Document:

Exhibit 4.4

                               METTLER TOLEDO
                          RETIREMENT SAVINGS PLAN

                            AMENDED AND RESTATED

                      EFFECTIVE AS OF JANUARY 1, 2000
                   (EXCEPT AS OTHERWISE PROVIDED HEREIN)

<PAGE>

                                  FOREWORD

PURPOSE

Effective  as of October  1, 1988,  Toledo  Scale  Corporation,  a Delaware
corporation,   established  the  Toledo  Scale   Corporation   Savings  and
Investment  Plan  (the  "Plan")  for the  benefit  of  eligible  employees.
Effective  January 1, 1992, the Plan was renamed the  Mettler-Toledo,  Inc.
Savings  and  Investment  Plan,  to  reflect a change in the name of Toledo
Scale Corporation to Mettler-Toledo,  Inc. (the "Company"). Effective as of
July 1, 1994,  the Mettler  Instrument  Corporation  Savings and Investment
Plan was merged into the Plan,  the Plan was amended and restated,  and the
Plan was renamed the "Mettler Toledo Retirement Savings Plan". Effective as
of October 1, 1999,  the  Safeline,  Inc.  401(k)  Plan was merged into the
Plan.  The  purpose  of the  Plan is to  encourage  eligible  employees  of
authorized  divisions or  departments  of the Company or of any  authorized
company  affiliated  with  the  Company  to  provide  additional  financial
security and to supplement  retirement  income by savings on a regular long
term basis.

BACKGROUND

As of January 1, 1981 Reliance  Electric Company,  a corporation  organized
and existing under the laws of the State of Delaware ("Reliance Electric"),
amended and restated the Reliance  Electric  Company Savings and Investment
Plan (the "Prior Reliance  Electric Plan") to continue to provide  eligible
employees additional financial security and to supplement retirement income
by savings on a regular and long term basis.

As of October 1, 1983  Reliance  Electric  amended and  restated  the Prior
Reliance  Electric  Plan.  Such  amended and  restated  plan is referred to
herein as the "Reliance Electric Plan".

The Company,  then a  wholly-owned  subsidiary  of Reliance  Electric,  and
Reliance Electric determined that:

     1)   Effective as of October 1, 1988,  the Plan should be  established
          to cover eligible employees of the Company in lieu of having such
          employees continue to participate in the Reliance Electric Plan;

     2)   All assets and  liabilities  of the Reliance  Electric Plan which
          were  allocable  to eligible  employees  of the Company  would be
          transferred to the Plan and the trust  established in conjunction
          therewith; and

     3)   As of the  inception of the Plan and the transfer  thereto of the
          aforementioned  assets and  liabilities of the Reliance  Electric
          Plan,  the  provisions  of the  Plan  would be the  same,  in all
          material respects, as those of the Reliance Electric Plan.

The Company has subsequently amended the Plan from time to time.

This amendment and  restatement of the Plan shall  constitute an amendment,
restatement  and  continuation of the Plan and of the Safeline 401(k) Plan.
Except  as the text may  specifically  provide  otherwise,  the  terms  and
provisions of the Plan as hereinafter  set forth and as it hereafter may be
amended  from time to time,  establish  the  rights  and  obligations  with
respect to  Participants  (as  hereinafter  defined)  employed on and after
January 1, 2000 and to transactions  under the Plan on and after such date.
Unless explicitly provided otherwise,  the provisions of this amendment and
restatement  with stated  effective dates prior to January 1, 2000 shall be
deemed to amend the  corresponding  provisions,  if any, of the Plan and of
the Safeline 401(k) Plan as in effect before this amendment and restatement
and all amendments  thereto as of such dates.  Events  occurring before the
applicable   effective   date  of  any  provision  of  this  amendment  and
restatement  shall be governed by the  applicable  provision of the Plan or
the Safeline 401(k) Plan,  whichever  applicable,  in effect on the date of
the event.

The  adoption  of the Plan in its  entirety  is intended to comply with the
provisions  of Sections  401(a) of the  Internal  Revenue  Code of 1986 and
applicable regulations thereunder.

<PAGE>

                               METTLER TOLEDO
                        SAVINGS AND INVESTMENT PLAN

                                  CONTENTS
                                  --------

ARTICLE I      Definitions.................................................1

ARTICLE II     Eligibility and Participation..............................10

ARTICLE III    Basic Salary Reduction Contributions.......................13

ARTICLE IV     Company Contributions......................................20

ARTICLE V      Valuation of Accounts......................................28

ARTICLE VI     Vesting of Accounts........................................29

ARTICLE VII    Investment of Accounts.....................................31

ARTICLE VIII   Withdrawals During Employment..............................36

ARTICLE IX     Distribution of Benefits...................................41

ARTICLE X      Administration of the Plan.................................48

ARTICLE XI     Operation of the Trust Fund................................53

ARTICLE XII    Adoption, Amendment, Termination and Merger................54

ARTICLE XIII   Miscellaneous..............................................56

ARTICLE XIV    Participation in Plan By Affiliates........................58

ARTICLE XV     Loans......................................................60

ARTICLE XVI    Determination of Top-Heavy Status..........................63

APPENDIX A

APPENDIX B

APPENDIX C

APPENDIX D

<PAGE>

                                 ARTICLE I

                                DEFINITIONS
                                -----------

As used herein,  unless otherwise  defined or required by the context,  the
following words and phrases shall have the meanings indicated.  Some of the
words and phrases  used in the Plan are not defined in this  Article I, but
for convenience are defined as they are introduced into the text.

1.1  "Account" means a Participant's Basic Employee  Contribution  Account,
     Basic  Salary  Reduction   Contribution   Account,   Company  Matching
     Contribution  Account,   After-Tax  Contribution  Account,   Qualified
     Contribution Account,  Rollover Account, or any subaccount thereof, as
     the context requires.

1.2  "Administrative   Committee"   means  the  committee   constituted  to
     administer the Plan in accordance with Section 10.2.

1.3  "After-Tax Contribution Account" means the separate Account maintained
     for a Participant  to record his share of the Trust Fund  attributable
     to  after-tax  contributions  made on his  behalf  under the  Reliance
     Electric Plan.

1.4  "Appropriate   Form"  means  the  form  or  forms  prescribed  by  the
     Administrative Committee for a particular purpose.

1.5  "Basic  Employee   Contribution"   means  a  contribution  made  by  a
     Participant  as a condition  of  participation  in the Prior  Reliance
     Electric  Plan,  as  provided  in Section  3.02 of the Prior  Reliance
     Electric Plan.

1.6  "Basic  Employee  Contribution  Account"  means the  separate  Account
     maintained  for a  Participant  to record  his share of the Trust Fund
     attributable to Basic Employee Contributions made on his behalf.

1.7  "Basic Salary Reduction  Contribution" means a contribution made by an
     Employer pursuant to an election by the Participant to reduce the cash
     compensation  otherwise  currently  payable  to him  by an  equivalent
     amount,  in  accordance  with the  provisions of Section 3.1, and such
     amounts contributed by an Employer to the Reliance Electric Plan under
     Section 3.01 thereof.

1.8  "Basic  Salary  Reduction  Contribution  Account"  means the  separate
     Account  maintained for a Participant to record his share of the Trust
     Fund attributable to Basic Salary Reduction  Contributions made on his
     behalf.

1.9  "Beneficiary"  means the person or persons so designated in accordance
     with  Section  2.4 to  receive  benefits  payable  under the Plan as a
     result of the Participant's death.

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

1.11 "Code" means the Internal  Revenue Code of 1986,  as amended from time
     to time.

1.12 "Common Stock" means the common stock of Mettler-Toledo  International
     Inc.  which is a qualifying  employer  security  within the meaning of
     Section 407(d)(5) of ERISA.

1.13 "Company" means Mettler-Toledo,  Inc., a Delaware corporation,  as now
     constituted or as may be constituted  hereafter,  or any person, firm,
     corporation or partnership which may succeed to its business and which
     adopts the Plan.

1.14 "Company Matching Contribution" means an Employer contribution made to
     the Trust Fund pursuant to Section 4.1.

1.15 "Company  Matching  Contribution  Account" means the separate  Account
     maintained  for a  Participant  to record  his share of the Trust Fund
     attributable to Company Matching Contributions made on his behalf.

1.16 "Compensation"  means  the  (a)  the  nondeferred  remuneration  of an
     Employee for services rendered to the Group, inclusive of Basic Salary
     Reduction  Contributions,  regularly  scheduled  paid  bonuses,  sales
     commissions,  overtime,  and incentive  earnings,  exclusive of, shift
     differential and the Group's cost for any employee benefit plan (which
     cost is not included in the gross income of the  Employee),  including
     the Plan,  except as provided in this Section,  and (b) in the case of
     an  Eligible  Employee  described  in  Section  1.20(ii),   an  amount
     determined by the Administrative Committee, using as a guideline to be
     uniformly and  consistently  applied,  that  nondeferred  remuneration
     which would be  considered  as his basic rate of  compensation  if his
     services were performed in a similar position in the United States for
     the Company,  but in no event shall the "Compensation",  as determined
     by the Administrative  Committee,  exceed the nondeferred remuneration
     actually  received by such an Eligible  Employee.  Effective  for each
     Plan Year  beginning on and after  January 1, 1989,  in no event shall
     the amount of  Compensation  taken into account  under the Plan exceed
     the adjusted annual limitation  permitted under Section  401(a)(17) of
     the Code for such Plan Year. Such adjusted annual limitation shall be,
     for each Plan Year beginning on and after January 1, 1989 and prior to
     January 1, 1994, $200,000 as adjusted for such year in the same manner
     as under Section  415(d) of the Code and, for each Plan Year beginning
     on and after  January 1, 1994,  $150,000 as adjusted  for such year as
     provided under Section 401(a)(17)(B) of the Code.

     In determining the  Compensation of an Eligible  Employee for purposes
     of the foregoing annual  limitation as applicable solely to Plan Years
     beginning before January 1, 1997, the rules aggregating certain family
     members  (as set forth in  Section  414(q) of the Code)  shall  apply,
     except that in applying such rules,  the term  "family"  shall include
     only the  spouse of the  Employee  and any  lineal  descendent  of the
     Employee  who has not  attained  age 19 before the end of the calendar
     year. If, as a result of these family  aggregation rules, the adjusted
     annual  limitation is exceeded,  then the limitation shall be prorated
     among  the  family   members  in  proportion   to  each   individual's
     Compensation as determined under this paragraph  without regard to the
     adjusted annual limitations.

1.17 "Disability"  means the  termination of service of a Participant  with
     the  Employer  due to a  physical  or  mental  disability  which  will
     permanently  disable such  Participant  from  performing the customary
     duties of his regular job with the Employer. Such permanent disability
     is to be determined by a licensed  physician provided by or acceptable
     to the Administrative Committee.

1.18 "Early Retirement Date" means the date of a Participant's  termination
     of  service,  provided  it occurs on or after his 55th  birthday,  but
     prior to his Normal  Retirement  Date,  and after his completion of 10
     1-year Periods of Service.

1.19 "Effective  Date" means October 1, 1988.  The  effective  date of this
     restatement is January 1, 2000, unless otherwise provided.

