Document:

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                                                                    Exhibit 4(b)

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                      AMENDED AND RESTATED RIGHTS AGREEMENT

                          Dated as of ___________, 2000

                                 By and Between

                            THE J. M. SMUCKER COMPANY

                                       and

                      COMPUTERSHARE INVESTOR SERVICES, LLC,
                   SUCCESSOR TO HARRIS TRUST AND SAVINGS BANK,
                                 as Rights Agent

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                                TABLE OF CONTENTS

                                                                     Page
                                                                     ----

1.       Certain Definitions ...........................................2

2.       Appointment of Rights Agent ...................................6

3.       Issue of Right Certificates ...................................6

4.       Form of Right Certificates ....................................7

5.       Countersignature and Registration .............................8

6.       Transfer, Split Up, Combination and Exchange of
         Right Certificates; Mutilated, Destroyed, Lost or
         Stolen Right Certificates .....................................8

7.       Exercise of Rights; Purchase Price; Expiration Date
         of Rights .....................................................9

8.       Cancellation and Destruction of Right Certificates ...........10

9.       Company Covenants Concerning Securities and Rights ...........10

10.      Record Date ..................................................12

11.      Adjustment of Purchase Price, Number and Kind of
         Securities or Number of Rights ...............................12

12.      Certificate of Adjusted Purchase Price or Number
         of Securities ................................................20

13.      Consolidation, Merger or Sale or Transfer of Assets
         or Earning Power .............................................20

14.      Fractional Rights and Fractional Securities ..................22

15.      Rights of Action .............................................24

16.      Agreement of Rights Holders ..................................24

17.      Right Certificate Holder Not Deemed a Shareholder ............25

18.      Concerning the Rights Agent ..................................25

19.      Merger or Consolidation or Change of Name of Rights Agent ....26

20.      Duties of Rights Agent .......................................26

21.      Change of Rights Agent .......................................28

                                      (i)

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                                                                     Page
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22.      Issuance of New Right Certificates ...........................29

23.      Redemption ...................................................29

24.      Exchange .....................................................30

25.      Notice of Certain Events .....................................31

26.      Notices ......................................................32

27.      Supplements and Amendments ...................................32

28.      Successors; Certain Covenants ................................33

29.      Benefits of This Agreement ...................................33

30.      Governing Law ................................................33

31.      Severability .................................................33

32.      Descriptive Headings, Etc. ...................................34

33.      Determinations and Actions by the Directors ..................34

35.      Counterparts .................................................34

Exhibit A ............................................................A-1

Exhibit B ............................................................B-1

Exhibit C ............................................................C-1

                                      (ii)

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                      AMENDED AND RESTATED RIGHTS AGREEMENT
                      -------------------------------------

         This Amended and Restated Rights Agreement, dated as of _________, 2000
(this "Agreement"), is made and entered into by and between The J. M. Smucker
Company, an Ohio corporation (the "Company"), and Computershare Investor
Services, LLC, successor to Harris Trust and Savings Bank, as rights agent
(the "Rights Agent").

                                    RECITALS
                                    --------

         A. The Company and the Rights Agent, as successor to Harris Trust and
Savings Bank, an Illinois banking corporation (the "Original Rights Agent") are
parties to a Rights Agreement, dated as of April 22, 1999 (the "Original Rights
Agreement"), and on April 22, 1999, the Directors of the Company authorized and
declared a dividend distribution of one class A right (a "Class A Right") for
each class A common share, without par value, of the Company (a "Class A Common
Share") and one class B right (a "Class B Right") for each class B common share,
without par value, of the Company (a "Class B Common Share") outstanding as of
the Close of Business (as hereinafter defined) on May 14, 1999 (the "Record
Date"), each Class A Right and Class B Right initially representing the right to
purchase one one-hundredth of a Preferred Share (as hereinafter defined), on the
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Class A Right (subject to adjustment as provided
herein) with respect to each Class A Common Share and one Class B Right (subject
to adjustment as provided herein) with respect to each Class B Common Share
issued or delivered by the Company (whether originally issued or delivered from
the Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date (as hereinafter defined) and the Expiration Date (as
hereinafter defined) or as provided in Section 22.

         B. On August 15, 2000, the shareholders of the Company approved the
adoption of a Merger Agreement, dated as of July 3, 2000 (the "Merger
Agreement"), by and between the Company and JMS-Ohio, Inc., an Ohio corporation
and a wholly owned subsidiary of the Company ("Sub"), pursuant to which Sub will
merge with and into the Company and each Class A Common Share and Class B Common
Share (other than those exchanged for cash as provided by the Merger Agreement)
were converted into one Common Share (as defined herein).

         C. In connection with the Merger (as defined in the Merger Agreement),
the Directors of the Company determined that it is necessary, desirable and in
the best interest of the shareholders of the Company to amend and restate the
Original Rights Agreement on the terms and conditions set forth herein.

         D. Notwithstanding anything in this Agreement to the contrary, this
Agreement will not be effective until immediately prior to the Effective Time
(as defined in the Merger Agreement) of the Merger.

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                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto hereby agree as follows:

         1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms have the meanings indicated:

         (a) "ACQUIRING PERSON" means any Person (other than the Company or any
Related Person or any Exempted Person) who or which, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 15% or more
of the then-outstanding Common Shares; PROVIDED, HOWEVER, that a Person will not
be deemed to have become an Acquiring Person solely as a result of a reduction
in the number of Common Shares outstanding unless and until such time as (i)
such Person or any Affiliate or Associate of such Person thereafter becomes the
Beneficial Owner of additional Common Shares representing 1% or more of the
then-outstanding Common Shares, other than as a result of a stock dividend,
stock split or similar transaction effected by the Company in which all holders
of Common Shares are treated equally, or (ii) any other Person who is the
Beneficial Owner of Common Shares representing 1% or more of the
then-outstanding Common Shares thereafter becomes an Affiliate or Associate of
such Person. Notwithstanding the foregoing, if the Directors of the Company
determine in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person" as defined pursuant to the foregoing provisions
of this paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.

         (b) "AFFILIATE" and "ASSOCIATE" will have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement, PROVIDED HOWEVER,
that a Person will not be deemed to be the Affiliate or Associate of another
Person solely because either or both Persons are or were Directors of the
Company.

         (c) A Person will be deemed the "BENEFICIAL OWNER" of, and to
"BENEFICIALLY OWN," any securities:

                     (i) the beneficial ownership of which such Person or any of
         such Person's Affiliates or Associates, directly or indirectly, has the
         right to acquire (whether such right is exercisable immediately or only
         after the passage of time) pursuant to any agreement, arrangement or
         understanding (whether or not in writing), or upon the exercise of
         conversion rights, exchange rights, warrants, options or other rights
         (in each case, other than upon exercise or exchange of the Rights);
         PROVIDED, HOWEVER, that a Person will not be deemed the Beneficial
         Owner of, or to Beneficially Own, securities tendered pursuant to a
         tender or exchange offer made by or on behalf of such Person or any of
         such Person's Affiliates or Associates until such tendered securities
         are accepted for purchase or exchange; or

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                    (ii) which such Person or any of such Person's Affiliates or
         Associates, directly or indirectly, has or shares the right to vote or
         dispose of, including pursuant to any agreement, arrangement or
         understanding (whether or not in writing); or

                   (iii) of which any other Person is the Beneficial Owner, if
         such Person or any of such Person's Affiliates or Associates has any
         agreement, arrangement or understanding (whether or not in writing)
         with such other Person (or any of such other Person's Affiliates or
         Associates) with respect to acquiring, holding, voting or disposing of
         any securities of the Company;

PROVIDED, HOWEVER, that a Person will not be deemed the Beneficial Owner of, or
to Beneficially Own, any security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (1) arises solely from a revocable proxy given to such Person
in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership arises
solely as a result of such Person's status as a "clearing agency," as defined in
Section 3(a)(23) of the Exchange Act; PROVIDED FURTHER, HOWEVER, that nothing in
this paragraph (c) will cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to Beneficially Own, any securities
acquired through such Person's participation in good faith in an underwriting
syndicate until the expiration of 40 calendar days after the date of such
acquisition, or such later date as the Directors of the Company may determine in
any specific case.

         (d) "BUSINESS DAY" means any day other than a Saturday, Sunday or a day
on which banking institutions in the State of Ohio, Illinois or New York (or
such other state in which the principal office of the Rights Agent is located)
are authorized or obligated by law or executive order to close.

         (e) "CLASS A COMMON SHARE" has the meaning set forth in the Recitals to
this Agreement.

         (f) "CLASS B COMMON SHARE" has the meaning set forth in the Recitals to
this Agreement.

         (g) "CLASS A RIGHT" has the meaning set forth in the Recitals to this
Agreement.

         (h) "CLASS B RIGHT" has the meaning set forth in the Recitals to this
Agreement.

         (i) "CLOSE OF BUSINESS" on any given date means 5:00 P.M., Eastern
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it means 5:00 P.M., Eastern time, on the next succeeding Business Day.

         (j) "COMMON SHARES" when used with reference to the Company means the
common shares, without par value, PROVIDED, HOWEVER, that, if the Company is the
continuing or surviving corporation in a transaction described in Section
13(a)(ii), "Common Shares" when used with reference to the Company means shares
of the capital stock or units of the equity interests with the greatest
aggregate voting power of the Company. "Common Shares" when used with

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reference to any corporation or other legal entity other than the Company,
including an Issuer, means shares of the capital stock or units of the equity
interests with the greatest aggregate voting power of such corporation or other
legal entity.

         (k) "COMPANY" means The J. M. Smucker Company, an Ohio corporation.

         (l) "DISTRIBUTION DATE" means the earlier of: (i) the Close of Business
on the tenth calendar day following the Share Acquisition Date (or, if the tenth
calendar day following the Share Acquisition Date occurs before the Record Date,
the Close of Business on the Record Date), or (ii) the Close of Business on the
tenth Business Day (or, unless the Distribution Date shall have previously
occurred, such later date as may be specified by the Directors of the Company)
after the commencement of a tender or exchange offer by any Person (other than
the Company or any Related Person), if upon the consummation thereof such Person
would be the Beneficial Owner of 15% or more of the then-outstanding Common
Shares.

         (m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         (n) "EXEMPTED PERSON" means any Smucker Family Member.

         (o) "EXPIRATION DATE" means the earliest of (i) the Close of Business
on the Final Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23, and (iii) the time at which all exercisable Rights are
exchanged as provided in Section 24.

         (p) "FINAL EXPIRATION DATE" means the tenth anniversary of the Record
Date.

         (q) "FLIP-IN EVENT" means any event described in clauses (A), (B) or
(C) of Section 11(a)(ii).

         (r) "FLIP-OVER EVENT" means any event described in clauses (i), (ii) or
(iii) of Section 13(a).

         (s) "ISSUER" has the meaning set forth in Section 13(b).

         (t) "MERGER AGREEMENT" has the meaning set forth in the Recitals to
this Agreement.

         (u) "NASDAQ" means The NASDAQ Stock Market.

         (v) "ORIGINAL RIGHTS AGENT" has the meaning set forth in the Recitals
to this Agreement.

         (w) "ORIGINAL RIGHTS AGREEMENT" has the meaning set forth in the
Recitals to this Agreement.

         (x) "PERSON" means any individual, firm, corporation or other legal
entity, and includes any successor (by merger or otherwise) of such entity.

         (y) "PREFERRED SHARES" means shares of Series A Junior Participating
Preferred Stock, without par value, of the Company having the rights and
preferences set forth in the form of

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Certificate of Adoption of Amendment to Amended Articles of Incorporation
attached as EXHIBIT A.

         (z) "PURCHASE PRICE" means initially $90.00 per one one-hundredth of a
Preferred Share, subject to adjustment from time to time as provided in this
Agreement.

         (aa) "RECORD DATE" has the meaning set forth in the Recitals to this
Agreement.

         (bb) "REDEMPTION PRICE" means $.01 per Right, subject to adjustment by
resolution of the Directors of the Company to reflect any stock split, stock
dividend or similar transaction occurring after the Record Date.

         (cc) "RELATED PERSON" means (i) any Subsidiary of the Company or (ii)
any employee benefit or stock ownership plan of the Company or of any Subsidiary
of the Company or any entity holding Common Shares for or pursuant to the terms
of any such plan.

         (dd) "RIGHT" has the meaning set forth in the Recitals to this
Agreement.

         (ee) "RIGHT CERTIFICATES" means the certificates evidencing the Rights
in substantially the form attached as Exhibit B.

         (ff) "RIGHTS AGENT" means Computershare Investor Services, LLC,
successor to Harris Trust and Savings Bank, unless and until a successor Rights
Agent has become such pursuant to the terms of this Agreement, and thereafter,
"Rights Agent" means such successor Rights Agent.

         (gg) "SECURITIES ACT" means the Securities Act of 1933, as amended.

         (hh) "SHARE ACQUISITION DATE" means the first date of public
announcement by the Company (by press release, filing made with the Securities
and Exchange Commission or otherwise) that an Acquiring Person has become such.

         (ii) "SMUCKER FAMILY MEMBER" means (i) any of the individuals, trusts,
foundations, partnerships or other entities listed on Schedule I, (ii) any trust
created by (or on behalf of) and for the benefit of any individual listed on
Schedule I, or (iii) the dependents of any individual listed on Schedule I that
share the same household with such individual.

         (jj) "SUBSIDIARY" when used with reference to any Person means any
corporation or other legal entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly or indirectly,
by such Person; PROVIDED, HOWEVER, that for purposes of Section 13(b),
"Subsidiary" when used with reference to any Person means any corporation or
other legal entity of which at least 20% of the voting power of the voting
equity securities or equity interests is owned, directly or indirectly, by such
Person.

         (kk) "TRADING DAY" means any day on which the principal national
securities exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, a Business Day.

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         (ll) "TRIGGERING EVENT" means any Flip-in Event or Flip-over Event.

         2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3, will also be, prior to the Distribution Date, the
holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment and hereby
certifies that it complies with the requirements of the New York Stock Exchange
governing transfer agents and registrars. The Company may from time to time act
as Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or
desirable. Any actions which may be taken by the Rights Agent pursuant to the
terms of this Agreement may be taken by any such Co-Rights Agent. To the extent
that any Co-Rights Agent takes any action pursuant to this Agreement, such
Co-Rights Agent will be entitled to all of the rights and protections of, and
subject to all of the applicable duties and obligations imposed upon, the Rights
Agent pursuant to the terms of this Agreement.

         3. ISSUE OF RIGHT CERTIFICATES. (a) Until the Distribution Date, (i)
the Rights will be evidenced by the certificates representing Common Shares
registered in the names of the record holders thereof (which certificates
representing Common Shares will also be deemed to be Right Certificates), (ii)
the Rights will be transferable only in connection with the transfer of the
underlying Common Shares, and (iii) the surrender for transfer of any
certificates evidencing Common Shares in respect of which Rights have been
issued will also constitute the transfer of the Rights associated with the
Common Shares evidenced by such certificates. On or as promptly as practicable
after the Record Date, the Company will send by first class, postage prepaid
mail, to each record holder of Common Shares as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company
as of such date, a copy of a Summary of Rights to Purchase Preferred Stock in
substantially the form attached as EXHIBIT C.

         (b) Rights will be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or exchange of any
Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares will have stamped on, impressed on, printed on,
written on, or otherwise affixed to them the following legend or such similar
legend as the Company may deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or transaction reporting system on
which the Common Shares may from time to time be listed or quoted, or to conform
to usage:

         This Certificate also evidences and entitles the holder hereof to
         certain Rights as set forth in an Amended and Restated Rights Agreement
         between The J. M. Smucker Company and Computershare Investor Services,
         LLC, successor to Harris Trust and Savings Bank, as Rights Agent, dated
         as of _________, 2000 (the "Rights Agreement"), the terms of which are
         hereby incorporated herein by reference and a copy of which is on file
         at the principal executive offices of The J. M. Smucker Company. The
         Rights are not exercisable prior to the occurrence of certain events
         specified in the Rights Agreement. Under certain circumstances, as set
         forth in the Rights Agreement, such Rights may be redeemed, may be
         exchanged, may expire, may be amended, or may be

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         evidenced by separate certificates and no longer be evidenced by this
         Certificate. The J. M. Smucker Company will mail to the holder of this
         Certificate a copy of the Rights Agreement, as in effect on the date of
         mailing, without charge promptly after receipt of a written request
         therefor. Under certain circumstances as set forth in the Rights
         Agreement, Rights that are or were beneficially owned by an Acquiring
         Person or any Affiliate or Associate of an Acquiring Person (as such
         terms are defined in the Rights Agreement) may become null and void.

         (c) Any Right Certificate issued pursuant to this Section 3 that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Right Certificate issued at any time upon the transfer
of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate and any Right
Certificate issued pursuant to Section 6 or 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall be subject to and contain the following legend or such similar
legend as the Company may deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage:

         The Rights represented by this Right Certificate are or were
         beneficially owned by a Person who was an Acquiring Person or an
         Affiliate or an Associate of an Acquiring Person (as such terms are
         defined in the Rights Agreement). This Right Certificate and the Rights
         represented hereby may become null and void in the circumstances
         specified in Section 11(a)(ii) or Section 13 of the Rights Agreement.

         (d) As promptly as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send, at the
expense of the Company), by first class, insured, postage prepaid mail, to each
record holder of Common Shares as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the Company, a Right
Certificate evidencing one Right for each Common Share so held, subject to
adjustment as provided herein. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.

         (e) In the event that the Company purchases or otherwise acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares will be deemed canceled and retired so
that the Company will not be entitled to exercise any Rights associated with the
Common Shares so purchased or acquired.

         4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the form of
election to purchase and the form of assignment to be printed on the reverse
thereof) will be substantially in the form attached as EXHIBIT B with such
changes and marks of identification or designation, and such legends, summaries
or endorsements printed thereon, as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or transaction
reporting system on which the Rights may from time to time be listed or quoted,
or to conform to usage. Subject to the

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provisions of Section 22, the Right Certificates, whenever issued, on their face
will entitle the holders thereof to purchase such number of one one-hundredths
of a Preferred Share as are set forth therein at the Purchase Price set forth
therein, but the Purchase Price, the number and kind of securities issuable upon
exercise of each Right and the number of Rights outstanding will be subject to
adjustment as provided herein.

         5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right Certificates will
be executed on behalf of the Company by its Chairman, its President or any Vice
President, either manually or by facsimile signature, and will have affixed
thereto the Company's seal or a facsimile thereof which will be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates will be manually countersigned by
the Rights Agent and will not be valid for any purpose unless so countersigned.
In case any officer of the Company who signed any of the Right Certificates
ceases to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, is a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such officer.

         (b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the principal office of the Rights Agent designated for
such purpose and at such other offices as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or any transaction reporting system on
which the Rights may from time to time be listed or quoted, books for
registration and transfer of the Right Certificates issued hereunder. Such books
will show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.

         6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a) Subject to the
provisions of Sections 7(d) and 14, at any time after the Close of Business on
the Distribution Date and prior to the Expiration Date, any Right Certificate or
Right Certificates representing exercisable Rights may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share (or other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any such Right Certificate
or Rights Certificates must make such request in a writing delivered to the
Rights Agent and must surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the

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Company shall reasonably request. Thereupon or as promptly as practicable
thereafter, subject to the provisions of Sections 7(d) and 14, the Company will
prepare, execute and deliver to the Rights Agent, and the Rights Agent will
countersign and deliver, a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

         (b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will prepare, execute and
deliver a new Right Certificate of like tenor to the Rights Agent and the Rights
Agent will countersign and deliver such new Right Certificate to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

         7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS. (a)
The registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date, upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office or offices of the
Rights Agent designated for such purpose, together with payment in cash, in
lawful money of the United States of America by certified check or bank draft
payable to the order of the Company, equal to the sum of (i) the exercise price
for the total number of securities as to which such surrendered Rights are
exercised and (ii) an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with the provisions
of Section 9(d).

         (b) Upon receipt of a Right Certificate representing exercisable Rights
with the form of election to purchase duly executed, accompanied by payment as
described above, the Rights Agent will promptly (i) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent) certificates representing the number of one
one-hundredths of a Preferred Share to be purchased (and the Company hereby
irrevocably authorizes and directs its transfer agent to comply with all such
requests), or, if the Company elects to deposit Preferred Shares issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (and the Company
hereby irrevocably authorizes and directs such depositary agent to comply with
all such requests), (ii) after receipt of such certificates (or depositary
receipts, as the case may be), cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, (iii) when appropriate,
requisition from the Company or any transfer agent therefor (or make available,
if the Rights Agent is the transfer agent) certificates representing the number
of equivalent common shares to be issued in lieu of the issuance of Common
Shares in accordance with the provisions of Section 11(a)(iii), (iv) when
appropriate, after receipt of such certificates, cause the same to be delivered
to or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder, (v) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of the issuance of fractional shares in accordance with the

                                       9
<PAGE>   13

provisions of Section 14 or in lieu of the issuance of Common Shares in
accordance with the provisions of Section 11(a)(iii), (vi) when appropriate,
after receipt, deliver such cash to or upon the order of the registered holder
of such Right Certificate, and (vii) when appropriate, deliver any due bill or
other instrument provided to the Rights Agent by the Company for delivery to the
registered holder of such Right Certificate as provided by Section 11(l).

         (c) In case the registered holder of any Right Certificate exercises
less than all the Rights evidenced thereby, the Company will prepare, execute
and deliver a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised and the Rights Agent will countersign and deliver such new
Right Certificate to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.

         (d) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company will be obligated to undertake any action with
respect to any purported transfer, split up, combination or exchange of any
Right Certificate pursuant to Section 6 or exercise of a Right Certificate as
set forth in this Section 7 unless the registered holder of such Right
Certificate has (i) completed and signed the certificate following the form of
assignment or the form of election to purchase, as applicable, set forth on the
reverse side of the Right Certificate surrendered for such transfer, split up,
combination, exchange or exercise and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company may reasonably request.

         8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange will, if surrendered to the Company or to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, will be canceled by it,
and no Right Certificates will be issued in lieu thereof except as expressly
permitted by the provisions of this Agreement. The Company will deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent will so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent will deliver
all canceled Right Certificates to the Company, or will, at the written request
of the Company, destroy such canceled Right Certificates, and in such case will
deliver a certificate of destruction thereof to the Company.

         9. COMPANY COVENANTS CONCERNING SECURITIES AND RIGHTS. The Company
covenants and agrees that:

                  (a) It will cause to be reserved and kept available out of its
         authorized and unissued Preferred Shares or any Preferred Shares held
         in its treasury, a number of Preferred Shares that will be sufficient
         to permit the exercise in full of all outstanding Rights in accordance
         with Section 7.

                  (b) So long as the Preferred Shares (and, following the
         occurrence of a Triggering Event, Common Shares and/or other
         securities) issuable upon the exercise of the Rights may be listed on a
         national securities exchange, or quoted on Nasdaq, it will endeavor to
         cause, from and after such time as the Rights become exercisable, all
         securities reserved for issuance upon the exercise of Rights to be
         listed on such exchange, or quoted on Nasdaq, upon official notice of
         issuance upon such exercise.

                                       10
<PAGE>   14

                  (c) It will take all such action as may be necessary to ensure
         that all Preferred Shares (and, following the occurrence of a
         Triggering Event, Common Shares and/or other securities) delivered upon
         exercise of Rights, at the time of delivery of the certificates for
         such securities, will be (subject to payment of the Purchase Price)
         duly authorized, validly issued, fully paid and nonassessable
         securities.

                  (d) It will pay when due and payable any and all federal and
         state transfer taxes and charges that may be payable in respect of the
         issuance or delivery of the Right Certificates and of any certificates
         representing securities issued upon the exercise of Rights; PROVIDED,
         HOWEVER, that the Company will not be required to pay any transfer tax
         or charge which may be payable in respect of any transfer or delivery
         of Right Certificates to a person other than, or the issuance or
         delivery of certificates or depositary receipts representing securities
         issued upon the exercise of Rights in a name other than that of, the
         registered holder of the Right Certificate evidencing Rights
         surrendered for exercise, or to issue or deliver any certificates or
         depositary receipts representing securities issued upon the exercise of
         any Rights until any such tax or charge has been paid (any such tax or
         charge being payable by the holder of such Right Certificate at the
         time of surrender) or until it has been established to the Company's
         reasonable satisfaction that no such tax is due.

                  (e) It will use its best efforts (i) to file on an appropriate
         form, as soon as practicable following the later of the Share
         Acquisition Date and the Distribution Date, a registration statement
         under the Securities Act with respect to the securities issuable upon
         exercise of the Rights, (ii) to cause such registration statement to
         become effective as soon as practicable after such filing, and (iii) to
         cause such registration statement to remain effective (with a
         prospectus at all times meeting the requirements of the Securities Act)
         until the earlier of (A) the date as of which the Rights are no longer
         exercisable for such securities and (B) the Expiration Date. The
         Company will also take such action as may be appropriate under, or to
         ensure compliance with, the securities or "blue sky" laws of the
         various states in connection with the exercisability of the Rights. The
         Company may temporarily suspend, for a period of time after the date
         set forth in clause (i) of the first sentence of this Section 9(e), the
         exercisability of the Rights in order to prepare and file such
         registration statement and to permit it to become effective. Upon any
         such suspension, the Company will issue a public announcement stating
         that the exercisability of the Rights has been temporarily suspended,
         as well as a public announcement at such time as the suspension is no
         longer in effect. In addition, if the Company determines that a
         registration statement should be filed under the Securities Act or any
         state securities laws following the Distribution Date, the Company may
         temporarily suspend the exercisability of the Rights in each relevant
         jurisdiction until such time as a registration statement has been
         declared effective and, upon any such suspension, the Company will
         issue a public announcement stating that the exercisability of the
         Rights has been temporarily suspended, as well as a public announcement
         at such time as the suspension is no longer in effect. Notwithstanding
         anything in this Agreement to the contrary, the Rights will not be
         exercisable in any jurisdiction if the requisite registration or
         qualification in such jurisdiction has not been effected or the
         exercise of the Rights is not permitted under applicable law.

                                       11
<PAGE>   15

                  (f) Notwithstanding anything in this Agreement to the
         contrary, after the later of the Share Acquisition Date and the
         Distribution Date it will not take (or permit any Subsidiary to take)
         any action if at the time such action is taken it is reasonably
         foreseeable that such action will eliminate or otherwise diminish the
         benefits intended to be afforded by the Rights.

                  (g) In the event that the Company is obligated to issue other
         securities of the Company and/or pay cash pursuant to Section 11, 13,
         14 or 24 it will make all arrangements necessary so that such other
         securities and/or cash are available for distribution by the Rights
         Agent, if and when appropriate.

         10. RECORD DATE. Each Person in whose name any certificate representing
Preferred Shares (or Common Shares and/or other securities, as the case may be)
is issued upon the exercise of Rights will for all purposes be deemed to have
become the holder of record of the Preferred Shares (or Common Shares and/or
other securities, as the case may be) represented thereby on, and such
certificate will be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the transfer books of the Company for
the Preferred Shares (or Common Shares and/or other securities, as the case may
be) are closed, such Person will be deemed to have become the record holder of
such securities on, and such certificate will be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred Shares
(or Common Shares and/or other securities, as the case may be) are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate will not be entitled to any rights of a holder of any security for
which the Rights are or may become exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions, or to exercise
any preemptive rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

         11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SECURITIES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities issuable
upon exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.

         (a) (i) In the event that the Company at any time after the Record Date
         (A) declares a dividend on the Preferred Shares payable in Preferred
         Shares, (B) subdivides the outstanding Preferred Shares, (C) combines
         the outstanding Preferred Shares into a smaller number of Preferred
         Shares, or (D) issues any shares of its capital stock in a
         reclassification of the Preferred Shares (including any such
         reclassification in connection with a consolidation or merger in which
         the Company is the continuing or surviving corporation), except as
         otherwise provided in this Section 11(a), the Purchase Price in effect
         at the time of the record date for such dividend or of the effective
         date of such subdivision, combination or reclassification and/or the
         number and/or kind of shares of capital stock issuable on such date
         upon exercise of a Right, will be proportionately adjusted so that the
         holder of any Right exercised after such time is entitled to receive
         upon payment of the Purchase Price then in effect the aggregate number
         and kind of shares of capital stock which, if such Right had been
         exercised immediately prior to such date and at a time when the
         transfer books of the Company for the Preferred Shares were

                                       12
<PAGE>   16

         open, the holder of such Right would have owned upon such exercise
         (and, in the case of a reclassification, would have retained after
         giving effect to such reclassification) and would have been entitled to
         receive by virtue of such dividend, subdivision, combination or
         reclassification; PROVIDED, HOWEVER, that in no event shall the
         consideration to be paid upon the exercise of one Right be less than
         the aggregate par value of the shares of capital stock issuable upon
         exercise of one Right. If an event occurs which would require an
         adjustment under both this Section 11(a)(i) and Section 11(a)(ii) or
         Section 13, the adjustment provided for in this Section 11(a)(i) will
         be in addition to, and will be made prior to, any adjustment required
         pursuant to Section 11(a)(ii) or Section 13.

                    (ii)   Subject to the provisions of Section 24, if:

              (A)  any Person becomes an Acquiring Person; or

              (B) any Acquiring Person or any Affiliate or Associate of any
         Acquiring Person, directly or indirectly, (1) merges into the Company
         or otherwise combines with the Company and the Company is the
         continuing or surviving corporation of such merger or combination
         (other than in a transaction subject to Section 13), (2) merges or
         otherwise combines with any Subsidiary of the Company, (3) in one or
         more transactions (otherwise than in connection with the exercise,
         exchange or conversion of securities exercisable or exchangeable for or
         convertible into shares of any class of capital stock of the Company or
         any of its Subsidiaries) transfers cash, securities or any other
         property to the Company or any of its Subsidiaries in exchange (in
         whole or in part) for shares of any class of capital stock of the
         Company or any of its Subsidiaries or for securities exercisable or
         exchangeable for or convertible into shares of any class of capital
         stock of the Company or any of its Subsidiaries, or otherwise obtains
         from the Company or any of its Subsidiaries, with or without
         consideration, any additional shares of any class of capital stock of
         the Company or any of its Subsidiaries or securities exercisable or
         exchangeable for or convertible into shares of any class of capital
         stock of the Company or any of its Subsidiaries (otherwise than as part
         of a pro rata distribution to all holders of shares of any class of
         capital stock of the Company, or any of its Subsidiaries), (4) sells,
         purchases, leases, exchanges, mortgages, pledges, transfers or
         otherwise disposes (in one or more transactions) to, from, with or of,
         as the case may be, the Company or any of its Subsidiaries (otherwise
         than in a transaction subject to Section 13), any property, including
         securities, on terms and conditions less favorable to the Company than
         the Company would be able to obtain in an arm's-length transaction with
         an unaffiliated third party, (5) receives any compensation from the
         Company or any of its Subsidiaries other than compensation as a
         director or a regular full-time employee, in either case at rates
         consistent with the Company's (or its Subsidiaries') past practices, or
         (6) receives the benefit, directly or indirectly (except
         proportionately as a shareholder), of any loans, advances, guarantees,
         pledges or other financial assistance or any tax credits or other tax
         advantage provided by the Company or any of its Subsidiaries; or

              (C) during such time as there is an Acquiring Person, there is any
         reclassification of securities of the Company (including any reverse
         stock split), or any recapitalization of the Company, or any merger or
         consolidation of the Company with any of its Subsidiaries, or any other
         transaction or series of transactions involving the Company or any of
         its Subsidiaries (whether or not with or into or otherwise involving an

                                       13
<PAGE>   17

         Acquiring Person), other than a transaction subject to Section 13,
         which has the effect, directly or indirectly, of increasing by more
         than 1% the proportionate share of the outstanding shares of any class
         of equity securities of the Company or any of its Subsidiaries, or of
         securities exercisable or exchangeable for or convertible into equity
         securities of the Company or any of its Subsidiaries, of which an
         Acquiring Person, or any Affiliate or Associate of any Acquiring
         Person, is the Beneficial Owner;

         then, and in each such case, from and after the latest of the
         Distribution Date, the Share Acquisition Date and the date of the
         occurrence of such Flip-in Event, proper provision will be made so that
         each holder of a Right, except as provided below, will thereafter have
         the right to receive, upon exercise thereof in accordance with the
         terms of this Agreement at an exercise price per Right equal to the
         product of the then-current Purchase Price multiplied by the number of
         one one-hundredths of a Preferred Share for which a Right was
         exercisable immediately prior to the date of the occurrence of such
         Flip-in Event (or, if any other Flip-in Event shall have previously
         occurred, the product of the then-current Purchase Price multiplied by
         the number of one one-hundredths of a Preferred Share for which a Right
         was exercisable immediately prior to the date of the first occurrence
         of a Flip-in Event), in lieu of Preferred Shares, such number of Common
         Shares as equals the result obtained by (x) multiplying the
         then-current Purchase Price by the number of one one-hundredths of a
         Preferred Share for which a Right was exercisable immediately prior to
         the date of the occurrence of such Flip-in Event (or, if any other
         Flip-in Event shall have previously occurred, multiplying the
         then-current Purchase Price by the number of one one-hundredths of a
         Preferred Share for which a Right was exercisable immediately prior to
         the date of the first occurrence of a Flip-in Event), and dividing that
         product by (y) 50% of the current per share market price of the Class A
         Common Shares (determined pursuant to Section 11(d)) on the date of the
         occurrence of such Flip-in Event. Notwithstanding anything in this
         Agreement to the contrary, from and after the first occurrence of a
         Flip-in Event, any Rights that are Beneficially Owned by (A) any
         Acquiring Person (or any Affiliate or Associate of any Acquiring
         Person), (B) a transferee of any Acquiring Person (or any such
         Affiliate or Associate) who becomes a transferee after the occurrence
         of a Flip-in Event, or (C) a transferee of any Acquiring Person (or any
         such Affiliate or Associate) who became a transferee prior to or
         concurrently with the occurrence of a Flip-in Event pursuant to either
         (1) a transfer from an Acquiring Person to holders of its equity
         securities or to any Person with whom it has any continuing agreement,
         arrangement or understanding regarding the transferred Rights or (2) a
         transfer which the Directors of the Company have determined is part of
         a plan, arrangement or understanding which has the purpose or effect of
         avoiding the provisions of this Section 11(a)(ii), and subsequent
         transferees of any of such Persons, will be void without any further
         action and any holder of such Rights will thereafter have no rights
         whatsoever with respect to such Rights under any provision of this
         Agreement. The Company will use all reasonable efforts to ensure that
         the provisions of this Section 11(a)(ii) are complied with, but will
         have no liability to any holder of Right Certificates or any other
         Person as a result of its failure to make any determinations with
         respect to an Acquiring Person or its Affiliates, Associates or
         transferees hereunder. Upon the occurrence of a Flip-in Event, no Right
         Certificate that represents Rights that are or have become void
         pursuant to the provisions of this Section 11(a)(ii) will thereafter be
         issued pursuant to Section 3 or Section 6, and any Right Certificate
         delivered to the Rights Agent that represents Rights that are or have
         become void pursuant to the provisions of

                                       14
<PAGE>   18

         this Section 11(a)(ii) will be canceled. Upon the occurrence of a
         Flip-over Event, any Rights that shall not have been previously
         exercised pursuant to this Section 11(a)(ii) shall thereafter be
         exercisable only pursuant to Section 13 and not pursuant to this
         Section 11(a)(ii).

