
the previous period of employment shall be disregarded in determining the
allocation of contributions to which he is entitled for the Plan Year, if any,
under the profit sharing feature of the Plan under Section 4.3. If such a
terminated Participant is entitled to receive installment payments pursuant to
Section 9.3, such payments shall be suspended.

                  If a terminated Participant is reemployed prior to incurring
five consecutive Break in Service years, thereafter completes a Year of Service
before incurring five One-Year Breaks in Service and, at or after his
termination of employment, any portion of his Account was forfeited pursuant to
Section 9.3(a) but such Participant did not receive a lump sum distribution
pursuant to Article 9, then an amount equal to the portion of his Account that
was forfeited shall be credited to his Account as of the close of the Plan Year
in which he completes such Year of Service. If upon his termination of
employment any such Participant received a lump sum

                                       41
<PAGE>   47

distribution and a portion of the Participant's Account was forfeited pursuant
to Section 9.3(a), then he shall have the right to pay an amount equal to such
lump sum distribution to the Trust. If the Participant makes such a payment,
then an amount equal to the portion of his Account that was forfeited pursuant
to Section 9.3(a) shall be credited along with the amount of such payment to his
Account as of the close of the Plan Year in which such payment is made. Any such
payment must be made by the earlier of the close of the Plan Year in which falls
the fifth anniversary of the Participant's date of reemployment. If pursuant to
this paragraph the forfeited portion of a Participant's Matching Contribution
Account or Profit Sharing Account is to be restored, the amount restored shall
be obtained from the total amount that has been forfeited pursuant to this
Section 10.3 during the Plan Year in which such Participant is reemployed or the
Plan Year in which such Participant makes the payment set forth above, as the
case may be, from the Matching Contribution Accounts or Profit Sharing Accounts
of Participants employed by the same Employer as the reemployed Participant. If
the aggregate amount to be so restored to the accounts of Participants who are
employees of a particular Employer exceeds the amount of such forfeitures, such
Employer shall make a contribution in an amount equal to such excess. Any such
contribution shall be made without regard to whether or not the limitations set
forth in Section 6.4 will be exceeded by such contribution.

                  Section 10.3. Employment by Related Entities. If an individual
is employed by an Affiliate, then any period of such employment shall be taken
into account solely for the purposes of (i) determining the individual's Years
of Service and (ii) determining when such individual has terminated his
employment for purposes of Article 9, to the same extent it would have been had
such period of employment been as an Employee of an Employer. An individual

                                       42
<PAGE>   48

shall not be permitted to make contributions or share in allocations of Employer
contributions for any period of employment with an entity other than an
Employer.

                  Section 10.4. Leased Employees. If an individual who performed
services as a leased employee (within the meaning of section 414(n)(2) of the
Code) of an Employer or an Affiliate becomes an Employee, or if an Employee
becomes such a leased employee, then any period during which such services were
so performed shall be taken into account solely for the purposes of (i)
determining the individual's Years of Service and (ii) determining when such
individual has terminated his employment for purposes of Article 9, to the same
extent it would have been had such period of employment been as an Employee.
This Section shall not apply to any period of service during which such a leased
employee was covered by a plan described in section 414(n)(5) of the Code.

                  Section 10.5. Reemployment of Veterans. The provisions of this
Section shall apply in the case of the reemployment by an Employer of an
Eligible Employee, within the period prescribed by laws relating to the rights
of reemployed veterans, after the Employee's completion of a period of qualified
military service (as defined in section 414(u)(5) of the Code). The provisions
of this Section are intended to provide such Employees with the rights required
by section 414(u) of the Code, and shall be interpreted in accordance with such
intent.

                  (a) Make Up of Salary Deferral Contributions. Such Employee
         shall be entitled to make contributions under the Plan ("make up
         deferrals"), in addition to any salary reduction contributions which
         the Employee elects to have made under the Plan pursuant to Section
         4.1. From time to time while employed by an Employer, such Employee may

                                       43
<PAGE>   49

         elect to contribute such make up deferrals during the period beginning
         on the date of such Employee's reemployment and ending on the earlier
         of:

                           (i) the end of the period equal to the product of
                  three and such Employee's period of qualified military
                  service, and

                           (ii) the fifth anniversary of the date of such
                  reemployment.

Such Employee shall not be permitted to contribute make up deferrals to the Plan
in excess of the amount which the Employee could have elected to have made under
the Plan in the form of salary reduction contributions if the Employee had
continued in employment with his Employer during such period of qualified
military service. The manner in which an Eligible Employee may elect to
contribute make up deferrals pursuant to this subsection (a) shall be prescribed
by the Committee.