1.20 "Eligible Employee" means each Employee of any Employer, excluding (i)
     any  Employee  included  in  a  unit  of  employees  represented  by a
     recognized  bargaining  agent and covered by a  collective  bargaining
     agreement in which retirement  benefits were the subject of good faith
     bargaining  unless such agreement  specifically  provides for coverage
     under  the  Plan,  and (ii) any  Employee  of an  Employer  which is a
     "foreign  subsidiary"  (as described in Section 406(a) of the Code and
     to which an agreement  entered into under Section  3121(1) of the Code
     applies) or a "domestic  subsidiary"  (described in Section  407(a) of
     the Code) and who is not a citizen of the United States,  other than a
     person employed by a subsidiary  authorized to participate in the Plan
     by the Administrative  Committee, and (iii) any Employee classified by
     an Employer as a co-op  student,  and (iv) any Employee of an Excluded
     Entity, while so employed.

     For  purposes  of  Sections  3.4,  4.3 and  4.4,  the  term  "Eligible
     Employee"  means an Eligible  Employee (as  otherwise  defined in this
     Section  1.20) of an Employer who, at any time during the Plan Year in
     question  has  satisfied  the  eligibility  requirements  set forth in
     Section  2.1,  regardless  of whether such  individual  has elected to
     become a Participant in the Plan.

     Notwithstanding  any  provision  of  the  Plan  to the  contrary,  any
     individual who an Employer determines to be an independent contractor,
     leased employee  (including a Leased Employee),  leased owner,  leased
     manager,   shared   employee  or  person   working   under  a  similar
     classification  shall  not  become  an  Eligible  Employee  hereunder,
     regardless of whether any such individual is ultimately  determined to
     be a common law employee, unless and until the Company shall otherwise
     determine.  Any Employee shall be considered an Eligible Employee only
     during  such period in which he  satisfies  the  requirements  defined
     above.

1.21 "Employee" means any person  performing  services for the Company,  or
     any other member of the Group, as a common law employee.

1.22 "Employer"  means any trade or  business  in which the  Company  has a
     direct or indirect ownership  interest,  or has a 50 percent direct or
     indirect  ownership  interest in the Company and which has adopted the
     Plan in accordance with Article XIV. As the context requires, the term
     "Employer"  may mean  any of the  Employers  or all of  them,  and may
     include the Company in addition to other Employers.

1.23 "Employment  Commencement  Date" means the date on which the  Employee
     first performs an Hour of Service.

1.24 "Enrollment  Date" means,  for periods  prior to January 1, 2000,  the
     first  day of any  calendar  quarter  and,  for  periods  on and after
     January 1, 2000,  the first day of any  calendar  month and such other
     date or dates as the Administrative Committee shall specify.

1.25 "ERISA" means the Employee  Retirement Income Security Act of 1974, as
     amended from time to time.

1.26 "Excluded  Entity"  means any  division of the  Company,  or any other
     corporation  (or  division  of such a  corporation)  subsidiary  to or
     affiliated with the Company,  which qualifies as a member of the Group
     but which is not expressly authorized by the Administrative  Committee
     to participate in the Plan.

1.27 "Group"  shall mean the Company and any other company which is related
     to the Company as a member of a controlled  group of  corporations  in
     accordance  with Section  414(b) of the Code or as a trade or business
     under common  control in accordance  with Section  414(c) of the Code,
     any  organization  which  is part of an  affiliated  service  group in
     accordance  with Section 414(m) of the Code, or any entity required to
     be aggregated  with the Company in accordance  with Section  414(o) of
     the Code and the  regulations  thereunder.  For the purposes under the
     Plan of  determining  whether or not a person is an  Employee  and the
     period of employment of such person,  each such other company shall be
     included in the  definition of "Group" only for such period or periods
     during which such other company is so a member of a controlled  group,
     under  common  control,  an  affiliated  service  group  or  otherwise
     required  to be  aggregated.  For  purposes  of  applying  the  annual
     contributions   limits  imposed  by  Section  415  of  the  Code,  the
     definition of "control" for this purpose shall be modified as required
     by Section 415(h) of the Code.

1.28 "Highly  Compensated  Employee" means, for a given Plan Year beginning
     on or after January 1, 1997, any Employee who is a 5 percent owner (as
     defined in Section  416(i)(1) of the Code) with respect to a member of
     the Group during the Plan Year or the preceding  Plan Year or who both
     received  Section  414(s)  compensation  (as defined in Section 3.4(c)
     hereof)  during the preceding Plan Year in excess of $80,000 and was a
     member of the "top-paid group" (as defined in Section 414(q)(3) of the
     Code) during such Plan Year.  For purposes of this Section  1.28,  the
     $80,000  amount  is to be  indexed  at the  same  time and in the same
     manner as other adjustments under Section 415(d) of the Code.

1.29 "Hour of  Service"  means an hour for which an Employee is directly or
     indirectly  paid  or  entitled  to  payment  by an  Employer  for  the
     performance of services.

1.30 "Interactive Electronic Communication" means a communication between a
     Participant or Beneficiary and the person or entity  designated by the
     Administrative   Committee   to   perform   recordkeeping   and  other
     administrative  services  on behalf of the Plan  pursuant  to a system
     maintained  by  such  person  or  entity  and   communicated  to  each
     Participant  and  Beneficiary  whereby each such  individual  may make
     elections and exercise options as described herein with respect to all
     or a portion  of his  Account  through  the use of such  system  and a
     personal  identification  number.  If a Participant or Beneficiary (i)
     consents  to  participate  in  Interactive  Electronic   Communication
     procedures   adopted  by  the   Administrative   Committee   and  (ii)
     acknowledges that actions taken by him through the use of his personal
     identification   number   pursuant  to  the   Interactive   Electronic
     Communication  procedure  constitute  his  signature  for  purposes of
     initiating   transactions   such  as  Investment  Fund  changes,   the
     Participant or Beneficiary, as the case may be, will be deemed to have
     given  his  written  consent  and  authorization  to any  such  action
     resulting  from the use of the  Interactive  Electronic  Communication
     system by the Participant or Beneficiary.

1.31 "Investment Fund" means each of the separate  investment options which
     the Administrative  Committee,  in its sole discretion and pursuant to
     uniform and nondiscriminatory rules, may make available under the Plan
     for the investment of Plan contributions and Accounts.

1.32 "Leased  Employee"  means any person  (other  than an  Employee  of an
     Employer)  who pursuant to an  agreement  between the Employer and any
     other person ("leasing  organization")  has performed services for the
     Employer  (or for the  Employer  and  related  persons  determined  in
     accordance  with  Section  414(n)(6)  of the Code) on a  substantially
     full-time  basis for a period of at least  one year and,  for  periods
     before  January  1, 1997,  such  services  are of a type  historically
     performed by  employees in the business  field of the Employer or, for
     periods on and after  January 1, 1997,  such  services  are  performed
     under  primary  direction  or  control  by the  recipient.  Except  as
     provided below, any person satisfying the foregoing  criteria shall be
     treated as an Employee.  Contributions  or benefits  provided a Leased
     Employee  by  the  leasing  organization  which  are  attributable  to
     services  performed  for the Employer  shall be treated as provided by
     the Employer.

     Notwithstanding  the  foregoing,   a  Leased  Employee  shall  not  be
     considered an Employee of an Employer if: (i) such Leased  Employee is
     covered  by  a  money   purchase   pension  plan   providing:   (1)  a
     nonintegrated  employer  contribution  rate of at least 10  percent of
     compensation, (2) immediate participation,  and (3) full and immediate
     vesting;  and (ii) Leased  Employees  do not  constitute  more than 20
     percent of the Employer's non-Highly Compensated Employee workforce.

1.33 "Mettler  Toledo Stock Fund" means the  Investment  Fund  described in
     Section 7.3.

1.34 "Normal   Retirement  Age"  means  the  attainment  of  age  65  by  a
     Participant.

1.35 "Normal  Retirement  Date" means the first day of the month coincident
     with or next following a Participant's 65th birthday.

1.36 "Notice" means,  unless otherwise  specifically  provided herein,  (i)
     written Notice on an appropriate  form provided by the  Administrative
     Committee that is, in the discretion of the Administrative  Committee,
     properly  completed  and  executed by the party giving such Notice and
     which is delivered by hand or by mail to the Administrative  Committee
     or to  such  party  designated  by the  terms  of the  Plan  or by the
     Administrative  Committee  to receive  the  Notice,  or (ii) Notice by
     Interactive   Electronic   Communication   to  the  person  or  entity
     designated by the  Administrative  Committee to perform  recordkeeping
     and other  administrative  services on behalf of the Plan. The form of
     Notice  satisfactory in any given circumstance under the Plan shall be
     determined by the  Administrative  Committee,  in its discretion,  and
     shall  be  applied   uniformly   to  all   Participants   and  to  all
     Beneficiaries.  Notice to any party as provided herein shall be deemed
     to be given when it is  actually  received  (either  physically  or by
     Interactive Electronic Communication, as the case may be) by the party
     to whom such Notice is given.

1.37 "Participant"  means an Eligible Employee who has become a participant
     in the Plan in  accordance  with  Article II. Each  Participant  shall
     continue to be such after he ceases to be an Eligible  Employee  until
     his Accounts have been completely distributed.

1.38 "Period  of  Service"  means  that  period  of time  commencing  on an
     Employee's Employment  Commencement Date or Reemployment  Commencement
     Date, whichever is applicable, and ending on the date of his Severance
     from Service.  Notwithstanding the foregoing,  however, if an Employee
     severs from service  with an Employer as a result of quit,  discharge,
     or  retirement  and then  returns to service  within 12 months of such
     event,  such period shall be counted as part of such Employee's Period
     of  Service.  For  purposes of  determining  an  Employee's  Period of
     Service,  all  non-successive  Periods of Service shall be aggregated;
     less than one 1-year  Periods of Service  shall be  aggregated  on the
     basis that 12 months of service or 365 days of service  equal a 1-year
     Period of Service.  A Period of Service also shall include such period
     of  service  in the  armed  forces  of the  United  States as shall be
     required to be recognized under applicable federal law with respect to
     military service.

1.39 "Period  of  Severance"  means  the  period of time  commencing  on an
     Employee's  Severance  from  Service  and  ending on his  Reemployment
     Commencement  Date.

1.40 "Plan" means the Mettler Toledo Retirement  Savings Plan, as set forth
     in this document,  including all appendices hereto, as the same may be
     amended from time to time.  For purposes of Section  401(a)(27) of the
     Code and  Section  407(d)(3)  of ERISA,  the Plan is a profit  sharing
     plan.

1.41 "Plan Year" means the 12-month period commencing on any January 1.

1.42 "Prior  Reliance  Electric Plan" means the Reliance  Electric  Company
     Savings and Investment  Plan, as amended and restated  effective as of
     January 1, 1981.

1.43 "Qualified  Contribution"  means an Employer  contribution made to the
     Trust Fund pursuant to Section 4.5.

1.44 "Qualified Contribution Account" means the separate Account maintained
     for a Participant  to record his share of the Trust Fund  attributable
     to Qualified Contributions made on his behalf.

1.45 "Reliance  Electric Plan" means the Reliance  Electric Company Savings
     and Investment  Plan, as amended and restated  effective as of October
     1, 1983.