                   (iii) Upon the occurrence of a Flip-in Event, if there are
         not sufficient Common Shares authorized but unissued or issued but not
         outstanding to permit the issuance of all the Common Shares issuable in
         accordance with Section 11(a)(ii) upon the exercise of a Right, the
         Directors of the Company will use their best efforts promptly to
         authorize and, subject to the provisions of Section 9(e), make
         available for issuance additional Common Shares or other equity
         securities of the Company having equivalent voting rights and an
         equivalent value (as determined in good faith by the Directors of the
         Company) to the Common Shares (for purposes of this Section 11(a)(iii),
         "equivalent common shares"). In the event that equivalent common shares
         are so authorized, upon the exercise of a Right in accordance with the
         provisions of Section 7, the registered holder will be entitled to
         receive (A) Common Shares, to the extent any are available, and (B) a
         number of equivalent common shares, which the Directors of the Company
         have determined in good faith to have a value equivalent to the excess
         of (x) the aggregate current per share market value on the date of the
         occurrence of the most recent Flip-in Event of all the Common Shares
         issuable in accordance with Section 11(a)(ii) upon the exercise of a
         Right (the "Exercise Value") over (y) the aggregate current per share
         market value on the date of the occurrence of the most recent Flip-in
         Event of any Common Shares available for issuance upon the exercise of
         such Right; PROVIDED, HOWEVER, that if at any time after 90 calendar
         days after the latest of the Share Acquisition Date, the Distribution
         Date and the date of the occurrence of the most recent Flip-in Event,
         there are not sufficient Common Shares and/or equivalent common shares
         available for issuance upon the exercise of a Right, then the Company
         will be obligated to deliver, upon the surrender of such Right and
         without requiring payment of the Purchase Price, Common Shares (to the
         extent available), equivalent common shares (to the extent available)
         and then cash (to the extent permitted by applicable law and any
         agreements or instruments to which the Company is a party in effect
         immediately prior to the Share Acquisition Date), which securities and
         cash have an aggregate value equal to the excess of (1) the Exercise
         Value over (2) the product of the then-current Purchase Price
         multiplied by the number of one one- hundredths of a Preferred Share
         for which a Right was exercisable immediately prior to the date of the
         occurrence of the most recent Flip-in Event (or, if any other Flip-in
         Event shall have previously occurred, the product of the then-current
         Purchase Price multiplied by the number of one one-hundredths of a
         Preferred Share for which a Right would have been exercisable
         immediately prior to the date of the occurrence of such Flip-in Event
         if no other Flip-in Event had previously occurred). To the extent that
         any legal or contractual restrictions prevent the Company from paying
         the full amount of cash payable in accordance with the foregoing
         sentence, the Company will pay to holders of the Rights as to which
         such payments are being made all amounts which are not then restricted
         on a pro rata basis and will continue to make payments on a pro rata
         basis as promptly as funds become available until the full amount due
         to each such Rights holder has been paid.

         (b) In the event that the Company fixes a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within

                                       15
<PAGE>   19

45 calendar days after such record date) to subscribe for or purchase Preferred
Shares (or securities having equivalent rights, privileges and preferences as
the Preferred Shares (for purposes of this Section 11(b), "equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the current per share
market price of the Preferred Shares (determined pursuant to Section 11(d)) on
such record date, the Purchase Price to be in effect after such record date will
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which is the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current per share market price and the denominator of which is
the number of Preferred Shares outstanding on such record date plus the number
of additional Preferred Shares and/or equivalent preferred shares to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or
all of which is in a form other than cash, the value of such consideration will
be as determined in good faith by the Directors of the Company, whose
determination will be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the Company will not be
deemed outstanding for the purpose of any such computation. Such adjustment will
be made successively whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, the Purchase Price will be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

         (c) In the event that the Company fixes a record date for the making of
a distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date will be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which is the current per share market price of the
Preferred Shares (as determined pursuant to Section 11(d)) on such record date
or, if earlier, the date on which Preferred Shares begin to trade on an
ex-dividend or when issued basis for such distribution, less the fair market
value (as determined in good faith by the Directors of the Company, whose
determination will be described in a statement filed with the Rights Agent) of
the portion of the evidences of indebtedness, cash, assets or stock so to be
distributed or of such subscription rights, options or warrants applicable to
one Preferred Share, and the denominator of which is such current per share
market price of the Preferred Shares; PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock issuable upon exercise of one
Right. Such adjustments will be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price will again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

                                       16
<PAGE>   20

         (d)        (i) For the purpose of any computation hereunder, the
         "current per share market price" of Common Shares on any date will be
         deemed to be the average of the daily closing prices per share of such
         Common Shares for the 30 consecutive Trading Days immediately prior to
         such date; PROVIDED, HOWEVER, that in the event that the current per
         share market price of the Common Shares is determined during a period
         following the announcement by the issuer of such Common Shares of (A) a
         dividend or distribution on such Common Shares payable in such Common
         Shares or securities convertible into such Common Shares (other than
         the Rights) or (B) any subdivision, combination or reclassification of
         such Common Shares, and prior to the expiration of 30 Trading Days
         after the ex-dividend date for such dividend or distribution, or the
         record date for such subdivision, combination or reclassification,
         then, and in each such case, the current per share market price will be
         appropriately adjusted to take into account ex-dividend trading or to
         reflect the current per share market price per Common Share equivalent.
         The closing price for each day will be the last sale price, regular
         way, or, in case no such sale takes place on such day, the average of
         the closing bid and asked prices, regular way, in either case as
         reported in the principal consolidated transaction reporting system
         with respect to securities listed or admitted to trading on the New
         York Stock Exchange or, if the Common Shares are not listed or admitted
         to trading on the New York Stock Exchange, as reported in the principal
         consolidated transaction reporting system with respect to securities
         listed on the principal national securities exchange on which the
         Common Shares are listed or admitted to trading or, if the Common
         Shares are not listed or admitted to trading on any national securities
         exchange, the last quoted price or, if not so quoted, the average of
         the high bid and low asked prices in the over-the-counter market, as
         reported by Nasdaq or such other system then in use, or, if on any such
         date the Common Shares are not quoted by any such organization, the
         average of the closing bid and asked prices as furnished by a
         professional market maker making a market in the Common Shares selected
         by the Directors of the Company. If the Common Shares are not publicly
         held or not so listed or traded, or are not the subject of available
         bid and asked quotes, "current per share market price" will mean the
         fair value per share as determined in good faith by the Directors of
         the Company, whose determination will be described in a statement filed
         with the Rights Agent.

                    (ii) For the purpose of any computation hereunder, the
         "current per share market price" of the Preferred Shares will be
         determined in the same manner as set forth above for Common Shares in
         Section 11(d)(i), other than the last sentence thereof. If the current
         per share market price of the Preferred Shares cannot be determined in
         the manner provided above, the "current per share market price" of the
         Preferred Shares will be conclusively deemed to be an amount equal to
         the current per share market price of the Common Shares multiplied by
         one hundred (as such number may be appropriately adjusted to reflect
         events such as stock splits, stock dividends, recapitalizations or
         similar transactions relating to the Common Shares occurring after the
         date of this Agreement). If neither the Common Shares nor the Preferred
         Shares are publicly held or so listed or traded, or the subject of
         available bid and asked quotes, "current per share market price" of the
         Preferred Shares will mean the fair value per share as determined in
         good faith by the Directors of the Company, whose determination will be
         described in a statement filed with the Rights Agent. For all purposes
         of this Agreement, the current per share market price of one
         one-hundredth of a Preferred Share will be equal to the current per
         share market price of one Preferred Share divided by one hundred.

                                       17
<PAGE>   21

         (e) Except as set forth below, no adjustment in the Purchase Price will
be required unless such adjustment would require an increase or decrease of at
least 1% in such price; PROVIDED, HOWEVER, that any adjustments which by reason
of this Section 11(e) are not required to be made will be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 will be made to the nearest cent or to the nearest one one- millionth
of a Preferred Share or one ten-thousandth of a Common Share or other security,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 will be made no later than the
earlier of (i) three years from the date of the transaction which requires such
adjustment and (ii) the Expiration Date.

         (f) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised becomes entitled to receive any
securities of the Company other than Preferred Shares, thereafter the number
and/or kind of such other securities so receivable upon exercise of any Right
(and/or the Purchase Price in respect thereof) will be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Shares (and the Purchase Price
in respect thereof) contained in this Section 11, and the provisions of Sections
7, 9, 10, 13 and 14 with respect to the Preferred Shares (and the Purchase Price
in respect thereof) will apply on like terms to any such other securities (and
the Purchase Price in respect thereof).

         (g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder will evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share issuable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

         (h) Unless the Company has exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price pursuant to Section
11(b) or Section 11(c), each Right outstanding immediately prior to the making
of such adjustment will thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one one-hundredths of a Preferred Share
issuable upon exercise of a Right immediately prior to such adjustment of the
Purchase Price by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.

         (i) The Company may elect, on or after the date of any adjustment of
the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of one one- hundredths of a Preferred Share issuable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights will be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights will become that number of Rights (calculated
to the nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company
will make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. Such record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, will be at least 10 calendar days later

                                       18
<PAGE>   22

than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company will, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to the provisions of Section 14, the additional Rights to
which such holders are entitled as a result of such adjustment, or, at the
option of the Company, will cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
are entitled after such adjustment. Right Certificates so to be distributed will
be issued, executed, and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and will be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.

         (j) Without respect to any adjustment or change in the Purchase Price
and/or the number and/or kind of securities issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number and kind of securities which were
expressed in the initial Right Certificate issued hereunder.

         (k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares or below the then par value, if any, of any other securities of
the Company issuable upon exercise of the Rights, the Company will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Preferred Shares or such other securities, as the case may be, at such adjusted
Purchase Price.

         (l) In any case in which this Section 11 otherwise requires that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of Preferred Shares or other securities of the Company, if any,
issuable upon such exercise over and above the number of Preferred Shares or
other securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company delivers to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
Preferred Shares or other securities upon the occurrence of the event requiring
such adjustment.

         (m) Notwithstanding anything in this Agreement to the contrary, the
Company will be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Directors of the Company
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at less
than the current per share market price therefor, (iii) issuance wholly for cash
of Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends, or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Preferred Shares is not taxable to such
shareholders.

         (n) Notwithstanding anything in this Agreement to the contrary, in the
event that the Company at any time after the Record Date prior to the
Distribution Date (i) pays a dividend on the outstanding Common Shares payable
in Common Shares, (ii) subdivides the outstanding

                                       19
<PAGE>   23

Common Shares, (iii) combines the outstanding Common Shares into a smaller
number of shares, or (iv) issues any shares of its capital stock in a
reclassification of the outstanding Common Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the number of Rights
associated with each Common Share then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, will be proportionately adjusted
so that the number of Rights thereafter associated with each Common Share
following any such event equals the result obtained by multiplying the number of
Rights associated with each Common Share immediately prior to such event by a
fraction the numerator of which is the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which is
the total number of Common Shares outstanding immediately following the
occurrence of such event. The adjustments provided for in this Section 11(n)
will be made successively whenever such a dividend is paid or such a
subdivision, combination or reclassification is effected.

         12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SECURITIES.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company will promptly (a) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Preferred Shares and the
Common Shares a copy of such certificate, and (c) if such adjustment is made
after the Distribution Date, mail a brief summary of such adjustment to each
holder of a Right Certificate in accordance with Section 26. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be obligated or responsible for
calculating any adjustment nor shall it be deemed to have knowledge of such
adjustment unless and until it shall have received such certificate.

         13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that:

                     (i) at any time after a Person has become an Acquiring
         Person, the Company consolidates with, or merges with or into, any
         other Person and the Company is not the continuing or surviving
         corporation of such consolidation or merger; or

                    (ii) at any time after a Person has become an Acquiring
         Person, any Person consolidates with the Company, or merges with or
         into the Company, and the Company is the continuing or surviving
         corporation of such merger or consolidation and, in connection with
         such merger or consolidation, all or part of the Common Shares is
         changed into or exchanged for stock or other securities of any other
         Person or cash or any other property; or

                   (iii) at any time after a Person has become an Acquiring
         Person, the Company, directly or indirectly, sells or otherwise
         transfers (or one or more of its Subsidiaries sells or otherwise
         transfers), in one or more transactions, assets or earning power
         (including without limitation securities creating any obligation on the
         part of the Company and/or any of its Subsidiaries) representing in the
         aggregate more than 50% of the assets or earning power of the Company
         and its Subsidiaries (taken as a whole) to any Person or Persons other
         than the Company or one or more of its wholly owned Subsidiaries;

                                       20
<PAGE>   24

then, and in each such case, proper provision will be made so that from and
after the latest of the Share Acquisition Date, the Distribution Date and the
date of the occurrence of such Flip-over Event (A) each holder of a Right
thereafter has the right to receive, upon the exercise thereof in accordance
with the terms of this Agreement at an exercise price per Right equal to the
product of the then-current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the Share Acquisition Date, such number of duly authorized,
validly issued, fully paid, nonassessable and freely tradeable Common Shares of
the Issuer, free and clear of any liens, encumbrances and other adverse claims
and not subject to any rights of call or first refusal, as equals the result
obtained by (x) multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is exercisable immediately
prior to the Share Acquisition Date and dividing that product by (y) 50% of the
current per share market price of the Common Shares of the Issuer (determined
pursuant to Section 11(d)), on the date of the occurrence of such Flip-over
Event; (B) the Issuer will thereafter be liable for, and will assume, by virtue
of the occurrence of such Flip-over Event, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company" will thereafter be
deemed to refer to the Issuer; and (D) the Issuer will take such steps
(including without limitation the reservation of a sufficient number of its
Common Shares to permit the exercise of all outstanding Rights) in connection
with such consummation as may be necessary to assure that the provisions hereof
are thereafter applicable, as nearly as reasonably may be possible, in relation
to its Common Shares thereafter deliverable upon the exercise of the Rights.

         (b) For purposes of this Section 13, "Issuer" means (i) in the case of
any Flip-over Event described in Sections 13(a)(i) or (ii) above, the Person
that is the continuing, surviving, resulting or acquiring Person (including the
Company as the continuing or surviving corporation of a transaction described in
Section 13(a)(ii) above), and (ii) in the case of any Flip-over Event described
in Section 13(a)(iii) above, the Person that is the party receiving the greatest
portion of the assets or earning power (including without limitation securities
creating any obligation on the part of the Company and/or any of its
Subsidiaries) transferred pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that, in any such case, (A) if (1) no class of equity
security of such Person is, at the time of such merger, consolidation or
transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Exchange Act, and (2) such Person is a
Subsidiary, directly or indirectly, of another Person, a class of equity
security of which is and has been so registered, the term "Issuer" means such
other Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, a class of equity security of two or more
of which are and have been so registered, the term "Issuer" means whichever of
such Persons is the issuer of the equity security having the greatest aggregate
market value. Notwithstanding the foregoing, if the Issuer in any of the
Flip-over Events listed above is not a corporation or other legal entity having
outstanding equity securities, then, and in each such case, (x) if the Issuer is
directly or indirectly wholly owned by a corporation or other legal entity
having outstanding equity securities, then all references to Common Shares of
the Issuer will be deemed to be references to the Common Shares of the
corporation or other legal entity having outstanding equity securities which
ultimately controls the Issuer, and (y) if there is no such corporation or other
legal entity having outstanding equity securities, (I) proper provision will be
made so that the Issuer creates or otherwise makes available for purposes of the
exercise of the Rights in accordance with the terms of this Agreement, a kind or
kinds of security or securities having a fair market value at least equal to the
economic value of the Common Shares which each holder of a Right would have been

                                       21
<PAGE>   25

entitled to receive if the Issuer had been a corporation or other legal entity
having outstanding equity securities; and (II) all other provisions of this
Agreement will apply to the issuer of such securities as if such securities were
Common Shares.

         (c) The Company will not consummate any Flip-over Event if, (i) at the
time of or immediately after such Flip-over Event, there are or would be any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements in effect which would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior to, simultaneously
with or immediately after such Flip-over Event, the shareholders of the Person
who constitutes, or would constitute, the Issuer for purposes of Section 13(a)
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates or Associates, or (iii) the form or nature of the
organization of the Issuer would preclude or limit the exercisability of the
Rights. In addition, the Company will not consummate any Flip-over Event unless
the Issuer has a sufficient number of authorized Common Shares (or other
securities as contemplated in Section 13(b) above) which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior to such consummation the Company and the
Issuer have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in subsections (a) and (b) of this Section 13
and further providing that as promptly as practicable after the consummation of
any Flip-over Event, the Issuer will:

                     (A) prepare and file a registration statement under the
         Securities Act with respect to the Rights and the securities issuable
         upon exercise of the Rights on an appropriate form, and use its best
         efforts to cause such registration statement to (1) become effective as
         soon as practicable after such filing and (2) remain effective (with a
         prospectus at all times meeting the requirements of the Securities Act)
         until the Expiration Date;

                     (B) take all such action as may be appropriate under, or to
         ensure compliance with, the securities or "blue sky" laws of the
         various states in connection with the exercisability of the Rights; and

                     (C) deliver to holders of the Rights historical financial
         statements for the Issuer and each of its Affiliates which comply in
         all respects with the requirements for registration on Form 10 under
         the Exchange Act.

         (d) The provisions of this Section 13 will similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, except for Rights that have become void pursuant to Section 11(a)(ii),
Rights that shall not have been previously exercised will cease to be
exercisable in the manner provided in Section 11(a)(ii) and will thereafter be
exercisable in the manner provided in Section 13(a).

         14. FRACTIONAL RIGHTS AND FRACTIONAL SECURITIES. (a) The Company will
not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, the Company
will pay as promptly as practicable to the registered holders of the Right
Certificates with regard to which such fractional Rights otherwise would be
issuable, an amount in cash equal to the same fraction of the current market
value of

                                       22
<PAGE>   26

one Right. For the purposes of this Section 14(a), the current market value of
one Right is the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights otherwise would have been
issuable. The closing price for any day is the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use, or, if on any
such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Rights selected by the Directors of the Company. If the Rights
are not publicly held or are not so listed or traded, or are not the subject of
available bid and asked quotes, the current market value of one Right will mean
the fair value thereof as determined in good faith by the Directors of the
Company, whose determination will be described in a statement filed with the
Rights Agent.

         (b) The Company will not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement provides that the holders of such
depositary receipts have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Shares represented by
such depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the Company may
pay to any Person to whom or which such fractional Preferred Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For purposes of this Section 14(b),
the current market value of one Preferred Share is the closing price of the
Preferred Shares (as determined in the same manner as set forth for Common
Shares in the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise; PROVIDED, HOWEVER, that if the
closing price of the Preferred Shares cannot be so determined, the closing price
of the Preferred Shares for such Trading Day will be conclusively deemed to be
an amount equal to the closing price of the Common Shares (determined pursuant
to the second sentence of Section 11(d)(i)) for such Trading Day multiplied by
one hundred (as such number may be appropriately adjusted to reflect events such
as stock splits, stock dividends, recapitalizations or similar transactions
relating to the Common Shares occurring after the date of this Agreement);
PROVIDED FURTHER, HOWEVER, that if neither the Common Shares nor the Preferred
Shares are publicly held or listed or admitted to trading on any national
securities exchange, or the subject of available bid and asked quotes, the
current market value of one Preferred Share will mean the fair value thereof as
determined in good faith by the Directors of the Company, whose determination
will be described in a statement filed with the Rights Agent.

                                       23
<PAGE>   27

         (c) Following the occurrence of a Triggering Event, the Company will
not be required to issue fractions of Common Shares or other securities issuable
upon exercise or exchange of the Rights or to distribute certificates which
evidence any such fractional securities. In lieu of issuing any such fractional
securities, the Company may pay to any Person to whom or which such fractional
securities would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of one such security. For purposes of this
Section 14(c), the current market value of one Common Share or other security
issuable upon the exercise or exchange of Rights is the closing price thereof
(as determined in the same manner as set forth for Common Shares in the second
sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date
of such exercise or exchange; PROVIDED, HOWEVER, that if neither the Common
Shares nor any such other securities are publicly held or listed or admitted to
trading on any national securities exchange, or the subject of available bid and
asked quotes, the current market value of one Common Share or such other
security will mean the fair value thereof as determined in good faith by the
Directors of the Company, whose determination will mean the fair value thereof
as will be described in a statement filed with the Rights Agent.

         15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the holder of any Common Shares), may in his own behalf
and for his own benefit enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under this Agreement, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to this Agreement.

         16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:

                  (a) Prior to the Distribution Date, the Rights are
         transferable only in connection with the transfer of the Common Shares;

                  (b) After the Distribution Date, the Right Certificates are
         transferable only on the registry books of the Rights Agent if
         surrendered at the principal office of the Rights Agent designated for
         such purpose, duly endorsed or accompanied by a proper instrument of
         transfer;

                  (c) The Company and the Rights Agent may deem and treat the
         person in whose name the Right Certificate (or, prior to the
         Distribution Date, the associated Common Share certificate) is
         registered as the absolute owner thereof and of the Rights evidenced
         thereby (notwithstanding any notations of ownership or writing on the
         Right Certificate or the associated Common Share certificate made by
         anyone other than the

                                       24
<PAGE>   28

         Company or the Rights Agent) for all purposes whatsoever, and neither
         the Company nor the Rights Agent will be affected by any notice to the
         contrary;

                  (d) Such holder expressly waives any right to receive any
         fractional Rights and any fractional securities upon exercise or
         exchange of a Right, except as otherwise provided in Section 14.

                  (e) Notwithstanding anything in this Agreement to the
         contrary, neither the Company nor the Rights Agent will have any
         liability to any holder of a Right or other Person as a result of its
         inability to perform any of its obligations under this Agreement by
         reason of any preliminary or permanent injunction or other order,
         decree or ruling issued by a court of competent jurisdiction or by a
         governmental, regulatory or administrative agency or commission, or any
         statute, rule, regulation or executive order promulgated or enacted by
         any governmental authority, prohibiting or otherwise restraining
         performance of such obligation; PROVIDED, HOWEVER, that the Company
         will use its best efforts to have any such order, decree or ruling
         lifted or otherwise overturned as soon as possible.

         17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder, as
such, of any Right Certificate will be entitled to vote, receive dividends, or
be deemed for any purpose the holder of Preferred Shares or any other securities
of the Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor will anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of Directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions of this Agreement or
exchanged pursuant to the provisions of Section 24.

         18. CONCERNING THE RIGHTS AGENT. (a) The Company will pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company will also indemnify the Rights Agent for, and hold it
harmless against, any loss, liability, suit, action, proceeding or expense,
incurred without negligence, bad faith, or willful misconduct on the part of the
Rights Agent, for anything done or omitted to be done by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnity provided for herein shall
survive the expiration of the Rights, the termination of this Agreement, and the
resignation or removal of the Rights Agent. The costs and expenses of enforcing
this right of indemnification shall also be paid by the Company.

         (b) The Rights Agent may conclusively rely upon and will be protected
and will incur no liability for or in respect of any action taken, suffered, or
omitted by it in connection with its administration of this Agreement in
reliance upon any Right Certificate or certificate evidencing

                                       25
<PAGE>   29

Preferred Shares or Common Shares or other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed, and, where necessary,
verified or acknowledged, by the proper Person or Persons. Notwithstanding
anything in this Agreement to the contrary, in no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of the action.

         19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. (a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the corporate trust business
of the Rights Agent or any successor Rights Agent, will be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. If at the time such successor Rights Agent
succeeds to the agency created by this Agreement any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and if at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates will have the full force provided in the Right Certificates
and in this Agreement.

         (b) If at any time the name of the Rights Agent changes and at such
time any of the Right Certificates have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and if at that time any of the Right
Certificates have not been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates will have the full force provided in the
Right Certificates and in this Agreement.

         20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions
(and no implied duties or obligations, except the duty of good faith, shall be
read into this Agreement against the Rights Agent), by all of which the Company
and the holders of Right Certificates, by their acceptance thereof, will be
bound:

                  (a) Before the Rights Agent acts or refrains from acting, the
         Rights Agent may consult with legal counsel (who may be legal counsel
         for the Company), and the opinion of such counsel will be full and
         complete authorization and protection to the Rights Agent as to any
         action taken or omitted by it in good faith and in accordance with such
         opinion.

                  (b) Whenever in the performance of its duties under this
         Agreement the Rights Agent deems it necessary or desirable that any
         fact or matter be proved or

                                       26
<PAGE>   30

         established by the Company prior to taking or suffering any action
         hereunder, such fact or matter (unless other evidence in respect
         thereof be herein specifically prescribed) may be deemed to be
         conclusively proved and established by a certificate signed by any one
         of the Chairman, the President, any Vice President, the Secretary or
         the Treasurer of the Company and delivered to the Rights Agent, and
         such certificate will be full authorization to the Rights Agent for any
         action taken or suffered in good faith by it under the provisions of
         this Agreement in reliance upon such certificate.

                  (c) The Rights Agent will be liable hereunder only for its own
         negligence, bad faith or willful misconduct.

                  (d) The Rights Agent will not be liable for or by reason of
         any of the statements of fact or recitals contained in this Agreement
         or in the Right Certificates (except its countersignature thereof) or
         be required to verify the same, but all such statements and recitals
         are and will be deemed to have been made by the Company only.

                  (e) The Rights Agent will not be under any responsibility in
         respect of the validity of this Agreement or the execution and delivery
         hereof (except the due execution and delivery hereof by the Rights
         Agent) or in respect of the validity or execution of any Right
         Certificate (except its countersignature thereof); nor will it be
         responsible for any breach by the Company of any covenant contained in
         this Agreement or in any Right Certificate; nor will it be responsible
         for any adjustment required under the provisions of Sections 11 or 13
         (including any adjustment which results in Rights becoming void) or
         responsible for the manner, method or amount of any such adjustment or
         the ascertaining of the existence of facts that would require any such
         adjustment (except with respect to the exercise of Rights evidenced by
         Right Certificates after actual notice of any such adjustment); nor
         will it by any act hereunder be deemed to make any representation or
         warranty as to the authorization or reservation of any shares of stock
         or other securities to be issued pursuant to this Agreement or any
         Right Certificate or as to whether any shares of stock or other
         securities will, when issued, be duly authorized, validly issued, fully
         paid and nonassessable.

                  (f) The Company will perform, execute, acknowledge and deliver
         or cause to be performed, executed, acknowledged and delivered all such
         further and other acts, instruments and assurances as may reasonably be
         required by the Rights Agent for the carrying out or performing by the
         Rights Agent of the provisions of this Agreement.

                  (g) The Rights Agent is hereby authorized and directed to
         accept instructions with respect to the performance of its duties
         hereunder from any person believed in good faith by the Rights Agent to
         be one of the Chairman, the President, any Vice President, the
         Secretary or the Treasurer of the Company, and to apply to such
         officers for advice or instructions in connection with its duties, and
         it will not be liable for any action taken or suffered to be taken by
         it in good faith in accordance with instructions of any such officer or
         for any delay in acting while waiting for such instructions.

                  (h) The Rights Agent and any shareholder, director, officer or
         employee of the Rights Agent may buy, sell or deal in any of the Rights
         or other securities of the Company or become pecuniarily interested in
         any transaction in which the Company may

                                       27
<PAGE>   31

         be interested, or contract with or lend money to the Company or
         otherwise act as fully and freely as though it were not Rights Agent
         under this Agreement. Nothing herein will preclude the Rights Agent
         from acting in any other capacity for the Company or for any other
         Person.

                  (i) The Rights Agent may execute and exercise any of the
         rights or powers hereby vested in it or perform any duty hereunder
         either itself or by or through its attorneys or agents, and the Rights
         Agent will not be answerable or accountable for any act, default,
         neglect or misconduct of any such attorneys or agents or for any loss
         to the Company resulting from any such act, default, neglect or
         misconduct, provided reasonable care was exercised in the selection and
         continued employment thereof. The Rights Agent will not be under any
         duty or responsibility to ensure compliance with any applicable federal
         or state securities laws in connection with the issuance, transfer or
         exchange of Right Certificates.

                  (j) If, with respect to any Right Certificate surrendered to
         the Rights Agent for exercise, transfer, split up, combination or
         exchange, either (i) the certificate attached to the form of assignment
         or form of election to purchase, as the case may be, has either not
         been completed or indicates an affirmative response to clause 1 or 2
         thereof, or (ii) any other actual or suspected irregularity exists, the
         Rights Agent will not take any further action with respect to such
         requested exercise, transfer, split up, combination or exchange without
         first consulting with the Company, and will thereafter take further
         action with respect thereto only in accordance with the Company's
         written instructions.

                  (k) No provision of this Agreement shall require the Rights
         Agent to expend or risk its own funds or otherwise incur any financial
         liability in the performance of any of its duties hereunder or in the
         exercise of its rights if there shall be reasonable grounds for
         believing that repayment of such funds or adequate indemnification
         against such risk or liability is not reasonably assured to it.

                  (l) The Rights Agent shall not be required to take notice or
         be deemed to have any notice of any fact, event or determination
         (including, without limitation, any dates or events defined in this
         Agreement or the designation of any Person as an Acquiring Person,
         Affiliate or Associate) under this Agreement unless and until the
         Rights Agent shall be specifically notified in writing by the Company
         of such fact, event or determination.

         21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
calendar days' notice in writing mailed to the Company and to each transfer
agent of the Preferred Shares or the Common Shares by registered or certified
mail, and, at the expense of the Company, to the holders of the Right
Certificates by first class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 calendar days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Preferred Shares and the Common Shares by registered or certified
mail, and to the holders of the Right Certificates by first class mail. If the
Rights Agent resigns or is removed or otherwise becomes incapable of acting, the
Company will appoint a successor to the Rights Agent. If the Company fails to
make such appointment within a period of 30 calendar days after giving notice of
such

                                       28
<PAGE>   32

removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who will, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, will be a corporation or other legal entity organized and doing
business under the laws of the United States or of any state of the United
States so long as such corporation is authorized to do business as a banking
institution in such state, in good standing, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent will be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent will deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Preferred Shares or the Common Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, will not affect
the legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.

         22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Directors to reflect any adjustment or change in the
Purchase Price per share and the number or kind of securities issuable upon
exercise of the Rights made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale by the Company of Common
Shares following the Distribution Date and prior to the Expiration Date, the
Company (a) will, with respect to Common Shares so issued or sold pursuant to
the exercise, exchange or conversion of securities (other than Rights) issued
prior to the Distribution Date which are exercisable or exchangeable for, or
convertible into Common Shares, and (b) may, in any other case, if deemed
necessary, appropriate or desirable by the Directors of the Company, issue Right
Certificates representing an equivalent number of Rights as would have been
issued in respect of such Common Shares if they had been issued or sold prior to
the Distribution Date, as appropriately adjusted as provided herein as if they
had been so issued or sold; PROVIDED, HOWEVER, that (i) no such Right
Certificate will be issued if, and to the extent that, in its good faith
judgment the Directors of the Company determine that the issuance of such Right
Certificate could have a material adverse tax consequence to the Company or to
the Person to whom or which such Right Certificate otherwise would be issued and
(ii) no such Right Certificate will be issued if, and to the extent that,
appropriate adjustment otherwise has been made in lieu of the issuance thereof.

         23. REDEMPTION. (a) Prior to the Expiration Date, the Directors of the
Company may, at their option, redeem all but not less than all of the
then-outstanding Rights at the Redemption Price at any time prior to the Close
of Business on the later of (i) the Distribution Date and (ii) Share Acquisition
Date. Any such redemption will be effective immediately upon the action of the
Directors of the Company ordering the same, unless such action of the Directors
of the

                                       29
<PAGE>   33

Company expressly provides that such redemption will be effective at a
subsequent time or upon the occurrence or nonoccurrence of one or more specified
events (in which case such redemption will be effective in accordance with the
provisions of such action of the Directors of the Company).

         (b) Immediately upon the effectiveness of the redemption of the Rights
as provided in Section 23(a), and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights will be to receive the Redemption Price,
without interest thereon. Promptly after the effectiveness of the redemption of
the Rights as provided in Section 23(a), the Company will publicly announce such
redemption and, within 10 calendar days thereafter, will give notice of such
redemption to the holders of the then-outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Company; PROVIDED, HOWEVER, that the failure to give, or any defect
in, any such notice will not affect the validity of the redemption of the
Rights. Any notice that is mailed in the manner herein provided will be deemed
given, whether or not the holder receives the notice. The notice of redemption
mailed to the holders of Rights will state the method by which the payment of
the Redemption Price will be made. The Company may, at its option, pay the
Redemption Price in cash, Common Shares (based upon the current per share market
price of the Common Shares (determined pursuant to Section 11(d)) at the time of
redemption), or any other form of consideration deemed appropriate by the
Directors of the Company (based upon the fair market value of such other
consideration, determined by the Directors of the Company in good faith) or any
combination thereof. The Company may, at its option, combine the payment of the
Redemption Price with any other payment being made concurrently to holders of
Common Shares and, to the extent that any such other payment is discretionary,
may reduce the amount thereof on account of the concurrent payment of the
Redemption Price. If legal or contractual restrictions prevent the Company from
paying the Redemption Price (in the form of consideration deemed appropriate by
the Directors) at the time of redemption, the Company will pay the Redemption
Price, without interest, promptly after such time as the Company ceases to be so
prevented from paying the Redemption Price.

         24. EXCHANGE. (a) The Directors of the Company may, at their option, at
any time after the Share Acquisition Date, exchange all or part of the
then-outstanding and exercisable Rights (which will not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii)) for Common Shares
at an exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the Record Date (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Any such exchange will be effective immediately upon the
action of the Directors of the Company ordering the same, unless such action of
the Directors of the Company expressly provides that such exchange will be
effective at a subsequent time or upon the occurrence or nonoccurrence of one or
more specified events (in which case such exchange will be effective in
accordance with the provisions of such action of the Directors of the Company).
Notwithstanding the foregoing, the Directors of the Company will not be
empowered to effect such exchange at any time after any Person (other than the
Company or any Related Person), who or which, together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
then-outstanding Common Shares.