                  (b) Make Up of Matching Contributions. An Eligible Employee
who contributes make up deferrals as described in subsection (a) shall be
entitled to an allocation of matching contributions ("make up matching
contributions") in an amount equal to the amount of matching contributions that
would have been allocated to the Matching Account of such Eligible Employee
under the Plan if such make up deferrals had been made in the form of salary
reduction contributions during the period of such Employee's qualified military
service (as determined pursuant to section 414(u) of the Code). The Eligible
Employee's Employer shall make a special contribution which shall be utilized
solely for purposes of such allocation.

                  (c) Make Up Profit Sharing Contributions. An Eligible Employee
shall be entitled to an allocation of profit sharing contributions for any Plan
Year during which he is in qualified military service if the Eligible Employee
would have satisfied the service requirements entitling him to share in an
allocation, but for the qualified military service (based on the Eligible

                                       44
<PAGE>   50

Employee's work schedule as in effect on the date such military service began,
as determined by the Committee). The Eligible Employee's Employer shall make a
special contribution which shall be utilized solely for purposes of such
allocation.

For purposes of determining the amount of contributions to be made under this
Section, an Eligible Employee's "Compensation" during any period of qualified
military service shall be determined in accordance with section 414(u) of the
Code. Any contributions made by an Eligible Employee or an Employer pursuant to
this Section on account of a period of qualified military service in a prior
Plan Year shall not be subject to the limitations prescribed by Section 6.1, 6.2
and 6.4 of the Plan (relating to sections 402(g), 415, and 404 of the Code) for
the Plan Year in which such contributions are made. The Plan shall not be
treated as failing to satisfy the nondiscrimination rules of Section 6.3 of the
Plan (relating to sections 401(k)(3) and 401(m) of the Code) for any Plan Year
solely on account of any make up contributions made by an Eligible Employee or
an Employer pursuant to this Section.

                                   ARTICLE 11

                SHAREHOLDER RIGHTS WITH RESPECT TO COMPANY STOCK

                  Section 11.1. Voting Shares of Company Stock. Each Participant
(or Beneficiary) shall be entitled to give voting instructions, in the time and
manner prescribed by the Trustee, with respect to the number of shares of
Company Stock represented by the units allocated to his Account representing the
proportional interest in the Company Stock Fund of such Participant (or
Beneficiary), if any. The Trustee shall vote, in person or by proxy, such shares
according to the voting instructions of Participants (or Beneficiaries) which
have been timely submitted to the Trustee. To the extent permitted by law, the
Trustee shall vote the shares

                                       45
<PAGE>   51

of Company Stock credited to Participants' (or Beneficiaries') accounts with
respect to which the Trustee does not timely receive voting instructions and
shares of Company Stock that are not allocated to Participants' (or
Beneficiaries') accounts (if any), in the same proportion by which the Trustee
votes shares of Company Stock for which instructions are timely received.

                  Written notice of any meeting of shareholders of the Company
and a request for voting instructions shall be given by the Trustee, at such
time and in such manner as the Trustee shall determine to each Participant (or
Beneficiary) entitled to give instructions for voting shares of Company Stock at
such meeting. The Committee shall establish and pay for a means by which such
voting instructions can expeditiously be delivered to the Trustee. All such
individual instructions shall be confidential and shall not be disclosed to any
person, including any Employer.

                  Section 11.2. Tender Offers. (a) Rights of Participants. In
the event a tender offer is made generally to the shareholders of the Company to
transfer all or a portion of their shares of Company Stock in return for
valuable consideration, including, but not limited to, offers regulated by
section 14(d) of the Securities Exchange Act of 1934, as amended, the Trustee
shall respond to such tender offer in respect of shares of Company Stock held by
the Trustee in the Company Stock Fund in accordance with instructions obtained
from Participants (or Beneficiaries). Each Participant (or Beneficiary) shall be
entitled to instruct the Trustee regarding how to respond to any such tender
offer with respect to the number of shares of Company Stock represented by the
units of interest in the Company Stock Fund then allocated to his Account. Each
Participant (or Beneficiary) who does not provide timely instructions to the
Trustee shall be presumed to have directed the Trustee not to tender shares of
Company Stock

                                       46
<PAGE>   52

allocated to his Account. A Participant (or Beneficiary) shall not be limited in
the number of instructions to tender or withdraw from tender which he can give,
but a Participant (or Beneficiary) shall not have the right to give instructions
to tender or withdraw from tender after a reasonable time established by the
Trustee pursuant to subsection (c) below.

                  (b) Duties of the Company. Within a reasonable time after the
commencement of a tender offer, the Company shall cause the Trustee to provide
to each Participant or Beneficiary, as the case may be:

                  (i)   the offer to purchase as distributed by the offeror to
         the shareholders of the Company,

                  (ii)  a statement of the shares of Company Stock represented
         by the units of interest in the Company Stock Fund allocated to his
         Account, and

                  (iii) directions as to the means by which instructions with
         respect to the tender offer can be given.