1.46 "Reemployment  Commencement  Date"  means the  first  date on which an
     Employee completes an Hour of Service following a Period of Severance.

1.47 "Rollover  Contribution" means a contribution made by a Participant or
     Eligible Employee to the Trust Fund pursuant to Section 3.7.

1.48 "Rollover  Contribution Account" means the separate Account maintained
     for a  Participant  or  Eligible  Employee  to record his share of the
     Trust Fund attributable to his Rollover Contribution.

1.49 "Severance  from Service"  means the earlier of: (i) the date on which
     an Employee resigns,  retires, dies or is discharged, or (ii) a period
     of twelve (12) months from the first date the Employee  remains absent
     from  employment  (with or without  pay) with the Company or any other
     Employer for any reason other than resignation,  retirement,  death or
     discharge, such as vacation, holiday, sickness,  disability,  leave of
     absence or layoff.

     The date of the Severance from Service for a Participant who is absent
     from  employment  by  reason of  parental  leave  shall be the  second
     anniversary of the first day of such absence,  or, if later,  the date
     the parental  leave  ceased.  The period  between the first and second
     anniversaries of the first date of absence for parental leave shall be
     treated as neither a Period of Service nor a Period of Severance.  For
     purposes of this  Section  1.49,  parental  leave means an  Employee's
     absence from work on account of the Employee's pregnancy, the birth of
     the  Employee's  child,  the placement of a child with the Employee in
     connection  with the  adoption of that child by the  Employee,  or for
     purposes of caring for that child for a period  beginning  immediately
     following that birth or placement.

     An absence will not be considered  by reason of parental  leave unless
     the Employee  provides the  Administrative  Committee with information
     within 10 working  days  demonstrating  that the absence is for one of
     the reasons  described in the preceding  sentence.  At the end of such
     absence, the Employee must provide the Administrative Committee or its
     representative  with a record of the  number of days of such  absence.
     Nothing in this Plan shall  require the Employer to grant a paid leave
     of absence to any Employee.

1.50 "Trustee" means the individual(s)  and/or  entity(ies)  appointed from
     time to time by the Board to  administer  the Trust Fund in accordance
     with Section 11.1.

1.51 "Trust Agreement" means the agreement entered into between the Company
     and the Trustee,  as provided for in Section  11.1, as the same may be
     amended from time to time.

1.52 "Trust  Fund"  means the trust fund  established  in  accordance  with
     Section  11.1 from  which  benefits  provided  under this Plan will be
     paid.

1.53 "Valuation  Date"  means each day the New York Stock  Exchange is open
     for business.

1.54 "Vested  Interest"  means  that  portion  of an  Account  in  which an
     individual has a fully vested and nonforfeitable right, as provided in
     Article VI.

1.55 "Year of Vesting Service" means a 1-year Period of Service, whether or
     not such  Period of Service  was  completed  consecutively;  provided,
     however, that a "Year of Vesting Service" shall not include:

     (a)  any portion of a Participant's Period of Service or employment by
          an Excluded Entity prior to March 1, 1978;

     (b)  prior to July 1, 1980, any portion of a  Participant's  Period of
          Service with respect to which the  Participant did not make Basic
          Employee Contributions under the Prior Reliance Electric Plan;

     (c)  any Year of Vesting Service ignored under Section 6.1;

     and, further provided, however, that a "Year of Vesting Service" shall
     include:

     (d)  employment by an Excluded  Entity on March 1, 1978 and thereafter
          of a person who, on or after that date,  either  ceases to be (i)
          an Employee of an  Employer  and becomes  employed by an Excluded
          Entity,  or (ii)  employed by an  Excluded  Entity and becomes an
          Employee of an Employer, except that if on or after March 1, 1978
          an  Employer or  Excluded  Entity is for the first time  included
          within   the   definition   of   "Employer"   or   "Group",   the
          Administrative   Committee   shall   determine,   in  a   uniform
          nondiscriminatory  manner, what portion, if any, of service prior
          to inclusion  within such definition shall be included under this
          paragraph (d).

The  use of the  masculine  pronoun  shall  include  the  feminine  and the
singular shall include the plural.

<PAGE>

                                 ARTICLE II

                       ELIGIBILITY AND PARTICIPATION
                       -----------------------------

2.1  Eligible Requirements:
     ----------------------

     (a)  Eligibility   Requirements   Prior  to  January  1,  2000.   Each
          individual  who was  considered a Participant  under the terms of
          the  Plan  as  of  December  31,  1999  shall  be   considered  a
          Participant  hereunder  as  of  January  1,  2000  provided  such
          individual  satisfies  the terms of Section 1.37 as of January 1,
          2000.  Except as otherwise  provided in an Appendix hereto,  each
          other Employee shall be entitled to become an active  Participant
          in the Plan as of the  first  day of the  calendar  year  quarter
          coincident with or next following the date he:

          (i)  becomes an Eligible Employee; and

          (ii) completes a 1-year Period of Service; and

          (iii) elects to participate in accordance with Section 2.2.

          Each  Employee who  satisfies  the  requirements  of this Section
          2.1(a)  shall be notified by his Employer of his  eligibility  to
          participate, as and when it occurs.

     (b)  Eligibility  Requirements On and After January 1, 2000. Except as
          otherwise  provided in an Appendix hereto,  each Employee who has
          not satisfied the  requirements set forth in Section 2.1(a) as of
          January 1, 2000 shall be entitled to become an active Participant
          in the  Plan  as of  January  1,  2000  or the  first  day of any
          subsequent calendar month that follows the date he:

          (i)  becomes an Eligible Employee; and

          (ii) elects to participate in accordance with Section 2.2;

          provided,  however,  if the Employee is classified as a temporary
          employee by his  Employer,  such  Employee  shall also complete a
          1-year  Period  of  Service  while so  employed  before  becoming
          eligible to participate in the Plan.

          Each  Employee who  satisfies  the  requirements  of this Section
          2.1(b)  shall be notified by his Employer of his  eligibility  to
          participate, as and when it occurs.

     (c)  Except as  specifically  provided  for  herein,  a  Participant's
          active  participation  in the Plan (and the right of an  Eligible
          Employee to  participate  in the Plan) shall cease and terminate,
          if and when he  incurs a Period  of  Severance.  However,  in the
          event such Participant (or such Eligible  Employee)  subsequently
          returns to  employment  as an Eligible  Employee,  he shall again
          have  the  right  to  become  an  active  Participant  as of  his
          Reemployment Commencement Date, upon the filing of an Appropriate
          Form with the Administrative Committee.

2.2  Completion of Appropriate Form:
     -------------------------------

     An Eligible  Employee may become a  Participant  as of any  Enrollment
     Date following his  satisfaction of the eligibility  requirements  set
     forth in Section 2.1,  provided he remains an Eligible  Employee as of
     the Enrollment  Date.  Such Employee may elect to become a Participant
     by completing and returning the Appropriate Form to the Administrative
     Committee  within 30 days (or such other period as the  Administrative
     Committee may prescribe) prior to that Enrollment Date.

     If an Eligible  Employee fails to complete and return the  Appropriate
     Form  to the  Administrative  Committee  before  the  Enrollment  Date
     following his  eligibility to participate  pursuant to Section 2.1, he
     shall be  deemed to have  elected  to have no Basic  Salary  Reduction
     Contributions  made on his behalf and shall not be entitled to Company
     Matching Contributions.  Such Eligible Employee may subsequently elect
     to participate  as provided in Section 2.3 as of the  Enrollment  Date
     next following the date of his election.

2.3  Elections upon Becoming a Participant:
     --------------------------------------

     The Eligible Employee, in completing the Appropriate Form specified in
     Section 2.2, (i) may authorize his Employer to reduce his current cash
     compensation by the amount of his Basic Salary Reduction Contributions
     pursuant to Section  3.1, and (ii) shall make an  investment  election
     from among those  options  made  available as provided in Section 7.1.
     Any such payroll  authorization or investment election shall remain in
     effect until changed by Notice given to the  Administrative  Committee
     in the manner provided under Sections 3.3 and 7.2, respectively.

2.4  Beneficiary Designation:
     ------------------------

     Each Participant shall designate a Beneficiary on the Appropriate Form
     provided by the Administrative  Committee.  The designated Beneficiary
     may be one or more  individuals  or an estate,  trust or  organization
     (other than a corporation);  however, if the Participant is married at
     the time of his death, his surviving spouse shall automatically be his
     sole  Beneficiary  unless such spouse had consented on an  Appropriate
     Form to a designation of a different  Beneficiary  (by name) or to any
     subsequent  change in a  Beneficiary  (by name,  unless the consent of
     such spouse expressly permits  designations by the Participant without
     any  requirement  for further  consent by such spouse,  provided  such
     spouse  acknowledges  his or her right to limit any such  consent to a
     specific Beneficiary and such spouse states that he or she voluntarily
     elects to relinquish such right).  Such consent must be witnessed by a
     notary   public  or  a  plan   representative   and  must  contain  an
     acknowledgment  by such  spouse of the effect of the  designation.  If
     more than one  individual  or trust is named,  the  Participant  shall
     indicate the shares and/or  precedence of each  individual or trust so
     named. Any Beneficiary so designated may be changed by the Participant
     at any  time  (subject  to his or her  current  spouse's  consent,  if
     applicable)  by  signing  and  filing  the  Appropriate  Form with the
     Administrative Committee.

     In the  event  that no  Beneficiary  had  been  designated  or that no
     designated   Beneficiary  survives  the  Participant,   the  following
     Beneficiaries (if then living) shall be deemed to have been designated
     in the following priority: (1) spouse, (2) children, including adopted
     children,  in equal shares, per stirpes,  and (3) those who would take
     under the intestate laws of the  jurisdiction in which the Participant
     was domiciled at the time of his death.

2.5  Transfers to or from Non-Covered Status:
     ----------------------------------------

     In the case of a Participant  who ceases to be actively  employed (due
     to layoff,  authorized leave of absence or otherwise),  but remains an
     Eligible  Employee who has not yet incurred a Severance  from Service,
     such Participant shall continue to be treated as an active Participant
     for all purposes of the Plan,  except that no Basic  Salary  Reduction
     Contributions may be made during such period(s) of absence unless such
     Participant receives nondeferred remuneration for such period(s).

     If a Participant ceases to qualify as an Eligible Employee but has not
     yet  incurred a Period of  Severance  (because he has  transferred  to
     employment  with a member of the Group that has not  adopted the Plan,
     or  otherwise),  he  shall  become  an  inactive  Participant,  and no
     contributions  under the Plan shall be made by the Participant,  or on
     his behalf, until he again becomes an Eligible Employee.

<PAGE>

                                ARTICLE III

                    BASIC SALARY REDUCTION CONTRIBUTIONS
                    ------------------------------------

3.1  Basic Salary Reduction Contributions:
     -------------------------------------

     Each  Participant  who is an Eligible  Employee  may elect to have his
     Employer make Basic Salary Reduction  Contributions to the Plan on his
     behalf to be  credited  to his  Basic  Salary  Reduction  Contribution
     Account, in which case the cash compensation  otherwise payable by the
     Employer to the Participant shall be reduced by an amount equal to the
     Basic  Salary  Reduction  Contributions  so made.  The amount of Basic
     Salary  Reduction  Contributions  shall be from 1 percent  through  16
     percent (in whole percentages), as the Participant shall designate.