         (b) Immediately upon the effectiveness of the exchange of any Rights as
provided in Section 24(a), and without any further action and without any
notice, the right to exercise such

                                       30
<PAGE>   34

Rights will terminate and the only right with respect to such Rights thereafter
of the holder of such Rights will be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. Promptly after the effectiveness of the exchange of any Rights
as provided in Section 24(a), the Company will publicly announce such exchange
and, within 10 calendar days thereafter, will give notice of such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent; PROVIDED, HOWEVER, that the failure to
give, or any defect in, such notice will not affect the validity of such
exchange. Any notice that is mailed in the manner herein provided will be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange will be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 11(a)(ii)) held by each holder of Rights.

         (c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any Common Share exchangeable for a Right (i)
equivalent common shares (as such term is used in Section 11(a)(iii)), (ii)
cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value, as
determined in good faith by the Directors of the Company (whose determination
will be described in a statement filed with the Rights Agent), equal to the
current market value of one Common Share (determined pursuant to Section 11(d))
on the Trading Day immediately preceding the date of the effectiveness of the
exchange pursuant to this Section 24.

         25. NOTICE OF CERTAIN EVENTS. (a) If, after the Distribution Date, the
Company proposes (i) to pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular periodic cash dividend), (ii) to offer to
the holders of Preferred Shares rights, options or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or any of its
Subsidiaries) representing more than 50% of the assets and earning power of the
Company and its Subsidiaries, taken as a whole, to any other Person or Persons
other than the Company or one or more of its wholly owned Subsidiaries, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or reclassification of the Common Shares then,
in each such case, the Company will give to each holder of a Right Certificate,
to the extent feasible and in accordance with Section 26, a notice of such
proposed action, which specifies the record date for the purposes of such stock
dividend, distribution or offering of rights, options or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice will be so given, in
the case of any action covered by clause (i) or (ii) above, at least 10 calendar
days prior to the record date for determining holders of the Preferred Shares
for purposes of such action, and, in the case of any such other

                                       31
<PAGE>   35

action, at least 10 calendar days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever is the earlier.

         (b) In case any Triggering Event occurs, then, in any such case, the
Company will as soon as practicable thereafter give to the Rights Agent and each
holder of a Right Certificate, in accordance with Section 26, a notice of the
occurrence of such event, which specifies the event and the consequences of the
event to holders of Rights.

         26. NOTICES. (a) Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company will be sufficiently given or made if sent by first class
mail, postage prepaid, and the Rights Agent recommends that any notice or demand
authorized by this Agreement to be given or made by any holder of a Rights
Certificate or the Company on the Rights Agent shall be sent or given by
registered or certified mail, and shall be deemed given or made on receipt. The
holders of Rights Certificates and the Company agree to assume the risk of
giving notice or demand on the Rights Agent if given by any other means. Any
such notice or demand shall be addressed (until another address is filed in
writing with the Rights Agent) as follows:

                           The J. M. Smucker Company
                           Strawberry Lane
                           Orville, Ohio  44667-0280
                           Attention: Richard K. Smucker, President

         (b) Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent will be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:

                           Computershare Investor Services, LLC
                           2 North LaSalle
                           P.O. Box A3504
                           Chicago, Illinois 60690-3504
                           Attention: Shareholder Services

         (c) Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right Certificate (or,
if prior the Distribution Date, to the holder of any certificate evidencing
Common Shares) will be sufficiently given or made if sent by first class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.

         27. SUPPLEMENTS AND AMENDMENTS. Prior to the time at which the Rights
cease to be redeemable pursuant to Section 23, and subject to the last two
sentences of this Section 27, the Company may in its sole and absolute
discretion, and the Rights Agent will if the Company so directs and at the
expense of the Company, supplement or amend any provision of this Agreement in
any respect without the approval of any holders of Rights or Common Shares. From
and after the time at which the Rights cease to be redeemable pursuant to
Section 23, and subject to the last two sentences of this Section 27, the
Company may, and the Rights Agent will

                                       32
<PAGE>   36

if the Company so directs and at the expense of the Company, supplement or amend
this Agreement without the approval of any holders of Rights or Common Shares in
order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to supplement or amend the provisions hereunder in any manner which the
Company may deem desirable; provided that no such supplement or amendment shall
adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no
such supplement or amendment shall cause the Rights again to become redeemable
or cause this Agreement again to become supplementable or amendable otherwise
than in accordance with the provisions of this sentence. Without limiting the
generality or effect of the foregoing, this Agreement may be supplemented or
amended to provide for such voting powers for the Rights and such procedures for
the exercise thereof, if any, as the Directors of the Company may determine to
be appropriate. Upon the delivery of a certificate from an officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent will execute such supplement
or amendment; PROVIDED, HOWEVER, that the failure or refusal of the Rights Agent
to execute such supplement or amendment will not affect the validity of any
supplement or amendment adopted by the Directors of the Company, any of which
will be effective in accordance with the terms thereof. Notwithstanding anything
in this Agreement to the contrary, no supplement or amendment may be made which
decreases the stated Redemption Price to an amount less than $.01 per Right.
Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment that changes the rights and duties of the Rights Agent under this
Agreement will be effective against the Rights Agent without the execution of
such supplement or amendment by the Rights Agent.

         28. SUCCESSORS; CERTAIN COVENANTS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent will be
binding on and inure to the benefit of their respective successors and assigns
hereunder.

         29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement will be
construed to give to any Person other than the Company, the Rights Agent, and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement. This Agreement will be for the sole and exclusive benefit of the
Company, the Rights Agent, and the registered holders of the Right Certificates
(or prior to the Distribution Date, the Common Shares).

         30. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder will be deemed to be a contract made under the
internal substantive laws of the State of Ohio and for all purposes will be
governed by and construed in accordance with the internal substantive laws of
such State applicable to contracts to be made and performed entirely within such
State, except as to the rights and obligations of the Rights Agent, which shall
be governed by and construed in accordance with the laws of the State of
Illinois.

         31. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement will remain in full force and
effect and will in no way be affected, impaired or invalidated; PROVIDED,
HOWEVER, that nothing contained in this Section 31 will affect the ability of
the Company under

                                       33
<PAGE>   37

the provisions of Section 27 to supplement or amend this Agreement to replace
such invalid, void or unenforceable term, provision, covenant or restriction
with a legal, valid and enforceable term, provision, covenant or restriction.

         32. DESCRIPTIVE HEADINGS, ETC. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions hereof.
Unless otherwise expressly provided, references herein to Articles, Sections,
Schedules and Exhibits are to Articles, Sections, Schedules and Exhibits of or
to this Agreement.

         33. DETERMINATIONS AND ACTIONS BY THE DIRECTORS. For all purposes of
this Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares of which any Person is the
Beneficial Owner, will be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The
Directors of the Company will have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including
without limitation the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including any determination as to whether
particular Rights shall have become void). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
any omission with respect to any of the foregoing) which are done or made by the
Directors of the Company in good faith will (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all other
parties and (y) not subject the Directors of the Company to any liability to any
Person, including without limitation the Rights Agent and the holders of the
Rights.

         34. PRIOR AGREEMENT. This Agreement amends and restates the Original
Rights Agreement, which shall, without further action, be superceded as of the
time this Agreement becomes effective.

         35. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts will for all purposes be deemed to be
an original, and all such counterparts will together constitute but one and the
same instrument.

                                       34
<PAGE>   38

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                  THE J. M. SMUCKER COMPANY

                              By: -------------------------------------
                                  Name: Steven J. Ellcessor
                                  Title: Senior Vice President-Finance
                                  Administration,
                                  Secretary/Treasurer, and
                                  General Counsel

                                  COMPUTERSHARE INVESTOR SERVICES, LLC,
                                  SUCCESSOR TO HARRIS TRUST AND SAVINGS BANK,
                                  as Rights Agent

                              By:
                                 --------------------------------------
                                 Name: Michael J. Lang
                                 Title: Vice President

                                       35
<PAGE>   39

                                                                       EXHIBIT A

                                     FORM OF
                             CERTIFICATE OF ADOPTION
                                  OF AMENDMENT
                      TO AMENDED ARTICLES OF INCORPORATION

                                       OF

                            THE J. M. SMUCKER COMPANY

         We, Richard K. Smucker, President, and Steven J. Ellcessor, Secretary,
of The J. M. Smucker Company, an Ohio corporation (the "Company"), do hereby
certify that pursuant to the authority conferred upon the Directors of the
Company (the "Directors") by the Articles of Incorporation of the Company, the
Directors at a meeting duly called and held on April 22, 1999 at which a quorum
was present and acting throughout, adopted the following resolution to amend the
Amended Articles of Incorporation of the Company pursuant to Section
1701.70(B)(1) of the Ohio Revised Code to create a series of Serial Preferred
Shares designated as Series A Junior Participating Preferred Shares:

                  RESOLVED, that Article Third of the Amended Articles of
Incorporation of this Company be, and it hereby is, amended by adding after
Division I of Article Third of the Amended Articles of Incorporation a new
Division I-A as set forth below:

                                  DIVISION I-A

                 SERIES A JUNIOR PARTICIPATING PREFERRED SHARES

                  Section 1. There is established hereby a series of Serial
Preferred Shares that shall be designated Series A Junior Participating
Preferred Shares (hereinafter sometimes called this "Series" or the "Series A
Junior Participating Preferred Shares") and that shall have the terms set forth
in this Division I-A.

                  Section 2. The number of shares of this Series shall be
700,000.

                  Section 3. (a) The holders of record of Series A Junior
Participating Preferred Shares shall be entitled to receive, when and as
declared by the Directors in accordance with the terms hereof, out of funds
legally available for the purpose, cumulative quarterly dividends payable in
cash on the first day of January, April, July and October in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a Series A Junior Participating Preferred Share or fraction of a Series A
Junior Participating Preferred Share in an amount per share (rounded to the
nearest cent) equal to the greater of (i) $1.00 per share or (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions (other than a
dividend payable in shares or Common Shares, or a subdivision of the outstanding
Common Shares (by reclassification or otherwise)), declared on

                                      A-1

<PAGE>   40

the Common Shares since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any Series A Junior Participating Preferred Share or fraction
of a Series A Junior Participating Preferred Share. In the event the Company
shall at any time declare or pay any dividend on the Common Shares payable in
Common Shares, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Shares (by reclassification or otherwise than by
payment of a dividend in Common Shares) into a greater or lesser number of
shares of Common Shares, then in each such case the amount to which holders of
Series A Junior Participating Preferred Shares were entitled immediately prior
to such event under clause (ii) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Shares outstanding immediately after such event and the
denominator of which is the number of shares of Common Shares that were
outstanding immediately prior to such event.

                  (b) Dividends shall begin to accrue and be cumulative on
outstanding Series A Junior Participating Preferred Shares from the Quarterly
Dividend Payment Date next preceding the date of issue of such Series A Junior
Participating Preferred Shares, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issues is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Shares entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. No dividends shall be paid upon or declared and set apart for any
Series A Junior Participating Preferred Shares for any dividend period unless at
the same time a dividend for the same dividend period, ratably in proportion to
the respective annual dividend rates fixed therefor, shall be paid upon or
declared and set apart for all Serial Preferred Shares of all series then
outstanding and entitled to receive such dividend. The Directors may fix a
record date for the determination of holders of Series A Junior Participating
Preferred Shares entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 40 days prior to the
date fixed for the payment thereof.

                  Section 4. The Series A Junior Participating Preferred Shares
are not redeemable.

                  Section 5. (a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company
(hereinafter referred to as a "Liquidation"), no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
Liquidation) to the Series A Junior Participating Preferred Shares, unless,
prior thereto, the holders of Series A Junior Participating Preferred Shares
shall have received at least an amount per share equal to one hundred times the
then applicable Purchase Price as defined in the Rights Agreement, as the same
may be from time to time amended in accordance with its terms (which Purchase
Price is $90.00 as of April 22, 1999), subject to adjustment from time to time
as provided in the Rights Agreement, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to the
date of such payment, provided that the holders of shares of Series A Junior
Participating Preferred Shares shall be entitled to receive at least an
aggregate amount per share, subject to the provision for adjustment hereinafter

                                      A-2
<PAGE>   41

set forth, equal to 100 times the aggregate amount to be distributed per share
to holders of Common Shares (the "Series A Junior Participating Preferred Shares
Liquidation Preference").

                  (b) In the event, however, that the net assets of the Company
are not sufficient to pay in full the amount of the Series A Junior
Participating Preferred Shares Liquidation Preference and the liquidation
preferences of all other series of Serial Preferred Shares, if any, which rank
on a parity with the Series A Junior Participating Preferred Shares as to
distribution of assets in Liquidation, all shares of this Series and of such
other series of Serial Preferred Shares shall share ratably in the distribution
of assets (or proceeds thereof) in Liquidation in proportion to the full amounts
to which they are respectively entitled.

                  (c) In the event the Company shall at any time declare or pay
any dividend on the Common Shares payable in consolidation of the outstanding
Common Shares (by reclassification or otherwise than by payment of a dividend in
Common Shares) into a greater or lesser number of shares of Common Shares, then
in each such case the amount to which holders of Series A Junior Participating
Preferred Shares were entitled immediately prior to such event pursuant to the
proviso set forth in paragraph (a) above, shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Shares outstanding immediately after such event and the denominator of which is
the number of shares of Common Shares that were outstanding immediately prior to
such event.

                  (d) The merger or consolidation of the Company into or with
any other corporation, or the merger of any other corporation into it, or the
sale, lease or conveyance of all or substantially all the property or business
of the Company, shall not be deemed to be a Liquidation for the purpose of this
Section 5.

                  Section 6. The Series A Junior Participating Preferred Shares
shall not be convertible into Common Shares.

                  IN WITNESS WHEREOF, Richard K. Smucker, President, and Steven
J. Ellcessor, Secretary, of The J. M. Smucker Company, acting for and on behalf
of the Company, have hereunto subscribed their names this 7th day of June, 1999.

                                       /s/ Richard K. Smucker
                                       ----------------------------------------
                                       Richard K. Smucker
                                       President

                                       /s/ Steven J. Ellcessor
                                       ----------------------------------------
                                       Steven J. Ellcessor
                                       Secretary

                                      A-3
<PAGE>   42

                                                                       EXHIBIT B

                            FORM OF RIGHT CERTIFICATE

Certificate No. R- ______                                         _______ Rights

         NOT EXERCISABLE AFTER MAY 14, 2009 (SUBJECT TO POSSIBLE EXTENSION AT
         THE OPTION OF THE COMPANY) OR EARLIER IF REDEEMED, EXCHANGED OR
         AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT
         AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
         AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS
         AGREEMENT, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING
         PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
         TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY
         BECOME NULL AND VOID.

                                Right Certificate

                            THE J. M. SMUCKER COMPANY

         This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions, and conditions of the
Rights Agreement, dated as of April 22, 1999 (the "Rights Agreement"), between
The J. M. Smucker Company, an Ohio corporation (the "Company"), and
Computershare Investor Services, LLC, successor to Harris Trust and Savings
Bank, an Illinois banking corporation, as rights agent (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (Eastern time)
on the Expiration Date (as such term is defined in the Rights Agreement) at the
principal office or offices of the Rights Agent designated for such purpose, one
one-hundredth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, without par value (the "Preferred Shares"), of
the Company, at a purchase price of $90.00 per one one-hundredth of a Preferred
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related Certificate duly
executed. If this Right Certificate is exercised in part, the holder will be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised. The number of Rights
evidenced by this Right Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
the date of the Rights Agreement, based on the Preferred Shares as constituted
at such date.

                                      B-1
<PAGE>   43

         As provided in the Rights Agreement, the Purchase Price and/or the
number and/or kind of securities issuable upon the exercise of the Rights
evidenced by this Right Certificate are subject to adjustment upon the
occurrence of certain events.

         This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the above- mentioned office of the Rights Agent and can
be obtained from the Company without charge upon written request therefor. Terms
used herein with initial capital letters and not defined herein are used herein
with the meanings ascribed thereto in the Rights Agreement.

         Pursuant to the Rights Agreement, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-in Event pursuant to
either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (b) a transfer
which the Directors of the Company have determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding certain
provisions of the Rights Agreement, and subsequent transferees of any of such
Persons, will be void without any further action and any holder of such Rights
will thereafter have no rights whatsoever with respect to such Rights under any
provision of the Rights Agreement. From and after the occurrence of a Flip-in
Event, no Right Certificate will be issued that represents Rights that are or
have become void pursuant to the provisions of the Rights Agreement, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the provisions of the Rights Agreement will be
canceled.

         This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates entitling the holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case may be) as
the Right Certificate or Right Certificates surrendered entitled such holder (or
former holder in the case of a transfer) to purchase, upon presentation and
surrender hereof at the principal office of the Rights Agent designated for such
purpose, with the Form of Assignment (if appropriate) and the related
Certificate duly executed.

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right or may be exchanged in whole or in part. The Rights
Agreement may be supplemented and amended by the Company, as provided therein.

         The Company is not required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the option

                                      B-2
<PAGE>   44

of the Company, be evidenced by depositary receipts) or other securities
issuable upon the exercise of any Right or Rights evidenced hereby. In lieu of
issuing such fractional Preferred Shares or other securities, the Company may
make a cash payment, as provided in the Rights Agreement.

         No holder of this Right Certificate, as such, will be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable upon the exercise of the Right or Rights represented hereby, nor will
anything contained herein or in the Rights Agreement be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate have been exercised in accordance with the
provisions of the Rights Agreement.

         This Right Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.

         WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ________, ____.

ATTEST:                                      THE J. M. SMUCKER COMPANY

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

Countersigned:

COMPUTERSHARE INVESTOR SERVICES, LLC,
SUCCESSOR TO HARRIS TRUST AND SAVINGS BANK,
as Rights Agent

By:
   ----------------------------------
   Authorized Signature

                                      B-3

<PAGE>   45

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT
                               ------------------

                (To be executed by the registered holder if such
                holder desires to transfer the Right Certificate)

         FOR VALUE RECEIVED, _______________ hereby sells, assigns and transfers
unto____________________________________________________________________________
                  (Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.

Dated:  __________, ____

                                                  ______________________________
                                                  Signature

Signature Guaranteed:

                                      B-4

<PAGE>   46

                                   CERTIFICATE
                                   -----------

         The undersigned hereby certifies by checking the appropriate boxes
that:

         (1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);

         (2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.

Dated:  __________, ____

                                                _______________________________
                                                Signature

                                      B-5

<PAGE>   47

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------

                      (To be executed if holder desires to
                         exercise the Right Certificate)

To The J. M. Smucker Company:

         The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the one one-hundredths of a
Preferred Share or other securities issuable upon the exercise of such Rights
and requests that certificates for such securities be issued in the name of and
delivered to:

Please insert social security
or other identifying number:____________________________________________________

________________________________________________________________________________
                         (Please print name and address)
________________________________________________________________________________

If such number of Rights is not all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
will be registered in the name of and delivered to:

Please insert social security
or other identifying number:____________________________________________________

________________________________________________________________________________
                         (Please print name and address)
________________________________________________________________________________

Dated:  __________, ____

                                              ________________________________
                                              Signature

Signature Guaranteed:

                                      B-6
<PAGE>   48

                                   CERTIFICATE

         The undersigned hereby certifies by checking the appropriate boxes
that:

         (1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined pursuant
to the Rights Agreement);

         (2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was, or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.

Dated:  __________, ____

                                                  _____________________________
                                                  Signature

                                     NOTICE

         SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF ELECTION TO
PURCHASE AND IN THE RELATED CERTIFICATES MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS RIGHT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.

         SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE PROGRAM) PURSUANT TO RULE 17Ad-15
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

                                      B-7

<PAGE>   49

                                                                       EXHIBIT C
                                                                       ---------

                  SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK

         The Directors (the "Directors") of The J. M. Smucker Company (the
"Company") have declared a dividend distribution of one right (a "Right") for
each outstanding share of common stock, without par value (the "Common Shares"),
of the Company. The distribution was payable on May 14, 1999 (the "Record Date")
to the shareholders of record as of the close of business on the Record Date.
Each Right entitles the registered holder thereof to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
without par value (the "Preferred Shares"), of the Company at a price (the
"Purchase Price") of $90.00 per one one- hundredth of a Preferred Share, subject
to adjustment. The description and terms of the Rights are set forth in an
Amended and Restated Rights Agreement, dated as of __________, 2000 (the "Rights
Agreement"), between the Company and Computershare Investor Services, LLC,
successor to Harris Trust and Savings Bank, as Rights Agent (the "Rights
Agent").

         Under the Rights Agreement, the Rights will be evidenced by the
certificates evidencing Common Shares until the earlier (the "Distribution
Date") of: (i) the close of business on the tenth calendar day following the
first date (the "Share Acquisition Date") of public announcement that a person
or group (other than a Related Person or an Exempted Person), together with its
affiliates and associates, has acquired beneficial ownership of 15% or more of
the outstanding Common Shares (any such person or group being hereinafter called
an "Acquiring Person") or (ii) the close of business on the tenth business day
(or such later date as may be specified by the Directors) following the
commencement of a tender offer or exchange offer by a person (other than the
Company or a Related Person), the consummation of which would result in
beneficial ownership by such person of beneficial ownership of 15% or more of
the outstanding Class A Common Shares. "Related Person" includes any subsidiary
of the Company or any employee benefit or stock ownership plan of the Company or
any of its subsidiaries. "Exempted Person" means any Smucker's Family Member (as
defined in the Rights Agreement).

         The Rights Agreement provides that, until the Distribution Date, the
Rights may be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption, exchange or expiration of the Rights),
any certificate evidencing Common Shares of the Company issued upon transfer or
new issuance of the Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the surrender for transfer of
any certificates evidencing Common Shares will also constitute the transfer of
the Rights associated with such certificates. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of Common Shares as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights. No Right is exercisable at any time prior to the
Distribution Date. The Rights will expire on the tenth anniversary of the Record
Date (the "Final Expiration Date") unless earlier redeemed, exchanged or amended
by the Company as described below. Until a Right is exercised, the holder
thereof, as such, will have no rights as a shareholder of the Company, including
the right to vote or to receive dividends.

         The Purchase Price payable, and the number of the Preferred Shares or
other securities issuable, upon exercise of the Rights will be subject to
adjustment from time to time to prevent

                                      C-1

<PAGE>   50

dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of, the Preferred Shares, (ii) upon the grant to holders of
Preferred Shares of certain rights or warrants to subscribe for or purchase the
Preferred Shares at a price, or securities convertible into the Preferred Shares
with a conversion price, less than the then-current market price of the
Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness, cash (excluding regular periodic cash
dividends), assets, stock (excluding dividends payable in the Preferred Shares)
or subscription rights or warrants (other than those referred to above). The
number of outstanding Rights and the number of one one-hundredths of the
Preferred Shares issuable upon exercise of each Right will be subject to
adjustment in the event of a stock dividend on the Common Shares payable in
Common Shares or a subdivision, combination or reclassification of Common Shares
occurring, in any such case, prior to the Distribution Date.

         The Preferred Shares issuable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled, in connection with the
declaration of a dividend on the Common Shares, to a preferential dividend
payment equal to the greater of (i) $1.00 per share and (ii) an amount equal to
100 times the related dividend declared per Common Share. Subject to customary
anti-dilution provisions, in the event of liquidation, the holders of Preferred
Shares will be entitled to a preferential liquidation payment equal to the
greater of (a) $100 per share and (b) an amount equal to 100 times the
liquidation payment made per Common Share. Because of the nature of the
Preferred Shares' dividend, voting and liquidation rights, the value of the one
one-hundredth interest in a Preferred Share purchasable upon exercise of a Right
should approximate the value of one Common Share.

         Rights will be exercisable to purchase Preferred Shares only after the
Distribution Date occurs and prior to the occurrence of a Flip-in Event as
described below. A Distribution Date resulting from the commencement of a tender
offer or exchange offer described in clause (ii) of the second paragraph of this
summary could precede the occurrence of a Flip-in Event and thus result in the
Rights being exercisable to purchase Preferred Shares. A Distribution Date
resulting from any occurrence described in clause (i) of the second paragraph of
this summary would necessarily follow the occurrence of a Flip-in Event and thus
result in the Rights being exercisable to purchase Common Shares or other
securities as described below.

         Under the Rights Agreement, in the event (a "Flip-in Event") that (i)
any person or group, together with its affiliates and associates, becomes an
Acquiring Person (ii) any Acquiring Person or any affiliate or associate thereof
merges into or combines with the Company and the Company is the surviving
corporation, (iii) any Acquiring Person or any affiliate or associate thereof
effects certain other transactions with the Company, or (iv) during such time as
there is an Acquiring Person the Company effects certain transactions, in each
case as described in the Rights Agreement, then, in each such case, proper
provision will be made so that from and after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence of such
Flip-in Event each holder of a Right, other than Rights that are or were owned
beneficially by an Acquiring Person (which, from and after the date of a Flip-in
Event, will be void), will have the right to receive, upon exercise thereof at
the then-current exercise price of the Right, that number of Common Shares (or,
under certain circumstances, an economically equivalent security or securities
of the Company) that at the time of such Flip-in Event have a market value of
two times the exercise price of the Right.

                                      C-2

<PAGE>   51

         In the event (a "Flip-over Event") that, at any time after a person has
become an Acquiring Person, (i) the Company merges with or into any person and
the Company is not the surviving corporation, (ii) any person merges with or
into the Company and the Company is the surviving corporation, but all or part
of the Common Shares are changed or exchanged for stock or other securities of
any other person or cash or any other property, or (iii) 50% or more of the
Company's assets or earning power, including securities creating obligations of
the Company, are sold, in each case as described in the Rights Agreement, then,
and in each such case, proper provision will be made so that from and after the
latest of the Share Acquisition Date, the Distribution Date and the date of the
occurrence of such Flip-over Event, each holder of a Right, other than Rights
which have become void, will thereafter have the right to receive, upon the
exercise thereof at the then-current exercise price of the Right, that number of
shares of common stock (or, under certain circumstances, an economically
equivalent security or securities) of such other person that at the time of such
Flip-over Event have a market value of two times the exercise price of the
Right.

         From and after the later of the Share Acquisition Date and the
Distribution Date, Rights (other than any Rights that have become void) will be
exercisable as described above, upon payment of the aggregate exercise price in
cash. In addition, at any time after the Share Acquisition Date and prior to the
acquisition by any person or group of affiliated or associated persons of 50% or
more of the outstanding Common Shares, the Company may exchange the Rights
(other than any rights that have become void), in whole or in part, at an
exchange ratio of one Common Share per Right (subject to adjustment).

         With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company will not be required to issue fractional
Preferred Shares (other than fractions that are integral multiples of one
one-hundredth of a Preferred Share, which may, at the option of the Company, be
evidenced by depositary receipts) or fractional Common Shares or other
securities issuable upon the exercise of Rights. In lieu of issuing such
securities, the Company may make a cash payment, as provided in the Rights
Agreement.

         The Company may, at its option, redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment (the "Redemption
Price"), at any time prior to the close of business on the later of the
Distribution Date and the Share Acquisition Date. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.

         The Rights Agreement may be amended by the Company without the approval
of any holders of Rights Certificates, including amendments that increase or
decrease the Purchase Price, that add other events requiring adjustment to the
Purchase Price payable and the number of the Preferred Shares or other
securities issuable upon the exercise of the Rights or that modify procedures
relating to the redemption of the Rights, except that no amendment may be made
that decreases the stated Redemption Price to an amount less than $0.01 per
Right.

         The Directors will have the exclusive power and authority to administer
the Rights Agreement and to exercise all rights and powers specifically granted
to the Directors or to the Company therein, or as may be necessary or advisable
in the administration of the Rights Agreement, including without limitation the
right and power to interpret the provisions of the

                                      C-3
<PAGE>   52

Rights Agreement and to make all determinations deemed necessary or advisable
for the administration of the Rights Agreement (including any determination to
redeem or not redeem the Rights or to amend or not amend the Rights Agreement).
All such actions, calculations, interpretations and determinations (including
any omission with respect to any of the foregoing) which are done or made by the
Directors in good faith will be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties and will not
subject the Directors to any liability to any person, including without
limitation the Rights Agent and the holders of the Rights.

         A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company.

         This summary description of the Rights is as of the Record Date, does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by this reference.

                                      C-4<PAGE>   1

                                                                     Exhibit 4.1

                         AMEND. NO. 1 PAGE DTD. 01-01-99

                               F.N.B. CORPORATION

                               SALARY SAVINGS PLAN

Defined Contribution Plan 7.7

Restated January 1, 1998

<PAGE>   2

                         AMEND. NO. 1 PAGE DTD. 01-01-99

                                  INTRODUCTION

         Southwest Banks, Inc. previously established a 401 (k) plan on May 1,
1989.

         Indian Rocks State Bank previously established a profit sharing/401 (k)
plan on April 6, 1986.

         Effective January 1, 1998, Southwest Banks, Inc. is of the opinion that
these two plans should be merged. Effective January 1, 1998, the plans are
merged and set forth in this document which is substituted in lieu of the prior
documents.

         The restated plan continues to be for the exclusive benefit of
employees of the Employer. All persons covered under one of the plans on
December 31, 1997, shall continue to be covered under the restated plan with no
loss of benefits.

         It is intended that the plan, as restated, shall qualify as a profit
sharing plan under the Internal Revenue Code of 1986, including any later
amendments to the Code.

INTRODUCTION                            5                               (87056)

<PAGE>   3

                         AMEND. NO. 1 PAGE DTD. 01-01-99

PRIMARY EMPLOYER means F.N.B. CORPORATION.

QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a spouse, an
immediate survivorship life annuity with installment refund, where the
survivorship percentage is 50% and the Contingent Annuitant is the Participant's
spouse. A former spouse, will be treated as the spouse to the extent provided
under a qualified domestic relations order as described in Code Section 414(p).
If a Participant does not have a spouse, the Qualified Joint and Survivor Form
means the Normal Form.

The amount of benefit payable under the Qualified Joint and Survivor Form shall
be the amount of benefit which may be provided by the Participant's Vested
Account.

QUALIFIED NON ELECTIVE CONTRIBUTIONS means contributions (other than Employer
Contributions made to the Plan on behalf of a Participant on account of Elective
Deferral Contributions or on account of contributions made by the Participant)
made by the Employer to fund this Plan which an Employee may not elect to have
paid to him in cash instead of being contributed to the Plan and which are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of Article III.

QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who dies
before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).

QUALIFYING EMPLOYER SECURITIES means common stock issued by the Employer and
meeting the requirements of Section 4975(e)(8) of the Code, or by a corporation
which is a member of the same controlled group of corporations, having a
combination of voting power and dividend rates equal to or in excess of:

(a)      That class of common stock of the Employer (or a corporation which is a
         member of the same controlled group of corporations) having the
         greatest voting power, and

(b)      That class of common stock of the Employer (or a corporation which is a
         member of the same controlled group of corporations) having the
         greatest dividend rights.

Noncallable preferred stock shall be treated as Qualifying Employer Securities
if such stock is convertible at any time into stock that meets the requirements
of (a) and (b) above, and if such conversion is at a conversion price which (as
of the date of the acquisition by the Plan) is reasonable. For purposes of the
preceding sentence, the preferred stock shall be treated as noncallable if,
after the call, there is a reasonable opportunity for conversion which meets the
requirements of the preceding sentence.

QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his share of
Qualifying Employer Securities.

REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service following an Eligibility Break in Service.

REENTRY DATE means the date a former Active Participant reenters the Plan. See
the ACTIVE PARTICIPANT SECTION of Article 11.

ARTICLE I                              17                               (87056)

<PAGE>   4

Your plan is an important legal document. This sample plan has be. n prepared
based on our understanding of the desired provisions. It may not fit your
situation. You should consult with your lawyer on the plan's legal and tax
implications. Neither Principal Mutual Life Insurance Company nor its agents can
be responsible for the legal or tax aspects of the plan nor its appropriateness
for your situation. If you wish to change the provisions of this sample plan,
you may ask us to prepare new sample wording for you and your lawyer to review.

<PAGE>   5

                              SOUTHWEST BANKS, INC.

                               SALARY SAVINGS PLAN

Defined Contribution Plan 7.7

Restated January 1, 1998-1

<PAGE>   6

                                TABLE OF CONTENTS

INTRODUCTION

ARTICLE I FORMAT AND DEFINITIONS

Section 1.01 ----- Format
Section 1.02 ----- Definitions

ARTICLE II  PARTICIPATION

Section 2.01 ----- Active Participant
Section 2.02 ----- Inactive Participant
Section 2.03 ----- Cessation of Participation
Section 2.04 ----- Adopting Employers - Single Plan

ARTICLE III  CONTRIBUTIONS

Section 3.01 ----- Employer Contributions
Section 3.01 A ----- Rollover Contributions
Section 3.02 ----- Forfeitures
Section 3.03 ----- Allocation
Section 3.04 ----- Contribution Limitation
Section 3.05 ----- Excess Amounts

ARTICLE IV INVESTMENT OF CONTRIBUTIONS

Section 4.01 ----- Investment of Contributions
Section 4.01A ----- Investment in Qualifying Employer Securities
Section 4.01 B ----- Voting and Tender Rights

ARTICLE V  BENEFITS

Section 5.01 ----- Retirement Benefits
Section 5.02 ---- Death Benefits
Section 5.03 ----- Vested Benefits
Section 5.04 ---- When Benefits Start
Section 5.05 ----- Withdrawal Privileges
Section 5.06 ----- Loans to Participants

TABLE OF CONTENTS                       3                                (87056)

<PAGE>   7

ARTICLE VI DISTRIBUTION OF BENEFITS

Section 6.01 ----- Automatic Forms of Distribution
Section 6.02 ----- Optional Forms of Distribution and Distribution Requirements
Section 6.02A ----- Distributions in Qualifying Employer Securities
Section 6.03 ----- Election Procedures
Section 6.04 ----- Notice Requirements
Section 6.05 ----- Distributions under Qualified Domestic Relations Orders

ARTICLE VII TERMINATION OF PLAN

ARTICLE VIII ADMINISTRATION OF PLAN

Section 8.01 ----- Administration
Section 8.02 ----- Records
Section 8.03 ----- Information Available
Section 8.04 ----- Claim and Appeal Procedures
Section 8.05 ----- Unclaimed Vested Account Procedure
Section 8.06 ----- Delegation of Authority

ARTICLE IX GENERAL PROVISIONS

Section 9.01 ----- Amendments
Section 9.02 ----- Direct Rollovers
Section 9.03 ----- Mergers and Direct Transfers
Section 9.04 ----- Provisions Relating to the Insurer and Other Parties
Section 9.05 ----- Employment Status
Section 9.06 ----- Rights to Plan Assets
Section 9.07 ----- Beneficiary
Section 9.08 ----- Nonalienation of Benefits
Section 9.09 ----- Construction
Section 9.10 ----- Legal Actions
Section 9.11 ----- Small Amounts
Section 9.12 ----- Word Usage
Section 9.13 ----- Transfers Between Plans

ARTICLE X TOP-HEAVY PLAN REQUIREMENTS

Section 10.01 ----- Application
Section 10.02 ----- Definitions
Section 10.03 ----- Modification of Vesting Requirements
Section 10.04 ----- Modification of Contributions
Section 10.05 ----- Modification of Contribution Limitation

PLAN EXECUTION

TABLE OF CONTENTS                       4                                (87056)

<PAGE>   8

                                  INTRODUCTION

         Southwest Banks, Inc. previously established a 401 (k) plan on
May 1, 1989.