                  The Company shall establish and pay for a means by which
instructions with respect to a tender offer can expeditiously be delivered to
the Trustee. All such individual instructions shall be confidential and shall
not be disclosed to any person, including any Employer. The Company at its
election may engage an agent to receive such instructions and transmit them to
the Trustee.

                  For purposes of allocating the proceeds of any sale or
exchange pursuant to a tender offer, the Trustee shall then treat as having been
sold or exchanged from each of the individual accounts of Participants (and
Beneficiaries) who provided timely directions to the Trustee under this Section
that number of shares of Company Stock represented by units in the Company Stock
Fund (if any) subject to such directions and the proceeds of such sale or

                                       47
<PAGE>   53

exchange shall be allocated accordingly. Any proceeds from the sale or exchange
of shares of Company Stock credited to Participants' (or Beneficiaries')
Accounts shall be invested in a commingled fund maintained by the Trustee
designated to hold such amounts pending investment instructions from the
Participants (and Beneficiaries) or the Committee, as the case may be.

                  (c) Duties of the Trustee. The Trustee shall follow the
instructions of the Participants (and Beneficiaries) with respect to the tender
offer as transmitted to the Trustee. The Trustee may establish a reasonable
time, taking into account the time restrictions of the tender offer, after which
it shall not accept instructions of Participants (or Beneficiaries).

                                   ARTICLE 12

                                 ADMINISTRATION

                  Section 12.1. The Committee. (a) The Company shall appoint a
committee consisting of three or more members that shall be known as the
Committee. The Committee shall be the "administrator" of the Plan within the
meaning of such term as used in ERISA and, except for duties specifically vested
in the Trustee, shall be responsible for the administration of the provisions of
the Plan. Subject to the following paragraph, the Company and the Committee
shall each be a "named fiduciary" within the meaning of such term as used in
ERISA. Notwithstanding the foregoing, the Company may, in its discretion,
delegate all or a portion of the responsibility for the administration of the
provisions of the Plan to such individual or group of individuals (the "Special
Committee") for such period of time as the Company deems appropriate. Such
delegation shall be set forth in writing by the Company and agreed to by the
Special Committee. The Special Committee shall be a "named fiduciary" with
respect to the

                                       48
<PAGE>   54

portion of the responsibility for Plan administration as set forth in the
written delegation. On and after the delegation of authority to a Special
Committee, and until such time as the Company revokes such delegation, the
Company, the Committee and any other named fiduciary with respect to the Plan,
shall have no liability for the acts (or failure to act) of the Special
Committee except to the extent of its co-fiduciary duty under ERISA.

                  (b) The Company shall have the right at any time, with or
without cause, to remove the members of the Committee. In addition, any member
of the Committee may resign and such resignation shall be effective upon
delivery of the written resignation to the Company. Upon the resignation,
removal or failure or inability for any reason of any member of the Committee to
act hereunder, the Company shall appoint a successor member of the Committee to
the extent necessary to satisfy the minimum number of Committee members. Any
successor members of the Committee shall have all the rights, privileges and
duties of the predecessor, but shall not be held accountable for the acts of the
predecessor.

                  (c) Any member of the Committee may, but need not, be an
employee, director, officer or shareholder of an Employer and such status shall
not disqualify him from taking any action hereunder or render him accountable
for any distribution or other material advantage received by him under the Plan,
provided that no member of the Committee who is a Participant shall take part in
any action of the Committee or any matter involving solely his rights under the
Plan.

                  (d) Promptly after the appointment of the members of the
Committee and from time to time thereafter, and promptly after the appointment
of any successor member of the Committee, the Trustee shall be notified as to
the names of the persons appointed initially and as

                                       49
<PAGE>   55

successor members of the Committee by delivery to the Trustee of a written
notice of such appointment.

                  (e) The Committee shall have the duty and authority to, in its
sole discretion, interpret and construe the Plan in regard to all questions of
eligibility, the status and rights of Participants, distributees and other
persons under the Plan, and the manner, time, and amount of payment of any
distribution under the Plan. Each Employer shall, from time to time, upon
request of the Committee, furnish to the Committee such data and information as
the Committee shall require in the performance of its duties. All determinations
and actions of the Committee shall be inclusive and binding upon all affected
parties, except that the Committee may revoke or modify a determination or
action that the Committee determines to have been made in error.

                  (f) The Committee shall direct the Trustee to make payments of
amounts to be distributed from the Trust under Article 9.

                  (g) The Committee shall supervise the collection of
Participants' contributions made pursuant to Article 5 and the delivery of such
contributions to the Trustee.