     The  Administrative  Committee  may from  time to time  specify  other
     percentages. In no event shall the aggregate of Basic Salary Reduction
     Contributions  (and such  other  "elective  deferrals",  as defined in
     Section 402(g)(3) of the Code and the regulations  thereunder) made on
     a  Participant's  behalf with respect to any calendar  year exceed the
     dollar limit as in effect with respect to such year in accordance with
     Sections  402(g)(1) and 402(g)(5) of the Code and Treasury  Regulation
     Section 1.402(g)-1(d)(1).

3.2  Voluntary Suspension:
     ---------------------

     A Participant may voluntarily  suspend any contributions made pursuant
     to  this  Article  III  effective  as of the  first  day of any  month
     provided  Notice  is  given  to the  Administrative  Committee  on the
     Appropriate  Form at such time and in such manner as determined by the
     Administrative Committee and communicated to Participants.

     A  Participant  who has  suspended  contributions  may elect to resume
     contributions made pursuant to this Article III as of the first day of
     any month by  giving  Notice to the  Administrative  Committee  on the
     Appropriate  Form at such time and in such manner as determined by the
     Administrative   Committee  and   communicated  to   Participants.   A
     suspension of any contributions made pursuant to this Article III also
     may be made  at  such  times  as are  necessary  to  comply  with  the
     provisions of Article VIII.

3.3  Change in Contribution Rates:
     -----------------------------

     A  Participant  may elect to increase or decrease  the amount of Basic
     Salary Reduction Contributions, within the limits specified in Section
     3.1,  effective  as of the first day of any month  provided  Notice is
     given to the Administrative  Committee on the Appropriate Form at such
     time and in such manner as determined by the Administrative  Committee
     and communicated to Participants.  Contribution  rate changes also may
     be made at such times as are  necessary to comply with the  provisions
     of  Section  3.4,  Section  4.2,  Section  4.3 or  Section  10.9.

3.4  Limitations on Basic Salary Reduction Contributions:
     ---------------------------------------------------

     (a)  Notwithstanding the foregoing provisions of this Article III, the
          Administrative  Committee  shall limit the amount of Basic Salary
          Reduction  Contributions made on behalf of each Employee who is a
          Highly  Compensated  Employee  for each Plan  Year to the  extent
          necessary  to  ensure  that  either  of the  following  tests  is
          satisfied:

          (i)  the "Actual  Deferral  Percentage" (as hereinafter  defined)
               for  the  group  of  Eligible  Employees,   who  are  Highly
               Compensated  Employees is not more than the Actual  Deferral
               Percentage  of all other  Eligible  Employees  multiplied by
               1.25; or

          (ii) the excess of the Actual  Deferral  Percentage for the group
               of Eligible Employees,  who are Highly Compensated Employees
               over that of all other Eligible Employees is not more than 2
               percentage  points,  and the Actual Deferral  Percentage for
               the group of Eligible  Employees who are Highly  Compensated
               Employees is not more than the Actual Deferral Percentage of
               all other Eligible Employees multiplied by 2.0.

     (b)  For  purposes of this  Section  3.4,  the term  "Actual  Deferral
          Percentage"  shall  mean,  for any  specified  group of  Eligible
          Employees,  the average of such Employees'  Deferral  Percentages
          (as defined below).

     (c)  For purposes of this Section 3.4, the term "Deferral  Percentage"
          shall mean, for any Eligible Employee, the ratio of:

          (i)  the  aggregate of the Basic Salary  Reduction  Contributions
               which,  in  accordance  with the rules set forth in Treasury
               Regulation Section 1.401(k)-1(b)(4),  are taken into account
               with respect to such Plan Year; to

          (ii) such Employee's  Section 414(s)  compensation  for such Plan
               Year. For this purpose,  Section 414(s)  compensation  shall
               mean W-2  compensation  as described in Treasury  Regulation
               Sections 1.414(s)-1(c)(2) and 1.415-2(d)(11), and shall also
               include all amounts currently not included in the Employee's
               gross  income by reason of Section 125 and  402(e)(3) of the
               Code.  In the case of an Employee  who begins,  resumes,  or
               ceases  to  be  eligible  to  elect  to  have  Basic  Salary
               Reduction  Contributions  made on his  behalf  during a Plan
               Year, the amount of Section 414(s) compensation  included in
               the Actual Deferral Percentage test is the amount of Section
               414(s)  compensation  received  by the  Employee  during the
               entire Plan Year.

     (d)  The  Deferral  Percentage  for any  Participant  who is a  Highly
          Compensated  Employee  for the Plan Year and who is  eligible  to
          have before-tax  contributions made on his behalf under 2 or more
          arrangements  described  in  Section  40l(k) of the Code that are
          maintained by the Company, or other Employer, shall be determined
          as if such  before-tax  contributions  were  made  under a single
          arrangement.  Notwithstanding the foregoing,  certain plans shall
          be  treated  as  separate  if  mandatorily   disaggregated  under
          Treasury Regulations.

          If the  Plan  is  permissibly  aggregated  or is  required  to be
          aggregated  with  other  plans  having  the same  plan  year,  as
          provided under Treasury Regulation Section  1.401(k)-1(b)(3)  for
          purposes  of  determining  whether  or  not  such  plans  satisfy
          Sections  401(k),  401(a)(4),  and  410(b) of the Code,  then the
          provisions  of this  Section 3.4 shall be applied by  determining
          the Actual  Deferral  Percentage of Employees who are eligible to
          participate in the Plan as if all such plans were a single plan.

     (e)  For Plan Years  beginning  before January 1, 1997, in determining
          the Deferral  Percentage for a Plan Year for a Highly Compensated
          Employee  described in Section  414(q)(6)(A)  of the Code,  Basic
          Salary Reduction Contributions and Section 414(s) compensation of
          such  Participant  shall,  to the extent  required under Treasury
          Regulation  Section  1.401(k)-1(g)(1)(ii)(C),  be aggregated with
          the Basic  Salary  Reduction  Contributions  and  Section  414(s)
          compensation  of any  individual  who is a family  member (as set
          forth in Section  414(q) of the Code).  The  Deferral  Percentage
          obtained by such aggregation  shall be combined with the Deferral
          Percentages   of  the  Highly   Compensated   Employees  who  are
          Participants in determining  the Actual  Deferral  Percentage for
          such group.  Any  Participant  or family  member  whose  Deferral
          Percentage  is  so   aggregated   shall  not  have  his  Deferral
          Percentage  separately  taken into  account  with  respect to any
          group of Employees in determining the Actual Deferral  Percentage
          for such group.

     (f)  In the event the Administrative Committee determines prior to any
          payroll  period  that  the  amount  of  Basic  Salary   Reduction
          Contributions  elected to be made  thereafter  is likely to cause
          the limitation prescribed in this Section 3.4 to be exceeded, the
          Administrative  Committee,  in its  discretion,  may  reduce  the
          amount of Basic Salary Reduction Contributions allowed to be made
          on behalf of Participants  who are Highly  Compensated  Employees
          (and/or such other Participants as the  Administrative  Committee
          may  prescribe)  to  a  rate  determined  by  the  Administrative
          Committee  (including  a rate of 0 percent if the  Administrative
          Committee so determines).  Except as is hereinafter provided, the
          Participants  to whom such reduction is applicable and the amount
          of such  reduction  shall be determined  pursuant to such uniform
          and nondiscriminatory rules as the Administrative Committee shall
          prescribe.

     (g)  Notwithstanding  the foregoing,  with respect to any Plan Year in
          which  Basic  Salary  Reduction  Contributions  made on behalf of
          Participants  who are  Highly  Compensated  Employees  exceed the
          applicable limit set forth in Section 3.4(a),  the Administrative
          Committee may reduce,  to the extent necessary to comply with the
          limitations  prescribed  in this Section 3.4, the amount of Basic
          Salary Reduction Contributions made on behalf of the Participants
          who  are  Highly   Compensated   Employees   (by  reducing   such
          contributions in the order of Deferral Percentages beginning with
          the highest or, for Plan Years  beginning on and after January 1,
          1997, in the order of Base Salary Reduction  Contribution amounts
          beginning  with the largest),  and  distribute  such excess Basic
          Salary Reduction Contributions (along with income attributable to
          such excess Basic Salary Reduction  Contributions,  determined in
          accordance with Section 3.4(h)) to the affected  Participants who
          are Highly Compensated Employees as soon as practicable after the
          end of such Plan Year,  and in all events prior to the end of the
          next following Plan Year.

          If, by application of the provisions of the preceding  paragraph,
          excess Basic Salary  Reduction  Contributions  are required to be
          distributed to a Participant  and 1 or more of his family members
          (as set  forth in  Section  414(q) of the  Code)  whose  Deferral
          Percentages  are required to be  aggregated  in  accordance  with
          Section 3.4(e),  the amount of the excess Basic Salary  Reduction
          Contributions (and income allocable thereto) to be distributed to
          each such  individual  shall be  determined by  multiplying  such
          excess Basic Salary Reduction  Contributions  by a fraction,  the
          numerator  of  which  is  each  such  individual's  Basic  Salary
          Reduction Contributions for the Plan Year, and the denominator of
          which  is the  aggregate  Basic  Salary  Reduction  Contributions
          contributed on behalf of the Participant and his family member(s)
          for the Plan Year.

     (h)  Income  on  a   Participant's   excess  Basic  Salary   Reduction
          Contributions  for the Plan Year in which such excess  occurs and
          for any period thereafter prior to the distribution thereof shall
          be determined in the manner provided for in Article V.

     (i)  Notwithstanding  any distributions  pursuant to the provisions of
          this Section 3.4,  excess  Basic Salary  Reduction  Contributions
          shall be treated as Annual Additions for purposes of Section 4.2.

     (j)  Distributions   pursuant  to  this  Section  3.4  shall  be  made
          proportionately  from the  Investment  Funds with  respect to the
          Participant's  Account or  Accounts  from which  distribution  is
          made.

     (k)  In the  event  that  an  Employer  elects  to  make  a  Qualified
          Contribution  on behalf of any or all  Participants  in the Plan,
          such Qualified  Contribution,  to the extent specified,  shall be
          treated  as a Basic  Salary  Reduction  Contribution  solely  for
          purposes of this Section 3.4.

     (l)  The Administrative  Committee may, in its sole discretion,  elect
          to use any  combination of the methods  described in this Section
          3.4  to  satisfy  the  limitations  contained  herein;  provided,
          however,  that such  combination of methods shall be applied in a
          uniform and nondiscriminatory manner.

     (m)  The  Administrative  Committee  also shall  take all  appropriate
          steps to meet the aggregate  limitation test contained in Section
          4.4.

3.5  Distributions of Excess Deferrals:
     ----------------------------------

     (a)  Notwithstanding any other provision of the Plan, Excess Deferrals
          (as  hereinafter  defined),  plus any  income  and minus any loss
          allocable thereto for both the calendar year and the "gap period"
          between  the  end  of  the   calendar   year  and  the  date  the
          distribution is made (determined in the same manner as the method
          set  forth  in  Section   3.4(h)),   shall  be   distributed   to
          Participants  who claim such  allocable  Excess  Deferrals,  such
          distribution to occur no later than April 15 of the calendar year
          following the calendar year in which the excess occurred.