         Indian Rocks State Bank previously established a profit sharing/401 (k)
plan on April 6, 1986.

         Effective January 1, 1998, Southwest Banks, Inc. has changed its name
to F.N.B. Corporation. F.N.B. Corporation is now the Primary Employer and is of
the opinion that these two plans should be merged under the name F.N.B.
Corporation and Affiliates Salary Savings 401(k). Effective January 1, 1998, the
plans are merged and set forth in this document which is substituted in lieu of
the prior documents.

         The restated plan continues to be for the exclusive benefit of
employees of the Employer. All persons covered under one of the plans on
December 31, 1997, shall continue to be covered under the restated plan with no
loss of benefits.

It is intended that the plan, as restated, shall qualify as a profit sharing
plan under the Internal Revenue Code of 1986, including any later amendments to
the Code.

INTRODUCTION                            5                                (87056)

<PAGE>   9

                                    ARTICLE I

                             FORMAT AND DEFINITIONS

SECTION 1.01--FORMAT.

          Words and phrases defined in the DEFINITIONS SECTION of Article I
shall have that defined meaning when used in this Plan, unless the context
clearly indicates otherwise.

          These words and phrases have an initial capital letter to aid in
identifying them as defined terms.

SECTION 1.02--DEFINITIONS.

ACCOUNT means, for a Participant, his share of the Investment Fund. Separate
accounting records are kept for those parts of his Account that result from:

          (a)        Elective Deferral Contributions

          (b)        Matching Contributions

          (c)        Other Employer Contributions

If the Employer elects to include any of these Contributions in computing the
percentages in the EXCESS AMOUNTS SECTION of Article III, a separate accounting
record shall be kept for any part of his Account resulting from such Employer
Contributions.

          (d)        Rollover Contributions

If the Participant's Vesting Percentage is less than 100% as to any of the
Employer Contributions, a separate accounting record will be kept for any part
of his Account resulting from such Employer Contributions and, if there has been
a prior Forfeiture Date, from such Contributions made before a prior Forfeiture
Date.

A Participant's Account shall be reduced by any distribution of his Vested
Account and by any Forfeitures. A Participant's Account will participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund. His Account is subject to any minimum guarantees applicable
under the Group Contract or other investment arrangement.

ACCRUAL COMPUTATION PERIOD means a 12-consecutive month period ending on the
last day of each Plan Year, including corresponding 12-consecutive month periods
before January 1, 1998.

ACTIVE PARTICIPANT means an Eligible Employee who is actively participating in
the Plan according

                                       6

<PAGE>   10

to the provisions in the ACTIVE PARTICIPANT SECTION of Article II.

ADDITIONAL CONTRIBUTIONS means additional contributions made by the Employer to
fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.

ADOPTING EMPLOYER means an employer controlled by or affiliated with the
Employer and listed in the ADOPTING EMPLOYERS - SINGLE PLAN SECTION of Article
II.

AFFILIATED SERVICE GROUP means any group of corporations, partnerships or other
organizations of which the Employer is a part and which is affiliated within the
meaning of Code Section 414(m) and regulations thereunder. Such a group includes
at least two organizations one of which is either a service organization (that
is, an organization the principal business of which is performing services), or
an organization the principal business of which is performing management
functions on a regular and continuing basis. Such service is of a type
historically performed by employees. In the case of a management organization,
the Affiliated Service Group shall include organizations related, within the
meaning of Code Section 144(a)(3), to either the management organization or the
organization for which it performs management functions. The term Controlled
Group, as it is used in this Plan, shall include the term Affiliated Service
Group.

ALTERNATE PAYEE means any spouse, former spouse, child or other dependent of a
Participant who is recognized by a qualified domestic relations order as having
a right to receive all, or a portion of the benefits payable under the Plan with
respect to such Participant.

ANNUAL COMPENSATION means, on any given date, the Employee's Compensation for
the latest Compensation Year ending on or before the given date.

ANNUITY STARTING DATE means, for a Participant, the first day of the first
period for which an amount is payable as an annuity or any other form.

BENEFICIARY means the person or persons named by a Participant to receive any
benefits under this Plan upon the Participant's death. See the BENEFICIARY
SECTION of Article IX.

CLAIMANT means any person who has made a claim for benefits under this Plan. See
the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.

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

COMPENSATION means, except as modified in this definition, the total earnings
paid or made available to an Employee by the Employer during any specified
period.

"Earnings" in this definition means Compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III.

                                       7
<PAGE>   11

Compensation shall exclude the following:

          car allowances

Compensation shall also include elective contributions. Elective contributions
are amounts excludable from the Employee's gross income under Code Sections 125,
402(e)(3), 402(h) or 403(b), and contributed by the Employer, at the Employee's
election, to a Code Section 401 (k) arrangement, a simplified employee pension,
cafeteria plan or tax-sheltered annuity. Elective contributions also include
Compensation deferred under a Code Section 457 plan maintained by the Employer
and Employee contributions "picked up" by a governmental entity and, pursuant to
Code Section 414(h)(2), treated as Employer contributions.

For purposes of the EXCESS AMOUNTS SECTION of Article Ill, the Employer may
elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).

For purposes of determining the allocation or amount of

          Additional Contributions
          Qualified Nonelective Contributions
          Discretionary Contributions

Compensation shall exclude earnings paid before the Employee's Entry Date.

For Plan Years beginning after December 31, 1988, and before January 1, 1994,
the annual Compensation of each Participant taken into account for determining
all benefits provided under the Plan for any year shall not exceed $200,000. For
Plan Years beginning on or after January 1, 1994, the annual Compensation of
each Participant taken into account for determining all benefits provided under
the Plan for any year shall not exceed $150,000.

The $200,000 limit shall be adjusted by the Secretary at the same time and in
the same manner as under Code Section 415(d). The $150,000 limit shall be
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which pay is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the annual compensation
limit will be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.

In determining the Compensation of a Participant for purposes of the annual
compensation limit, the rules of Code Section 414(q)(6) shall apply, except that
in applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the application of such
rules the adjusted annual compensation limit is exceeded, then (except for
purposes of determining the portion of Compensation up to the integration level
if this Plan provides for permitted disparity) the limitation shall be prorated
among

                                       8
<PAGE>   12

the affected individuals in proportion to each such individual's Compensation as
determined under this definition prior to the application of this limitation.

If Compensation for any prior determination period is taken into account in
determining a Participant's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the annual
compensation limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1989, which are used to determine
benefits in Plan Years beginning after December 31, 1988 and before January 1,
1994, the annual compensation limit is $200,000. For this purpose, for
determination periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, which are used to determine benefits in
Plan Years beginning on or after January 1, 1994, the annual compensation limit
is $150,000.

Compensation means, for an Employee who is a Leased Employee, the Employee's
Compensation for the services he performs for the Employer, determined in the
same manner as the Compensation of Employees who are not Leased Employees,
regardless of whether such Compensation would be received directly from the
Employer or from the leasing organization.

COMPENSATION YEAR means each one-year period ending on the last day of the Plan
Year, including corresponding periods before January 1, 1998.

CONTINGENT ANNUITANT means an individual named by the Participant to receive a
lifetime benefit after the Participant's death in accordance with a survivorship
life annuity.

CONTRIBUTIONS means

          Elective Deferral Contributions
          Matching Contributions
          Qualified Nonelective Contributions
          Additional Contributions
          Discretionary Contributions
          Rollover Contributions

as set out in Article III, unless the context clearly indicates otherwise.

CONTROLLED GROUP means any group of corporations, trades or businesses of which
the Employer is a part that are under common control. A Controlled Group
includes any group of corporations, trades or businesses, whether or not
incorporated, which is either a parent-subsidiary group, a brother-sister group,
or a combined group within the meaning of Code Section 414(b), Code
Section 414(c) and regulations thereunder and, for purposes of determining
contribution limitations under the CONTRIBUTION LIMITATION SECTION of
Article III, as modified by Code Section 415(h) and, for the purpose of
identifying Leased Employees, as modified by Code Section 144(a)(3). The term
Controlled Group, as it is used in this Plan, shall include the term Affiliated
Service Group and any other employer

                                       9
<PAGE>   13

required to be aggregated with the Employer under Code Section 414(o) and the
regulations thereunder.

DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.

DISCRETIONARY CONTRIBUTIONS means discretionary contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.

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

EARLY RETIREMENT DATE means the day of any month before a Participant's Normal
Retirement Date which the Participant selects for the start of his retirement
benefit. This day shall be on or after the date on which he ceases to be an
Employee and the date he meets the following requirement(s):

(a)      He has attained age 55.

(b)      He has completed five years of Vesting Service.

ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer to fund
this Plan in accordance with a qualified cash or deferred arrangement as
described in Code Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.

ELIGIBILITY BREAK IN SERVICE means an Eligibility Computation Period in which an
Employee is credited with 500 or fewer Hours-of-Service. An Employee incurs an
Eligibility Break in Service on the last day of an Eligibility Computation
Period in which he has an Eligibility Break in Service.

ELIGIBILITY COMPUTATION PERIOD means a 12-consecutive month period. The first
Eligibility Computation Period begins on an Employee's Employment Commencement
Date. Later Eligibility Computation Periods begin on anniversaries of his
Employment Commencement Date.

To determine an Eligibility Computation Period after an Eligibility Break in
Service, the Plan shall use the 12-consecutive month period beginning on an
Employee's Reemployment Commencement Date as if his Reemployment Commencement
Date were his Employment Commencement Date.

ELIGIBILITY SERVICE means one year of service for each Eligibility Computation
Period in which an Employee is credited with at least 1,000 Hours-of-Service.
The year of service will be credited as of the date the Hour-of-Service
requirement is met.

However, Eligibility Service is modified as follows:

                                       10
<PAGE>   14
Predecessor Employer service included:

         An Employee's service with a Predecessor Employer shall be included as
         service with the Employer. This service includes service performed
         while a proprietor or partner.

Period of Military Duty included:

         A Period of Military Duty shall be included as service with the
         Employer to the extent it has not already been credited. For purposes
         of crediting Hours-of-Service during the Period of Military Duty, an
         Hour-of-Service shall be credited (without regard to the 501
         Hour-of-Service limitation) for each hour an Employee would normally
         have been scheduled to work for the Employer during such period.

Controlled Group service included:

An Employee's service with a member firm of a Controlled Group while both that
firm and the Employer were members of the Controlled Group shall be included as
service with the Employer.

ELIGIBLE EMPLOYEE means any Employee of the Employer.

ELIGIBLE RETIREMENT PLAN means an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a) or a qualified trust
described in Code Section 401(a), that accepts the Distributee's Eligible
Rollover Distribution.

However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.

ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any portion of
the balance to the credit of the Distributee, except -hat an Eligible Rollover
Distribution does not include:

(a)      Any distribution that is one of a series of substantially equal
         periodic payments (not less frequently than annually) made for the life
         (or life expectancy) of the Distributee or the joint lives (or joint
         life expectancies) of the Distributee and the Distributee's designated
         Beneficiary, or for a specified period of ten years or more.

(b)      Any distribution to the extent such distribution is required under'
         Code Section 401(a)(9).

(c)      The portion of any distribution that is not includible in gross income
         (determined without regard to the exclusion for net unrealized
         appreciation with respect to employer securities).

EMPLOYEE means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections 414(b),
(c), (m) or (o). A Controlled Group member is required to be aggregated with the
Employer.

                                       11
<PAGE>   15

The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as provided in
Code Sections 414(n) or 414(o).

EMPLOYER means the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement, assume
the obligations of this Plan or any predecessor corporation or firm of the
Employer (absorbed by the Employer, or of which the Employer was once a part)
which became a predecessor because of a change of name, merger, purchase of
stock or purchase of assets and which maintained this Plan.

EMPLOYER CONTRIBUTIONS means

          Elective Deferral Contributions
          Matching Contributions
          Qualified Nonelective Contributions
          Additional Contributions
          Discretionary Contributions

as set out in Article III, unless the context clearly indicates otherwise.

EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service.

ENTRY DATE means the date an Employee first enters the Plan as an active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.

FISCAL YEAR means the Primary Employer's taxable year. The last day of the
Fiscal Year is December 31.

FORFEITURE means the part, if any, of a Participant's Account that is forfeited.
See the FORFEITURES SECTION of Article III.

FORFEITURE DATE means, as to a Participant, the date the Participant incurs five
consecutive Vesting Breaks in Service. A Participant incurs a Vesting Break in
Service on the last day of the period used to determine the Vesting Break in
Service.

This is the date on which the Participant's Nonvested Account will be forfeited
unless an earlier forfeiture occurs as provided in the FORFEITURES SECTION of
Article III.

GROUP CONTRACT means the group annuity contract or contracts into which the
Trustee enters with the Insurer for the investment of Contributions and the
payment of benefits under this Plan. The term Group Contract as it is used in
this Plan is deemed to include the plural unless the context clearly indicates
otherwise.

                                       12
<PAGE>   16

HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee or a
highly compensated former Employee.

A highly compensated active Employee means any Employee who performs service for
the Employer during the determination year and who, during the look-back year
is:

(a)      An Employee who is a 5% owner, as defined in Section 4160)(1)(B)(i), at
         any time during the determination year or the look-back year.

(b)      An Employee who receives compensation in excess of $75,000 (indexed in
         accordance with Section 415(d) during the look-back year.

(c)      An Employee who receives compensation in excess of $50,000 (indexed in
         accordance with Section 415(d) during the look-back year and is a
         member of the top-paid group for the look-back year.

(d)      An Employee who is an officer, within the meaning of Section 4160),
         during the look-back year and who receives compensation in the
         look-back year greater than 50% of the dollar limitation in effect
         under Section 415(b)(1)(A) for the calendar year in which the look-back
         year begins. The number of officers is limited to 50 (or, if lesser,
         the greater of 3 employees or 10% of employees) excluding those
         employees who may be excluded in determining the top-paid group.

(e)      An Employee who is both described in paragraph b, c or d above when
         these paragraphs are modified to substitute the determination year for
         the look-back year and one of the 100 Employees who receive the most
         compensation from the Employer during the determination year.

If no officer has satisfied the compensation requirement of (c) above during
either a determination year or look-back year, the highest paid officer for such
year shall be treated as a Highly Compensated Employee.

For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the twelve-month period immediately preceding the determination
year.

A highly compensated former Employee means any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.

If an Employee is, during a determination year or look-back year, a family
member of either a 5 percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most

Highly compensated Employees ranked on the basis of compensation paid by the
Employer during such

                                       13
<PAGE>   17

year, then the family member and the 5 percent owner or top-ten highly
compensated Employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated Employee shall be treated as a
single Employee receiving compensation, and Plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated Employee. For purposes
of this definition, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such lineal
ascendants and descendants.

Compensation is compensation within the meaning of Code Section 415(c)(3),
including elective or salary reduction contributions to a cafeteria plan, cash
or deferred arrangement or tax-sheltered annuity. The top-paid group consists of
the top 20% of employees ranked on the basis of compensation received during the
year.

Employers aggregated under Section 414(b), (c), (m) or (o) are treated as a
single Employer.

HOUR-OF-SERVICE means the following:

(a)      Each hour for which an Employee is paid, or entitled to payment, for
         performing duties for the Employer during the applicable computation
         period.

(b)      Each hour for which an Employee is paid, or entitled to payment, by the
         Employer because of a period of time in which no duties are performed
         (irrespective of whether the employment relationship has terminated)
         due to vacation, holiday, illness, incapacity (including disability),
         layoff, jury duty, military duty or leave of absence. Notwithstanding
         the preceding provisions of this subparagraph (b), no credit will be
         given to the Employee

         (1)      for more than 501 Hours-of-Service under this subparagraph (b)
                  because of any single continuous period in which the Employee
                  performs no duties (whether or not such period occurs in a
                  single computation period); or

         (2)      for an Hour-of-Service for which the Employee is directly or
                  indirectly paid, or entitled to payment, because of a period
                  in which no duties are performed if such payment is made or
                  due under a plan maintained solely for the purpose of
                  complying with applicable worker's or workmen's compensation,
                  or unemployment compensation or disability insurance laws; or

         (3)      for an Hour-of-Service for a payment which solely reimburses
                  the Employee for medical or medically related expenses
                  incurred by him.

        For purposes of this subparagraph (b), a payment shall be deemed to be
        made by, or due from the Employer, regardless of whether such payment is
        made by, or due from the Employer, directly or indirectly through, among
        others, a trust fund or insurer, to which the Employer contributes or
        pays premiums and regardless of whether contributions made or due to the
        trust fund, insurer or other

                                       14
<PAGE>   18

         entity are for the benefit of particular employees or are on behalf of
         a group of employees in the aggregate.

         (c)      Each hour for which back pay, irrespective of mitigation of
                  damages, is either awarded or agreed to by the Employer. The
                  same Hours-of-Service shall not be credited both under
                  subparagraph (a) or subparagraph (b) above (as the case may
                  be) and under this subparagraph (c). Crediting of
                  Hours-of-Service for back pay awarded or agreed to with
                  respect to periods described in subparagraph (b) above will be
                  subject to the limitations set forth in that subparagraph.

The crediting of Hours-of-Service above shall be applied under the rules of
paragraphs (b) and (c) of the Department of Labor Regulation 2530.200b-2
(including any interpretations or opinions implementing said rules); which
rules, by this reference, are specifically incorporated in full within this
Plan. The reference to paragraph (b) applies to the special rule for determining
hours of service for reasons other than the performance of duties such as
payments calculated (or not calculated) on the basis of units of time and the
rule against double credit. The reference to paragraph (c) applies to the
crediting of hours of service to computation periods.

Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b), (c), (m)
or (o) and the regulations thereunder for purposes of eligibility and vesting.
Hours-of-Service shall also be credited for any individual who is considered an
employee for purposes of this Plan pursuant to Code Section 414(n) or Code
Section 414(o) and the regulations thereunder.

Solely for purposes of determining whether a one-year break in service has
occurred for eligibility or vesting purposes, during a Parental Absence an
Employee shall be credited with the Hours-of-Service which otherwise would
normally have been credited to the Employee but for such absence, or in any case
in which such hours cannot be determined, eight Hours-of-Service per day of such
absence. The Hours-of-Service credited under this paragraph shall be credited in
the computation period in which the absence begins if the crediting is necessary
to prevent a break in service in that period; or in all other cases, in the
following computation period.

INACTIVE PARTICIPANT means a former Active Participant who has an Account. See
the INACTIVE PARTICIPANT SECTION of Article II.

INSURER means Principal Mutual Life Insurance Company and any other insurance
company or companies named by the Trustee or Primary Employer.

INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants. These funds result from Contributions made under the
Plan.

INVESTMENT MANAGER means any fiduciary (other than a trustee or Named Fiduciary)

                                       15
<PAGE>   19

(a)      who has the power to manage, acquire, or dispose of any assets of the
         Plan; and

(b)      who (1) is registered as an investment adviser under the Investment
         Advisers Act of 1940, or (2)is a bank, as defined in the Investment
         Advisers Act of 1940, or (3) is an insurance company qualified to
         perform services described in subparagraph (a) above under the laws of
         more than one state; and

(c)      who has acknowledged in writing being a fiduciary with respect to the
         Plan.

LATE RETIREMENT DATE means the day of any month which is after a Participant's
Normal Retirement Date and on which retirement benefits begin. If a Participant
continues to work for the Employer after his

Normal Retirement Date, his Late Retirement Date shall be the earliest day of
the month on or after he ceases to be an Employee. An earlier or a later
Retirement Date may apply if the Participant so elects. An earlier Retirement
Date may apply if the Participant is age 70 1 /2. See the WHEN BENEFITS START
SECTION of Article V.

LEASED EMPLOYEE means any person (other than an employee of the recipient) who
pursuant to an agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the recipient
and related persons determined in accordance with Code Section 414(n)(6)) on a
substantially full time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business field
of the recipient employer. Contributions or benefits provided a Leased Employee
by the leasing organization which are attributable to service performed for the
recipient employer shall be treated as provided by the recipient employer.

A Leased Employee shall not be considered an employee of the recipient if:

(a)      such employee is covered by a money purchase pension plan providing (1)
         a nonintegrated employer contribution rate of at least 10 percent of
         compensation, as defined in Code Section 415(c)(3), but including
         amounts contributed pursuant to a salary reduction agreement which are
         excludable from the employee's gross income under Code Sections 125,
         402(e)(3), 402(h) or 403(b), (2) immediate participation, and (3) full
         and immediate vesting and

(b)      Leased Employees do not constitute more than 20 percent of the
         recipient's nonhighly compensated workforce.

LOAN ADMINISTRATOR means the person or positions authorized to administer the
Participant loan program.

The Loan Administrator is Penny Calloway.

MATCHING CONTRIBUTIONS means matching contributions made by the Employer to fund
this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.

                                       16
<PAGE>   20

MONTHLY DATE means each Yearly Date and the same day of each following month
during the Plan Year beginning on such Yearly Date.

NAMED FIDUCIARY means the person or persons who have authority to control and
manage the operation and administration of the Plan.

The Named Fiduciary is the Employer.

NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is neither
a Highly Compensated Employee nor a family member.

NONVESTED ACCOUNT means the part, if any, of a Participant's Account that is in
excess of his Vested Account.

NORMAL FORM means a single life annuity with installment refund.

NORMAL RETIREMENT AGE means the age at which the Participant's normal retirement
benefit becomes nonforfeitable. A Participant's Normal Retirement Age is 65.

NORMAL RETIREMENT DATE means the date the Participant reaches his, Normal
Retirement Age. Unless otherwise provided in this Plan, a Participant's
retirement benefits shall begin on a Participant's Normal Retirement Date if he
has ceased to be an Employee on such date and has a Vested Account. Even if the
Participant is an Employee on his Normal Retirement Date, he may choose to have
his retirement benefit begin on such date. See the WHEN BENEFITS START SECTION
of Article V.

PARENTAL ABSENCE means an Employee's absence from work which begins on or after
the first Yearly Date after December 31, 1984,

(a)      by reason of pregnancy of the Employee,

(b)      by reason of birth of a child of the Employee,

(c)      by reason of the placement of a child with the Employee in connection
         with adoption of such child by such Employee, or

(d)      for purposes of caring for such child for a period beginning
         immediately following such birth or placement.

PARTICIPANT means either an Active Participant or an Inactive Participant.

PERIOD OF MILITARY DUTY means, for an Employee

(a)      who served as a member of the armed forces of the United States, and

                                       17
<PAGE>   21

(b)      who was reemployed by the Employer at a time when the Employee had a
         right to reemployment in accordance with seniority rights as protected
         under Section 2021 through 2026 of Title 38 of the U. S. Code,

the period of time from the date the Employee was first absent from active work
for the Employer because of such military duty to the date the Employee was
reemployed.

PLAN means the 401 (k) savings plan of the Employer set forth in this document,
including any later amendments to it.

PLAN ADMINISTRATOR means the person or persons who administer the Plan.

The Plan Administrator is the Employer.

PLAN YEAR means a period beginning on a Yearly Date and ending on the day before
the next Yearly Date.

PREDECESSOR EMPLOYER means Mercantile Bank. If the Employer maintains the plan
of a predecessor employer, the Plan treats the service of the Employee with the
predecessor employer as service with the Employer.

PRIMARY EMPLOYER means SOUTHWEST BANKS, INC.

QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a spouse, an
immediate survivorship life annuity with installment refund, where the.
survivorship percentage is 50% and the Contingent Annuitant is the Participant's
spouse. A former spouse will be treated as the spouse to the extent provided
under a qualified domestic relations order as described in Code Section 414(pl.
If a Participant does not have a spouse, the Qualified Joint and Survivor Form
means the Normal Form.

The amount of benefit payable under the Qualified Joint and Survivor Form shall
be the amount of benefit which may be provided by the Participant's Vested
Account.

QUALIFIED NONELECTIVE CONTRIBUTIONS means contributions (other than Employer
Contributions made to the Plan on behalf of a Participant on account of Elective
Deferral Contributions or on account of contributions made by the Participant)
made by the Employer to fund this Plan which an Employee may not elect to have
paid to him in cash instead of being contributed to the Plan and which are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of Article III.

QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who dies
before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).

                                       18
<PAGE>   22

QUALIFYING EMPLOYER SECURITIES means common stock issued by the Employer and
meeting the requirements of Section 4975(e)(8) of the Code, or by a corporation
which is a member of the same controlled group of corporations, having a
combination of voting power and dividend rates equal to or in excess of:

(a)      That class of common stock of the Employer (or a corporation which is a
         member of the same controlled group of corporations) having the
         greatest voting power, and

(b)      That class of common stock of the Employer (or a corporation which is a
         member of the same controlled group of corporations) having the
         greatest dividend rights.

Noncallable preferred stock shall be treated as Qualifying Employer Securities
if such stock is convertible at any time into stock that meets the requirements
of (a) and (b) above, and if such conversion is at a conversion price which (as
of the date of the acquisition by the Plan) is reasonable. For purposes of the
preceding sentence, the preferred stock shall be treated as noncafable if, after
the call, there is a reasonable opportunity for conversion which meets the
requirements of the preceding sentence.

QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his share of
Qualifying Employer Securities.

REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service following an Eligibility Break in Service.

REENTRY DATE means the date a former Active Participant reenters the Plan. See
the ACTIVE PARTICIPANT SECTION of Article II.

RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.

ROLLOVER CONTRIBUTIONS means the Rollover Contributions which,are made by or for
a Participant according to the provisions of the ROLLOVER CONTRIBUTIONS SECTION
of Article III.

SEMI-YEARLY DATE means each Yearly Date and the sixth Monthly Date after each
Yearly Date which is within the same Plan Year.

TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.

TEFRA COMPLIANCE DATE means the date a plan is to Comply with the provisions of
TEFRA. The TEFRA Compliance Date as used in this Plan is,

(a)      for purposes of contribution limitations, Code Section 415,

         (1)      if the plan was in effect on July 1, 1982, the first day of
                  the first limitation year which

                                       19
<PAGE>   23

                  begins after December 31, 1982, or

         (2)      if the plan was not in effect on July 1, 1982, the first day
                  of the first limitation year which ends after July 1, 1982.

(b)      for all other purposes, the first Yearly Date after December 31, 1983.

TOTALLY AND PERMANENTLY DISABLED means the Participant, because of a physical or
mental disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Plan Administrator considers will
be of long continued duration. A Participant also is disabled if he incurs the
permanent loss or loss of use of a member or function of the body, or is
permanently disfigured, and incurs a separation from service. The Plan considers
a Participant disabled on the date the Plan Administrator determines the
Participant satisfies the definition of disability. The Plan Administrator may
require a Participant to submit to a physical examination in order to confirm
disability. The Plan Administrator will apply these provisions in a
nondiscriminatory, consistent and uniform manner.

TRUST means an agreement of trust between the Primary Employer and Trustee
established for the purpose of holding and distributing the Trust Fund under the
provisions of the Plan. The Trust may provide for the investment of all or any
portion of the Trust Fund in the Group Contract.

TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from Contributions made
under the Plan which are forwarded to the Trustee to be deposited in the Trust
Fund.

TRUSTEE means the trustee or trustees under the Trust. The term Trustee as it is
used in this Plan is deemed to include the plural unless the context clearly
indicates otherwise.

VALUATION DATE means the date on which the value of the assets of the Trust is
determined. The value of each Account which is maintained under this Plan shall
be determined on the Valuation Date. In each Plan Year, the Valuation Date shall
be the close of each business day.

VESTED ACCOUNT means the vested part of a Participant's Account. The
Participant's Vested Account is determined as follows.

If the Participant's Vesting Percentage is 100%, his Vested Account equals his
Account.

If the Participant's Vesting Percentage is less than 100%, his Vested Account
equals the sum of (a) and (b) below:

(a)      The part of the Participant's Account that results from Employer
         Contributions made before a prior Forfeiture Date and all other
         Contributions which were 100% vested when made.

                                       20
<PAGE>   24

(b)      The balance of the Participant's Account in excess of the amount in (a)
         above multiplied by his Vesting Percentage.

If the Participant has wjthdrawn any part of his Account resulting from Employer
Contributions, other than the vested Employer Contributions included in (a)
above, the amount determined under this subparagraph (b) shall be equal to P(AB
+ D) - D as defined below:

P        The Participant's Vesting Percentage.

AB       The balance of the Participant's Account in excess of the amount in (a)
         above.

D        The amount of withdrawal resulting from Employer Contributions, other
         than the vested Employer Contributions included in (a) above.

 The Participant's Vested Account is nonforfeitable.

VESTING BREAK IN SERVICE means a Vesting Computation Period in which an Employee
is credited with 500 or fewer Hours-of-Service. An Employee incurs a Vesting
Break in Service on the last day of a Vesting Computation Period in which he has
a Vesting Break in Service.

VESTING COMPUTATION PERIOD means a 12-consecutive month period ending on the
last day of each Plan Year, including corresponding 12-consecutive month periods
before January 1, 1998.

VESTING PERCENTAGE means the percentage used to determine the nonforfeitable
portion of a Participant's Account attributable to Employer Contributions which
were not 10096 vested when made.

A Participant's Vesting Percentage is shown in the following schedule opposite
the number of whole years of his Vesting Service.

                   VESTING SERVICE                           VESTING
                    (whole years)                           PERCENTAGE
                   ---------------                          ----------

                    Less than 1                                   0
                         1                                       20
                         2                                       40
         --              3                                       60
                         4                                       80
                     5 or more                                  100

However, the Vesting Percentage for a Participant who is an Employee on or after
the earliest of (i) the date he reaches his Normal Retirement Age, (ii) the date
of his death, (iii) the date he meets the requirement(s) for an Early Retirement
Date, or (iv) the date he becomes Totally and Permanently Disabled, shall be
100% on such date.

                                       21
<PAGE>   25

If the schedule used to determine a Participant's Vesting Percentage is changed,
the new schedule shall not apply to a Participant unless he is credited with an
Hour-of-Service on or after the date of the change and the Participant's
nonforfeitable percentage on the day before the date of the change is not
reduced under this Plan. The amendment provisions of the AMENDMENT SECTION of
Article IX regarding changes in the computation of the Vesting Percentage shall
apply.

VESTING SERVICE means one year of service for each Vesting Computation Period in
which an Employee is credited with at least 1,000 Hours-of-Service.

However, Vesting Service is modified as follows:

Predecessor Employer service included:

         An Employee's service with a Predecessor Employer shall be included as
         service with the Employer. This service includes service performed
         while a proprietor or partner.

Period of Military Duty included:

         A Period of Military Duty shall be included as service with the
         Employer to the extent it has not already been credited. For purposes
         of crediting Hours-of-Service during the Period of Military Duty, an
         Hour-of-Service shall be credited (without regard to the 501
         Hour-of-Service limitation) for each hour an Employee would normally
         have been scheduled to work for the Employer during such period.

Controlled Group service included:

         An Employee's service with a member firm of a Controlled Group while
         both that firm and the Employer were members of the Controlled Group
         shall be included as service with the Employer.

YEARLY DATE means May 1, 1989, and each following January 1.

YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.

                                   ARTICLE II

                                  PARTICIPATION

SECTION 2.01--ACTIVE PARTICIPANT.

          (a)      An Employee shall first become an Active Participant (begin
                   active participation in the

                                       22
<PAGE>   26

                  Plan) on the earliest Semi-yearly Date on or after January 1,
                  1998, on which he is an Eligible Employee and has met both of
                  the eligibility requirements set forth below. This date is his
                  Entry Date.

                  (1)      He has completed one year of Eligibility Service
                           before his Entry Date.

                  (2)      He is age 21 or older.

                  Each Employee who was an Active Participant under the Plan or
                  the Indian Rocks State Bank Profit Sharing/401 (k) Plan on
                  December 31, 1997, shall continue to be an Active Participant
                  if he is still an Eligible Employee on January 1, 1998, and
                  his Entry Date shall not change.

                  If a person has been an Eligible Employee who has met all the
                  eligibility requirements above, but is not an Eligible
                  Employee on the date which would have been his Entry Date, he
                  shall become an Active Participant on the date he again
                  becomes an Eligible Employee. This date is his Entry Date.

         (b)      An Inactive Participant shall again become an Active
                  Participant (resume active participation in the Plan) on the
                  date he again performs an Hour-of-Service as an Eligible
                  Employee. This date is his Reentry Date.

         Upon again becoming an Active Participant, he shall cease to be an
Inactive Participant.

         (c)      A former Participant shall again become an Active Participant
                  (resume active participation in the Plan) on the date he again
                  performs an Hour-of-Service as an Eligible Employee. This date
                  is his Reentry Date.

         There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.

SECTION 2.02--INACTIVE PARTICIPANT.

         An Active Participant shall become an Inactive Participant (stop
accruing benefits under the Plan) on the earlier of the following:

         (a)      The date on which he ceases to be an Eligible Employee (on his
                  Retirement Date if the date he ceases to be an Eligible
                  Employee occurs within one month of his Retirement Date).

         (b)      The effective date of complete termination of the Plan.

         An Employee or former Employee who was an Inactive

                                       23
<PAGE>   27

Participant under the Plan or the Indian Rocks State Bank Profit Sharing/401(k)
Plan on December 31, 1997, shall continue to be an Inactive Participant on
January 1, 1998. Eligibility for any benefits payable to him or on his behalf
and the amount of the benefits shall be determined according to the provisions
of the prior document, unless otherwise stated in this document.

SECTION 2.03--CESSATION OF PARTICIPATION.

          A Participant shall cease to be a Participant on the date he is no
longer an Eligible Employee and his Account is zero.

SECTION 2.04--ADOPTING EMPLOYERS - SINGLE PLAN.