                  (h) The members of the Committee may allocate their
responsibilities and may designate any person, partnership or corporation to
carry out any of their responsibilities with respect to administration of the
Plan. Any such allocation or designation shall be reduced to writing and such
writing shall be kept with the records of the Plan.

                  (i) The Committee may act at a meeting, or by writing without
a meeting, by the vote or written assent of a majority of its members. The
Committee shall elect one of its members as secretary and keep the Trustee
advised of the identity of the member holding that

                                       50
<PAGE>   56

office. The secretary shall be the Plan's agent for service of legal process,
keep records of all meetings of the Committee, and forward all necessary
communications to the Trustee. The secretary, or an officer of the Company so
designated by the Committee, shall have the authority to execute all instruments
or documents necessary or appropriate to carry out the actions and decisions of
the Committee, and any person may rely upon any such instrument or document so
executed as such evidence. The Committee may adopt such rules and procedures as
it deems desirable for the conduct of its affairs and the administration of the
Plan, provided that any such rules and procedures shall be consistent with the
provisions of the Plan and ERISA.

                  (j) The members of the Committee shall discharge their duties
with respect to the Plan (A) solely in the interest of the Participants and
Beneficiaries, (B) for the exclusive purpose of providing benefits to Employees
participating in the Plan and their Beneficiaries and of defraying reasonable
expenses of administering the Plan and (C) with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. The Employers hereby jointly
and severally indemnify the members of the Committee and each of them, from the
effects and consequences of their acts, omissions and conduct in their official
capacity, except to the extent that such effects and consequences result from
their own willful misconduct.

                  (k) The members of the Committee may not receive any
compensation or fee for services as members of the Committee unless otherwise
agreed between the members of the Committee and the Employers. The Employers
shall reimburse the members of the Committee

                                       51
<PAGE>   57

for any necessary expenditures incurred in the discharge of their duties as
members of the Committee.

                  (l) The Committee may employ such counsel (who may be counsel
for an Employer) and agents and may arrange for such clerical and other services
as it may require in carrying out the provisions of the Plan.

                  Section 12.2. Claims Procedure. If any Participant or
distributee believes he is entitled to benefits in an amount greater than those
which he is receiving or has received, he may file a claim with the Committee.
Such a claim shall be in writing and state the nature of the claim, the facts
supporting the claim, the amount claimed, and the address of the claimant. The
Committee shall review the claim and, unless special circumstances require an
extension of time, within 90 days after receipt of the claim, give written
notice by registered or certified mail to the claimant of its decision with
respect to the claim. If special circumstances require an extension of time, the
claimant shall be so advised in writing within the initial 90-day period and in
no event shall such an extension exceed 90 days. The notice of the decision of
the Committee with respect to the claim shall be written in a manner calculated
to be understood by the claimant and, if the claim is wholly or partially
denied, set forth the specific reasons for the denial, specific references to
the pertinent Plan provisions on which the denial is based, a description of any
additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary, and
an explanation of the claim review procedure under the Plan. The Committee shall
also advise the claimant that he or his duly authorized representative may
request a review of the denial by filing with the Committee within 60 days after
notice of the denial has been received by claimant, a written request for such

                                       52
<PAGE>   58

review. The claimant shall be informed that he may have reasonable access to
pertinent documents and submit comments in writing to the Committee within the
same 60-day period. If a request is so filed, review of the denial shall be made
by the Review Committee within, unless special circumstances require an
extension of time, 60 days after receipt of such request, and the claimant shall
be given written notice of the Committee's final decision. If special
circumstances require an extension of time, the claimant shall be so advised in
writing within the initial 60-day period and in no event shall such an extension
exceed 60 days. The notice of the Committee's final decision shall include
specific reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based and shall be written in a manner
calculated to be understood by the claimant.

                  Section 12.3. Procedures for Domestic Relations Orders. If the
Committee receives any written judgment, decree or order (including approval of
a property settlement agreement) pursuant to the domestic relations or community
property laws of any state relating to the provision of child support, alimony
or marital property rights of a spouse, former spouse, child or other dependent
of a Participant and purporting to provide for the payment of all or a portion
of the Participant's benefit under the Plan to or on behalf of one or more of
such persons (such judgment, decree or order being hereinafter called a
"domestic relations order"), the Committee shall determine whether such order
constitutes a "qualified domestic relations order," as defined in Section
14.2(b), and shall notify the Participant and each payee named in such order in
writing of its determination. The Committee shall adopt procedures relating to
its review of any such domestic relations order, in accordance with section
414(p) of the Code and section 206(d)(3) of ERISA.

                                       53
<PAGE>   59

                  Section 12.4. Information from Participants and Beneficiaries.
Each Participant and Beneficiary shall furnish to the Committee, in the form
prescribed by it, such personal data, affidavits, authorization to obtain
information, and other information as the Committee may deem appropriate for the
proper administration of the Plan.