     (b)  For purposes of this Section 3.5,  "Excess  Deferrals" shall mean
          the   amount   of  a   Participant's   Basic   Salary   Reduction
          Contributions (and other "elective  deferrals" within the meaning
          of Section  402(g)(3)  of the Code) for a calendar  year that the
          Participant   allocates  to  this  Plan  pursuant  to  the  claim
          procedure set forth in Section 3.5(c) hereof.

     (c)  A  Participant  may make a claim for the  distribution  of Excess
          Deferrals  pursuant to the terms and  conditions  of this Section
          3.5(c).  Such Participant's  claim shall be in writing;  shall be
          submitted to the  Administrative  Committee no later than March 1
          of the calendar  year  following  the calendar year of the Excess
          Deferrals;  shall specify the amount of the Participant's  Excess
          Deferrals  for  the  preceding   calendar   year;  and  shall  be
          accompanied by (i) the  Participant's  written  statement that if
          such amounts are not  distributed,  such Excess  Deferrals,  when
          added to other "elective deferrals" within the meaning of Section
          402(g)(3)  of  the  Code,   exceed  the  limit   imposed  on  the
          Participant in accordance  with the applicable  provisions of the
          Code for the year in which the deferral  occurred,  and (ii) such
          documentation  as  the  Administrative  Committee,  in  its  sole
          discretion,  shall  require  to  substantiate  the  Participant's
          written statement. The Administrative Committee may, on a uniform
          and nondiscriminatory  basis,  automatically deem the Participant
          to have made a claim for a  distribution  of Excess  Deferrals if
          such excess  arises by taking into  account  only those  elective
          deferrals made to this Plan and any other plans of an Employer.

     (d)  The Excess Deferrals distributed to a Participant with respect to
          a calendar  year shall be adjusted  for income and, if there is a
          loss allocable to the Excess Deferrals,  shall in no event exceed
          the  lesser  of  the   Participant's   Basic   Salary   Reduction
          Contributions  Account under the Plan or the Participant's  Basic
          Salary Reduction Contributions for the year.

     (e)  Excess  Deferrals shall be treated as annual  additions under the
          Plan, unless such amounts are distributed no later than the first
          April 15th following the close of the Participant's  taxable year
          in which such excess occurred.

3.6  Coordination of Excess Amounts under Sections 401(k) and 402(g)
     of the Code:
     ---------------------------------------------------------------

     (a)  The amount of excess Basic Salary  Reduction  Contributions to be
          distributed  under Section 3.4 with respect to a Participant  for
          the Plan Year shall be reduced by any Excess Deferrals previously
          distributed  to  such  Participant  under  Section  3.5  for  the
          Participant's taxable year ending with or within such Plan Year.

     (b)  The  amount of Excess  Deferrals  that may be  distributed  under
          Section  3.5 with  respect to a  Participant  for a taxable  year
          shall  be   reduced  by  any  excess   Basic   Salary   Reduction
          Contributions  previously distributed to such Participant for the
          Plan Year beginning with or within such taxable year.

3.7  Rollover Contributions
     ----------------------

     (a)  Under such rules and procedures as the  Administrative  Committee
          may establish,  any Eligible  Employee may contribute to the Plan
          in cash (or any other property  acceptable to the  Administrative
          Committee  and  the  Trustee)  all or a  portion  of  the  amount
          received from an Eligible  Retirement Plan (within the meaning of
          Section  9.11)  provided  such  amount  qualifies  as an Eligible
          Rollover  Distribution (within the meaning of Section 9.11). Such
          amount  must be in the  form of a  direct  rollover  (within  the
          meaning  of  Section   9.11).   Before   accepting  any  rollover
          contribution  from  an  Eligible  Employee,   the  Administrative
          Committee   shall  determine  to  its   satisfaction   that  such
          contribution  does not contain  amounts from  sources  other than
          those provided by this Section 3.7. In making such determination,
          the Administrative Committee may require the Eligible Employee to
          provide such evidence as may reasonably be necessary to establish
          that the amounts to be rolled-over  meet the requirements of this
          Section.

     (b)  Any rollover contribution made pursuant to the provisions of this
          Section 3.7 shall be deposited  into a separate  account for such
          Eligible  Employee  (his  "Rollover  Account")  to which shall be
          credited the investment earnings and losses attributable thereto.
          An Eligible Employee shall be 100% vested in his Rollover Account
          at all times. Notwithstanding any provision of Section 7.2 of the
          Plan to the contrary:

          (i)  an Eligible Employee  electing a rollover shall specify,  at
               or prior to the time the rollover  contribution is made, the
               manner in which the amounts rolled over shall be invested in
               each Investment Fund offered under the Plan; such investment
               election  shall specify,  in 5% increments  from 0% to 100%,
               the   percentage   of  the  Eligible   Employee's   rollover
               contribution to be invested in each Investment Fund;

          (ii) prior  to  the  date  on  which  he  becomes  a  Participant
               hereunder,  an  Eligible  Employee  who has made a  rollover
               contribution shall have the opportunity to change the manner
               in which the Rollover Account is invested;  such opportunity
               shall be equivalent to that available to a Participant  with
               respect to the  Accounts  maintained  on such  Participant's
               behalf.

     (c)  An Eligible Employee who makes a rollover contribution, but which
          is not  otherwise  eligible for  membership  in  accordance  with
          Section  2.1 or  Appendix  A,  shall  not  be  entitled  to  make
          contributions   under   Article   III,  or  share  any   Employer
          contribution  allocated in accordance  with Article IV or Article
          XVI.

     (d)  The  Administrative  Committee may promulgate  specific rules and
          regulations governing all aspects of this Section.

<PAGE>

                                 ARTICLE IV

                           COMPANY CONTRIBUTIONS
                           ---------------------

4.1  Amount of Company Contributions:
     --------------------------------

     (a)  Except as otherwise  provided in an Appendix  hereto,  as of each
          pay   period   each   Employer   shall  make   Company   Matching
          Contributions to the Plan on behalf of each Participant who is an
          Eligible  Employee of such  Employer,  in an amount  which,  when
          added  to   forfeitures,   if  any,  equals  50  percent  of  the
          Participant's  Basic Salary Reduction  Contributions for such pay
          period that are not in excess of six percent of the Participant's
          Compensation for such pay period.  Company Matching Contributions
          shall be made in cash.

     (b)  For any Plan Year,  an Employer may  contribute  such  additional
          amounts  as  it  shall   determine.   Such  additional   matching
          contributions shall be allocated to Participants who are Eligible
          Employees of such Employer in the same  proportion that the Basic
          Salary Reduction  Contributions of each such Participant for such
          Plan  Year  bears  to  the  aggregate   Basic  Salary   Reduction
          Contributions of all such Participants for such Plan Year, taking
          into  consideration  only that portion of each such Participant's
          Basic Salary  Reduction  Contributions  which does not exceed six
          percent  of such  Participant's  Compensation  for  each  payroll
          period during such Plan Year.

4.2  Limitation on Annual Additions:
     -------------------------------

     Notwithstanding anything herein to the contrary, in no event shall the
     Annual  Addition  (as   hereinafter   defined)  with  respect  to  any
     Participant  in any Plan Year  exceed  the lesser of (i) 25 percent of
     the  Participant's  IRC 415  compensation  (as  described  in  Section
     415(c)(3) of the Code), or (ii) $30,000,  or such greater amount as is
     permissible  under  Section  415(c)(1)(A),  subject to any  adjustment
     under Section 415(d) of the Code.

     For purposes of this Section 4.2, with respect to each Plan Year,  the
     term "Annual  Addition" with respect to any Participant  means the sum
     of:

     (i)  Basic Salary  Reduction  Contributions  made in  accordance  with
          Section 3.1;

     (ii) Company  Matching  Contributions  made in accordance with Section
          4.1;

     (iii) Qualified Contributions made in accordance with Section 4.5;

     (iv) Forfeitures, if any;

     (v)  Employee   after-tax   contributions  to  a  tax-qualified   plan
          sponsored by any member of the Group; and

     (vi) Amounts described in Code Sections 415(l)(1) and 419A(d)(2).

     If a  Participant  is  also  participating  in  another  tax-qualified
     defined  contribution  plan maintained by any member of the Group, the
     otherwise  applicable  limitation on Annual  Additions under this Plan
     shall be reduced by the amount of annual additions (within the meaning
     of  Section  415(c)(2)  of the  Code)  under  any such  other  defined
     contribution plan.

     With respect to any Plan Year  beginning  before January 1, 2000, if a
     Participant  in this Plan is a participant  in any  qualified  defined
     benefit  plan  maintained  by any  member of the  Group,  the  overall
     limitation  of Section  415(e) of the Code shall be  complied  with by
     limiting the amount of Annual  Additions  to all defined  contribution
     plans  maintained by any member of the Group,  including this Plan, to
     such person.

     If the  limitations  applicable to any  Participant in accordance with
     this Section 4.2 would be exceeded,  the  contributions  made by or on
     behalf  of a  Participant  under  the  Plan  shall be  reduced  in the
     following  order,  but  only  to the  extent  necessary  to  meet  the
     limitations:  (i) after-tax  contributions  made to any  tax-qualified
     plan sponsored by a member of the Group,  (ii) Basic Salary  Reduction
     Contributions   to  the  extent  not   matched  by  Company   Matching
     Contributions,  (iii)  Basic  Salary  Reduction  Contributions  to the
     extent  matched  by  Company  Matching  Contributions,   (iv)  Company
     Matching Contributions made pursuant to Section 4.1, and (v) Qualified
     Contributions made pursuant to Section 4.5.

     In the event that,  notwithstanding  the foregoing  provisions of this
     Section  4.2,  the  limitations   with  respect  to  Annual  Additions
     prescribed  hereunder are exceeded with respect to any Participant and
     such  excess  arises  as a  consequence  of  an  error  in  estimating
     Compensation,  the allocation of forfeitures,  if any, or a reasonable
     error  in   determining   the   amount  of  Basic   Salary   Reduction
     Contributions:

     (i)  The   after-tax   contribution   and   Basic   Salary   Reduction
          Contribution  portions  of such  excess  shall be returned to the
          Participant, along with any income attributable thereto; and

     (ii) The  Company  Matching  Contribution  portion  shall be held in a
          suspense  account  and shall be used to reduce  Company  Matching
          Contributions  for all  Participants  in the Plan  Year,  and all
          succeeding years, as necessary.

4.3  Limitation on Company Matching Contributions:
     ---------------------------------------------

     (a)  Notwithstanding the foregoing  provisions of Article III and this
          Article IV, the  Administrative  Committee shall limit the amount
          of Company Matching  Contributions  made on behalf of each Highly
          Compensated  Employee who is eligible to  participate in the Plan
          for each Plan Year, to the extent necessary to ensure that either
          of the following tests is satisfied:

          (i)  the  "Actual   Contribution   Percentage"   (as  hereinafter
               defined) for the group of Eligible  Employees who are Highly
               Compensated   Employees,   is  not  more  than  the   Actual
               Contribution  Percentage  of all  other  Eligible  Employees
               multiplied by 1.25; or

          (ii) the excess of the  Actual  Contribution  Percentage  for the
               group  of  Eligible  Employees  who are  Highly  Compensated
               Employees,  over that of all other Eligible Employees is not
               more than 2 percentage points,  and the Actual  Contribution
               Percentage  for the  group  of  Eligible  Employees  who are
               Highly  Compensated  Employees  is not more than the  Actual
               Contribution  Percentage  of all  other  Eligible  Employees
               multiplied by 2.0.