         Each of the employers controlled by or affiliated with the Employer and
listed below is an Adopting Employer. Each Adopting Employer listed below
participates with the Employer in this Plan. An Adopting Employer's agreement to
participate in this Plan shall be in writing.

         If the Adopting Employer did not maintain its plan before its date of
adoption specified below, its date of adoption shall be the Entry Date for any
of its employees who have met the requirements in the ACTIVE PARTICIPANT SECTION
of Article II as of that date. Service with and earnings from an Adopting
Employer shall be included as service with and earnings from the Employer.
Transfer of employment, without interruption, between an Adopting Employer and
another Adopting Employer or the Employer shall not be considered an
interruption of service.

         Contributions made by an Adopting Employer shall be treated as
Contributions made by the Employer. Forfeitures arising from those Contributions
shall be used for the benefit of all Participants.

         An employer shall not be an Adopting Employer if it ceases to be
controlled by or affiliated with the Employer. Such an employer may continue a
retirement plan for its employees in the form of a separate document. This Plan
shall be amended to delete a former Adopting Employer from the list below.

         If an employer ceases to be an Adopting Employer and does not continue
a retirement plan for the benefit of its employees, partial termination may
result and the provisions of Article VII apply.

<TABLE>
<CAPTION>
                                                  ADOPTING EMPLOYERS

NAME                                                  FISCAL YEAR END                DATE OF ADOPTION
<S>                                                  <C>                            <C>
FIRST NATIONAL BANK OF NAPLES                         December 31                    MAY 1, 1989
CAPE CORAL NATIONAL BANK                              December 31                    December 7, 1994
Indian Rocks State Bank                               December 31                    January 1, 1998
First National Bank of Fort Myers                     December 31                    May 24, 1997
Customer Service Company of F.N.B.                    December 31                    February 12, 1997
</TABLE>

                                       24
<PAGE>   28

                                   ARTICLE III

                                  CONTRIBUTIONS

SECTION 3.01--EMPLOYER CONTRIBUTIONS.

         Employer Contributions for Plan Years which end on or after January 1,
1998, may be made without regard to current or accumulated net income, earnings,
or profits of the Employer. Notwithstanding the foregoing, the Plan shall
continue to be designed to qualify as a profit sharing plan for purposes of Code
Sections 401(a), 402, 412, and 417. Such Contributions will be equal to the
Employer Contributions as described below:

         (a)      The amount of each Elective Deferral Contribution for a
                  Participant shall be equal to any percentage(not less than 1 %
                  nor more than 15%) of his Compensation as elected in his
                  elective deferral agreement. An Employee who is eligible to
                  participate in the Plan may file an elective deferral
                  agreement with the Employer. The elective deferral agreement
                  to start Elective Deferral Contributions may be effective on a
                  Participant's Entry Date (Reentry Date, if applicable) or any
                  following first day of the payroll period. The Participant
                  shall make any change or terminate the elective deferral
                  agreement by filing a new elective deferral agreement. A
                  Participant's elective deferral agreement making a change may
                  be effective on any date an elective deferral agreement to
                  start Elective Deferral Contributions could be effective. A
                  Participant's elective deferral agreement to stop Elective
                  Deferral Contributions may be effective the first day of the
                  payroll period. The elective deferral agreement must be in
                  writing and effective before the beginning of the pay period
                  in which Elective Deferral Contributions are to start, change
                  or stop.

                  Elective Deferral Contributions are fully (100%) vested and
                  nonforfeitable.

         (b)      The amount of each Matching Contribution for a Participant
                  shall be equal to a percentage as determined by the Employer
                  of the Elective Deferral Contributions made for him,
                  disregarding any Elective Deferral Contributions in excess of
                  a percentage as determined by the Employer of his
                  Compensation.

                  Matching Contributions are subject to the Vesting Percentage.

         (c)      The amount of each Qualified Nonelective Contribution shall be
                  determined by the Employer. A Qualified Nonelective
                  Contribution shall be made for a Participant only if he is a
                  Nonhighly Compensated Employee.

                  The Employer may, at its discretion, make all or any portion
                  (up to 100%) of this Qualified Nonelective Contribution to the
                  Trustee in the form of Qualifying Employer Securities.

                  Qualified Nonelective Contributions are fully (100%) vested
                  and nonforfeitable.

         (d)      The amount of each Additional Contribution for a Participant
                  eligible for an allocation for the Plan Year shall be equal to
                  5% of his Compensation for the Plan Year.

                                       25
<PAGE>   29

                  The Employer may, at its discretion, make all or any portion
                  (up to 100%) of this Additional Contribution) to the Trustee
                  in the form of Qualifying Employer Securities.

                  Additional Contributions are subject to the Vesting
                  Percentage.

         (e)      The amount of each Discretionary Contribution shall be
                  determined by the Employer.

                  The Employer may, at its discretion, make all or any portion
                  (up to 100%) of this Discretionary Contribution in the form of
                  Qualifying Employer Securities.

                  Discretionary Contributions are subject to the Vesting
                  Percentage.

         No Participant shall be permitted to have Elective Deferral
Contributions, as defined in the EXCESS AMOUNTS SECTION of Article III, made
under this Plan, or any other qualified plan maintained by the Employer, during
any taxable year, in excess of the dollar limitation contained in Code Section
402(g) in effect at the beginning of such taxable year.

         The Employer shall pay to the Trustee its Contributions used to
determine the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, to the Plan for each Plan Year not later than the end of
the twelve-month period immediately following the Plan Year for which they are
deemed to be paid. Any such Contributions accumulated through payroll deductions
shall be paid within 90 days of the date withheld or the date it is first
reasonably practical for the Employer to do so, if earlier.

         A portion of the Plan assets resulting from Employer Contributions (but
not more than the original amount of those Contributions and reduced
proportionately for losses, if applicable) may be returned if the Employer
Contributions are made because of a mistake of fact or are more than the amount
deductible under Code Section 404 (excluding any amount which is not deductible
because the Plan is disqualified). The amount involved must be returned to the
Employer within one year after the date the Employer Contributions are made by
mistake of fact or the date the deduction is disallowed, whichever applies.
Except as provided under this paragraph and Article VII, the assets of the Plan
shall never be used for the benefit of the Employer and are held for the
exclusive purpose of providing benefits to Participants and their Beneficiaries
and for defraying reasonable expenses of administering the Plan.

SECTION 3.01 A--ROLLOVER CONTRIBUTIONS.

A Rollover Contribution may be made by or for a Participant if the following
conditions are met:

         (a)      The Contribution is a rollover contribution which the Code
                  permits to be transferred to a plan that meets the
                  requirements of Code Section 401(a).

         (b)      If the Contribution is made by the Participant, it is made
                  within sixty days after he receives the distribution.

         (c)      The Participant furnishes evidence satisfactory to the Plan
                  Administrator that the proposed transfer is in fact a rollover
                  contribution that meets conditions (a) and (b) above.

                                       26
<PAGE>   30

         The Rollover Contribution may be made by the Participant or the
Participant may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a Rollover Contribution. The
Contribution shall be made according to procedures set up by the Plan
Administrator.

         Rollover Contributions made by or for a Participant shall be credited
to his Account. The part of the Participant's Account resulting from Rollover
Contributions is fully (100%) vested and nonforfeitable at all times. A separate
accounting record shall be maintained for that part of his Rollover Contribution
which consists of voluntary contributions that were deducted from the
Participant's gross income for Federal income tax purposes.

SECTION 3.02--FORFEITURES.

         The Nonvested Account of a Participant shall be forfeited as of the
earlier of the following: the date of the Participant's death, if prior to such
date he had ceased to be an Employee; or his Forfeiture Date. All or a part of a
Participant's Nonvested Account will be forfeited if, after he ceases to be an
Employee, he receives a distribution of his entire Vested Account or a
distribution of his Vested Account derived from Employer Contributions which
were not 100% vested when made according to the provisions of the VESTED
BENEFITS SECTION of Article V or the SMALL AMOUNTS SECTION of Article IX. If a
Participant's Vested Account is zero on the date he ceases to be an Employee, he
shall be deemed to have received a distribution of his entire Vested Account on
such date. The forfeiture will occur as of the date he receives the distribution
or on the date such provision became effective, if later. If he receives a
distribution of his entire Vested Account, his entire Nonvested Account will be
forfeited. If he receives a distribution of his Vested Account from Employer
Contributions which were not 100% vested when made, but less than his entire
Vested Account, the amount to be forfeited will be determined by multiplying his
Nonvested Account by a fraction. The numerator of the fraction is the amount of
the distribution derived from Employer Contributions which were not
100(Degree),% vested when made and the denominator of the fraction is his entire
Vested Account derived from such Employer Contributions on the date of
distribution.

         A Forfeiture shall also occur as described in the EXCESS AMOUNTS
SECTION of Article III.

         Forfeitures may first be applied to pay administrative expenses under
the Plan which would otherwise be paid by the Employer.

         Forfeitures not used to pay administrative expenses shall be allocated
as described in the ALLOCATION SECTION of Article III as of the last day of the
Plan Year in which they arise. Upon such allocation, Forfeitures shall be deemed
to be Discretionary Contributions.

         Forfeitures of Matching Contributions which relate to excess amounts
shall be applied as provided in the EXCESS AMOUNTS SECTION of Article III.

          If a Participant again becomes an Eligible Employee after receiving a
distribution which caused his Nonvested Account to be forfeited, he shall have
the right to repay to the Plan the entire amount of the distribution he received
(excluding any amount of such distribution resulting from Contributions which
were 100% vested when made). The repayment must be made before the earlier of
the date five years after the date he again becomes an Eligible Employee or the
end of the first period of five consecutive Vesting Breaks in Service which
begin after

                                       27
<PAGE>   31

the date of the distribution.

         If the Participant makes the repayment provided above, the Plan
Administrator shall restore to his Account an amount equal to his Nonvested
Account which was forfeited on the date of distribution, unadjusted for any
investment gains or losses. If the amount of the repayment is zero dollars
because the Participant was deemed to have received a distribution or the plan
did not have repayment provisions in effect on the date the distribution was
made and he again performs an Hour-of-Service as an Eligible Employee within the
repayment period, the Plan Administrator shall restore the Participant's Account
as if he had made a required repayment on the date he performed such
Hour-of-Service. Restoration of the Participant's Account shall include
restoration of all Code Section 41 1(d)(6) protected benefits with respect to
that restored Account, according to applicable Treasury regulations. Provided,
however, the Plan Administrator shall not restore the Nonvested Account if a
Forfeiture Date has occurred after the date of the distribution and on or before
the date of repayment and that Forfeiture Date would result in a complete
forfeiture of the amount the Plan Administrator would otherwise restore.

         The Plan-Administrator shall restore the Participant's Account by the
close of the Plan Year following the Plan Year in which repayment is made.
Permissible sources for restoration are Forfeitures or Employer Contributions.
The Employer shall contribute, without regard to any requirement or condition of
the EMPLOYER CONTRIBUTIONS SECTION of Article III, such additional amount needed
to make the required restoration. The repaid and restored amounts are not
included in the Participant's Annual Addition, as defined in the CONTRIBUTION
LIMITATION SECTION of Article Ill.

SECTION 3.03--ALLOCATION.

         The following Contributions for the Plan Year, plus any Forfeitures
released for allocation for the Plan Year, shall be allocated among all eligible
persons:

         Qualified Nonelective Contributions
         Additional Contributions
         Discretionary Contributions

         For purposes of the Discretionary Contribution (plus any Forfeitures)
and the Additional Contribution allocation, the eligible persons are all
Participants who had 1,000 or more Hours-of-Service in the Accrual Computation
Period that ends in the Plan Year and who are Active Participants on the last
day of the Plan Year. For purposes of the Qualified Nonelective Contribution
allocation, the eligible persons are all Participants who are Active
Participants on the last day of the Plan Year. The amount allocated to such a
person shall be determined below and under Article X.

         An Employee's service with a Predecessor Employer shall be included as
service with the Employer for the purpose of determining his Hours-of-Service to
be eligible for an allocation. This service includes service performed while a
proprietor or partner.

         The following Contributions for each Plan Year shall be allocated to
each Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:

         Elective Deferral Contributions

                                       28
<PAGE>   32

         Matching Contributions

These Contributions shall be allocated when made and credited to the
Participant's Account.

         The following Contributions are allocated as of the last day of the
Plan Year to each eligible person for whom they are made and credited to his
Account:

         Additional Contributions

         Qualified Nonelective Contributions are allocated as of the last day of
each Plan Year. For purposes of this allocation, only Nonhighly Compensated
Employees shall be eligible persons. The amount allocated to each eligible
person for the Plan Year shall be equal to Qualified Nonelective Contributions
for the Plan Year, multiplied by the ratio of (a) his Annual Compensation as of
the last day of the Plan Year to (b) the total of such compensation for all
eligible persons. This amount is credited to his Account.

         Discretionary Contributions plus any Forfeitures are allocated as of
the last day of each Plan Year. The amount allocated to each eligible person for
the Plan Year shall be equal to the Discretionary Contributions plus any
Forfeitures for the Plan Year, multiplied by the ratio of (a) his Annual
Compensation as of the last day of the Plan Year to (b) the total of such
compensation for all eligible persons. This amount is credited to his Account.

         In determining the amount of Employer Contributions to be allocated to
a Participant who is a Leased Employee, contributions and benefits provided by
the leasing organization which are attributable to services such Leased Employee
performs for the Employer shall be treated as provided by the Employer and there
shall be no duplication of those contributions or benefits under this Plan.

         The Plan suspends the accrual requirements outlined above for any Plan
Year the Plan fails to satisfy tests as described in the Excess Amounts Section
of Article III. The Plan Administrator will suspend the accrual requirements for
the Employees who are Participants, beginning first with the Employees, employed
with the Employer on the last day of the Plan Year, then the Employees who have
the latest separation from service during the Plan Year, and continuing to
suspend in descending order the accrual requirements for each Employee who
incurred an earlier separation from service, from the latest to the earliest
separation from service date, until the Plan satisfies the tests as described in
the Excess Amounts Section of Article III for the Plan Year. If two or more
Employees have a separation from service on the same day, the Plan Administrator
will suspend the accrual requirements for all such Employees, irrespective of
whether the plan can satisfy the tests by accruing benefits for fewer than all
such Employees. If the Plan suspends the accrual requirements for an Employee,
that Employee will share in the allocation of Employer Contributions and
Forfeitures, if any, without regard to the number of Hours of Service he has
earned for the Plan Year and without regard to whether he is employed by the
Employer on the last day of the Plan Year.

SECTION 3.04--CONTRIBUTION LIMITATION.

(a)      For the purpose of determining the contribution limitation set forth in
         this section, the following terms are defined:

         Aggregate Annual Addition means, for a Participant with respect to any
         Limitation Year, the sum

                                       29
<PAGE>   33

         of his Annual Additions under all defined contribution plans of the
         Employer, as defined in this section, for such Limitation Year. The
         nondeductible participant contributions which the Participant makes to
         a defined benefit plan shall be treated as Annual Additions to a
         defined contribution plan. The Contributions the Employer, as defined
         in this section, made for the Participant for a Plan Year beginning on
         or after March 31, 1984, to an individual medical benefit account, as
         defined in Code Section 415(1)(2), under a pension or annuity plan of
         the Employer, as defined in this section, shall be treated as Annual
         Additions to a defined contribution plan. Also, amounts derived from
         contributions paid or accrued after December 31, 1985, in Fiscal Years
         ending after such date, which are attributable to post-retirement
         medical benefits allocated to the separate account of a key employee,
         as defined in Code Section 419A(d)(3), under a welfare benefit fund, as
         defined h- Code Section 419(e), maintained by the Employer, as defined
         in this section, are treated as Annual Additions to a defined
         contribution plan. The 25% of Compensation limit under Maximum
         Permissible Amount does not apply to Annual Additions resulting from
         contributions made to an individual medical account, as defined in Code
         Section 415(1)(2), or to Annual Additions resulting from contributions
         for medical benefits, within the meaning of Code Section 419A, after
         separation from service.

         Annual Addition means the amount added to a Participant's account for
         any Limitation Year which may not exceed the Maximum Permissible
         Amount. The Annual Addition under any plan for a Participant with
         respect to any Limitation Year, shall be equal to the sum of (1) and
         (2) below:

         (1)      Employer contributions and forfeitures credited to his account
                  for the Limitation Year.

         (2)      Participant contributions made by him for the Limitation Year.

Before the first Limitation Year beginning after December 31, 1986, the amount
under (2) above is the lesser of (i) 1 /2 of his nondeductible participant
contributions made for the Limitation Year, or (II) the amount, if any, of his
nondeductible participant contributions made for the Limitation Year which is in
excess of six percent of his Compensation, as defined in this section, for such
Limitation Year.

Compensation means all wages for Federal income tax withholding purposes, as
defined under Code Section 3401 (a) (for purposes of income tax withholding at
the source), disregarding any rules limiting the remuneration included as wages
based on the nature or location of the employment or the services performed.
Compensation also includes all other payments to an Employee in the course of
the Employer's trade or business, for which the Employer must furnish the
Employee a written statement under Code Sections 6041(d) and 6051(a)(3). The
"Wages, Tips and Other Compensation" box on Form W-2 satisfies this definition.

For any self-employed individual Compensation will mean earned income.

For purposes of applying the limitations of this section, Compensation for a
Limitation Year is the Compensation actually paid or made available during such
Limitation Year.

                                       30
<PAGE>   34

Defined Benefit Plan Fraction means, with respect to a Limitation Year for a
Participant who is or has been a participant in a defined benefit plan ever
maintained by the Employer, as defined in this section, the quotient, expressed
as a decimal, of

      (1)      the Participant's Projected Annual Benefit under all such
               plans as of the close of such Limitation Year, divided by

      (2)      on and after the TEFRA Compliance Date, the lesser of (i) or (ii)
               below:

               (i)     1.25 multiplied by the maximum dollar limitation which
                       applies to defined benefit plans determined for the
                       Limitation Year under Code Sections 415(b) or (d) or

               (ii)    1.4 multiplied by the Participant's highest average
                       compensation as defined in the defined benefit plan(s),

including any adjustments under Code Section 415(b).

      Before the TEFRA Compliance Date, this denominator is the Participant's
      Projected Annual Benefit as of the close of the Limitation Year if the
      plan(s) provided the maximum benefit allowable.

The Defined Benefit Plan Fraction shall be modified as follows:

If the Participant was a participant as of the first day of the first Limitation
Year beginning after December 31 , 1986, in one or more defined benefit plans
maintained by the Employer, as defined in this section, which were in existence
on May 6, 1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which the Participant
had accrued as of the close of the last Limitation Year beginning before January
1, 1987, disregarding any changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code Section 415
for all Limitation Years beginning before January 1, 1987.

Defined Contribution Plan Fraction means, for a Participant with respect to a
Limitation Year, the quotient, expressed as a decimal, of

      (1)      the Participant's Aggregate Annual Additions for such Limitation
               Year and all prior Limitation Years, under all defined
               contribution plans (including the Aggregate Annual Additions
               attributable to nondeductible accounts under defined benefit
               plans and attributable to all welfare benefit funds, as defined
               in Code Section 419(e) and attributable to individual medical
               accounts, as defined in Code Section 415(1)(2)) ever maintained
               by the Employer, as defined in this section, divided by

      (2)      on and after the TEFRA Compliance Date, the sum of the amount
               determined for the Limitation Year under (i) or (ii) below,
               whichever is less, and the amounts determined in the same manner

                                       31
<PAGE>   35

               for all prior Limitation Years during which he has been an
               Employee or an employee of a predecessor employer:

               (i)     1.25 multiplied by the maximum permissible dollar amount
                       for each such Limitation Year, or

               (ii)    1.4 multiplied by the maximum permissible percentage of
                       the Participant's Compensation, as defined in this
                       section, for each such Limitation Year.

               Before the TEFRA Compliance Date, this denominator is the sum of
               the maximum allowable amount of Annual Addition to his account(s)
               under all the plans) of the Employer, as defined in this section,
               for each such Limitation Year.

The Defined Contribution Plan Fraction shall be modified as follows:

If the Participant was a participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more defined contribution
plans maintained by the Employer, as defined in this section, which were in
existence on May 6, 1986, the numerator of this fraction shall be adjusted if
the sum of the Defined Contribution Plan Fraction and Defined Benefit Plan
Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, the dollar amount determined below shall be permanently subtracted
from the numerator of this fraction. The dollar amount is equal to the excess of
the sum of the two fractions, before adjustment, over 1.0 multiplied by the
denominator of his Defined Contribution Plan Fraction. The adjustment is
calculated using his Defined Contribution Plan Fraction and Defined Benefit Plan
Fraction as they would be computed as of the end of the last Limitation Year
beginning before January 1, 1987, and disregarding any changes in the terms and
conditions of the plan made after May 5, 1986, but using the Code Section 415
limitations applicable to the first Limitation Year beginning on or after
January 1, 1987.

The Annual Addition for any Limitation Year beginning before January 1, 1987,
shall not be recomputed to treat all employee contributions as Annual Additions.

For a plan that was in existence on July 1, 1982, for purposes of determining
the Defined Contribution Plan Fraction for any Limitation Year ending after
December 31, 1982, the Plan Administrator may elect, in accordance with the
provisions of Code Section 415, that the denominator for each Participant for
all Limitation Years ending before January 1, 1983, will be equal to

      (1)      the Defined Contribution Plan Fraction denominator which would
               apply for the last Limitation Year ending in 1982 if an
               election under this paragraph were not made, multiplied by.

      (2)      a fraction, equal to (i) over (ii) below:

               (i)     the lesser of (A) $51,875, or (B) 1.4, multiplied by
                       25% of the Participant's Compensation, as defined in
                       this section, for the Limitation Year ending in 1981;

                                       32
<PAGE>   36

               (ii)    the lesser of (A) $41,500, or (B) 25% of the
                       Participant's Compensation, as defined in this section,
                       for the Limitation Year ending in 1981.

The election described above is applicable only if the plan administrators under
all defined contribution plans of the Employer, as defined in this section, also
elect to use the modified fraction.

Employer means any employer that adopts this Plan and all Controlled Group
members and any other entity required to be aggregated with the employer
pursuant to regulations under Code Section 414(o).

Limitation Year means the 12-consecutive month period within which it is
determined whether or not the limitations of Code Section 415 are exceeded.
Limitation Year means each 12-consecutive month period ending on the last day of
each Plan Year, including corresponding 12-consecutive month periods before
January 1, 1998. If the Limitation Year is other than the calendar year,
execution of this Plan (or any amendment to this Plan changing the Limitation
Year) constitutes the Employer's adoption of a written resolution electing the
Limitation Year. If the Limitation Year is changed, the new Limitation Year
shall begin within the current Limitation Year, creating a short Limitation
Year.

Maximum Permissible Amount means, for a Participant with respect to any
Limitation Year, the lesser of (1) or (2) below:

      (1)      The greater of $30,000 or one-fourth of the maximum dollar
               limitation which applies to Defined benefit plans set forth in
               Code Section 415(b)(1)(A) as in effect for the Limitation Year.
               (Before the TEFRA Compliance Date, $25,000 multiplied by the cost
               of living adjustment factor permitted by Federal regulations.)

      (2)      25% of his Compensation, as defined in this section, for such
               Limitation Year.

      The compensation limitation referred to in (2) shall not apply to any
      contribution for medical benefits (within the meaning of Code Section 401
      (h) or Code Section 419A(f)(2)) which is otherwise treated as an annual
      addition under Code Section 415(1)(1) or Code Section 419A(d)(2).

      If there is a short Limitation Year because of a change in Limitation
      Year, the Maximum Permissible Amount will not exceed the maximum dollar
      limitation which would otherwise apply multiplied by the following
      fraction:

                  Number of months in the short Limitation Year
                  ---------------------------------------------
                                        12

      Projected Annual Benefit means a Participant's expected annual benefit
      under all defined benefit plan(s) ever maintained by the Employer, as
      defined in this section. The P -ojected Annual Benefit shall be determined
      assuming that the Participant will continue employment until the later of
      current age or normal retirement age under such plan(s), and that the
      Participant's compensation for the current Limitation Year and all other
      relevant factors used to determine benefits under such plan(s) will remain

                                       33
<PAGE>   37

      constant for all future Limitation Years. Such expected annual benefit
      shall be adjusted to the actuarial equivalent of a straight life annuity
      if expressed in a form other than a straight life or qualified joint and
      survivor annuity.

(b)   The Annual Addition under this Plan for a Participant during a Limitation
      Year shall not be more than the Maximum Permissible Amount.

(c)   Contributions and Forfeitures which would otherwise be credited to the
      Participant's Account shall be limited or reallocated to the extent
      necessary to meet the restrictions of subparagraph (b) above for any
      Limitation Year in the following order. Forfeitures shall be reallocated
      in the same manner as described in the ALLOCATION SECTION of Article III
      to the remaining Participants to whom the limitations do not apply for the
      Limitation Year. Discretionary Contributions shall be reallocated in the
      same manner as described in the ALLOCATION SECTION of Article III to the
      remaining Participants to whom the limitations do not apply for the
      Limitation Year. The Discretionary Contributions shall be limited if there
      are no such remaining Participants. Additional Contributions shall be
      limited. Qualified Nonelective Contributions shall be reallocated in the
      same manner as described in the ALLOCATION SECTION of Article III to the
      remaining Participants to whom the limitations do not apply for the
      Limitation Year. The Qualified Nonelective Contributions shall be limited
      if there are no such remaining Participants. Elective Deferral
      Contributions that are not the basis for Matching Contributions shall be
      limited. Matching Contributions shall be limited to the extent necessary
      to limit the Participant's Annual Addition under this Plan to his maximum
      amount. If Matching Contributions are limited because of this limit,
      Elective Deferral Contributions that are the basis for Matching
      Contributions shall be reduced in proportion. If, due to (i) an error in
      estimating a Participant's Compensation as defined in this section, (ii)
      because Forfeitures cannot be reallocated to remaining Participants due to
      the limits of this section, (iii) as a result of a reasonable error in
      determining the amount of elective deferrals (within the meaning of Code
      Section 402(gl(3)) that may be made with respect to any individual under
      the limits of Code Section 415, or (iv) other limited facts and
      circumstances, a Participant's Annual Addition is greater than the amount
      permitted in (b) above, such excess amount shall be applied as-follows.
      Elective Deferral Contributions which are not the basis for Matching
      Contributions will be returned to the Participant. If an excess still
      exists, Elective Deferral Contributions that are the basis for Matching
      Contributions will be returned to the Participant. Matching Contributions
      based on Elective Deferral Contributions which are returned shall be
      forfeited. If after the return of lective Deferral Contributions, an
      excess amount still exists, and the Participant is an Active =articipant
      as of the end of the Limitation Year, the excess amount shall be used to
      offset Employer :ontributions for him in the next Limitation Year. If
      after the return of Elective Deferral Contributions, an excess amount
      still exists, and the Participant is not an Active Participant as of the
      end of the Limitation Year, the excess amount will be held in a suspense
      account which will be used to offset Employer Contributions for all
      Participants in the next Limitation Year. No Employer Contributions that
      would be included in the next Limitation Year's Annual Addition may be
      made before the total suspense account has been used.

(d)   A Participant's Aggregate Annual Addition for a Limitation Year shall not
      exceed the Maximum Permissible Amount.

                                       34
<PAGE>   38

      If, for the Limitation Year, the Participant has an Annual Addition under
      more than one defined contribution plan or a welfare benefit fund, as
      defined in Code Section 419(e), or an individual medical account, as
      defined in Code Section 415(1)(2), maintained by the Employer, as defined
      in this section, and such plans and welfare benefit funds and individual
      medical accounts do not otherwise limit the Aggregate Annual Addition to
      the Maximum Permissible Amount, any reduction necessary shall be made
      first to the profit sharing plans, then to all other such plans and
      welfare benefit funds and individual medical accounts and, if necessary,
      by reducing first those that were most recently allocated. Welfare benefit
      funds and individual medical accounts shall be deemed to be allocated
      first. However, elective deferral contributions shall be the last
      contributions reduced before the welfare benefit fund or individual
      medical account is reduced.

      If some of the Employer's defined contribution plans were not in existence
      on July 1, 1982, and some were in existence on that date, the Maximum
      Permissible Amount which is based on a dollar amount may differ for a
      Limitation Year. The Aggregate Annual Addition for the Limitation Year in
      which the dollar limit differs shall not exceed the lesser of (1) 25% of
      Compensation as defined in this section, (2) $45,475, or (3) the greater
      of $30,000 or the sum of the Annual Additions for such Limitation Year
      under all the plan(s) to which the $45,475 amount applies.

(e)   If a Participant is or has been a participant in both defined benefit and
      defined contribution plans (including a welfare benefit fund or individual
      medical account) ever maintained by the Employer, as defined in this
      section, the sum of the Defined Benefit Plan Fraction and the Defined
      Contribution Plan Fraction for any Limitation Year shall not exceed 1.0
      (1.4 before the TEFRA Compliance Date).

      After all other limitations set out in the plans and funds have been
      applied, the following limitations shall apply so that the sum of the
      Participant's Defined Benefit Plan Fraction and Defined Contribution Plan
      Fraction shall not exceed 1.0 (1.4 before the TEFRA Compliance Date). The

      Projected Annual Benefit shall be limited first. If the Participant's
      annual benefit(s) equal his Projected Annual Benefit, as limited, then
      Annual Additions to the defined contribution plan(s) shall be limited to
      the extent needed to reduce the sum to 1.0 (1.4). First, the voluntary
      contributions the Participant may make for the Limitation Year shall be
      limited. Next, in the case of a profit sharing plan, any forfeitures
      allocated to the Participant shall be reallocated to remaining
      participants to the extent necessary to reduce the decimal to 1.0 (1.4).
      Last, to the extent necessary, employer contributions for the Limitation
      Year shall be reallocated or limited, and any required and optional
      employee contributions to which such employer contributi; is were geared
      shall be reduced in proportion.

      If, for the Limitation Year, the Participant has an Annual Addition under
      more than one defined contribution plan or welfare benefit fund or
      individual medical account maintained by the Employer, as defined in this
      section, any reduction above shall be made first to the profit sharing
      plans, then to all other such plans and welfare benefit plans and
      individual medical accounts and, if necessary, by reducing first those
      that were most recently allocated. However, elective deferral
      contributions shall be the last contributions reduced before the welfare
      benefit fund or individual medical account is reduced. The annual addition
      to the welfare benefit fund and individual medical account shall be
      limited last.

                                       35
<PAGE>   39

SECTION 3.05--EXCESS AMOUNTS.

(a)   For the purposes of this section, the following terms are defined:

      Actual Deferral Percentage means the ratio (expressed as a percentage) of
      Elective Deferral Contributions under this Plan on behalf of the Eligible
      Participant for the Plan Year to the Eligible Participant's Compensation
      for the Plan Year. In modification of the foregoing, Compensation shall be
      limited to the Compensation received while an Active Participant. The
      Elective Deferral Contributions used to determine the Actual Deferral
      Percentage shall include Excess Elective Deferrals (other than Excess
      Elective Deferrals of Nonhighly Compensated Employees that arise solely
      from Elective Deferral Contributions made under this Plan or any other
      plans of the Employer or a Controlled Group member), but shall exclude
      Elective Deferral Contributions that are used in computing the
      Contribution Percentage (provided the Average Actual Deferral Percentage
      test is satisfied both with and without exclusion of these Elective
      Deferral Contributions). Under such rules as the Secretary of the Treasury
      shall prescribe in Code Section 401(k)(3)(D), the Employer may elect to
      include Qualified Nonelective Contributions and Qualified Matching
      Contributions under this Plan in computing the Actual Deferral Percentage.
      For an Eligible Participant for whom such Contributions on his behalf for
      the Plan Year are zero, the percentage is zero.

      Aggregate Limit means the greater of (1) or (2) below:

      (1)      The sum of

               (i)     125 percent of the greater of the Average Actual Deferral
                       Percentage of the Nonhighly Compensated Employees for the
                       Plan Year or the Average Contribution Percentage of
                       Nonhighly Compensated Employees under the Plan subject to
                       Code Section 401 (m) for the Plan Year beginning with or
                       within the Plan Year of the cash or deferred arrangement
                       and the lesser of 200% or two plus the lesser of such
                       Average Actual Deferral Percentage or Average
                       Contribution Percentage.

      (2)      The sum of

               (i)     125 percent of the lesser of the Average Actual Deferral
                       Percentage of the Nonhighly Compensated Employees for the
                       Plan Year or the Average Contribution Percentage of
                       Nonhighly Compensated Employees under the Plan subject to
                       Code Section 401 (m) for the Plan Year beginning with or
                       within the Plan Year of the cash or deferred arrangement
                       and

               (ii)    the lesser of 200% or two plus the greater of such
                       Average Actual Deferral Percentage or Average
                       Contribution Percentage.

                                       36
<PAGE>   40

      Average Actual Deferral Percentage means the average (expressed as a
      percentage) of the Actual Deferral Percentages of the Eligible
      Participants in a group.

      Average Contribution Percentage means the average (expressed as a
      percentage) of the Contribution Percentages of the Eligible Participants
      in a group.

      Contribution Percentage means the ratio (expressed as a percentage) of the
      Eligible Participant's Contribution Percentage Amounts to the Eligible
      Participant's Compensation for the Plan Year. In modification of the
      foregoing, Compensation shall be limited to the Compensation received
      while an Active Participant. For an Eligible Participant for whom such
      Contribution Percentage Amounts for the Plan Year are zero, the percentage
      is zero.

      Contribution Percentage Amounts means the sum of the Participant
      Contributions and Matching Contributions (that are not Qualified Matching
      Contributions) under this Plan on behalf of the Eligible Participant for
      the Plan Year. Such Contribution Percentage Amounts shall not include
      Matching Contributions that are forfeited either to correct Excess
      Aggregate Contributions or because the Contributions to which they relate
      are Excess Elective Deferrals, Excess Contributions or Excess Aggregate
      Contributions. Under such rules as the Secretary of the Treasury shall
      prescribe in Code Section 401(k)(3)(D), the Employer may elect to include
      Qualified Nonelective Contributions and Qualified Matching Contributions
      under this Plan which were not used in computing the Actual Deferral
      Percentage in computing the Contribution Percentage. The Employer may also
      elect to use Elective Deferral Contributions in computing the Contribution
      Percentage so long as the Average Actual Deferral Percentage test is met
      before the Elective Deferral Contributions are used in the Average
      Contribution Percentage test and continues to be met following the
      exclusion of those Elective Deferral Contributions that are used to meet
      the Average Contribution Percentage test.