                  Section 12.5. Notices to Participants, Etc. All notices,
reports and statements given, made, delivered or transmitted to a Participant or
distributee or any other person entitled to or claiming benefits under the Plan
shall be deemed to have been duly given, made or transmitted when mailed by
first class mail with postage prepaid and addressed to the Participant or
distributee or such other person at the address last appearing on the records of
the Committee. A Participant or distributee or other person may record any
change of his address from time to time by written notice filed with the
Committee.

                  Section 12.6. Notices to Committee. Written directions,
notices and other written or electronic communications from Participants or
distributees or any other person entitled to or claiming benefits under the Plan
to the Committee shall be deemed to have been duly given, made or transmitted
either when delivered to such location as shall be prescribed by the Committee
for the giving of such directions, notices and other communications or, in the
case of written directions, when mailed by first class mail with postage prepaid
and addressed to the addressee at the address specified upon such forms.

                  Section 12.7. Records. The Committee shall keep a record of
all of its proceedings and shall keep or cause to be kept all books of account,
records and other data as may be necessary or advisable in its judgment for the
administration of the Plan.

                                       54
<PAGE>   60

                  Section 12.8. Reports of Trustee and Accounting to
Participants. The Committee shall keep on file, in such form as it shall deem
convenient and proper, all reports concerning the Trust Fund received by it from
the Trustee, and the Committee shall, as soon as possible after the close of
each Plan Year, advise each Participant and Beneficiary of the balance credited
to any Account for his benefit as of the close of such Plan Year pursuant to
Article 7 hereof.

                                   ARTICLE 13

                        PARTICIPATION BY OTHER EMPLOYERS

                  Section 13.1. Adoption of Plan. With the consent of the
Company, any entity may become a participating Employer under the Plan by (a)
taking such action as shall be necessary to adopt the Plan and (b) executing and
delivering such instruments and taking such other action as may be necessary or
desirable to put the Plan and Trust into effect with respect to such entity, as
prescribed by the Company.

                  Section 13.2. Exclusion from Participation. The Company may,
by written instrument, exclude an Employer from continued participation in the
Plan. An entity that is an Employer may withdraw from participation in the Plan
at any time by taking appropriate action as prescribed by the Company. Upon the
effective date of an entity's exclusion or withdrawal from participation in the
Plan pursuant to this Section, such entity shall thereupon cease to be an
Employer.

                  Section 13.3. Company as Agent for Employers. Each entity
which becomes a participating Employer pursuant to Section 13.1 or Section 13.4
by so doing shall be deemed to have appointed the Company its agent to exercise
on its behalf all of the powers and authorities

                                       55
<PAGE>   61

hereby conferred upon the Company by the terms of the Plan, including, but not
by way of limitation, the power to amend and terminate the Plan. The authority
of the Company to act as such agent shall continue until such Employer is
excluded or withdraws from the Plan.

                  Section 13.4. Successor Employer. In the event that any
Employer is reorganized by way of merger, consolidation, transfer of assets or
otherwise, so that another corporation other than an Employer succeeds to all or
substantially all of such Employer's business, and such successor corporation is
an Affiliate, such successor corporation automatically shall be substituted for
such Employer under the Plan, unless such Employer or successor corporation is
removed by the Company or withdraws from participation in the Plan as an
Employer.

                                   ARTICLE 14

                                  MISCELLANEOUS

                  Section 14.1. Expenses. All costs and expenses incurred in
administering the Plan and the Trust, including the expenses of the Committee,
the fees of counsel and any agents for the Committee, the fees and expenses of
the Trustee, the fees of counsel for the Trustee and other administrative
expenses shall be paid under the direction of the Committee to the extent such
expenses are not paid by the Employers. The Company, in its sole discretion,
having regard to the nature of a particular expense, shall determine the portion
of such expense that is to be borne by the Employer.

                  Section 14.2.  Non-Assignability.  (a)  In General.  It is a
condition of the Plan, and all rights of each Participant and Beneficiary shall
be subject thereto, that no right or interest of any Participant or Beneficiary
in the Plan shall be assignable or transferable in whole or in

                                       56
<PAGE>   62

part, either directly or by operation of law or otherwise, including, but not by
way of limitation, execution, levy, garnishment, attachment, pledge or
bankruptcy, but excluding devolution by death or mental incompetency, and any
attempt to do so shall be void, and no right or interest of any Participant or
Beneficiary in the Plan shall be liable for, or subject to, any obligation or
liability of such Participant or Beneficiary, including claims for alimony or
the support of any spouse, except as provided below or as otherwise required by
law.