     (b)  For purposes of this  Section 4.3, the term "Actual  Contribution
          Percentage"  shall  mean,  for any  specified  group of  Eligible
          Employees,   the   average   of  such   Employees'   Contribution
          Percentages (as defined below).

     (c)  For  purposes  of  this  Section  4.3,  the  term   "Contribution
          Percentage" shall mean for any Eligible Employee, the ratio of:

          (i)  the Company Matching Contributions which, in accordance with
               the  rules  set  forth  in   Treasury   Regulation   Section
               1.401(m)-1(b)(4),  are taken into  account  with  respect to
               such Plan Year; to

          (ii) such Employee's  Section 414(s)  compensation  for such Plan
               Year. For this purpose,  Section 414(s)  compensation  shall
               mean W-2  compensation  as described in Treasury  Regulation
               Sections 1.414(s)-1(c)(2) and 1.415-2(d)(11), and shall also
               include all amounts currently not included in the Employee's
               gross income by reason of Sections 125 and  402(e)(3) of the
               Code.  In the case of an Employee  who begins,  resumes,  or
               ceases to be eligible to have Company Matching Contributions
               made on his behalf during a Plan Year, the amount of Section
               414(s)  compensation  included  in the  Actual  Contribution
               Percentage test is the amount of Section 414(s) compensation
               received by the Employee during the entire Plan Year.

     (d)  The  Contribution  Percentage  for a Participant  who is a Highly
          Compensated  Employee  for the Plan Year and who is  eligible  to
          make  after-tax  contributions,  or  to  have  matching  employer
          contributions  (within the meaning of Section 40l(m)(4)(A) of the
          Code)  made on his  behalf  under 2 or more  plans  described  in
          Section 40l(a) of the Code that are maintained by the Company, or
          other member of the Group, shall be determined as if the total of
          such after-tax  contributions and matching employer contributions
          were  made  under  a  single  arrangement.   Notwithstanding  the
          foregoing,   certain  plans  shall  be  treated  as  separate  if
          mandatorily disaggregated under Treasury Regulations.

          If the  Plan  is  permissibly  aggregated  or is  required  to be
          aggregated  with  other  plans  having  the same  plan  year,  as
          provided under Treasury Regulation Section  1.401(m)-1(b)(3)  for
          purposes  of  determining  whether  or  not  such  plans  satisfy
          Sections  401(m),  401(a)(4),  and  410(b) of the Code,  then the
          provisions  of this  Section 4.3 shall be applied by  determining
          the Actual Contribution  Percentage of Employees who are eligible
          to  participate  in the Plan as if all such  plans  were a single
          plan.

     (e)  For Plan Years  beginning  before January 1, 1997, in determining
          the  Contribution  Percentage  of a  Participant  who is a Highly
          Compensated Employee,  Company Matching Contributions and Section
          414(s)  compensation  of such  Participant  shall,  to the extent
          required       under      Treasury       Regulation       Section
          1.401(m)-1(f)(1)(ii)(C),    reflect    the    Company    Matching
          Contributions  made by and on behalf of, and the  Section  414(s)
          compensation  of, any  individual  who is a family member (as set
          forth in Section 414(q) of the Code). The Contribution Percentage
          obtained  by  such   aggregation   shall  be  combined  with  the
          Contribution  Percentages  of  the  applicable  group  of  Highly
          Compensated  Employees  in  determining  the Actual  Contribution
          Percentage for such group. Any Participant or family member whose
          Contribution  Percentage  is so  aggregated  shall  not  have his
          Contribution   Percentage  separately  taken  into  account  with
          respect  to any group of  Employees  in  determining  the  Actual
          Contribution Percentage for such group.

     (f)  In the event the Administrative Committee determines prior to any
          payroll period that the amount of Company Matching  Contributions
          to  be  made   thereafter  is  likely  to  cause  the  limitation
          prescribed in this Section 4.3 to be exceeded, the Administrative
          Committee,  in its  discretion,  may  reduce  the  amount of such
          contributions  allowed to be made by or on behalf of Participants
          who  are  Highly   Compensated   Employees   (and/or  such  other
          Participants as the Administrative  Committee may prescribe) to a
          rate determined by the Administrative Committee (including a rate
          of 0 percent  if the  Administrative  Committee  so  determines).
          Except as is hereinafter provided,  the Participants to whom such
          reduction is applicable and the amount of such reduction shall be
          determined pursuant to such uniform and  nondiscriminatory  rules
          as the Administrative Committee shall prescribe.

     (g)  Notwithstanding  the foregoing,  with respect to any Plan Year in
          which   Company   Matching   Contributions   made  on  behalf  of
          Participants  who are  Highly  Compensated  Employees  exceed the
          applicable limit set forth in Section 4.3(a),  the Administrative
          Committee may reduce,  to the extent necessary to comply with the
          limitations prescribed in this Section 4.3, the amount of Company
          Matching Contributions made on behalf of the Participants who are
          Highly  Compensated  Employees (by reducing such Company Matching
          Contributions,  for Plan Years beginning  before January 1, 1997,
          in the order of the Contribution  Percentages  beginning with the
          highest  or, for Plan  Years  beginning  on and after  January 1,
          1997,  in the  order of  Company  Matching  Contribution  amounts
          beginning with the largest),  and distribute  such excess Company
          Matching  Contributions,  to the extent then vested,  (along with
          income  attributable  to such  vested  excess  contributions,  as
          determined   pursuant   to  Section   4.3(h))  to  the   affected
          Participants  who are  Highly  Compensated  Employees  as soon as
          practicable  after the end of such Plan  Year,  and in all events
          prior to the end of the next  following  Plan Year. The amount of
          excess Company Matching  Contributions  that are not vested shall
          be forfeited, and shall be held in a suspense account and used to
          reduce the Employer's future Company Matching Contributions.

          If, by application of the provisions of the preceding  paragraph,
          excess Company Matching  Contributions are to be distributed to a
          Participant  and one or more of his family  members (as set forth
          in Section 414(q) of the Code) whose Contribution Percentages are
          required to be aggregated in accordance with Section 4.3(e),  the
          amount of the excess Company Matching  Contributions  (and income
          allocable  thereto)  to be  distributed  to each such  individual
          shall be determined by multiplying  such excess Company  Matching
          Contributions by a fraction,  the numerator of which is each such
          individual's  Company Matching  Contributions  for the Plan Year,
          and  the   denominator   of   which  is  the   Company   Matching
          Contributions  contributed by or on behalf of the Participant and
          the family member(s) for the Plan Year.

     (h)  Income on excess Company Matching Contributions for the Plan Year
          in which such excess occurs and for any period  thereafter  prior
          to the  distribution  thereof  shall be  determined in the manner
          provided for in Article V.

     (i)  Notwithstanding  any  distributions  pursuant  to  the  foregoing
          provisions,   excess  Company  Matching  Contributions  shall  be
          treated as Annual Additions for purposes of Section 4.2.

     (j)  Distributions   pursuant  to  this  Section  4.3  shall  be  made
          proportionately  from the  Investment  Funds with  respect to the
          Participant's  Account or  Accounts  from which  distribution  is
          made.

     (k)  In the  event  that  the  Employer  elects  to  make a  Qualified
          Contribution  on behalf of any or all  Participants  in the Plan,
          any such Qualified Contribution,  to the extent specified,  shall
          be treated as a Company Matching Contribution solely for purposes
          of this Section 4.3.

     (l)  In determining  whether the  requirements of this Section 4.3 are
          satisfied, the Administrative Committee may in its discretion, in
          accordance  with  regulations,  take into  account  Participants'
          Basic Salary Reduction Contributions made to the Plan pursuant to
          Section 3.1; provided that such  contributions are not taken into
          account in order to satisfy the requirements of Section 3.4.

     (m)  The Administrative  Committee may, in its sole discretion,  elect
          to use any  combination of the methods  described in this Section
          4.3  to  satisfy  the  limitations  contained  herein;  provided,
          however,  that such  combination of methods shall be applied in a
          uniform and nondiscriminatory manner.

     (n)  The  Administrative  Committee  shall  also take all  appropriate
          steps to meet the aggregate  limitation test contained in Section
          4.4.

4.4  Aggregate Limitation:
     ---------------------

     Any other provision of the Plan to the contrary  notwithstanding,  the
     provisions  of this Section 4.4 shall apply if the  conditions of both
     (a) and (b) below are satisfied:

     (a)  the sum of (i) the "Actual  Deferral  Percentage"  (as defined in
          Section 3.4) for the group of Eligible  Employees  who are Highly
          Compensated   Employees   and  (ii)  the   "Actual   Contribution
          Percentage"  (as defined in Section 4.3) for such group of Highly
          Compensated   Employees   exceeds  the   "Aggregate   Limit"  (as
          hereinafter defined); and

     (b)  both (i) the Actual Deferral Percentage for the group of Eligible
          Employees  who  are  Highly  Compensated  Employees  exceeds  125
          percent of the Actual  Deferral  Percentage of all other Eligible
          Employees  and (ii) the Actual  Contribution  Percentage  of such
          group of Highly Compensated  Employees exceeds 125 percent of the
          Actual Contribution Percentage of all such other Employees.

          The term  "Aggregate  Limit"  means the greater of the sum of (i)
          and (ii) below or the sum of (iii) and (iv) below:

          (i)  125  percent  of the  greater  of (1)  the  Actual  Deferral
               Percentage  of the group of Eligible  Employees  who are not
               Highly Compensated Employees, or (2) the Actual Contribution
               Percentage  of the group of Eligible  Employees  who are not
               Highly Compensated Employees, and

          (ii) 2 plus the lesser of (i)(1) or (i)(2) above (but in no event
               more  than 200  percent  of the  lesser  of (i)(1) or (i)(2)
               above).

          (iii)125  percent  of the  lesser  of  (1)  the  Actual  Deferral
               Percentage  of the group of Eligible  Employees  who are not
               Highly Compensated Employees, or (2) the Actual Contribution
               Percentage  of the group of Eligible  Employees  who are not
               Highly Compensated Employees, and

          (iv) 2 plus the greater of (iii)(1) or (iii)(2)  above (but in no
               event more than 200  percent of the  greater of  (iii)(1) or
               (iii)(2) above).

     (c)  If the Actual  Deferral  Percentage  and/or  Actual  Contribution
          Percentage  for the group of  Eligible  Employees  who are Highly
          Compensated   Employees,    determined   after   any   corrective
          distribution  of excess amounts in accordance with the provisions
          of Sections 3.4 and 4.3 have been effectuated,  exceeds an amount
          which  would  cause  the  limits  set  forth  in  the   foregoing
          provisions  of this Section 4.4 to be exceeded,  first the amount
          of Basic Salary  Reduction  Contributions  and then the amount of
          Company  Matching  Contributions  shall be  reduced,  in the same
          manner and at the same time as such  contributions are reduced in
          accordance  with  Sections  3.4 and 4.3,  but only to the  extent
          necessary to bring the Plan into  compliance  with the applicable
          limits set forth in this Section 4.4.