      Elective Deferral Contributions means employer contributions made on
      behalf of a participant pursuant to an election to defer under any
      qualified cash or deferred arrangement as described in Code Section
      401(k), any simplified employee pension cash or deferred arrangement as
      described in Code Section 402(h)(1)(B), any eligible deferred compensation
      plan under Code Section 457, any plan as described under Code Section
      501(c)(18), and any employer contributions made on behalf of a participant
      for the purchase of an annuity contract under Code Section 403(b) pursuant
      to a salary reduction agreement. Elective Deferral Contributions shall not
      include any deferrals properly distributed as excess Annual Additions.

      Eligible Participant means, for purposes of the Actual Deferral
      Percentage, any Employee who is eligible to make an Elective Deferral
      Contribution, and shall include the following: any Employee who would be a
      plan participant if he chose to make req fired contributions; any Employee
      who can make Elective Deferral Contributions but who has changed the
      amount of his Elective Deferral Contribution to 0%, or whose eligibility
      to make an Elective Deferral Contribution is suspended because of a loan,
      distribution or hardship withdrawal; and, any Employee who is not able to
      make an Elective Deferral Contribution because of Code Section 415(c)(1) -
      Annual Additions limits. The Actual Deferral Percentage for any such
      included Employee is zero.

                                       37
<PAGE>   41

      Eligible Participant means, for purposes of the Average Contribution
      Percentage, any Employee who is eligible to make a Participant
      Contribution or to receive a Matching Contribution, and shall include the
      following: any Employee who would be a plan participant if he chose to
      make required contributions; any Employee who can make a Participant
      Contribution or receive a matching contribution but who has made an
      election not to participate in the Plan; and any Employee who is not able
      to make a Participant Contribution or receive a matching contribution
      because of Code Section 4151c)(1) or 415(e) limits. The Average
      Contribution Percentage for any such included Employee is zero.

      Excess Aggregate Contributions means, with respect to any Plan Year, the
excess of:

      (1)      The aggregate Contributions taken into account in computing the
               numerator of the Contribution Percentage actually made on behalf
               of Highly Compensated Employees for such Plan Year, over

      (2)      The maximum amount of such Contributions permitted by the Average
               Contribution Percentage test (determined by reducing
               Contributions made on behalf of Highly Compensated Employees in
               order of their Contribution Percentages beginning with the
               highest of such percentages).

      Such determination shall be made after first determining Excess Elective
Deferrals and then determining Excess Contributions.

      Excess Contributions means, with respect to any Plan Year, the excess of:

      (1)      The aggregate amount of Contributions actually taken into account
               in computing the Actual Deferral Percentage of Highly Compensated
               Employees for such Plan Year, over

      (2)      The maximum amount of such Contributions permitted by the Actual
               Deferral Percentage test (determined by reducing Contributions
               made on behalf of Highly Compensated Employees in order of the
               Actual Deferral Percentages, beginning with the highest of such
               percentages).

      A Participant's Excess Contributions for a Plan Year will be reduced by
      the amount of Excess Elective Deferrals, if any, previously distributed to
      the Participant for the taxable year ending in that Plan Year.

      Excess Elective Deferrals means those Elective Deferral Contributions that
      are includible in a Participant's gross income under Code Section 402(g)
      to the extent such Participant's Elective Deferral Contributions for a
      taxable year exceed the dollar limitation under such Code section.

      Excess Elective Deferrals shall be treated as Annual Additions, as defined
      in the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan,
      unless such amounts are distributed no later than the first April 15
      following the close of the Participant's taxable year.

      Family Member means an Employee, or former employee; the spouse of the
      Employee or former

                                       38
<PAGE>   42

      employee, and the lineal ascendants or descendants and the spouses of such
      lineal ascendants or descendants of any such Employee or former employee.
      In determining if an individual is a family member as to an Employee or
      former employee, legal adoptions are taken into account.

      Matching Contributions means employer contributions made to this or any
      other defined contribution plan, or to a contract described in Code
      Section 403(b), on behalf of a participant on account of a Participant
      Contribution made by such participant, or on account of a participant's
      Elective Deferral Contributions, under a plan maintained by the employer.

      Participant Contributions means contributions made to any plan by or on
      behalf of a participant that are included in the participant's gross
      income in the year in which made and that are maintained under a separate
      account to which earnings and losses are allocated.

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

      Qualified Nonelective Contributions means any employer contributions
      (other than Matching Contributions) which an employee may not elect to
      have paid to him in cash instead of being contributed to the plan and
      which are subject to the distribution and nonforfeitability requirements
      under Code Section 401(k) when made.

(b)   A Participant may assign to this Plan any Excess Elective Deferrals made
      during a taxable year by notifying the Plan Administrator in writing on or
      before the first following March 1 of the amount of the Excess Elective
      Deferrals to be assigned to the Plan. A Participant is deemed to notify
      the Plan Administrator of any Excess Elective Deferrals that arise by
      taking into account only those Elective Deferral Contributions made to
      this Plan and any other plans of the Employer or a Controlled Group member
      and reducing such Excess Elective Deferrals by the amount of Excess
      Contributions, if any, previously distributed for the Plan Year beginning
      in that taxable year. The Participant's claim for Excess Elective
      Deferrals shall be accompanied by the Participant's written statement that
      if such amounts are not distributed, such Excess Elective Deferrals, when
      added to amounts deferred under other plans or arrangements described in
      Code Sections 401(k), 408(k) or 403(b), will exceed the limit imposed on
      the Participant by Code Section 402(g) for the year in which the deferral
      occurred. The Excess Elective Deferrals assigned to this Plan can not
      exceed the Elective Deferral Contributions allocated under this Plan for
      such taxable year.

      Notwithstanding any other provisions of the Plan, Elective Deferral
      Contributions in an amount equal to the Excess Elective Deferrals assigned
      to this Plan, plus any income and minus any loss allocable thereto, shall
      be distributed no later than April 15 to any Participant to whose Account
      Excess Elective Deferrals were assigned for the preceding year and who
      claims Excess Elective Deferrals for such taxable year.

      The income or loss allocable to such Excess Elective Deferrals shall be
      equal to the income or loss allocable to the Participant's Elective
      Deferral Contributions for the taxable year in which the excess

                                       39
<PAGE>   43

      occurred multiplied by a fraction. The numerator of the fraction is the
      Excess Elective Deferrals. The denominator of the fraction is the closing
      balance without regard to any income or loss occurring during such taxable
      year (as of the end of such taxable year) of the Participant's Account
      resulting from Elective Deferral Contributions.

      Any Matching Contributions which were based on the Elective Deferral
      Contributions which are distributed as Excess Elective Deferrals, plus any
      income and minus any loss allocable thereto, shall be forfeited. These
      Forfeitures shall be used to offset the earliest Employer Contribution due
      after the Forfeiture arises.

(c)   As of the end of each Plan Year after Excess Elective Deferrals have been
      determined, one of the following tests must be met:

      (1)      The Average Actual Deferral Percentage for Eligible Participants
               who are Highly Compensated Employees for the Plan Year is not
               more than the Average Actual Deferral Percentage for Eligible
               Participants who are Nonhighly Compensated Employees for the Plan
               Year multiplied by 1.25.

      (2)      The Average Actual Deferral Percentage for Eligible Participants
               who are Highly Compensated Employees for the Plan Year is not
               more than the Average Actual Deferral Percentage for Eligible
               Participants who are Nonhighly Compensated Employees for the Plan
               Year multiplied by 2 and the difference between the Average
               Actual Deferral Percentages is not more than 2.

      The Actual Deferral Percentage for any Eligible Participant who is a
      Highly Compensated Employee for the Plan Year and who is eligible to have
      Elective Deferral Contributions (and Qualified Nonelective Contributions
      or Qualified Matching Contributions, or both, if used in computing the
      Actual Deferral Percentage) allocated to his account under two or more
      plans or arrangements described in Code Section 401 (k) that are
      maintained by the Employer or a Controlled Group member shall be
      determined as if all such Elective Deferral Contributions (and, if
      applicable, such Qualified Nonelective Contributions or Qualified Matching
      Contributions, or both) were made under a single arrangement. If a Highly
      Compensated Employee participates in two or more cash or deferred
      arrangements that have different Plan Years, all cash or deferred
      arrangements ending with or within the same calendar year shall be treated
      as a single arrangement. Notwithstanding the foregoing, certain plans
      shall be treated as separate if mandatorily disaggregated under the
      regulations under Code Section 401 (k) or permissibly disaggregated as
      provided.

      In the event that this Plan satisfies the requirements of Code Sections
      401(k), 401(a)(4), or 410(b) only if aggregated with one or more other
      plans, or if one or more other plans satisfy the requirements of such Code
      sections only if aggregated with this Plan, then this section shall be
      applied by determining the Actual Deferral Percentage of employees as if
      all such plans were a single plan. Plans may be aggregated in order to
      satisfy Code Section 401 (k) only if they have the same Plan Year.

      For purposes of determining the Actual Deferral Percentage of an Eligible
      Participant who is a five-percent

                                       40
<PAGE>   44

      owner or one of the ten most highly-paid Highly Compensated Employees, the
      Elective Deferral Contributions (and Qualified Nonelective Contributions
      or Qualified Matching Contributions, or both, if used in computing the
      Actual Deferral Percentage) and Compensation of such Eligible Participant
      include the Elective Deferral Contributions (and, if applicable, Qualified
      Nonelective Contributions or Qualified Matching Contributions, or both)
      and Compensation for the Plan Year of Family Members. Family Members, with
      respect to such Highly Compensated Employees, shall be disregarded as
      separate employees in determining the Actual Deferral Percentage both for
      Participants who are Nonhighly Compensated Employees and for Participants
      who are Highly Compensated Employees.

      For purposes of determining the Actual Deferral Percentage, Elective
      Deferral Contributions, Qualified Nonelective Contributions and Qualified
      Matching Contributions must be made before the last day of the 12-month
      period immediately following the Plan Year to which contributions relate.

      The Employer shall maintain records sufficient to demonstrate satisfaction
      of the Average Actual Deferral Percentage test and the amount of Qualified
      Nonelective Contributions or Qualified Matching Contributions, or both,
      used in such test.

      The determination and treatment of the Contributions used in computing the
      Actual Deferral Percentage shall satisfy such other requirements as may be
      prescribed by the Secretary of the Treasury.

      If the Plan Administrator should determine during the Plan Year that
      neither of the above tests is being met, the Plan Administrator may adjust
      the amount of future Elective Deferral Contributions of the Highly
      Compensated Employees.

      Notwithstanding any other provisions of this Plan, Excess Contributions,
      plus any income and minus any loss allocable thereto, shall be distributed
      no later than the last day of each Plan Year to Participants to whose
      Accounts such Excess Contributions were allocated for the preceding Plan
      Year. If such excess amounts are distributed more than 2 1 J2 months after
      the last day of the Plan Year in which such excess amounts arose, a ten
      (10) percent excise tax will be imposed on the employer maintaining the
      plan with respect to such amounts. Such distributions shall be made
      beginning with the Highly Compensated Employee(s) who has the greatest
      Actual Deferral Percentage, reducing his Actual Deferral Percentage to the
      next highest Actual Deferral Percentage level. Then, if necessary,
      reducing the Actual Deferral Percentage of the Highly Compensated
      Employees at the next highest level, and continuing in this manner until
      the average Actual Deferral Percentage of the Highly Compensated Group
      satisfies the Actual Deferral Percentage test. Excess Contributions of
      Participants who are subject to the family member aggregation rules shall
      be allocated among the Family Members in proportion to the Elective
      Deferral Contributions (and amounts treated as Elective Deferral
      Contributions) of each Family Member that is combined to determine the
      combined Actual Deferral Percentage.

      Excess Contributions shall be treated as Annual Additions, as defined in
      the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.

                                       41
<PAGE>   45

      The Excess Contributions shall be adjusted for income or loss. The income
      or loss allocable to such Excess Contributions shall be equal to the
      income or loss allocable to the Participant's Elective Deferral
      Contributions (and, if applicable, Qualified Nonelective Contributions or
      Qualified Matching Contributions, or both) for the Plan Year in which the
      excess occurred multiplied by a fraction. The numerator of the fraction is
      the Excess Contributions. The denominator of the fraction is the closing
      balance without regard to any income or loss occurring during such Plan
      Year (as of the end of such Plan Year) of the Participant's Account
      resulting from Elective Deferral Contributions (and Qualified Nonelective
      Contributions or Qualified Matching Contributions, or both, if used in
      computing the Actual Deferral Percentage).

      Excess Contributions shall be distributed from the Participant's Account
      resulting first from Elective Deferral Contributions not the basis for
      Matching Contributions, then if necessary, from Elective Deferral
      Contributions which are the basis for Matching Contributions. If such
      Excess Contributions exceed the balance in the Participant's Account
      resulting from Elective Deferral Contributions, the balance shall be
      distributed from the Participant's Account resulting from Qualified
      Matching Contributions (if applicable) and Qualified Nonelective
      Contributions, respectively.

      Any Matching Contributions which were based on the Elective Deferral
      Contributions which are distributed as Excess Contributions, plus any
      income and minus any loss allocable thereto, shall be forfeited. These
      Forfeitures shall be used to offset the earliest Employer Contribution due
      after the Forfeiture arises.

(d)   As of the end of each Plan Year, one of the following tests must be met:

      (1)      The Average Contribution Percentage for Eligible Participants who
               are Highly Compensated Employees for the Plan Year is not more
               than the Average Contribution Percentage for Eligible
               Participants who are Nonhighly Compensated Employees for the Plan
               Year multiplied by 1 .25.

      (2)      The Average Contribution Percentage for Eligible Participants who
               are Highly Compensated Employees for the Plan Year is not more
               than the Average Contribution Percentage for Eligible
               Participants who are Nonhighly Compensated Employees for the Plan
               Year multiplied by 2 and the difference between the Average
               Contribution Percentages is not more than 2.

      If one or more Highly Compensated Employees participate in both a cash or
      deferred arrangement and a plan subject to the Average Contribution
      Percentage test maintained by the Employer or a Controlled Group member
      and the sum of the Average Actual Deferral Percentage and Average
      Contribution Percentage of those Highly Compensated Employees subject to
      either or both tests exceeds the Aggregate Limit, then the Contribution
      Percentage of those Highly Compensated Employees who also participate in a
      cash or deferred arrangement will be reduced (beginning with such Highly
      Compensated Employees whose Contribution Percentage is the highest) so
      that the limit is not exceeded. The amount by which each Highly
      Compensated Employee's Contribution Percentage is reduced shall be treated
      as an Excess Aggregate Contribution. The Average Actual Deferral
      Percentage and Average Contribution Percentage of the Highly Compensated
      Employees are determined after any

                                       42
<PAGE>   46

      corrections required to meet the Average Actual Deferral Percentage and
      Average Contribution Percentage tests. Multiple use does not occur if
      either the Average Actual Deferral Percentage or Average Contribution
      Percentage of the Highly Compensated Employees does not exceed 1.25
      multiplied by the Average Actual Deferral Percentage and Average
      Contribution Percentage of the Nonhighly Compensated Employees.

      The Contribution Percentage for any Eligible Participant who is a Highly
      Compensated Employee for the Plan Year and who is eligible to have
      Contribution Percentage Amounts allocated to his account under two or more
      plans described in Code Section 401 (a) or arrangements described in Code
      Section 401 (IC) that are maintained by the Employer or a Controlled Group
      member shall be determined as if the total of such Contribution Percentage
      Amounts was made under each plan. If a Highly Compensated Employee
      participates in two or more cash or deferred arrangements that have
      different Plan Years, all cash or deferred arrangements ending with or
      within the same calendar year shall be treated as a single arrangement.
      Notwithstanding the foregoing, certain plans shall be treated as separate
      if mandatorily disaggregated under the regulations under Code Section 401
      (m) or permissibly disaggregated as provided.

      In the event that this Plan satisfies the requirements of Code Sections
      401(m), 401 (a)(4), or 410(b) only if aggregated with one or more other
      plans, or if one or more other plans satisfy the requirements of Code
      sections only if aggregated with this Plan, then this section shall be
      applied by determining the Contribution Percentages of Eligible
      Participants as if all such plans were a single plan. Plans may be
      aggregated in order to satisfy Code Section 401 (m) only if they have the
      same Plan Year.

      For purposes of determining the Contribution Percentage of an Eligible
      Participant who is a five-percent owner or one of the ten most highly-paid
      Highly Compensated Employees, the Contribution Percentage Amounts and
      Compensation of such Participant shall include Contribution Percentage
      Amounts and Compensation for the Plan Year of Family Members. Family
      Members, with respect to Highly Compensated Employees, shall be
      disregarded as separate employees in determining the Contribution
      Percentage both for employees who are Nonhighly Compensated Employees and
      for employees who are Highly Compensated Employees.

      For purposes of determining the Contribution Percentage, Participant
      Contributions are considered to have been made in the Plan Year in which
      contributed to the Plan. Matching Contributions and Qualified Nonelective
      Contributions will be considered made for a Plan Year if made no later
      than the end of the 12-month period beginning on the day after the close
      of the Plan Year.

      The Employer shall maintain records sufficient to demonstrate satisfaction
      of the Average Contribution Percentage test and the amount of Qualified
      Nonelective Contributions or Qualified Matching Contributions, or both,
      used in such test.

      The determination and treatment of the Contribution Percentage of any
      Participant shall satisfy such other requirements as may be prescribed by
      the Secretary of the Treasury.

                                       43
<PAGE>   47

      Notwithstanding any other provisions of this Plan, Excess Aggregate
      Contributions, plus any income and minus any loss allocable thereto, shall
      be forfeited, if not vested, or distributed, if vested, no later than the
      last day of each Plan Year to Participants to whose Accounts such Excess
      Aggregate Contributions were allocated for the preceding Plan Year. If
      such Excess Aggregate Contributions are distributed more than 2 1 /2
      months after the last day of the Plan Year in which such excess amounts
      arose, a ten (10) percent excise tax will be imposed on the employer
      maintaining the plan with respect to those amounts. Excess Aggregate
      Contributions will be distributed beginning with the Highly Compensated
      Employee(s) who has the greatest Contribution Percentage, reducing his
      contribution percentage to the next highest level. Then, if necessary,
      reducing the Contribution Percentage of the Highly Compensated Employee at
      the next highest level, and continuing in this manner until the Actual
      Contribution Percentage of the Highly Compensated Group satisfies the
      Actual Contribution Percentage Test. Excess Aggregate Contributions of
      Participants who are subject to the family member aggregation rules shall
      be allocated among the Family Members in proportion to the Employee and
      Matching Contributions (or amounts treated as Matching Contributions) of
      each Family Member that is combined to determine the combined Contribution
      Percentage. Excess Aggregate Contributions shall be treated as Annual
      Additions, as defined in the CONTRIBUTION LIMITATION SECTION of Article
      III, under the Plan.

      The Excess Aggregate Contributions shall be adjusted for income or loss.
      The income or loss allocable to such Excess Aggregate Contributions shall
      be equal to the income or loss allocable to the Participant's Contribution
      Percentage Amounts for the Plan Year in which the excess occurred
      multiplied by a fraction. The numerator of the fraction is the Excess
      Aggregate Contributions. The denominator of the fraction is the closing
      balance without regard to any income or loss occurring during such Plan
      Year (as of the end of such Plan Year) of the Participant's Account
      resulting from Contribution Percentage Amounts.

      Excess Aggregate Contributions shall be distributed from the Participant's
      Account resulting from Participant Contributions that are not required as
      a condition of employment or partic nation or for obtaining additional
      benefits from Employer Contributions. If such Excess Aggregate
      Contributions exceed the balance in the Participant's Account resulting
      from such Participant Contributions, the balance shall be forfeited, if
      not vested, or distributed, if vested, on a pro-rata basis from the
      Participant's Account resulting from Contribution Percentage Amounts.
      These Forfeitures shall be used to offset the earliest Employer
      Contribution due after the Forfeiture arises.

                                   ARTICLE IV

                           INVESTMENT OF CONTRIBUTIONS

SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.

      All Contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.

      Investment of Contributions is governed by the provisions of the Trust,
the Group Contract and any

                                       44
<PAGE>   48

other funding arrangement in which the Trust Fund is or may be invested. To the
extent permitted by the Trust, Group Contract or other funding arrangement, the
parties named below shall direct the Contributions to any of the accounts
availbble under the Trust or Group Contract and may request the transfer of
assets resulting from those Contributions oetween such accounts. A Participant
may not direct the Trustee to invest the Participant's Account in collectibles.
Collectibles means any work of art, rug or antique, metal or gem, stamp or coin,
alcoholic beverage or other tangible personal property specified by the
Secretary of Treasury. To the extent that a Participant does not direct the
investment of his Account, such Account shall be invested ratably in the
accounts available under the Trust or Group Contract in the same manner as the
undirected Accounts of all other Participants. The Vested Accounts of all
Inactive Participants may be segregated and invested separately from the
Accounts of all other Participants.

      The Trust Fund shall be valued at current fair market value as of the last
day of the last calendar month ending in the Plan Year and, at the discretion of
the Trustee, may be valued more frequently. The valuation shall take into
consideration investment earnings credited, expenses charged, payments made and
changes in the value of the assets held in the Trust Fund. The Account of a
Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain or
loss of such investments. The share shall be determined by multiplying the gain
or loss of the investment by the ratio of the part of the Participant's Account
invested in such funding arrangement to the total of the Trust Fund invested in
such funding arrangement.

      At least annually, the Named Fiduciary shall review all pertinent Employee
information and Plan data in order to establish the funding policy of the Plan
and to determine appropriate methods of carrying out the Plan's objectives. The
Named Fiduciary shall inform the Trustee and any Investment Manager of the
Plan's short-term and long-term financial needs so the investment policy can be
coordinated with the Plan's financial requirements.

      (a)   Employer Contributions other than Matching Contributions and
            Elective Deferral Contributions: The Trustee shall direct the
            investment of such Employer Contributions and transfer of assets
            resulting from those Contributions.

      (b)   Elective Deferral Contributions: The Participant shall direct the
            investment of Elective Deferral Contributions and transfer of assets
            resulting from those Contributions.

      (c)   Matching Contributions: The Participant shall direct the investment
            of Matching Contributions and transfer of assets resulting from
            those Contributions.

      (d)   Rollover Contributions: The Participant shall direct the investment
            of Rollover Contributions and transfer of assets resulting from
            those Contributions.

      Notwithstanding the foregoing, the Participant shall direct the investment
of contributions that are held

                                       45
<PAGE>   49

under the Plan as a result of a merger or direct transfer as described in the
MERGER AND DIRECT TRANSFERS SECTION of ARTICLE IX.

      However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject to
Participant direction.

SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.

      All or any portion (up to 100%) of the Discretionary Contributions,
Qualified Nonelective Contributions, and Additional Contributions may be made in
the form of Qualifying Employer Securities as long as the Plan Administrator so
directs. The Trustee shall invest all or any portion (up to 100%) of the
Discretionary Contributions, Qualified Nonelective Contributions and Additional
Contributions in Qualifying Employer Securities as long as the Plan
Administrator so directs.

      Any dividends payable on the Qualifying Employer Securities shall, unless
otherwise directed by the Plan Administrator, be made in the form of additional
shares of Qualifying Employer Securities hereunder. The Plan Administrator will
allocate any dividends the Employer pays with respect to Qualifying Employer
Securities to the Accounts of Participants in the same ratio, determined on the
dividend declaration date, that Qualifying Employer Securities allocated to the
Participant's Qualifying Employer Securities Account bears to the Qualifying
Employer Securities allocated to all Qualifying Employer Securities Accounts.

      If the securities of the Employer are not publicly traded and if no market
or an extremely thin market exists for the Qualifying Employer Securities, so
that a reasonable valuation may not be obtained from the market place, then such
Qualifying Employer Securities must be valued at least annually by an
independent appraiser who is not associated with the Employer, the Plan
Administrator, the Trustee, or any person related to any fiduciary under the
Plan. The independent appraiser may be associated with a person who is merely a
contract administrator with respect to the Plan, but who exercises no
discretionary authority and is not a Plan fiduciary.

      If there is a public market for Qualifying Employer Securities of the type
held by the Plan, then the Plan Administrator may use as the value of the shares
the price at which such shares traded in such market, or an average of the bid
and asked prices for such shares in such market, provided that such value is
representative of the fair market value of such shares in the opinion of the
Plan Administrator. If the Qualifying Employer Securities do not trade on the
annual valuation date or if the market is very thin on such date, then the Plan
Administrator may use the average of trade prices for a period of time ending on
such date, provided that such value is representative of the fair market value
of such shares in the opinion of the Plan Administrator. The value of a
Participant's Qualifying Employer Securities Account may a expressed in units.

      For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to the
last day of the Plan Year. The fair market value of Qualifying Employer

                                       46
<PAGE>   50

Securities shall be determined on such a Valuation Date. The average of the bid
and asked prices of Qualifying Employer Securities as of the date of the
transaction shall apply for purposes of valuing distributions and other
transactions of the Plan to the extent such value is representative of the fair
market value of such shares in the opinion of the Plan Administrator.

      All purchases of Qualifying Employer Securities shall be made at a price,
or prices, which, in the judgment of the Plan Administrator, do not exceed the
fair market value of such Qualifying Employer Securities.

      In the event that the Trustee acquires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code Section
4975(el(2), in exchange for cash or other assets of the Trust, the terms of such
purchase shall contain the provision that in the event that there is a final
determination by the Internal-Revenue Service or court of competent jurisdiction
that a fair market value of such shares of Qualifying Employer Securities, as of
the date of purchase was less than the purchase price paid by the Trustee, then
the seller shall pay or transfer, as the case may be, to the Trustee, an amount
of cash, shares of Qualifying Employer Securities, or any combination thereof
equal in value to the difference between the purchase price and said fair market
value for all such shares. In the event that cash and/or shares of Qualifying
Employer Securities are paid and/or transferred to the Trustee under this
provision, shares of Qualifying Employer Securities shall be valued at their
fair market value as of the date of said purchase, and interest at a reasonable
rate from the date of purchase to the date of payment shall be paid by the
seller on the amount of cash paid.

      The Plan Administrator may direct the Trustee to sell, resell or otherwise
dispose of Qualifying Employer Securities to any person, including the Employer,
provided that any such sales to any disqualified person, including the Employer,
will be made at not less than the fair market value and no commission is
charged. Any such sale shall be made in conformance with Section 408(e) of
ERISA.

      The Trustee may suspend purchases of Qualifying Employer Securities in
circumstances in which such suspension is necessary to comply with rules and
regulations of the Securities and Exchange Commission, in which event such
purchases will be made or resumed as or when the Trustee reasonably determines
that such purchases are permitted under such rules and regulations.

      In the event the Plan Administrator directs the Trustee to dispose of any
Qualifying Employer Securities held as Trust Assets under circumstances which
require registration and/or qualification of the securities under applicable
Federal or state securities laws, then the Employer, at its own expense, will
take or cause to be taken any and all such action as may be necessary or
appropriate to effect such registration and/or qualification.

      If SEC filing is required, the Qualifying Employer Securities provisions
set forth in this Plan restatement will not be made available to Participants
until the later of the effective date of the Plan restatement or the date the
Plan and any other necessary documentation has been filed for registration with
the SEC by the Employer.

                                       47
<PAGE>   51

SECTION 4.01 B--VOTING AND TENDER RIGHTS.

VOTING RIGHTS.

      (A) VOTING OF ALLOCATED SHARES. All shares of Qualifying Employer
Securities allocated to a Participant's Qualifying Employer Securities Account
shall be voted by the Trustee as the Participant, to whom such shares are
allocated, directs in writing from time to time.

      (B) VOTING OF SHARES AS TO WHICH PARTICIPANTS FAIL TO GIVE VOTING
INSTRUCTIONS. The Trustee does not have the right to vote any Qualifying
Employer Securities as to which a Participant (or Beneficiary) fails to give
voting instructions.

      (C) OBLIGATIONS OF THE EMPLOYER. The Employer shall, in an appropriate
time and manner, furnish the Trustees and Participants with proxy materials,
notices and information statements on which a Participant may give his
confidential voting instructions. The materials furnished to Participants should
generally be the same as those provided to non-Participant shareholders.

      (D) FAIL SAFE RULES. With respect to the voting of Qualifying Employer
Securities which are not part of a registration-type class of securities (as
defined in Code Section 409(e)(4), a Participant (or Beneficiary) has the right
to direct _the Trustee regarding the voting of such Qualifying Employer
Securities allocated to his Qualifying Employer Securities Account with respect
to any corporate matter which involves the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as the Treasury may prescribe in
regulations. The voting rights provided in this section extend to all corporate
matters requiring a vote of stockholders with respect to Qualifying Employer
Securities allocated to the Participant's Qualifying Employer Securities
Account.

TENDER OFFER FOR QUALIFYING EMPLOYER SECURITIES.

      (A) OBLIGATIONS OF THE EMPLOYER. In the event of a tender offer for
Qualifying Employer Securities, the Trustee shall, as promptly as possible after
such tender offer is made, send to all Participants such materials and forms for
responding to the tender as are appropriate in order to determine the tender
instructions of each such Participant. Such materials or forms sent to the
Participant shall appropriately note that a failure by a Participant to return
such tender form within a specified reasonable period of time shall be deemed a
direction to the Trustee not to tender the shares of Qualifying Employer
Securities as to which the Participant has the right to tender (or not tender)
as provided below. In carrying out the steps necessary to determine the tender
instructions of Participants unaer this section, the Trustee shall adopt such
means as it deems appropriate to provide the Participants with the opportunity
to indicate their directions in a confidential manner,.i.e., without the
disclosure of any Participant's individual decision to the public or to the
Employer.

      (B) TENDER RULES. After the Participants have received appropriate tender
materials and forms, the Trustee shall, at the expiration of the period during
which the Participants may direct the Trustee to tender, tender (or refrain from
tendering) the shares of Qualifying Employer Securities allocated to a
Participant's Employer Securities Account to carry out the tender of such
shares. Notwithstanding the foregoing

                                       48
<PAGE>   52

provision of this section, the Trustee shall have the right to change or modify
its actions with respect to tendering (or failing to tender) Qualifying Employer
Securities held in the Plan if necessary to comply with the terms of any valid
order of a court of competent jurisdiction directing the Trustee to take certain
actions inconsistent with the rules of this section.

      (C) FRACTIONAL SHARES. After the expiration of the period during which
Participants may direct the Trustee to tender their shares, the Trustee shall
determine the total number of whole shares it was directed to tender, and the
total number of whole shares it was directed not to tender (either expressly or
by a Participant's failure timely to respond). If the majority of the whole
shares of Qualifying Employer Securities were directed to be tendered, then the
Trustee also shall tender, as promptly as practical, any allocated or
unallocated fractional shares that are held in the Plan. However, if the
majority of the whole shares of Qualifying Employer Securities were directed not
to be tendered (either expressly or by a Participant's failure timely to
respond), the Trustee shall not tender such shares.

                                    ARTICLE V

                                    BENEFITS

SECTION 5.01--RETIREMENT BENEFITS.

      On a Participant's Retirement Date, his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.

SECTION 5.02--DEATH BENEFITS.

      If a Participant dies before his Annuity Starting Date, his Vested Account
shall be distributed according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.

SECTION 5.03--VESTED BENEFITS.

      A Participant may receive a distribution of his Vested Account at any time
after he ceases to be an Employee, provided he has not again become an Employee.
However, if the Participant is entitled to an allocation of Employer
Contributions or Forfeitures in the Plan Year in which separation of service
occurs, the distribution may not commence earlier than the first day of the Plan
Year beginning after that separation from service. If such amount is not payable
under the provisions of the SMALL AMOUNTS SECTION of Article IX, it will be
distributed only if the Participant so elects. The Participant's election shall
be subject to the requirements in the ELECTION PROCEDURES SECTION of Article VI
for a qualified election of a retirement benefit.

      If a Participant does not receive an earlier distribution according to the
provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon his
Retirement Date or death, his Vested Account

                                       49
<PAGE>   53

shall be applied according to the provisions of the RETIREMENT BENEFITS SECTION
or the DEATH BENEFITS SECTION of Article V.

      The Nonvested Account of a Participant who has ceased to be an Employee
shall remain a part of his Account until it becomes a Forfeiture; provided,
however, if the Participant again becomes an Employee so that his Vesting
Percentage can increase, the Nonvested Account may become a part of his Vested
Account.

SECTION 5.04--WHEN BENEFITS START.

      Benefits under the Plan begin when a Participant retires, dies or ceases
to be an Employee, whichever applies, as provided in the preceding sections of
this article. Benefits which begin before Normal Retirement Date for a
Participant who became Totally and Permanently Disabled when he was an Employee
shall be deemed to begin because he is Totally and Permanently Disabled. The
start of benefits is subject to the qualified election procedures of Article VI.

      Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:

      (a)   The date the Participant attains age 65 (Normal Retirement Age, if
            earlier).

      (b)   The tenth anniversary of the Participant's Entry Date.

      (c)   The date the Participant ceases to be an Employee.

      Notwithstanding the foregoing, the failure of a Participant and spouse to
consent to a distribution while a benefit is immediately distributable, within
the meaning of the ELECTION PROCEDURES SECTION of Article VI, shall be deemed to
be an election to defer commencement of payment of any benefit sufficient to
satisfy this section.

      The Participant may elect to have his benefits begin after the latest date
for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal Retirement
Date or the date he ceases to be an Employee, if later. The election must
describe the form of distribution and the -,ate the benefits will begin. The
Participant shall not elect a date for beginning benefits or a form of
distribution that would result in a benefit payable when he dies which would be
more than incidental within the meaning of governmental regulations.

      Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.

      Contributions which are used to compute the Actual Deferral Percentage, as
defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially

                                       50
<PAGE>   54

all of the assets (within the meaning of Code Section 409(d)(2)) used by the
Employer in a trade or business or disposition by the Employer of the Employer's
interest in a subsidiary (within the meaning of Code Section 409(d)(3)) if the
transferee corporation is not a Controlled Group member, the Employee continues
employment with the transferee corporation and the transferor corporation
continues to maintain the Plan. Such distributions made after March 31, 1988,
must be made in a single sum.

SECTION 5.05--WITHDRAWAL PRIVILEGES.

      A Participant may withdraw all or any portion of his Vested Account which
results from the following Contributions

      Elective Deferral Contributions in the event of hardship due to an
immediate and heavy financial need. Withdrawals from the Participant's Account
resulting from Elective Deferral Contributions shall be limited to the amount of
the Participant's Elective Deferral Contributions. Immediate and heavy financial
need shall be limited to: (i) expenses incurred or necessary for medical care,
described in Code Section 213(d), of the Participant, the Participant's spouse,
or any dependents of the Participant (as defined in Code Section 152); (ii)
purchase (excluding mortgage payments) of a principal residence for the
Participant; (iii) payment of tuition and related educational fees and the
payment of room and board expenses for the next 12 months of post-secondary
education for the Participant, his spouse, children or dependents; (iv) the need
to prevent the eviction of the Participant from his principal residence or
foreclosure on the mortgage of the Participant's principal residence; or (v) any
other distribution which is deemed by the Commissioner of Internal Revenue to be
made on account of immediate and heavy financial need as provided in Treasury
regulations. The Participant's request for a withdrawal shall include his
written statement that an immediate and heavy financial need exists and explain
its nature.