                  (b) Exception for Qualified Domestic Relations Orders.
Notwithstanding any provision of the Plan to the contrary, if a Participant's
Account under the Plan, or any portion thereof, is the subject of one or more
qualified domestic relations orders, as defined below, such account balance or
portion thereof shall be paid to the person and at the time and in the manner
specified in any such order. For purposes of this subsection, "qualified
domestic relations order" shall have the meaning set forth in section 414(p) of
the Code and section 206(d)(3) of ERISA. The Committee may adopt rules and
procedures for purposes of determining whether an order is a "qualified domestic
relations order" under the Code and ERISA, and is consistent with the terms of
the Plan and the administration thereof. For purposes of this Plan, payment of
an assigned benefit pursuant to a domestic relations order may commence as soon
as administratively practicable after such order is determined by the Committee
to constitute a "qualified domestic relations order" under section 414(p) of the
Code and section 206(d)(3) of ERISA, if the terms of the order so provide.

                  Section 14.3.  Employment Non-Contractual.  The Plan confers
no right upon an Employee to continue in employment.

                                       57
<PAGE>   63

                  Section 14.4. Limitation of Rights. The Employers do not
guarantee or promise to pay or to cause to be paid any of the benefits provided
by the Plan. A Participant or distributee shall have no right, title or claim in
or to any specific asset of the Trust Fund, but shall have the right only to
distributions from the Trust Fund on the terms and conditions herein provided.

                  Section 14.5. Merger or Consolidation with Another Plan. A
merger or consolidation with, or transfer of assets or liabilities to, any other
plan shall not be effected unless the terms of such merger, consolidation or
transfer are such that each Participant, distributee, Beneficiary or other
person entitled to receive benefits from the Plan would, if the Plan were to
terminate immediately after the merger, consolidation or transfer, receive a
benefit equal to or greater than the benefit such person would be entitled to
receive if the Plan were to terminate immediately before the merger,
consolidation, or transfer.

                  Section 14.6. Transfer of Assets from Trust. The Committee may
direct the Trustee to transfer all or a specified portion of the Trust assets to
any other plan or plans maintained by the Employer of the employer or employers
of a former Participant or Participants, without regard to whether such
Participants would otherwise be entitled to receive a distribution under Section
9.3 of the Plan, provided that the Trustee has received evidence satisfactory to
it that such other plan meets all applicable requirements of the Code.

                  Section 14.7. Transfer of Prior Plan Account Balances. This
Plan shall accept a transfer of assets from the trust funding from the Prior
Plan with respect to the Prior Plan Participants. A Prior Plan Participant's
account under the Prior Plan shall be administered under this Plan as follows:

                                       58
<PAGE>   64

                  (a) A Participant's Elective Contribution Account under the
Prior Plan shall be credited to the Participant's Salary Reduction Account.

                  (b) A Participant's Company Contributions Account under the
Prior Plan shall be credited to the Participant's Matching Account.

                  (c) A Participant's Company Special Account under the Prior
Plan shall be credited to the Participant's Profit Sharing Account.

                  (d) A Participant's Voluntary Contribution Account under the
Prior Plan shall be credited to the Participant's Voluntary Contribution
Account.

                  (e) A Participant's Rollover Account under the Prior Plan
shall be credited to the Participant's Rollover Account.

                  Section 14.8.  Gender and Plurals. Wherever used in the Plan,
words in the masculine gender shall include masculine or feminine gender, and,
unless the context otherwise requires, words in the singular shall include the
plural, and words in the plural shall include the singular.

                  Section 14.9.  Applicable Law. The Plan and all rights
hereunder shall be governed by and construed in accordance with the laws of the
State of Illinois to the extent such laws have not been preempted by applicable
federal law.

                  Section 14.10. Severability. If a provision of the Plan shall
be held illegal or invalid, the illegality or invalidity shall not affect the
remaining parts of the Plan and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included in the Plan.

                  Section 14.11. No Guarantee. Neither the Committee, the
Employers, nor the Trustee in any way guarantees the Trust from loss or
depreciation nor the payment of any money that may be or become due to any
person from the Trust Fund. Nothing herein contained shall be deemed to give any
Participant, distributee, or Beneficiary an interest in any specific part of

                                       59
<PAGE>   65

the Trust Fund or any other interest except the right to receive benefits out of
the Trust Fund in accordance with the provisions of the Plan and the Trust
agreement.

                  Section 14.12. Plan Voluntary. Although it is intended that
the Plan shall be continued and that contributions shall be made as herein
provided, the Plan is entirely voluntary on the part of the Employers and the
continuance of the Plan and the payment of contributions hereunder are not to be
regarded as contractual obligations of the Employers.