     (d)  In determining  whether the  requirements of this Section 4.4 are
          satisfied, the Administrative Committee may in its discretion, in
          accordance  with  regulations,  take into  account  Participants'
          Basic Salary Reduction Contributions made to the Plan pursuant to
          Section 3.1; provided that such  contributions are not taken into
          account in order to satisfy the requirements of Section 3.4.

4.5  Qualified Contributions:
     ------------------------

     An Employer may, in its sole discretion, make a Qualified Contribution
     in  order  to  satisfy  the  requirements  of  Section  3.4 or 4.3.  A
     Qualified  Contribution  is a  contribution  that  (i) is  made by the
     Employer that may be aggregated with other contributions in accordance
     with Sections 3.4 and 4.3; (ii) is nonforfeitable at all times;  (iii)
     may not be distributed to a Participant or any  Beneficiary  until the
     earliest  date  provided  for in  Section  401(k)(2)(B)  of  the  Code
     (determined  without regard to subsection (i)(IV) of such Section) and
     (iv) complies with the  requirements  of Treasury  Regulation  Section
     1.401(k)-1(b)(5).

     A Qualified  Contribution  may take the form of a  qualified  matching
     contribution    (as   defined   in   Treasury    Regulation    Section
     1.401(k)-1(g)(13)(i)),  or a qualified  nonelective  contribution  (as
     defined in Treasury  Regulation  Section  1.401(k)-1(g)(13)(ii)).  The
     Employer shall specify the form of the Qualified Contribution, and the
     Participants to whom such contribution is to be allocated.

4.6  Return of Contributions:
     ------------------------

     Notwithstanding  any  provision  of  the  Plan  to  the  contrary,   a
     contribution  (or part thereof) made to the Plan by an Employer  shall
     be returned to that Employer if:

     (a)  the contribution is made by reason of mistake of fact; or

     (b)  the contribution is not currently deductible under Section 404 of
          the Code;

     provided  that such  return of  contribution  is made  within one year
     after the mistaken  payment of the contribution or the disallowance of
     the tax deduction, as the case may be.

<PAGE>

                                 ARTICLE V

                           VALUATION OF ACCOUNTS
                           ---------------------

5.1  Maintenance of Accounts:
     ------------------------

     The  Administrative  Committee shall separately  maintain on behalf of
     each Participant,  where applicable,  and shall separately account for
     on a reasonable  and consistent  basis, a Basic Employee  Contribution
     Account, Basic Salary Reduction Contribution Account, Company Matching
     Contribution  Account,   Qualified   Contribution  Account,   Rollover
     Account, and Supplemental Employee Contribution Account.

5.2  Valuation:
     ----------

     As of each Valuation Date, the Administrative Committee shall cause to
     be adjusted  the Basic  Employee  Contribution  Account,  Basic Salary
     Reduction Contribution Account, Company Matching Contribution Account,
     Qualified  Contribution  Account,  Rollover Account,  and Supplemental
     Employee Contribution Account for each Participant on whose behalf any
     such  Account  is  maintained  to reflect  his share of  contributions
     (including  for this purpose  contributions  made after such Valuation
     Date  but   credited  as  of  such   Valuation   Date),   withdrawals,
     distributions,  income,  expenses  payable  from the  Trust  Fund (and
     allocable to the Investment Funds in which the Participant's  Accounts
     are  invested)  and any  increase  or  decrease  in the  value of such
     Investment  Funds since the preceding  Valuation Date. The fair market
     value on the Valuation  Date is to be used for this  purpose,  and the
     respective  Accounts of Participants  are to be adjusted in accordance
     with the valuation.

     The Administrative Committee reserves the right to change from time to
     time the procedures used in valuing any one or more of the Accounts or
     crediting  and  debiting  any  one  or  more  of  the  Accounts  if it
     determines,  after due  deliberation  and upon the  advise of  counsel
     and/or the current recordkeeper, that such action is justified in that
     it results in a more  accurate  reflection of the fair market value of
     the  Accounts.  In the event of a conflict  between the  provisions of
     Article   V  and  such   new   administrative   procedures,   the  new
     administrative procedures shall prevail.

5.3  Valuation of Funds:
     -------------------

     The Administrative  Committee shall determine the fair market value of
     each  Investment  Fund as of the end of each Plan Year, and as soon as
     practicable  thereafter  shall deliver or mail to each  Participant or
     Beneficiary  a statement  setting  forth the fair market  value of his
     Account in each Investment Fund.

<PAGE>

                                 ARTICLE VI

                            VESTING OF ACCOUNTS
                            -------------------

6.1  Vesting:
     --------

     A Participant  shall always be 100 percent  vested in the value of his
     After-Tax  Contribution Account,  Basic Employee Contribution Account,
     Basic Salary Reduction  Contribution Account,  Qualified  Contribution
     Account,  and Rollover  Account.  Except as  otherwise  provided in an
     Appendix hereto, a Participant shall be vested in his Company Matching
     Contribution Account in accordance with the following schedule:

               YEARS OF VESTING SERVICE               VESTED INTEREST
               ------------------------               ---------------

               Less than 3 years                          0 percent
               3 years or more                          100 percent

     Notwithstanding   any  other   provision  of  Article  VI,   Employees
     participating  in the  Plan  shall  become  fully  vested  in  Company
     Matching Contributions credited to their Accounts at:

     (a)  Normal Retirement Age;

     (b)  Early Retirement Date;

     (c)  the time they incur a Disability;

     (d)  death;

     (e)  termination of the Plan; or

     (f)  termination  of  employment  due to  the  closing  or  divestment
          (including  the  closing of a plant or  facility)  of an Employer
          (but only with respect to Eligible Employees of such Employer).

     Notwithstanding  the  foregoing,  if a  Participant  who is not  fully
     vested has a 1-year Period of Severance and is subsequently rehired by
     an Employer,  his Years of Vesting Service shall be computed by adding
     (i) his Years of  Vesting  Service  earned  prior to his  Reemployment
     Commencement Date to (ii) his Years of Vesting Service that he accrues
     subsequent to his Reemployment  Commencement  Date,  provided that the
     Participant's Period of Severance is shorter than the greater of (i) 5
     years, or (ii) the aggregate number of Years of Vesting Service earned
     prior  to  his  termination  date.  If  the  Participant's  Period  of
     Severance equals or is longer than the greater of (i) 5 years, or (ii)
     the aggregate  number of Years of Vesting  Service earned prior to his
     termination  date,  his Years of Vesting  Service  earned prior to his
     initial date of termination shall be ignored for all purposes.

6.2  Treatment of Forfeitures:
     -------------------------

     In the event that a Participant terminates employment and is less than
     100 percent  vested in all  Accounts,  forfeitures  of his  non-vested
     interest in the Company Matching  Contributions  Account shall be used
     by the  Employer  to reduce  future  Company  Matching  Contributions.
     Amounts  shall  be  forfeited  on  the  earlier  of  the  date  of the
     distribution of his Vested Interest,  or upon the fifth anniversary of
     the Participant's Severance from Service.

6.3  Reinstatement of Accounts:
     --------------------------

     If a former Participant whose termination of employment  resulted in a
     forfeiture  pursuant to Section 6.2 is  re-employed  by an Employer or
     any member of the Group,  the  Participant  may elect (upon  giving 30
     days' advance  notice or such other period as may be prescribed by the
     Administrative  Committee)  to repay the  Trustee,  in cash,  the full
     amount  distributed to the  Participant in accordance  with Article IX
     and such repayment shall be allocated to the Participant's Account. In
     such event,  the amount of the forfeiture  (unadjusted by any gains or
     losses)  shall  be  restored  and  credited  as  of  the  Reemployment
     Commencement Date to the  Participant's  Account in such manner as the
     Administrative  Committee  shall  deem  appropriate  pursuant  to such
     uniform  and  nondiscriminatory  rules as it shall  from  time to time
     prescribe.

     If a distribution is a result of a termination of employment, the time
     for  repayment  may not end  before the  earlier of 5 years  after the
     first Reemployment  Commencement Date or the close of the first period
     of 5  consecutive  1-year  Periods of Severance  commencing  after the
     distribution.

     The  amount  of  Company  Matching  Contributions,  if any,  which are
     restored  will be derived  first from  amounts  forfeited  and not yet
     applied to reduce future Company Matching  Contributions,  and second,
     if such amounts are not  sufficient  to make a full  restoration,  the
     Employer shall make an additional contribution in the amount necessary
     to complete the restoration.  Years of Vesting Service  completed with
     respect to such restored amount shall also be restored.

<PAGE>

                                ARTICLE VII

                           INVESTMENT OF ACCOUNTS
                           ----------------------

7.1  Investment of Accounts:
     -----------------------

     All  contributions  made to the Plan by or on behalf of a  Participant
     shall  be  invested  in  such  Investment  Fund  or  Funds  which  the
     Administrative  Committee, in its discretion,  shall make available to
     Participants, Beneficiaries and Eligible Employees. The Administrative
     Committee  may,  at  any  time  add  to,  subtract  from,  or  replace
     Investment  Funds then being  offered.  The  Administrative  Committee
     shall endeavor to provide  Participants with the opportunity to obtain
     sufficient  information  to  make  informed  decisions  regarding  all
     available Investment Funds.

     A  portion  of an  Investment  Fund  may be  invested  in  short  term
     securities issued or guaranteed by the United States of America or any
     agency or instrumentality  thereof or any other investments of a short
     term nature, including corporate obligations or participations therein
     and through the medium of any common,  collective or commingled  trust
     fund  maintained  by the  Trustee  which is  invested  principally  in
     property  of the kind  specified  in this  paragraph.  A portion of an
     Investment Fund may be maintained in cash.

7.2  Investment Elections:
     ---------------------

     (a)  When an Eligible  Employee  completes and returns the Appropriate
          Form to become a Participant,  he shall give Notice regarding the
          investment  of  contributions  made on his behalf under the Plan.
          The Notice shall specify,  in 5% increments  from 0% to 100%, the
          percentage  of all future Basic Salary  Reduction  Contributions,
          Company Matching  Contributions,  and Qualified Contributions (in
          accordance with a single election to be applied  uniformly to all
          types of  contributions)  to be invested in each  Investment Fund
          which is then made available under the Plan.

          A Participant may change the investment elections made under this
          Section 7.2(a) at any time by giving Notice to the Administrative
          Committee or its designee within such time and in accordance with
          such means as are designated by the Administrative  Committee and
          communicated to Participants and Eligible Employees.  Such Notice
          of change shall be subject to the procedural  specifications  set
          forth above (and, if applicable,  subject to the  limitations set
          forth in Section 7.3) and, except as may otherwise be provided in
          the  Trust   Agreement,   shall  be  effective  with  respect  to
          contributions  received by the Trustee  (or  otherwise  deposited
          into the Trust Fund) as of the Valuation Date on which the Notice
          is  received  or as of the  next  following  Valuation  Date,  in
          accordance  with  procedures  established  by the  Administrative
          Committee,   and   communicated  to  Participants   and  Eligible
          Employees.