      No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed necessary
only if all of the following requirements are met: (i) the distribution is not
in excess of the amount of the immediate and heavy financial need of the
Participant (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); (ii) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer; (iii) the Plan, and all other plans maintained
by the Employer, provide that the Participant's elective contributions and
employee contributions will be suspended for at least 12 months after receipt of
the hardship distribution; and (iv) the Plan, and all other plans maintained by
the Employer, provide that the Participant may not make elective contributions
for the Participant's taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under Code Section
402(g) for such next taxable year less the amount of such Participant's elective
contributions for the taxable year of the hardship distribution. The Plan will
suspend elective contributions and employee contributions for 12 months and
limit elective deferrals as provided in the preceding sentence. A Participant
shall not cease to be an Eligible Participant, as defined in the EXCESS AMOUNTS
SECTION of Article III, merely because his elective contributions or employee
contributions are suspended.

                                       51
<PAGE>   55

      A request for withdrawal shall be in writing on a form furnished for that
purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.

      A forfeiture shall not occur solely as a result of a withdrawal.

SECTION 5.06--LOANS TO PARTICIPANTS.

      Loans shall be made available to all Participants on a reasonably
equivalent basis from the Participant's Account resulting from their- Elective
Deferral Contributions and Matching Contributions. For purposes of this section,
Participant means any Participant or Beneficiary who is a party-in-interest,
within the meaning of Section 3(14) of the Employee Retirement Income Security
Act of 1974 (ERISA). Loans shall not be made to highly compensated employees, as
defined in Code Section 414(q), in an amount greater than the amount made
available to other Participants.

      No loans will be made to any shareholder-employee or owner-employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section 318(a)(1)), on any day
during the taxable year of such corporation, more than 5% of the outstanding
stock of the corporation.

      A loan to a Participant shall be a Participant-directed investment of his
Account. No Account other than the borrowing Participant's Account shall share
in the interest paid on the loan or bear any expense or loss incurred because of
the loan.

      The number of outstanding loans shall be limited to two. No more than two
loans will be approved for any Participant in any 12-month period. The minimum
amount of any loan shall be $400.

      Loans must be adequately secured and bear a reasonable rate of interest.

      The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:

      (a)      $50,000 reduced by the highest outstanding loan balance of loans
               during the one-year period ending on the day before the new loan
               is made.

      (b)      The greater of (1) or (2), reduced by (3) below:

               (1)     One-half of the Participant's Vested Account.

               (2)     $10,000.

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<PAGE>   56

               (3)     Any outstanding loan balance on the date the new loan is
                       made.

For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.

      The foregoing notwithstanding, the amount of such loan shall not exceed
50% of the amount of the Participant's Vested Account resulting from Elective
Deferral Contributions and Matching Contributions. For purposes of this maximum,
a Participant's Vested Account does not include any accumulated deductible
employee contributions, as defined in Code Section 72(o)(5)(B). No collateral
other than a portion of the Participant's Vested Account (as limited above)
shall be accepted. The Loan Administrator shall determine if the collateral is
adequate for the amount of the loan requested.

      A Participant must obtain the consent of the Participant's spouse, if any,
to the use of the Vested Account as security for the loan. Spousal consent shall
be obtained no earlier than the beginning of the 90-day period that ends on the
date on which the loan to be so secured is made. The consent must be in writing,
must acknowledge the effect of the loan, and must be witnessed by a plan
representative or a notary public. Such consent shall thereafter be binding with
respect to the consenting spouse or any subsequent spouse with respect to that
loan. A new consent shall be required if the Vested Account is used for
collateral upon renegotiation, extension, renewal, or other revision of the
loan.

      If a valid spousal consent has been obtained in accordance with the above,
then, notwithstanding any other provision of this Plan, the portion of the
Participant's Vested Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be taken into account for
purp9ses of determining the amount of the Vested Account payable at the time of
death or distribution, but only if the reduction is used as repayment of the
loan. If less than 100(Degree)k of the Participant's Vested Account (determined
without regard to the preceding sentence) is payable to the surviving spouse,
then the Vested Account shall be adjusted by first reducing the Vested Account
by the amount of the security used as repayment of the loan, and then
determining the benefit payable to the surviving spouse.

      Each loan shall bear a reasonable fixed rate of interest to be determined
by the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial lenders for loans of comparable risk on similar terms and
for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate among
Participants in the matter of interest rates; but loans granted at different
times may bear different interest rates in accordance with the current
appropriate standards.

      The loan shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less frequently than quarterly,
over a period not extending beyond five years from the date of the loan. The
period of repayment for any loan shall be arrived at by mutual agreement between
the Loan Administrator and the Participant.

                                       53
<PAGE>   57

      The Participant shall make a written application for a loan from the Plan
on forms provided by the Loan Administrator. The application must specify the
amount and duration requested. No loan will be approved unless the Participant
is creditworthy. The Participant must grant authority to the Loan Administrator
to investigate the Participant's creditworthiness so that the loan application
may be properly considered.

      Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will be
able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning the
creditworthiness and/or credit history of the Participant to determine whether a
loan should be approved.

      Each loan shall be fully documented in the form of a promissory note
signed by the Participant for the face amount of the loan, together with
interest determined as specified above.

      There will be an assignment of collateral to the Plan executed at the time
the loan is made.

      In those cases where repayment through payroll deduction by the Employer
is available, installments are so payable, and a payroll deduction agreement
will be executed by the Participant at the time of making the loan.

      Where payroll deduction is not available, payments are to be timely made.

      Any payment that is not by payroll deduction shall be made payable to the
Employer or Trustee, as specified in the promissory note, and delivered to the
Loan Administrator, including prepayments, service fees and penalties, if any,
and other amounts due under the note.

      The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so provides,
such amounts may be assessed and collected from the Account of the Participant
as part of the loan balance.

      Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.

      If any amount remains unpaid for more than 31 days after due, a default is
deemed to occur.

      Upon default, the Plan has the right to pursue any remedy available by law
to satisfy the amount due, along with accrued interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.

      If any payment of principal or interest or any other amount due under the
promissory note, or any portion thereof, is not made for a period of 90 days
after due, the entire principal balance whether or not

                                       54
<PAGE>   58

otherwise then due, shall become immediately due and payable without demand or
notice, and subject to collection or satisfaction by any lawful means, including
specifically but not limited to the right to enforce the claim against the
security pledged and to execute upon the collateral as allowed by law.

      In the event of default, foreclosure on the note and attachment of
security or use of amounts pledged to satisfy the amount then due, will not
occur until a distributable event occurs in accordance with the Plan, and will
not occur to an extent greater than the amount then available upon any
distributable event which has occurred under the Plan.

      All reasonable costs and expenses, including but not limited to attorney's
fees, incurred by the Plan in connection with any default or in any proceeding
to enforce any provision of a promissory note or instrument by which a
promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.

      If payroll deduction is being utilized, in the event that a Participant's
available payroll deduction amounts in any given month are insufficient to
satisfy the total amount due, there will be an increase in the amount taken
subsequently, sufficient to make up the amount that is then due. If the
subsequent deduction is also insufficient to satisfy the amount due within 31
days, a default is deemed to occur as above. If any amount remains past due more
than 90 days, the entire principal amount, whether or not otherwise then due,
along with interest then accrued and any other amount then due under the
promissory note, shall become due and payable, as above.

      If the Participant ceases to be a party-in-interest (as defined in this
section) the balance of the outstanding loan becomes due and payable, and the
Participant's Vested Account will be used as available for distribution(s) to
pay the outstanding loan. The Participant's Vested Account will not be used to
pay any amount due under the outstanding loan before the date which is 31 days
after the date he ceased to be an Employee, and the Participant may elect to
repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan, this will not occur until the time,
or in excess of the extent to which, a distributable event occurs under the
Plan.

                                       55
<PAGE>   59

                                   ARTICLE VI

                            DISTRIBUTION OF BENEFITS

SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.

      Unless a qualified election of an optional form of benefit has been made
within the election period (see the ELECTION PROCEDURES SECTION of Article VI),
the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:

      (a)      The automatic form of retirement benefit for a Participant who
               does not die before his Annuity Starting Date shall be the
               Qualified Joint and Survivor Form.

      (b)      The automatic form of death benefit for a Participant who dies
               before his Annuity Starting Date shall be:

               (1)     A Qualified Preretirement Survivor Annuity for a
                       Participant who has a spouse to whom he has been
                       continuously married throughout the one-year period
                       ending on the date of his death. The spouse may elect to
                       start receiving the death benefit on any first day of the
                       month on or after the Participant dies and before the
                       date the Participant would have been age 70 1 /2. If the
                       spouse dies before benefits start, the Participant's
                       Vested Account, determined as of the date of the spouse's
                       death, shall be paid to the spouse's Beneficiary.

               (2)     A single-sum payment to the Participant's Beneficiary for
                       a Participant who does not have a spouse who is entitled
                       to a Qualified Preretirement Survivor Annuity.

               Before a death benefit will be paid on account of the death of a
               Participant who does not have a spouse who is entitled to a
               Qualified Preretirement Survivor Annuity, it must be established
               to the satisfaction of a plan representative that the Participant
               does not have such a spouse.

SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
              REQUIREMENTS.

      (a)      For purposes of this section, the following terms are defined:

               Applicable Life Expectancy means Life Expectancy (or Joint and
               Last Survivor Expectancy) calculated using the attained age of
               the Participant (or Designated Beneficiary) as of the
               Participant's (or Designated Beneficiary's) birthday in the
               applicable calendar year reduced by one for each calendar year
               which has elapsed since the date Life Expectancy was first
               calculated. If Life Expectancy is being recalculated, the
               Applicable Life Expectancy shall be the Life Expectancy so
               recalculated. The applicable calendar year shall be the first
               Distribution Calendar Year, and if Life Expectancy is being
               recalculated such succeeding calendar year.

                                       56
<PAGE>   60

               Designated Beneficiary means the individual who is designated as
               the beneficiary under the Plan in accordance with Code Section
               401(a)(9) and the regulations thereunder.

               Distribution Calendar Year means a calendar year for which a
               minimum distribution is required. For distributions beginning
               before the Participant's death, the first Distribution Calendar
               Year is the calendar year immediately preceding the calendar year
               which contains the Participant's Required Beginning Date. For
               distributions beginning after the Participant's death, the first
               Distribution Calendar Year is the calendar year in which
               distributions are required to begin pursuant to (e) below.

               Joint and Last Survivor Expectancy means joint and last survivor
               expectancy computed by use of the expected return multiples in
               Table VI of section 1 .72-9 of the Income Tax Regulations.

               Unless otherwise elected by the Participant (or spouse, in the
               case of distributions described in (e)(2)(ii) below) by the time
               distributions are required to begin, life expectancies shall be
               recalculated annually. Such election shall be irrevocable as to
               the Participant (or spouse) and shall apply to all subsequent
               years. The life expectancy of a nonspouse Beneficiary may not be
               recalculated.

               Life Expectancy means life expectancy computed by use of the
               expected return multiples in Table V of section 1 .72-9 of the
               Income Tax Regulations.

               Unless otherwise elected by the Participant (or spouse, in the
               case of distributions described in (e) (2)(ii) below) by the time
               distributions are required to begin, life expectancies shall be
               recalculated annually. Such election shall be irrevocable as to
               the Participant (or spouse) and shall apply to all subsequent
               years. The life expectancy of a nonspouse Beneficiary may not be
               recalculated.

               Participant's Benefit means

               (1)     The Account balance as of the last valuation date in the
                       calendar year immediately preceding the Distribution
                       Calendar Year (valuation calendar year) increased by the
                       amount of any contributions or forfeitures allocated to
                       the Account balance as of the dates in the valuation
                       calendar year after the valuation date and decreased by
                       distributions made in the valuation calendar year after
                       the valuation date.

               (2)     For purposes of (1) above, if any portion of the minimum
                       distribution for the first Distribution Calendar Year is
                       made in the second Distribution Calendar Year on or
                       before the Required Beginning Date, the amount of the
                       minimum distribution made in the second Distribution
                       Calendar Year shall be treated as if it had been made in
                       the immediately preceding Distribution Calendar Year.

      Required Beginning Date means, for a Participant, the first day of April
      of the calendar year following

                                       57
<PAGE>   61

      the calendar year in which the Participant attains age 70 1 /2, unless
      otherwise provided in (1), (2) or (3) below:

      (1)      The Required Beginning Date for a Participant who attains age 70
               1 /2 before January 1, 1988, and who is not a 5-percent owner is
               the first day of April of the calendar year following the
               calendar year in which the later of retirement or attainment of
               age 70 1 /2 occurs.

      (2)      The Required Beginning Date for a Participant who attains age
               70 1 /2 before January 1, 1988, and who is a 5-percent owner
               is the first day of April of the calendar year following the
               later of

                       (i)      the calendar year in which the Participant
                                attains age 70 1 /2, or

                       (ii)     the earlier of the calendar year with or within
                                which ends the Plan Year in which the
                                Participant becomes a 5-percent owner, or the
                                calendar year in which the Participant retires.

               (3)     The Required Beginning Date of a Participant who is not
                       a 5-percent owner and who attains age 70 1 /2 during
                       1988 and who has not retired as of January 1, 1989, is
                       April 1, 1990.

               A Participant is treated as a 5-percent owner for purposes of
               this section if such Participant is a 5-percent owner as defined
               in Code Section 416(i) (determined in accordance with Code
               Section 416 but without regard to whether the Plan is top-heavy)
               at any time during the Plan Year ending with or within the
               calendar year in which such owner attains age 66 1 /2 or any
               subsequent Plan Year.

               Once distributions have begun to a 5-percent owner under this
               section, they must continue to be distributed, even if the
               Participant ceases to be a 5-percent owner in a subsequent year.

      (b)      The optional forms of retirement benefit shall be the
               following: a straight life annuity; single life annuities with
               certain periods of five, ten or fifteen years; a single life
               annuity with installment refund; survivorship life annuities
               with installment refund and survivorship percentages of 50, 66
               2/3 or 100; fixed period annuities for any period of whole
               months which is not less than 60 and does not exceed the Life
               Expectancy of the Participant and the named Beneficiary as
               provided in (d) below where the Life Expectancy is not
               recalculated; and a series of installments chosen by the
               Participant with a minimum payment each year beginning with
               the year the Participant turns age 70 1 /2. The payment for
               the first year in which a minimum payment is required will be
               made by April 1 of the following calendar year. The payment
               for the second year and each successive year will be made by
               December 31 of that year. The minimum payment will be based on
               a period equal to the Joint and Last Survivor Expectancy of
               the Participant and the Participant's spouse, if any, as
               provided in (d) below where the Joint and Last Survivor
               Expectancy is recalculated. The balance of the Participant's
               Vested Account,

                                       58
<PAGE>   62

               if any, will be payable on the Participant's death to his
               Beneficiary in a single sum. The Participant may also elect to
               receive his Vested Account in a single-sum payment.

               Election of an optional form is subject to the qualified election
               provisions of Article VI.

               Any annuity contract distributed shall be nontransferable. The
               terms of any annuity contract purchased and distributed by the
               Plan to a Participant or spouse shall comply with the
               requirements of this Plan.

      (c)      The optional forms of death benefit are a single-sum payment and
               any annuity that is an optional form of retirement benefit.
               However, a series of installments shall not be available if the
               Beneficiary is not the spouse of the deceased Participant.

      (d)      Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article
               VI, joint and survivor annuity requirements, the requirements of
               this section shall apply to any distribution of a Participant's
               interest and will take precedence over any inconsistent
               provisions of this Plan. Unless otherwise specified, the
               provisions of this section apply to calendar years beginning
               after December 31, 1984.

               All distributions required under this section shall be determined
               and made in accordance with the proposed regulations under Code
               Section 401(a)(9), including the minimum distribution incidental
               benefit requirement of section 1.401(a)(9)-2 of the proposed
               regulations.

               The entire interest of a Participant must be distributed or begin
               to be distributed no later than the Participant's Required
               Beginning Date.

               As of the first Distribution Calendar Year, distributions, if not
               made in a single sum, may only be made over one of the following
               periods (or combination thereof):

               (1)     the life of the Participant,

               (2)     the life of the Participant and a Designated Beneficiary,

               (3)     a period certain not extending beyond the Life
                       Expectancy of the Participant, or

               (4)     a period certain not extending beyond the Joint and Last
                       Survivor Expectancy of the Participant and a Designated
                       Beneficiary.

               If the Participant's interest is to be distributed in other than
               a single sum, the following minimum distribution rules shall
               apply on or after the Required Beginning Date:

               (5)     Individual account:

                                       59
<PAGE>   63

                       (i)      If a Participant's Benefit is to be distributed
                                over

                                (a)      a period not extending beyond the Life
                                         Expectancy of the Participant or the
                                         Joint Life and Last Survivor
                                         Expectancy of the Participant and the
                                         Participant's Designated Beneficiary
                                         or

                                (b)      a period not extending beyond the Life
                                         Expectancy of the Designated
                                         Beneficiary,

                                the amount required to be distributed for each
                                calendar year beginning with the distributions
                                for the first Distribution Calendar Year, must
                                be at least equal to the quotient obtained by
                                dividing the Participant's Benefit by the
                                Applicable Life Expectancy.

                       (ii)     For calendar years beginning before January 1,
                                1989, if the Participant's spouse is not the
                                Designated Beneficiary, the method of
                                distribution selected must assure that at least
                                5096 of the present value of the amount
                                available for distribution is paid within the
                                Life Expectancy of the Participant.

                       (iii)    For calendar years beginning after December 31,
                                1988, the amount to be distributed each year,
                                beginning with distributions for the first
                                Distribution Calendar Year shall not be less
                                than the quotient obtained by dividing the
                                Participant's Benefit by the lesser of

                                (a)      the Applicable Life Expectancy or

                                (b)      if the Participant's spouse is not the
                                         Designated Beneficiary, the applicable
                                         divisor determined from the table set
                                         forth in Q&A-4 of section 1.401 (a)
                                         (9)-2 of the proposed regulations.

                                Distributions after the death of the Participant
                                shall be distributed using the Applicable Life
                                Expectancy in (5)(i) above as the relevant
                                divisor without regard to Proposed Regulations
                                section 1.401(a)(9)-2.

                       (iv)     The minimum distribution required for the
                                Participant's first Distribution Calendar Year
                                must be made on or before the Participant's
                                Required Beginning Date. The minimum
                                distribution for the Distribution Calendar Year
                                for other calendar years, including the minimum
                                distribution for the Distribution Calendar Year
                                in which the Participant's Required Beginning
                                Date occurs, must be made on or before December
                                31 of that Distribution Calendar Year.

               (6)     Other forms:

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<PAGE>   64

                       (i)      If the Participant's Benefit is distributed in
                                the form of an annuity purchased from an
                                insurance company, distributions thereunder
                                shall be made in accordance with the
                                requirements of Code Section 401 (a) (9) and the
                                proposed regulations thereunder.

      (e)      Death distribution provisions:

               (1)     Distribution beginning before death. If the Participant
                       dies after distribution of his interest has begun, the
                       remaining portion of such interest will continue to be
                       distributed at least as rapidly as under the method of
                       distribution being used prior to the Participant's death.

               (2)     Distribution beginning after death. If the Participant
                       dies before distribution of his interest begins,
                       distribution of the Participant's entire interest shall
                       be completed by December 31 of the calendar year
                       containing the fifth anniversary of the Participant's
                       death except to the extent that an election is made to
                       receive distributions in accordance with (i) or (ii)
                       below:

                       (i)      if any portion of the Participant's interest is
                                payable to a Designated Beneficiary,
                                distributions may be made over the life or over
                                a period certain not greater than the Life
                                Expectancy of the Designated Beneficiary
                                commencing on or before December 31 of the
                                calendar year immediately following the calendar
                                year in which the Participant died;

                       (ii)     if the Designated Beneficiary is the
                                Participant's surviving spouse, the date
                                distributions are required to begin in
                                accordance with (i) above shall not be earlier
                                than the later of

                                (a)      December 31 of the calendar year
                                         immediately following the calendar
                                         year in which the Participant died and

                                (b)      December 31 of the calendar year in
                                         which the Participant would have
                                         attained age 70 1/2.

                       If the Participant has not made an election pursuant to
                       this (e)(2) by the time of his death, the Participant's
                       Designated Beneficiary must elect the method of
                       distribution no later than the earlier of

                       (iii)    December 31 of the calendar year in which
                                distributions would be required to begin under
                                this subparagraph, or

                       (iv)     December 31 of the calendar year which contains
                                the fifth anniversary of the date of death of
                                the Participant.

                                       61
<PAGE>   65

                       If the Participant has no Designated Beneficiary, or if
                       the Designated Beneficiary does not elect a method of
                       distribution, distribution of the Participant's entire
                       interest must be completed by December 31 of the calendar
                       year containing the fifth anniversary of the
                       Participant's death.

               (3)     For purposes of (e)(2) above, if the surviving spouse
                       dies after the Participant, but before payments to such
                       spouse begin, the provisions of (e)(2) above, with the
                       exception of (e)(2)(ii) therein, shall be applied as if
                       the surviving spouse were the Participant.

               (4)     For purposes of this (e), any amount paid to a child of
                       the Participant will be treated as if it had been paid to
                       the surviving spouse if the amount becomes payable to the
                       surviving spouse when the child reaches the age of
                       majority.

               (5)     For purposes of this (e), distribution of a Participant's
                       interest is considered to begin on the Participant's
                       Required Beginning Date (or if (e)(3) above is
                       applicable, the date distribution is required to begin to
                       the surviving spouse pursuant to (e)(2) above). If
                       distribution in the form of an annuity irrevocably
                       commences to the Participant before the Required
                       Beginning Date, the date distribution is considered to
                       begin is the date distribution actually commences.

SECTION 6.02A--DISTRIBUTIONS IN QUALIFYING EMPLOYER SECURITIES.

      Except as otherwise provided in this section, the Trustee shall distribute
a Participant's accrued benefit in whole shares of Qualifying Employer
Securities, cash, or a combination of both, as determined by the Employer;
provided, however, that a Participant has the right to demand distribution of
his Qualifying Employer Securities Account balance entirely in whole shares of
Qualifying Employer Securities. The Trustee will pay in cash any fractional
security share to which a Participant or his Beneficiary is entitled.

      Notwithstanding the foregoing provisions of this section, if the
Employer's charter or bylaws restrict ownership of substantially all shares of
Qualifying Employer Securities to Employees and the Trust, as described in Code
Section 409(h)(2), the Trustee will make the distribution of a Participant's
accrued benefit entirely in cash.

      Notwithstanding the preceding provisions of this section, the Trustee, if
directed in writing by the Plan Administrator, will pay, in cash, any cash
dividends on Qualifying Employer Securities allocated, or allocable to
Participants' Qualifying Employer Securities Accounts, irrespective of whether a
Participant is fully vested in his Qualifying Employer Securities Account. The
Plan Administrator's direction must state whether the Trustee is to pay the cash
dividend distributions currently, or within the 90 day period following the
close of the Plan Year in which the Employer pays the dividends to the Trust.
The Plan Administrator may request the Employer to pay dividends on Qualifying
Employer Securities directly to Participants.

                                       62
<PAGE>   66

      Election of such distribution is subject to the qualified election
provisions of Article VI.

SECTION 6.03--ELECTION PROCEDURES.

      The Participant, Beneficiary, or spouse shall make any election under this
section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the p visions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election pr.)visions of (c) below.

      (a)      Retirement Benefits. A Participant may elect his Beneficiary or
               Contingent Annuitant and may elect to have retirement benefits
               distributed under any of the optional forms of retirement benefit
               described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
               REQUIREMENTS SECTION of Article VI.

      (b)      Death Benefits. A Participant may elect his Beneficiary and may
               elect to have death benefits distributed under any of the
               optional forms of death benefit described in the OPTIONAL FORMS
               OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article
               VI.

               If the Participant has not elected an optional form of
               distribution for the death benefit payable to his Beneficiary,
               the Beneficiary may, for his own benefit, elect the form of
               distribution, in like manner as a Participant.

               The Participant may waive the Qualified Preretirement Survivor
               Annuity by naming someone other than his spouse as Beneficiary.

               In lieu of the Qualified Preretirement Survivor Annuity described
               in the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the
               spouse may, for his own benefit, waive the Qualified
               Preretirement Survivor Annuity by electing to have the benefit
               distributed under any of the optional forms of death benefit
               described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
               REQUIREMENTS SECTION of Article VI.

      (c)      Qualified Election. The Participant, Beneficiary or spouse may
               make an election at any time during the election period. The
               Participant, Beneficiary, or spouse may revoke the election made
               (or make a new election) at any time and any number of times
               during the election period. An election is effective only if it
               meets the consent requirements below.

               The election period as to retirement benefits is the 90-day
               period ending on the Annuity Starting Date. An election to waive
               the Qualified Joint and Survivor Form may not be made before the
               date he is provided with the notice of the ability to waive the
               Qualified Joint and Survivor Form. If the Participant elects the
               series of installments, he may elect on any later date to have
               the balance of his Vested Account paid under any of the optional
               forms of retirement benefit available under the Plan. His
               election period for this election is the 90-day period ending on

                                       63
<PAGE>   67

               the Annuity Starting Date for the optional form of retirement
               benefit elected.

               A Participant may make an election as to death benefits at any
               time before he dies. The spouse's election period begins on the
               date the Participant dies and ends on the date benefits begin.
               The Beneficiary's election period begins on the date the
               Participant dies and ends on the date benefits begin. An election
               to waive the Qualified Preretirement Survivor Annuity may not be
               made by the Participant before the date he is provided with the
               notice of the ability to waive the Qualified Preretirement
               Survivor Annuity. A Participant's election to waive the Qualified
               Preretirement Survivor Annuity which is made before the first day
               of the Plan Year in which he reaches age 35 shall become invalid
               on such date. An election made by a Participant after he ceases
               to be an Employee will not become invalid on the first day of the
               Plan Year in which he reaches age 35 with respect to death
               benefits from that part of his Account resulting from
               Contributions made before he ceased to be an Employee.

               If the Participant's Vested Account has at any time exceeded
               $3,500, any benefit which is (1) immediately distributable or (2)
               payable in a form other than a Qualified Joint and Survivor Form
               or a Qualified Preretirement Survivor Annuity requires the
               consent of the Participant and the Participant's spouse (or where
               either the Participant or the spouse has died, the survivor). The
               consent of the Participant or spouse to a benefit which is
               immediately distributable must not be made before the date the
               Participant or spouse is provided with the notice of the ability
               to defer the distribution. Such consent shall be made in writing.
               The consent shall not be made more than 90 days before the
               Annuity Starting Date. Spousal consent is not required for a
               benefit which is immediately distributable in a Qualified Joint
               and Survivor Form. Furthermore, if spousal consent is not
               required because the Participant is electing an optional form of
               retirement benefit that is not a life annuity pursuant to (d)
               below, only the Participant need consent to the distribution of a
               benefit payable in a form that is not a life annuity and which is
               immediately distributable. Neither the consent of the Participant
               nor the Participant's spouse shall be required to the extent that
               a distribution is required to satisfy Code Section 401 (a) (9) or
               Code Section 415. In addition, upon termination of this Plan if
               the Plan does not offer an annuity option (purchased from a
               commercial provider), the Participant's Account balance may,
               without the Participant's consent, be distributed to the
               Participant or transferred to another defined contribution plan
               (other than an employee stock ownership plan as defined in Code
               Section 4975(e)(7)) within the same Controlled Group. A benefit
               is immediately distributable if any part of the benefit could be
               distributed to the Participant (or surviving spouse) before the
               Participant attains (or would have attained if not deceased) the
               older of Normal Retirement Age or age 62. If the Qualified Joint
               and Survivor Form is waived, the spouse has the right to limit
               consent only to a specific Beneficiary or a specific form of
               benefit. The spouse can relinquish one or both such rights. Such
               consent shall be made in writing. The consent shall not be made
               more than 90 days before the Annuity Starting Date. If the
               Qualified Preretirement Survivor Annuity is waived, the spouse
               has the right to limit consent only to a specific Beneficiary.
               Such consent shall be in writing. The spouse's consent shall be
               witnessed by a plan representative or notary public. The spouse's
               consent must acknowledge the effect of the election, including
               that the spouse had the right to limit consent only to a specific

                                       64
<PAGE>   68

               Beneficiary or a specific form of benefit, if applicable, and
               that the relinquishment of one or both such rights was voluntary.
               Unless the consent of the spouse expressly permits designations
               by the Participant without a requirement of further consent by
               the spouse, the spoue's consent must be limited to the form of
               benefit, if applicable, and the Beneficiary (includinc any
               Contingent Annuitant), class of Beneficiaries, or contingent
               Beneficiary named in the election. Spousal consent is not
               required, however, if the Participant establishes to the
               satisfaction of the plan representative that the consent of the
               spouse cannot be obtained because there is no spouse or the
               spouse cannot be located. A spouse's consent under this paragraph
               shall not be valid with respect to any other spouse. A
               Participant may revoke a prior election without the consent of
               the spouse. Any, new election will require a new spousal consent,
               unless the consent of the spouse expressly permits such election
               by the Participant without further consent by the spouse. A
               spouse's consent may be revoked at any time within the
               Participant's election period.

      (d)      Special Rule for Profit Sharing Plan. As provided in the
               preceding provisions of the Plan, if a Participant has a spouse
               to whom he has been continuously married throughout the one-year
               period ending on the date of his death, the Participant's Vested
               Account shall be paid to such spouse. However, if there is no
               such spouse or if the surviving spouse has already consented in a
               manner conforming to the qualified election requirements in (c)
               above, the Vested Account shall be payable to the Participant's
               Beneficiary in the event of the Participant's death.

               The Participant may waive the spousal death benefit described
               above at any time provided that no such waiver shall be effective
               unless it satisfies the conditions of (c) above (other than the
               notification requirement referred to therein) that would apply to
               the Participant's waiver of the Qualified Preretirement Survivor
               Annuity.

               Because this is a profit sharing plan which pays death benefits
               as described above, this subsection (d) applies if the following
               condition is met: with respect to the Participant, this Plan is
               not a direct or indirect transferee after December 31, 1984, of a
               defined benefit plan, money purchase plan (including a target
               plan), stock bonus plan or profit sharing plan which is subject
               to the survivor annuity requirements of Code Section 401 (a) (1
               1) and Code Section 417. If the above condition is met, spousal
               consent is not required for electing a benefit payable in a form
               that is not a life annuity. If the above condition is not met,
               the consent requirements of this article shall be operative.

SECTION 6.04--NOTICE REQUIREMENTS.

      (a)      Optional forms of retirement benefit. The Plan Administrator
               shall furnish to the Participant and the Participant's spouse a
               written explanation of the optional forms of retirement benefit
               in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
               REQUIREMENTS SECTIONof Article VI, including the material
               features and relative values of these options, in a manner that
               would satisfy the notice requirements of Code Section 417(a)(3)
               and the right of the Participant and the Participant's spouse to
               defer distribution until the benefit is no longer immediately
               distributable.

                                       65
<PAGE>   69

               The Plan Administrator shall furnish the written explanation by a
               method reasonably calculated to reach the attention of the
               Participant and the Participant's spouse no less than 30 days and
               no more than 90 days before the Annuity Starting Date.

      (b)      Qualified Joint and Survivor Form. The Plan Administrator shall
               furnish to the Participant a written explanation of the
               following: the terms and conditions of the Qualified Joint and
               Survivor Form; the Participant's right to make, and the effect
               of, an election to waive the Qualified Joint and Survivor Form;
               the rights of the Participant's spouse; and the right to revoke
               an election and the effect of such a revocation. The Plan
               Administrator shall furnish the written explanation by a method
               reasonably calculated to reach the attention of the Participant
               no less than 30 days and no more than 90 days before the Annuity
               Starting Date.

               After the written explanation is given, a Participant or spouse
               may make written request for additional information. The written
               explanation must be personally delivered or mailed (first class
               mail, postage prepaid) to the Participant or spouse within 30
               days from the date of the written request. The Plan Administrator
               does not need to comply with more than one such request by a
               Participant or spouse.

               The Plan Administrator's explanation shall be written in
               nontechnical language and will explain the terms and conditions
               of the Qualified Joint and Survivor Form and the financial effect
               upon the Participant's benefit (in terms of dollars per benefit
               payment) of electing not to have benefits distributed in
               accordance with the Qualified Joint and Survivor Form.

      (c)      Qualified Preretirement Survivor Annuity. As required by the Code
               and Federal regulation, the Plan Administrator shall furnish to
               the Participant a written explanation of the following: the terms
               and conditions of the Qualified Preretirement Survivor Annuity;
               the Participant's right to make, and the effect of, an election
               to waive the Qualified Preretirement Survivor Annuity; the rights
               of the Participant's spouse; and the right to revoke an election
               and the effect of such a revocation. The Plan Administrator shall
               furnish the written explanation by a method reasonably calculated
               to reach the attention of the Participant within the applicable
               period. The applicable period for a Participant is whichever of
               the following periods ends last:

               (1)     the period beginning one year before the date the
                       individual becomes a Participant and ending one year
                       after such date; or

               (2)     the period beginning one year before the date the
                       Participant's spouse is first entitled to a Qualified
                       Preretirement Survivor Annuity and ending one year after
                       such date.

               If such notice is given before the period beginning with the
               first day of the Plan Year in which the Participant attains age
               32 and ending with the close of the Plan Year preceding the Plan
               Year in which the Participant attains age 35, an additional
               notice shall be given within such period. If a Participant ceases
               to be an Employee before attaining age 35, an additional notice
               shall be given within the period beginning one year before the
               date he ceases to be an Employee

                                       66
<PAGE>   70

               and ending one year after such date.

               After the written explanation is given, a Participant or spouse
               may make written request for additional information. The written
               explanation must be personally delivered or mailed (first class
               mail, postage prepaid) to the Participant or spouse within 30
               days from the date of the written request. The Plan Administrator
               does not need to comply with more than one such request by a
               Participant or spouse.

               The Plan Administrator's explanation shall be written in
               nontechnical language and will explain the terms and conditions
               of the Qualified Preretirement Survivor Annuity and the financial
               effect upon the spouse's benefit (in terms of dollars per benefit
               payment) of electing not to have benefits distributed in
               accordance with the Qualified Preretirement Survivor Annuity.