                                   ARTICLE 15

                           TOP-HEAVY PLAN REQUIREMENTS

                  Section 15.1. Top-Heavy Plan Determination. If as of the
determination date (as hereinafter defined) for any Plan Year (a) the sum of the
account balances under the Plan and all other defined contribution plans in the
aggregation group (as defined below) and (b) the present value of accrued
benefits under all defined benefit plans in such aggregation group of all
Participants in such plans who are key employees (as defined below) for such
Plan Year exceeds 60% of the aggregate of the account balances and present value
of accrued benefits of all Participants in such plans as of the determination
date (as hereinafter defined), then the Plan shall be a top-heavy plan for such
Plan Year, and the requirements of Sections 15.3 and 15.4 shall be applicable
for such Plan Year as of the first day thereof. If the Plan is a top-heavy plan
for any Plan Year and is not a top-heavy plan for any subsequent Plan Year, the
requirements of this Article 15 shall not be applicable for such subsequent Plan
Year except to the extent provided in Section 15.4.

                                       60
<PAGE>   66

                  Section 15.2.  Definitions and Special Rules. (a) Definitions.
For purposes of this Article 15, the following definitions shall apply:

                  (1) Determination Date. The determination date for all plans
         in the aggregation group shall be the last day of the preceding Plan
         Year, and the valuation date applicable to a determination date shall
         be (i) in the case of a defined contribution plan, the date as of which
         account balances are determined that coincides with or immediately
         precedes the determination date, and (ii) in the case of a defined
         benefit plan, the date as of which the most recent actuarial valuation
         for the Plan Year that includes the determination date is prepared,
         except that if any such plan specifies a different determination or
         valuation date, such different date shall be used with respect to such
         plan.

                  (2) Aggregation Group. The aggregation group shall consist of
         (a) each plan of an Employer in which a key Employee is a Participant,
         (b) each other plan that enables such a plan to be qualified under
         section 401(a) of the Code, and (c) any other plans of an Employer that
         the Company designates as part of the aggregation group.

                  (3) Key Employee.  Key employee shall have the meaning set
         forth in section 416(i) of the Code.

                  (4) Compensation. Compensation shall have the meaning set
         forth in section 1.415-2(d) of the Regulations.

                  (b) Special Rules. For the purpose of determining the accrued
benefit or account balance of a Participant, the accrued benefit or account
balance of any person who has not performed services for an Employer at any time
during the five-year period ending on the determination date shall not be taken
into account pursuant to this Section, and any person who received a
distribution from a plan (including a plan that has terminated) in the
aggregation group during the five-year period ending on the last day of the
preceding Plan Year shall be treated as a participant in such plan, and any such
distribution shall be included in such Participant's account balance or accrued
benefit, as the case may be.

                  Section 15.3. Minimum Contribution for Top-Heavy Years.
Notwithstanding any provision of the Plan to the contrary, the sum of the
Employer contributions under Article 4 (other than salary reduction
contributions) allocated during any Plan Year to the accounts of each

                                       61
<PAGE>   67

Participant (other than a key employee) during any Plan Year for which the Plan
is a top-heavy plan shall in no event be less than the lesser of (i) 3% of such
Participant's Compensation during such Plan Year and (ii) the highest percentage
at which Employer contributions are made on behalf of any key employee for such
Plan Year. Such minimum contribution shall be made even if, under other
provisions of the Plan, the Participant would not otherwise be entitled to
receive an allocation or would receive a lesser allocation for the year because
of the Participant's failure to complete a specified service requirement. If
during any Plan Year for which this Section is applicable a defined benefit plan
is included in the aggregation group and such defined benefit plan is a
top-heavy plan for such Plan Year, the percentage set forth in clause (i) of the
first sentence of this Section shall be 5%. The percentage referred to in clause
(ii) of the first sentence of this Section shall be obtained by dividing the
aggregate of Employer contributions made pursuant to Article 4 and pursuant to
any other defined contribution plan that is required to be included in the
aggregation group (other than a defined contribution plan that enables a defined
benefit plan that is required to be included in such group to be qualified under
section 401(a) of the Code) during the Plan Year on behalf of such key employee
by such key employee's compensation for the Plan Year.

                  Section 15.4. Special Rules for Applying Statutory Limitations
on Benefits. The provisions of this Section shall apply only to limitation years
commencing prior to January 1, 2000.

                  (a) In any Plan Year for which the Plan is a top-heavy plan,
         clause (ii)(A)(I) of Section 6.2 shall be applied by substituting
         "100%" for "125%" appearing therein, unless, for such Plan Year, (i)
         the percentage of account balances of Participants who are key
         employees does not excess 90% and (ii) employer contributions and
         forfeitures allocated to the accounts of Participants who are not key
         employees equals at least 4% of the Compensation of each such
         Participant.

                                       62
<PAGE>   68

                  (b) In any Plan Year for which the Plan is a top-heavy plan,
         clause (ii)(B)(I) of Section 6.2 shall be applied by substituting
         "100%" for "125%" appearing therein unless for any such Plan Year (i)
         the percentage of accrued benefits of Participants who are key
         employees does not exceed 90% and (ii) the minimum accrued benefit of
         each Participant under all defined benefit plans in the aggregate group
         is at least 3% of his average compensation (determined under Section
         416(d) of the Code) multiplied by each Year of Service after 1983, not
         in excess of 10, for which such plans are top-heavy plans.

                                   ARTICLE 16

            AMENDMENT, ESTABLISHMENT OF SEPARATE PLAN AND TERMINATION

                  Section 16.1. Amendment. The Company may, at any time and from
time to time, amend, suspend or modify the Plan by written instrument duly
adopted by the Company, or, in the case of an amendment that does not have a
material impact on benefits to Participants and costs to the Employers, by
written instrument or resolution duly adopted by the Committee. Any such
amendment, suspension or modification shall become effective as of the date the
Company or the Committee, as the case may be, shall determine and may apply to
Participants in the Plan at the time thereof as well as to future Participants.

                  Section 16.2. Establishment of Separate Plan. If an Employer
withdraws or is excluded from the Plan under Section 13.2, the Committee shall
determine the portion of each investment fund held by the Trustee that is
applicable to the Participants of such Employer and their Beneficiaries and
direct the Trustee to segregate such portion in separate investment funds. Such
separate investment funds shall thereafter be held and administered as a part of
the separate plan of such Employer.

                  The portion of each investment fund applicable to the
Participants (and Beneficiaries) of a particular Employer shall be:

                                       63
<PAGE>   69

                  (a) the total amount credited to all subaccounts invested in
         such investment fund that are applicable to the Participants (and
         Beneficiaries) of such Employer, increased or decreased, as the case
         may be, by

                  (b) an amount that bears the same ratio to the difference, if
         any, between

                           (i)  the total value of such investment fund, and

                           (ii) the total amount credited to all subaccounts
invested in such investment fund

         as the total amount credited to the subaccounts invested in such
         investment fund that are applicable to the Participants (and
         Beneficiaries) of such Employer bears to the total amount credited to
         such subaccounts of all Participants (and Beneficiaries).

                  Section 16.3. Full Vesting upon Termination of Participation
or Partial Termination of the Plan. In the event that any Employer terminates
its participation in the Plan, or in the event of the partial termination of the
Plan, the accounts of all Participants of such Employer, or of those
Participants who are affected by the partial termination of the Plan, as the
case may be, shall become fully vested and shall not thereafter be subject to
forfeiture.

                  Section 16.4. Distribution upon Termination of the Plan. Any
Employer may at any time terminate its participation in the Plan by written
instrument executed on behalf of the Employer and duly adopted. In the event of
any such termination, the Committee shall determine the portion of each
investment fund held by the Trustee that is applicable to the Participants of
such Employer and their Beneficiaries and direct the Trustee to distribute such
portion of each investment fund to Participants (and Beneficiaries) ratably in
proportion to the balances of their respective subaccounts invested in such
investment fund. The portion of each investment fund applicable to the
Participants (and Beneficiaries) of such Employer shall be:

                                       64
<PAGE>   70

                  (a) the total amount credited to all subaccounts invested in
         such investment fund that are applicable to the Participants (and
         Beneficiaries) of such Employer, increased or decreased, as the case
         may be, by

                  (b) an amount that bears the same ratio to the difference, if
         any, between

                           (i)  the total value of such investment fund, and

                           (ii) the total amount credited to all subaccounts
                  invested in such investment fund

         as the total amount credited to the subaccounts invested in such
         investment fund that are applicable to the Participants (and
         Beneficiaries) of such Employer bears to the total amount credited to
         such subaccounts of all Participants (and Beneficiaries).

A complete discontinuance of contributions by an Employer shall be deemed a
termination of such Employer's participation in the Plan for purposes of this
Section.

                  Section 16.5. Trust Fund to Be Applied Exclusively for
Participants and Their Beneficiaries. Subject only to the provisions of Article
6 and Section 16.4, and any other provision of the Plan to the contrary
notwithstanding, it shall be impossible for any part of the Trust Fund to be
used for or diverted to any purpose not for the exclusive benefit of
Participants and their beneficiaries or the payment of reasonable administrative
expenses either by operation or termination of the Plan, power of amendment or
other means.

                                       65
<PAGE>   71

                  IN WITNESS WHEREOF, the Company has caused this instrument to
be executed by its duly authorized officers this 31st day of January, 2000.

                         KPMG CONSULTING, INC.

                         By:  /s/ Nathan H. Peck
                             ___________________________________

                         Title:  Chief Financial Officer
                               _________________________________

ATTEST:

/s/ Paul Ciandrini
_______________________________________

Title:   Executive Vice President
       ________________________________

                                       66

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