SECTION 6.05--DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS.

      The Plan specifically permits distributions to an Alternate Payee under a
qualified domestic relations order as defined in Code Section 414(p), at any
time, irrespective of whether the Participant has attained his earliest
retirement age as defined in Code Section 414(p), under the Plan. A distribution
to an Alternate Payee before the Participant-s attainment of earliest retirement
age, as defined in Code Secti,)n 414(p), is available only if:

      1)       the order specifies distributions at that time or permits an
               agreement between the Plan and the Alternate Payee to authorize
               an earlier distribution; and

      2)       if the present value of the Alternate Payee's benefits under the
               Plan exceeds $3,500, and the order requires, the Alternate Payee
               consents to any distribution occurring before the Participant's
               attainment of earliest retirement age, as defined in Code Section
               414(p).

Nothing in this section shall permit a Participant a right to receive a
distribution at a time otherwise not permitted under the Plan nor shall it
permit the Alternate Payee to receive a form of payment not permitted under the
Plan.

      The Plan Administrator shall establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Plan Administrator promptly shall notify the Participant
and an Alternate Payee named in the order, in writing, of the receipt of the
order and the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic relations
order, the Plan Administrator shall determine the qualified status of the order
and shall notify the Participant and each Alternate Payee, in writing, of its
determination. The Plan Administrator shall provide notice under this paragraph
by mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations. The Plan
Administrator may treat as qualified any domestic relations order entered before
January 1, 1985, irrespective of whether it satisfies all the requirements
described in Code Section 414(p).

                                       67
<PAGE>   71

      If any portion of the Participant's Vested Account is payable during the
period the Plan Administrator is making its determination of the qualified
status of the domestic relations order, a separate accounting shall be made of
the amount payable. If the Plan Administrator determines the order is a
qualified domestic relations order within 18 months of the date amounts are
first payable following receipt of the order, the payable amount shall be
distributed in accordance with the order. If the Plan Administrator does not
make its determination of the qualified status of the order within the 18 month
determination period, the payable amounts shall be distributed in the manner the
Plan would distribute if the order did not exist and the order shall apply
prospectively if the Plan Administrator later determines the order is a
qualified domestic relations order.

      The Plan shall make payments or distributions required under this section
by separate benefit checks or other separate distribution to the Alternate
Payee(s).

                                       68
<PAGE>   72

                                   ARTICLE VII

                               TERMINATION OF PLAN

      The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at--any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions under
the Plan constitutes complete termination of Plan.

      The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.

      A Participant's Account which does not result from Contributions which are
used to compute the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.

      Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.

      The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if it
would contravene any provision of law.

                                       69
<PAGE>   73

                                  ARTICLE VIII

                             ADMINISTRATION OF PLAN

SECTION 8.01--ADMINISTRATION.

      Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has the power to construe the Plan, including ambiguous provisions, and to
determine all questions that may arise under the Plan, including all questions
relating to the eligibility of Employees to participate in the Plan and the
amount of benefit to which any Participant, Beneficiary, spouse or Contingent
Annuitant may become entitled. The Plan Administrator's decisions upon all
matters within the scope of its authority shall be final.

      Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.

      The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.

SECTION 8.02--RECORDS.

      All acts and determinations of the Plan Administrator shall oe duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.

      Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.

SECTION 8.03--INFORMATION AVAILABLE.

      Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Group Contract or any other instrument under which the Plan was established or
is operated. The Plan Administrator shall maintain all of the items listed

                                       70
<PAGE>   74

in this section in its office, or in such other place or places as it may
designate in order to comply with governmental regulations. These items may be
examined during reasonable business hours. Upon the written request of a
Participant or Beneficiary receiving benefits under the Plan, the Plan
Administrator will furnish him with a copy of any of these items. The Plan
Administrator may make a reasonable charge to the requesting person for the
copy.

SECTION 8.04--CLAIM AND APPEAL PROCEDURES.

      A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.

      If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days -)f
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within V s initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
 .gate by which the Plan Administrator's decision is expected to be rendered. The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.

      The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which denial
is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of the
Plan Administrator's notice of denial of benefits and that failure to make the
written appeal within such 60-day period shall render the Plan Administrator's
determination of such denial final, binding and conclusive.

      If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review, unless special circumstances
(such as a hearing) would make rendering a decision within the 60-day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.

SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.

      At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified or
registered mail addressed to his last known address and in accordance with the
notice requirements of Article VI, will notify him of his entitlement to a
benefit. If the Participant, spouse or

                                       71
<PAGE>   75

Beneficiary fails to claim the Vested Account or make his whereabouts known in
writing within six months from the date of mailing the notice, the Plan
Administrator may treat such unclaimed Vested Account as a forfeiture and apply
it according to the forfeiture provisions of Article III. If Article III
contains no forfeiture provisions, such amount will be applied to reduce the
earliest Employer Contributions due after the forfeiture arises.

      If a Participant's Vested Account is forfeited according to the provisions
of the above paragraph and the Participant, his spouse or his Beneficiary at any
time make a claim for benefits, the forfeited Vested Account shall be
reinstated, unadjusted for any gains or losses occurring after the date it was
forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of the
Plan.

SECTION 8.06--DELEGATION OF AUTHORITY.

      All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.

                                       72
<PAGE>   76

                                   ARTICLE IX

                               GENERAL PROVISIONS

SECTION 9.01--AMENDMENTS.

      The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined by
Internal Revenue Service regulations) to comply with the requirements of any law
or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued interest
or benefit of Participants or their Beneficiaries or eliminate an optional form
of distribution with respect to benefits attributable to service before the
amendment nor allow reversion or diversion of Plan assets to the Employer at any
time, except as may be necessary to comply with the requirements of any law or
regulation issued by any governmental agency to which the Employer is subject.
No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's Account or eliminating an optional form of benefit, with respect
to benefits attributable to service before the amendment shall be treated as
reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is
amended, in the case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's
employer-derived accrued benefit will not be less than his percentage computed
under the Plan without regard to such amendment.

      An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a change
in top-heavy status of the Plan as provided in the MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article X, changes the computation of the percentage
used to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant

      (a)      who has completed at least three Years of Service on the date the
               election period described below ends (five Years of Service if
               the Participant does not have at least one Hour-of-Service in a
               Plan Year beginning after December 31, 1988) and

      (b)      whose nonforfeitable percentage will be determined on any
               date after the date of the change

may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. An election does not need to
be provided for any Participant or former Participant whose nonforfeitable
percentage, determined according to the Plan provisions as changed, cannot at
any time be less than the percentage determined without regard to such change.
The election period shall begin no later than the date the Plan amendment is
adopted, or deemed adopted in the case of a change in the top-heavy status of
the Plan, and end no earlier than the sixtieth day after the latest of the date
the amendment is adopted (deemed adopted) or becomes effective, or the date the
Participant is issued written notice of the amendment (deemed

                                       73
<PAGE>   77

amendment) by the Employer or the Plan Administrator.

SECTION 9.02--DIRECT ROLLOVERS.

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

SECTION 9.03--MERGERS AND DIRECT TRANSFERS.

      The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if this Plan had then terminated).
The Employer may enter into merger agreements or direct transfer of assets
agreements with the employers under other retirement plans which are qualifiable
under Code Section 401(a), including an elective transfer, and may accept the
direct transfer of plan assets, or may transfer plan assets, as a party to any
such agreement. The Employer shall not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan if such action
would result in a defined benefit feature being maintained under this Plan.

      The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee, until the time he meets all of the requirements to become
an Active Participant.

      The Plan shall hold, administer and distribute the transferred assets as a
part of the Plan. The Plan shall maintain a separate account for the benefit of
the Employee on whose behalf the Plan accepted the transfer in order to reflect
the value of the transferred assets. Unless a transfer of assets to the Plan is
an elective transfer, the Plan shall apply the optional forms of benefit
protections described in the AMENDMENTS SECTION of Article IX to all transferred
assets. A transfer is elective if: (1) the transfer is voluntary, under a fully
informed election by the Participant; (2) the Participant has an alternative
that retains his Code Section 411(d)(6) protected benefits (including an option
to leave his benefit in the transferor plan, if that plan is not terminating);
(3) if the transferor plan is subject to Code Sections 401(a)(11) and 417, the
transfer satisfies the applicable spousal consent requirements of the Code; (4)
the notice requirements under Code Section 417, requiring a written explanation
with respect to an election not to receive benefits in the form of a qualified
joint and survivor annuity, are met with respect to the Participant and spousal
transfer election; (5) the Participant has a right to immediate distribution
from the transferor plan under provisions in the plan not inconsistent with Code
Section 401(a); (6) the transferred benefit is equal to the Participant's entire
nonforfeitable accrued benefit under the transferor plan, calculated to be at
least the greater of the

                                       74
<PAGE>   78

single sum distribution provided by the transferor plan (if any) or the present
value of the Participant's accrued benefit under the transferor plan payable at
the plan's normal retirement age and calculated using an interest rate subject
to the restrictions of Code Section 417(e) and subject to the overall
limitations of Code Section 415; (7) the Participant has a 100% nonforfeitable
interest in the transferred benefit; and (8) the transfer otherwise satisfies
applicable Treasury regulations.

SECTION 9.04--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.

      The obligations of an Insurer shall be governed solely by the provisions
of the Group Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Group Contract. See the
CONSTRUCTION SECTION of this article.

      Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments, and any other written agreements entered
into with the Trustee.

      Such Insurer, issuer or distributor is not a party to the Plan, nor bound
in any way by the Plan provisions. Such parties shall not be required to look to
the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.

      Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming that the Plan has not been amended or terminated and in dealing with
any party acting as Trustee according to the latest information which they have
received at their home office or principal address.

SECTION 9.05--EMPLOYMENT STATUS.

      Nothing contained in this Plan gives an Employee the right to be retained
in the Employer's employ or to interfere with the Employer's right to discharge
any Employee.

SECTION 9.06--RIGHTS TO PLAN ASSETS.

      No Employee shall have any right to or interest in any assets of the Plan
upon termination of his employment or otherwise except as specifically provided
under this Plan, and then only to the extent of the benefits payable to such
Employee in accordance with Plan provisions.

      Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.

                                       75
<PAGE>   79

SECTION 9.07--BENEFICIARY.

      Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out of
his participation in the Plan. The Participant may change his Beneficiary from
time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.

      With the Employer's consent, the Plan Administrator may maintain records
of Beneficiary designations for Participants before their Retirement Dates. In
that event, the written designations made by Participants shall be filed with
the Plan Administrator. If a Participant dies before his Retirement Date, the
Plan Administrator shall certify to the Insurer the Beneficiary designation on
its records for the Participant.

      If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.

SECTION 9.08--NONALIENATION OF BENEFITS.

      Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
richts to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits, except in the case of a 'oan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations order,
as defined in Code Section 414(p), or any domestic relations order entered
before January 1, 1985.

SECTION 9.09--CONSTRUCTION.

      The validity of the Plan or any of its provisions is determined under and
construed according to Federal law and, to the extent permissible, according to
the laws of the state in which the Employer has its principal office. In case
any provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.

      In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.

                                       76
<PAGE>   80

SECTION 9.10--LEGAL ACTIONS.

      The Plan, the Plan Administrator, the Trustee and the Named Fiduciary are
the necessary parties to any action or proceeding involving the assets held with
respect to the Plan or administration of the Plan or Trust. No person employed
by the Employer, no Participant, former Participant or their Beneficiaries or
any other person having or claiming to have an interest in the Plan is entitled
to any notice of process. A final judgment entered in any such action or
proceeding shall be binding and conclusive on all persons having or claiming to
have an interest in the Plan.

SECTION 9.11--SMALL AMOUNTS.

      If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of his
Retirement Date, the date he dies, or the date he ceases to be an Employee for
any other reason. This is a small amounts payment. If a small amount is payable
as of the date the Participant dies, the small amounts payment shall be made to
the Participant's Beneficiary (spouse if the death benefit is payable to the
spouse). If a small amount is payable while the Participant is living, the small
amounts payment shall be made to the Participant. The small amounts payment is
in full settlement of all benefits otherwise payable.

      No other small amounts payments shall be made.

SECTION 9.12--WORD USAGE.

      The masculine gender, where used in this Plan, shall include the feminine
gender and the singular words as used in this Plan may include the plural,
unless the context indicates otherwise.

SECTION 9.13--TRANSFERS BETWEEN PLANS.

      If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which under
this Plan is determined using the hours method, then the Employee's service
shall be equal to the sum of (a), (b) and (c) below:

      (a)      The number of whole years of service credited to him under the
               other plan as of the date he became an Eligible Employee under
               this Plan.

      (b)      One year or a part of a year of service for the applicable
               service period in which he became an Eligible Employee if he is
               credited with the required number of Hours-of-Service. If the
               Employer does not have sufficient records to determine the
               Employee's actual Hours-of-Service in that part of the service
               period before the date he became an Eligible Employee, the
               Hours-of-Service shall be determined using an equivalency. For
               any month in which he would be required to be credited with one
               Hour-of-Service, the Employee shall be deemed for purposes of
               this section to be credited with 190 Hours-of-Service.

      (c)      The Employee's service determined under this Plan using the hours
               method after the end of the applicable service period in which he
               became an Eligible Employee.

                                       77
<PAGE>   81

      If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method, then the Employee's service
shall be equal to the sum of (d), (e) and (f) below:

      (d)      The number of whole years of service credited to him under the
               other plan as of the beginning of the applicable service period
               under that plan in which he became an Eligible Employee under
               this Plan.

      (e)      The greater of (1) the service that would be credited to him for
               that entire service period using the elapsed time method or (2)
               the service credited to him under the other plan as of the date
               he became an Eligible Employee under this Plan.

      (f)      The Employee's service determined under this Plan using the
               elapsed time method after the end of the applicable service
               period under the other plan in which he became an Eligible
               Employee.

      Any modification of service contained in this Plan shall be applicable to
the service determined pursuant to this section.

      If the Employee previously participated in the plan of a Controlled Group
member which credited service under a different method than is used in this
Plan, for purposes of determining eligibility and vesting the provisions above
shall apply as though the plan of the Controlled Group member were a plan of the
Employer.

                                       78
<PAGE>   82

                                    ARTICLE X

                           TOP-HEAVY PLAN REQUIREMENTS

SECTION 10.01--APPLICATION.

      The provisions of this article shall supersede all other provisions in the
Plan to the contrary.

      For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one Employer.
The term Employer as used in this article shall be deemed to include all members
of the Controlled Group unless the term as used clearly indicates only the Emple
ver is meant.

      The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose under
this article.

      The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers, including the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. For this
purpose, the term "employee representatives" does not include any organization
more than half of whose members are employees who are owners, officers, or
executives.

SECTION 10.02--DEFINITIONS.

      The following terms are defined for purposes of this article.

      Aggregation Group means

      (a)      each of the Employer's retirement plans in which a Key Employee
               is a participant during the Year containing the Determination
               Date or one of the four preceding Years,

      (b)      each of the Employer's other retirement plans which allows the
               plan(s) described in (a) above to meet the nondiscrimination
               requirement of Code Section 401(a)(4) or the minimum coverage
               requirement of Code Section 410, and

      (c)      any of the Employer's other retirement plans not included in (a)
               or (b) above which the Employer desires to include as part of the
               Aggregation Group. Such a retirement plan shall be included only
               if the Aggregation Group would continue to satisfy the
               requirements of Code Section 401 (a) (4) and Code Section 410.

                                       79
<PAGE>   83

      The plans in (a) and (b) above constitute the "required" Aggregation
      Group. The plans in (a), (b) and (c) above constitute the "permissive"
      Aggregation Group.

      Compensation means, as to an Employee for any period, compensation as
      defined in the CONTRIBUTION LIMITATION SECTION of Article Ill. For
      purposes of determining who is a Key Employee, Compensation shall include,
      in addition to compensation as defined in the CONTRIBUTION LIMITATION
      SECTION of Article III, elective contributions. Elective contributions are
      amounts excludable from the Employee's gross income under Code Sections
      125, 402(e)(3), 402(h) or 403(b), and contributed by the Employer, at the
      Employee's election, to a Code Section 401(k) arrangement, a simplified
      employee pension, cafeteria plan or tax-sheltered annuity.

      For purposes of Compensation as defined in this section, Compensation'
      shall be limited to the maximum dollar amount, as adjusted, in the same
      manner and in the same time as the Compensation defined in the DEFINITION
      SECTION of Article I.

      Determination Date means as to this Plan for any Year, the last day of the
      preceding Year. However, if there is no preceding Year, the Determination
      Date is the last day of such Year.

      Key Employee means any Employee or former Employee (including
      Beneficiaries of deceased Employees) who at any time during the
      determination period was

      (a)      one of the Employer's officers (subject to the maximum below)
               whose Compensation (as defined in this section) for the Year
               exceeds 50 percent of the dollar limitation under Code Section
               415 (b) (1)(A),

      (b)      one of the ten Employees who owns (or is considered to own, under
               Code Section 318) more than a half percent ownership interest and
               one of the largest interests in the Employer during any Year of
               the determination period if such person's Compensation (as
               defined in this section) for the Year exceeds the dollar
               limitation under Code Section 415(c)(1)(A),

      (c)      a five-percent owner of the Employer, or

      (d)      a one-percent owner of the Employer whose Compensation (as
               defined in this section) for the Year is more than $150,000.

      Each member of the Controlled Group shall be treated as a separate
      employer for purposes of determining ownership in the Employer.

      The determination period is the Year containing the Determination Date and
      the four preceding Years. If the Employer has fewer than 30 Employees, no
      more than three Employees shall be treated as Key Employees because they
      are officers. If the Employer has between 30 and 500 Employees, no more
      than ten percent of the Employer's Employees (if not an integer, increased
      to the next integer) shall be treated as Key Employees because they are
      officers. In no event will more than 50 Employees be

                                       80
<PAGE>   84

      treated as Key Employees because they are officers if the Employer has 500
      or more Employees. The number of Employees for any Plan Year is the
      greatest number of Employees during the determination period. Officers who
      are employees described in Code Section 414(q)(8) shall be excluded. If
      the Employer has more than the maximum number of officers to be treated as
      Key Employees, the officers shall be ranked by amount of annual
      Compensation (as defined in this section), and those with the greater
      amount of annual Compensation during the determination period shall be
      treated as Key Employees. To determine the ten Employees owning the
      largest interests in the Employer, if more than one Employee has the same
      ownership interest, the Employee(s) having the greater annual Compensation
      shall be treated as owning the larger interest(s). The determination of
      who is a Key Employee shall be made according to Code Section 4160)(1) and
      the regulations thereunder.

      Non-key Employee means a person who is a non-key employee within the
      meaning of Code Section 416 and regulations thereunder.

      Present Value means the present value of a participant's accrued benefit
      under a defined benefit plan as of his normal retirement age (attained age
      if later) or, if the plan provides non-proportional subsidies, the age at
      which the benefit is most valuable. The accrued benefit of any Employee
      (other than a Key Employee) shall be determined under the method which is
      used for accrual purposes for all plans of the Employer or if there is no
      one method which is used for accrual purposes for all plans of the
      Employer, as if such benefit accrued not more rapidly than the slowest
      accrual rate permitted under Code Section 411(b)(1)(C). For purposes of
      establishing Present Value, any benefit shall be discounted only for 7.5%
      interest and mortality according to the 1971 Group Annuity Table (Male)
      without the 7% margin but with projection by Scale E from 1971 to the
      later of (a) 1974, or (b) the year determined by adding the age to 1920,
      and wherein for females the male age six years younger is used. If the
      Present Value of accrued benefits is determined for a participant under
      more than one defined benefit plan included in the Aggregation Group, all
      such plans shall use the same actuarial assumptions to determine the
      Present Value.

      Top-heavy Plan means a plan which is a top-heavy plan for any plan year
      beginning after December 31, 1983. This Plan shall be a Top-heavy Plan if

      (a)      the Top-heavy Ratio for this Plan alone exceeds 60 percent and
               this Plan is not part of any required Aggregation Group or
               permissive Aggregation Group.

      (b)      his Plan is a part of a required Aggregation Group, but not part
               of a permissive Aggregation Group, and the Top-heavy Ratio for
               the required Aggregation Group exceeds 60 percent.

      (c)      this Plan is a part of a required Aggregation Group and part of a
               permissive Aggregation Group and the Top-heavy Ratio for the
               permissive Aggregation Group exceeds 60 percent.

      Top-heavy Ratio means the ratio calculated below for this Plan or for the
      Aggregation Group.

      (a)      If the Employer maintains one or more defined contribution plans
               (including any simplified

                                       81
<PAGE>   85

               employee pension plan) and the Employer has not maintained any
               defined benefit plan which during the five-year period ending on
               the determination date has or has had accrued benefits, the
               Top-heavy Ratio for this Plan alone or for the required or
               permissive Aggregation Group as appropriate is a fraction, the
               numerator of which is the sum of the account balances of all Key
               Employees as of the determination date and the denominator of
               which is the sum of all account balances of all employees as of
               the determination date. Both the numerator and denominator of the
               Top-heavy Ratio are adjusted for any distribution of an account
               balance (including those made from terminated plan(s) of the
               Employer which would have been part of the required Aggregation
               Group had such plan(s) not been terminated) made in the five-year
               period ending on the determination date. Both the numerator and
               denominator of the Top-heavy Ratio are increased to reflect any
               contribution not actually made as of the Determination Date, but
               which is required to be taken into account on that date under
               Code Section 416 and the regulations thereunder.

      (b)      If the Employer maintains one or more defined contribution plans
               (including any simplified employee pension plan) and the Employer
               maintains or has maintained one or more defined benefit plans
               which during the five-year period ending on the determination
               date has or has had accrued benefits, the Top-heavy Ratio for any
               required or permissive Aggregation Group as appropriate is a
               fraction, the numerator of which is the sum of the account
               balances under the defined contribution plan(s) of all Key
               Employees and the Present Value of accrued benefits under the
               defined benefit plan(s) for all Key Employees, and the
               denominator of which is the sum of the account balances under the
               defined contribution plan(s) for all employees and the Present
               Value of accrued benefits under the defined benefit plans for all
               employees. Both the numerator and denominator of the Top-heavy
               Ratio are adjusted for any distribution of an account balance or
               an accrued benefit (including those made from terminated plans)
               of the Employer which would have been part of the required
               Aggregation Group had such plan(s) not been terminated) made in
               the five-year period ending on the determination date.

      (c)      For purposes of (a) and (b) above, the value of account balances
               and the Present Value of accrued benefits will be determined as
               of the most recent valuation date that falls within or ends with
               the 12-month period ending on the determination date, except as
               provided in Code Section 416 and the regulations thereunder for
               the first and second plan years of a defined benefit plan. The
               account balances and accrued benefits of an employee who is not a
               Key Employee but who was a Key Employee in a prior year will be
               disregarded. The calculation of the Top-heavy Ratio and the
               extent to which distributions, rollovers and transfers during the
               five-year period ending on the determination date are to be taken
               into account, shall be determined according to the provisions of
               Code Section 416 and regulations thereunder. The account balances
               and accrued benefits of an individual who has performed no
               service for the Employer during the five-year period ending on
               the determination date shall be excluded from the Top-heavy Ratio
               until the time the individual again performs service for the
               Employer. Deductible employee contributions will not be taken
               into account for purposes of computing the Top-heavy Ratio. When
               aggregating plans, the value of account balances and accrued
               benefits will be calculated with reference to the determination
               dates that fall within the same calendar year.

                                       82
<PAGE>   86

      Account, as used in this definition, mean: the value of an employee's
      account under one of the Employer's retirement plans on the latest
      valuation date. In the case of a money purchase plan or target benefit
      plan, such value shall be adjusted to include any contributions made for
      or by the employee after the valuation date and on or before such
      determination date or due to be made as of such determination date but not
      yet forwarded to the insurer or trustee. In the case of a profit sharing
      plan, such value shall be adjusted to include any contributions made for
      or by the employee after the valuation date and on or before such
      determination date. During the first Year of any profit sharing plan such
      adjustment in value shall include contributions made after such
      determination date that are allocated as of a date in such Year. The
      nondeductible employee contributions which an employee makes under a
      defined benefit plan of the Employer shall be treated as if they were
      contributions under a separate defined contribution plan.

      Valuation Date means, as to this Plan, the last day of the last calendar
      month ending in a Year.

      Year means the Plan Year unless another year is specified by the Employer
      in a separate written resolution in accordance with regulations issued by
      the Secretary of the Treasury or his delegate.

SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.

      If a Participant's Vesting Percentage determined under Article I is not at
least as great as his Vesting Percentage would be if it were determined under a
schedule permitted in Code Section 416, the following shall apply. During any
Year in which the Plan is a Top-heavy Plan, the Participant's Vesting Percentage
shall be the greater of the Vesting Percentage determined under Article I or the
schedule below.

              VESTING SERVICE                       VESTING SERVICE
               (whole years)                          PERCENTAGE

                Less than 2                                 0
                     2                                     20
                     3                                     40
                     4                                     60
                     5                                     80
                 6 or more                                100

      The schedule above shall not apply to Participants who are not credited
with an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentage determined above applies to all of the Participant's Account
resulting from Employer Contributions, including Contributions the Employer
makes before the TEFRA Compliance Date or when the Plan is not a Top-heavy Plan.

      If, in a later Year, this Plan is not a Top-heavy Plan, a Participant's
Vesting Percentage shall be determined under Article I. A Participant's Vesting
Percentage determined under either Article I or the schedule above shall never
be reduced and the election procedures of the AMENDMENTS SECTION of

                                       83
<PAGE>   87

Article IX shall apply when changing to or from the schedule as though the
automatic change were the result of an amendment.

      The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.

SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.

      During any Year in which this Plan is a Top-heavy Plan, the Employer shall
make a minimum contribution or allocation on the last day of the Year for each
person who is a Non-key Employee on that day and who either was or could have
been an Active Participant during the Year. A Non-key Employee is not required
to have a minimum number of hours-of-service or minimum amount of Compensation,
or to have had any Elective Deferral Contributions made for him in order to be
entitled to this minimum. The minimum contribution or allocation for such person
shall be equal to the lesser of (a) or (b) below:

      (a)      Three percent of such person's Compensation (as defined in this
               article).

      (b)      The "highest percentage" of Compensation (as defined in this
               article) for such Year at which the Employer's contributions are
               made for or allocated to any Key Employee. The highest percentage
               shall be determined by dividing the Employer Contributions made
               for or allocated to each Key Employee during such Year by the
               amount of his Compensation (as defined in this article), which is
               not more than the maximum set out above, and selecting the
               greatest quotient (expressed as a percentage). To determine the
               highest percentage, all of the Employer's defined contribution
               plans within the Aggregation Group shall be treated as one plan.
               The provisions of this paragraph shall not apply if this Plan and
               a defined benefit plan of the Employer are required to be
               included in the Aggregation Group and this Plan enables the
               defined benefit plan to meet the requirements of Code Section 401
               (a) (4) or Code Section 410.

      If the Employer's contributions and allocations otherwise required under
the defined contribution plan(s) are at least equal to the minimum above, no
additional contribution or reallocation shall be required. If the Employer's
contributions and allocations are less than the minimum above and Employer
Contributions under this Plan are allocated to Participants, any Employer
Contributions (other than those which are allocated on the basis of the amount
made for such person) shall be reallocated to provide the minimum. The remaining
Contributions shall be allocated as provided in the preceding articles of this
Plan taking into account any amount which was reallocated to_provide the
minimum. If the Employer's total contributions and allocations are less than the
minimum above after any reallocation provided above, the Employer shall
contribute the difference for the Year.

      The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-heavy Plans. If an
additional contribution or allocation is required to meet the minimum above, it
shall be provided in this Plan.

                                       84
<PAGE>   88

      A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.

      If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of the Employer's
which is a Top-heavy Piz -i during that same Year, the minimum benefits for him
shall not be duplicated. The defined benefit plan shall privide an annual
benefit for him on, or adjusted to, a straight life basis of the lesser of (c)
two percent of his average pay multiplied. by his years of service or (d) twenty
percent of his average pay. Average pay and years of service shall have the
meaning set forth in such defined benefit plan for this purpose.

      For purposes of this section, any employer contribution made according to
a salary reduction or similar arrangement shall not apply before the first
Yearly Date in 1985. On and after the first Yearly Date in 1989, any such
employer contributions and employer contributions which are matching
contributions, as defined in Code Section 401(m), shall not apply in determining
if the minimum contribution requirement has been met, but shall apply in
determining the minimum contribution required. Forfeitures credited to a
Participant's Account are treated as employer contributions.

      The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-employment),
Chapter 21 of the Code (relating to Federal Insurance Contributions Act), Title
II of the Social Security Act or any other Federal or state law.

SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.

      If the provisions of subsection (e) of the CONTRIBUTION LIMITATION SECTION
of Article III are applicable for any Limitation Year during which this Plan is
a Top-heavy Plan, the benefit limitations shall be modified. The definitions of
Defined Benefit Plan Fraction and Defined Contribution Plan Fraction in the
CONTRIBUTION LIMITATION SECTION of Article III shall be modified by substituting
"1.0" in lieu of "1.25." The optional denominator for determining the Defined
Contribution Plan Fraction shall be modified by substituting "$41,500" in lieu
of "$51,875." In addition, an adjustment shall be made to the numerator of the
Defined Contribution Plan Fraction. The adjustment is a reduction of that
numerator similar to the modification of the Defined Contribution Plan Fraction
described in the CONTRIBUTION LIMITATION SECTION of Article III, and shall be
made with respect to the last Plan Year beginning before January 1, 1984.

      The modifications in the paragraph above shall not apply with respect to a
Participant so long as employer contributions, forfeitures or nondeductible
employee contributions are not credited to his account under this or any of the
Employer's other defined contribution plans and benefits do not accrue for such
Participant under the Employer's defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.

                                       85
<PAGE>   89

      By executing this Plan, the Primary Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
Plan's legal and tax implications.

      Executed this ________ day of ________________________, 19___.

                                                     SOUTHWEST BANKS, INC.

                                           By:
                                               --------------------------------

                                               --------------------------------
                                                             Title

         The adopting Employer must agree to participate in or adopt the Plan in
writing. If this has not already been done, it may be done by signing below.

                                                FIRST NATIONAL BANK OF NAPLES

                                           By:
                                               --------------------------------

                                               --------------------------------
                                                             Title

                                               --------------------------------
                                                              Date

                                                   CAPE CORAL NATIONAL BANK

                                           By:
                                               --------------------------------

                                               --------------------------------
                                                             Title

                                               --------------------------------
                                                             Date

                                       86
<PAGE>   90

                                                  INDIAN ROCKS STATE BANK

                                           By:
                                               --------------------------------

                                               --------------------------------
                                                             Title

                                               --------------------------------
                                                              Date

                                              FIRST NATIONAL BANK OF FORT MYERS

                                           By:
                                               --------------------------------

                                               --------------------------------
                                                             Title

                                               --------------------------------
                                                              Date

                                             CUSTOMER SERVICE COMPANY OF F.N.B.

                                           By:
                                               --------------------------------

                                               --------------------------------
                                                             Title

                                               --------------------------------
                                                              Date

                                       87
<PAGE>   91

                                 AMENDMENT NO. 1

                    SOUTHWEST BANKS, INC. SALARY SAVINGS PLAN

         The Plan named above gives the Employer the right to amend it at any
time. According to that right, the Plan is amended as provided below:

         Effective January 1, 1999,

                  by striking the following:

                           Title Page
                           Page 5
                           Page 17

                  and substituting the following:

                           Title Page
                           Page 5
                           Page 17

         The provisions and conditions set forth on any page of this amendment
are a part of the Plan as fully as if recited over the signature(s) below.

         By signing this amendment, the Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tax implications.

         Signed this _________ day of ___________________, 19___.

                SOUTHWEST BANKS, INC.                  F.N.B. CORPORATION

          By:                                   By:
             -----------------------------         ----------------------------

             -----------------------------         ----------------------------
                        Title                                  Title

                                       88
<PAGE>   92

                               SECOND AMENDMENT TO
                     F.N.B. CORPORATION SALARY SAVINGS PLAN

The F.N.B. Corporation Salary Savings Plan (the "Plan") is hereby amended,
effective as of January 1, 2000, as follows:

         The following definitions are amended as indicated below such that each
         reference in the Plan to such word shall now have the meaning as stated
         in this Amendment:

                  "EMPLOYER" shall mean F.N.B. Corporation and any other
                  affiliated employer, which, with the consent of the Board,
                  shall adopt this Plan.

                  "PLAN ADMINISTRATOR" shall mean the Pension Committee of
                  F.N.B. Corporation.

                  "PRIMARY EMPLOYER" shall mean F.N.B. Corporation.

                                       89
<PAGE>   93

                               THIRD AMENDMENT TO
                     F.N.B. CORPORATION SALARY SAVINGS PLAN

The F.N.B. Corporation Salary Savings Plan (the "Plan") is hereby amended,
effective as of January 1, 2000, as follows:

         The following definitions are amended as indicated below such that each
         reference in the Plan to such word shall now have the meaning as stated
         in this Amendment:

                  "COMPENSATION" means except as modified in this definition,
                  the total earnings paid or made available to an Employee by
                  the Employer during any specified period.

                  "Earnings" in this definition means Compensation as defined in
                  the CONTRIBUTION LIMITATION SECTION of Article III.

                  Compensation shall exclude reimbursements or other expense
                  allowances, fringe benefits (cash and noncash), moving
                  expenses, deferred compensation and welfare benefits.

                  Compensation shall also include elective contributions.
                  Elective contributions are amounts excludable from the
                  Employee's gross income under Code Sections 125, 402(e)(3),
                  402(h) or 403(b), and contributed by the Employer, at the
                  Employee's election, to a Code Section 401(k) arrangement, a
                  simplified employee pension, cafeteria plan or tax-sheltered
                  annuity. Elective contributions also include Compensation
                  deferred under a Code Section 457 plan maintained by the
                  Employer and Employee contributions "picked up" by a
                  governmental entity and, pursuant to Code Section 414(h)(2),
                  treated as Employer contributions.

                  For purposes of the EXCESS AMOUNTS SECTION of Article III, the
                  Employer may elect to use an alternative nondiscriminatory
                  definition of Compensation in accordance with the regulations
                  under Code Section 414(s).

The provisions and conditions set forth on any page of this Amendment are a part
of the Plan as fully as if recited.

Unless otherwise stated on any page of this Amendment, eligibility for any
benefits and the amount of such benefits payable to or on behalf of an
individual who is an Inactive Participant on the effective date(s) stated above,
shall be determined according to the provisions of the Plan as in effect on the
day before he became an Inactive Participant.

                                       90

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