     (b)  Each  Participant and  Beneficiary  shall have the opportunity to
          change the manner in which the Accounts  maintained on his behalf
          under the Plan is invested.  Such opportunity  shall be exercised
          by giving Notice to the Administrative  Committee or its designee
          within  such  time  and in  accordance  with  such  means  as are
          designated by the  Administrative  Committee and  communicated to
          Participants,  Eligible  Employees  and  affected  Beneficiaries.
          Subject to any minimum dollar limitation which may be established
          by the  Administrative  Committee from time to time,  such Notice
          shall specify,  in a whole dollar amount or in 1% increments from
          0% to 100%, the dollar amount, or percentage of the total Account
          maintained on behalf of the  Participant or Beneficiary  which is
          to be  invested  in each  Investment  Fund then  made  available.
          Except as may otherwise be set forth in the Trust Agreement, such
          Notice shall be effective as of the  Valuation  Date on which the
          Notice is  received  by the  Trustee or as of the next  following
          Valuation Date, in accordance with procedures  established by the
          Administrative   Committee  and   communicated  to  Participants,
          Eligible  Employees and affected  Beneficiaries.  Notwithstanding
          any  provision of this Section  7.2(b) to the  contrary,  (i) the
          election   hereunder   shall  be  subject   to  any   contractual
          limitations  imposed on the  direct  transfer  of assets  between
          given  Investment  Funds and (ii) in no event shall a Participant
          or  Beneficiary be permitted to effect a change in the investment
          of his total  Account to the extent  that the  investment  change
          would  contradict any limitation then in effect on transfers into
          or out of the Mettler Toledo Stock Fund that has been established
          by  the  Administrative   Committee,   in  its  discretion,   and
          communicated to Participants and Beneficiaries.

     (c)  Any  investment  elections  or  changes in  elections  under this
          Section  7.2 may be  limited  or  delayed  by the  Administrative
          Committee or Trustee,  if, in the judgment of such party,  giving
          immediate  effect to such elections  would  adversely  affect the
          Account balances of a significant number of Participants.

     (d)  In the event a Participant's or Beneficiary's investment election
          is incomplete,  the Participant or Beneficiary will be assumed to
          have chosen to invest in such default fund as is set forth in the
          Trust Agreement,  or otherwise  determined by the  Administrative
          Committee.

     (e)  Any investment  election  under the foregoing  provisions of this
          Section  7.2 shall  remain in effect  until  changed  by  another
          election under this Section.

     (f)  Each  Participant,  Eligible  Employee and  Beneficiary is solely
          responsible  for the  selection  of his  investment  option.  The
          Trustee, the Administration Committee, the Company, the Employer,
          and the directors,  officers,  supervisors and other employees of
          the  Company  and the  Employer  are not  empowered  to  advise a
          Participant, Eligible Employee or Beneficiary as to the manner in
          which any portion of his Account shall be invested. The fact that
          an  investment  option is  available  under the Plan shall not be
          construed as a  recommendation  for investment in that investment
          option.

7.3  Mettler Toledo Stock Fund:
     --------------------------

     The  provisions of this Section shall become  applicable to the extent
     to which Participants' and Beneficiaries'  Accounts under the Plan are
     invested in the Mettler Toledo Stock Fund.

     (a)  The Administrative  Committee shall make available under the Plan
          an  investment  fund which shall  consist  exclusively  of Common
          Stock; provided,  however, that in the discretion of the Trustee,
          within guidelines set by the Administrative  Committee, a portion
          of  such  fund  may  be  held  in   short-term   interest-bearing
          investments  or cash  pending  purchase  of  Common  Stock and to
          provide  sufficient  liquidity  for  exchanges  out of the  fund,
          withdrawals and loans.  Such Investment Fund shall be referred to
          as the "Mettler Toledo Stock Fund".  Subject to any limitation on
          contributions  and/or transfers into or out of the Mettler Toledo
          Stock  Fund  that  the  Administrative   Committee  may,  in  its
          discretion,  establish,  a Participant  or  Beneficiary  shall be
          permitted to invest  contributions made to the Plan on his behalf
          and existing Accounts  maintained under the Plan on his behalf in
          the Mettler  Toledo Stock Fund in accordance  with the provisions
          of Sections 7.2. Unless otherwise  limited under the terms of the
          Trust Agreement, the Trustee may, in its discretion,  purchase or
          sell Common  Stock on the open market or by  privately-negotiated
          transaction;  provided  however,  that any such  purchase or sale
          shall  be  made  only  in  exchange  for  fair  market  value  as
          determined  by  the  Trustee  and,  provided  further,   that  no
          commission  shall be charged to or paid by the Plan with  respect
          to any  purchase or sale of Common  Stock  between the Plan and a
          party in  interest  (as defined in Section  3(14) of ERISA).  Any
          distributions,  dividends or other income received by the Trustee
          with respect to the Mettler Toledo Stock Fund shall be reinvested
          by  the  Trustee  in  the   Mettler   Toledo   Stock  Fund.   The
          Administrative  Committee shall provide, at such time and in such
          manner as it shall determine in its discretion,  whether share or
          unit  accounting be performed  with respect to the Mettler Toledo
          Stock Fund.

     (b)  The restrictions  contained in this Section 7.3(b) shall apply to
          that portion of the Accounts maintained on behalf of Participants
          or  Beneficiaries  which are invested in the Mettler Toledo Stock
          Fund and, if and to the extent necessary,  any election made by a
          Participant  or  Beneficiary  under  the  Plan  shall  be  deemed
          modified to be consistent with this Section 7.3(b).

          Notwithstanding  the provisions of Section 7.2, and Articles VIII
          and XV:

          (i)  No  Participant  or  Beneficiary  shall,  on  the  basis  of
               material  nonpublic  information with respect to the Company
               or its  affiliates,  make  an  election  permitted  by  that
               Section or those  Articles if (1) such election would result
               in an exchange into or out of, loans from, withdrawals from,
               or an increase or decrease in the amount of contributions to
               the  Mettler  Toledo  Stock  Fund,  and (2) the  transaction
               resulting from such election is prohibited by Rule 10b-5.

          (ii) No officer shall make an election  permitted by that Section
               or  those  Articles  if  such  election  would  result  in a
               transaction involving the Mettler Toledo Stock Fund which is
               not an exempt transaction pursuant to Rule 16b-3.

          For purposes of this Section  7.3(b),  the terms "Rule 10b-5" and
          "Rule  16b-3"  shall mean the rules,  as  amended,  having  those
          designations  promulgated  by the United  States  Securities  and
          Exchange  Commission  pursuant to the Securities  Exchange Act of
          1934, as amended,  and the terms  "affiliate" and "officer" shall
          have the  meanings  set forth in Rule  12b-2  and Rule  16a-1(f),
          respectively, both as so promulgated and amended.

7.4  Voting of Common Stock:
     -----------------------

     (a)  Each  Participant,  Eligible  Employee or Beneficiary  who has an
          Account  maintained  on his  behalf  with  an  investment  in the
          Mettler  Toledo  Stock Fund shall have the  following  powers and
          responsibilities:

          (i)  Prior to each annual or special meeting of the  shareholders
               of  Mettler-Toledo  International  Inc.  ("MTI"),  MTI shall
               cause to be sent to each person described in Section 7.4(a),
               a copy of the proxy solicitation  material for such meeting,
               together  with  a  form   requesting   confidential   voting
               instructions  for the voting of the Common Stock held in the
               Mettler  Toledo  Stock Fund in  proportion  to the number of
               units  of the  Mettler  Toledo  Stock  Fund  held  by such a
               person's  Accounts  or, if  applicable,  the  number of full
               shares of Common  Stock  credited  under the Mettler  Toledo
               Stock Fund to such a person's Accounts. Upon receipt of such
               a  person's  instructions,  the  Trustee  shall then vote in
               person, or by proxy, such Common Stock as so instructed.

          (ii) MTI  shall  cause  the  Trustee  to  furnish,   as  soon  as
               practicable  after  receipt by the  Trustee,  to each person
               described  in  Section  7.4(a),  notice  of  any  tender  or
               exchange  offer for, or a request or invitation  for tenders
               or  exchanges  of,  Common  Stock made to the  Trustee.  The
               Trustee shall request from each such person  instructions as
               to the  tendering or  exchanging of Common Stock held in the
               Mettler  Toledo  Stock Fund in  proportion  to the number of
               units  of the  Mettler  Toledo  Stock  Fund  held  by such a
               person's  Accounts  or, if  applicable,  the  number of full
               shares of Common  Stock  credited  under the Mettler  Toledo
               Stock  Fund to such a  person's  Accounts.  Within  the time
               specified by the notice of any tender or exchange offer for,
               or request or invitation for tenders or exchanges of, Common
               Stock,  the Trustee  shall  tender or  exchange  such Common
               Stock as to which the Trustee has received  instructions  to
               tender or  exchange  from the persons  described  in Section
               7.4(a).

          (iii)Instructions  received from the persons described in Section
               7.4(a) by the Trustee  regarding the voting,  tendering,  or
               exchanging of Common Stock held in the Mettler  Toledo Stock
               Fund shall be held in strictest  confidence and shall not be
               divulged to any other person, including directors,  officers
               or employees of MTI and of the Company,  except as otherwise
               required by law, regulation or lawful process.

     (b)  The Trustee shall, in its discretion, vote Common Stock for which
          the Trustee does not receive affirmative  direction and shall, in
          its  discretion,  determine  whether to tender or exchange Common
          Stock with  respect to which the  Trustee  does not  receive  any
          affirmative direction.

7.5  Voting of Shares in Residual Exxon Stock Fund:
     ----------------------------------------------

     Before  an  annual  or  special  meeting  of its  shareholders,  Exxon
     Corporation shall furnish, to each Participant who is participating in
     the  Investment  Fund  primarily   invested  in  stock  of  the  Exxon
     Corporation  ("Exxon  Stock  Fund") at such  time,  a proxy  form with
     related  material and a request that the proxy be signed and returned.
     Upon  receipt  of  the  signed  proxy,  the  shares  credited  to  the
     Participant's  Account  in the Exxon  Stock Fund shall be voted in the
     manner  directed.  Any shares as to which no proxy is received  may be
     voted by the Trustee in its discretion.

<PAGE>

                                ARTICLE VIII

                       WITHDRAWALS DURING EMPLOYMENT
                       -----------------------------

8.1  Basic Withdrawals:
     ------------------

     Subject to subsections  (c), (d) and (e) below, a Participant  may, by
     filing the Appropriate Form with the Administrative  Committee,  elect
     to withdraw amounts during employment in accordance with the following
     order of withdrawal options;  provided,  however, that any Participant
     electing a  withdrawal  from the  options  below  shall be required to
     exhaust all withdrawal  possibilities  under the options preceding the
     withdrawal option elected:

     (a)  A Participant employed by an Employer who has attained age 59-1/2
          may  withdraw all or any portion of his Account in which he has a
          Vested Interest.

     (b)  A  Participant  employed by an Employer  who has not yet attained
          age  59-1/2  may  withdraw  from his  Accounts  according  to the
          following schedule:

          (i)  On and after July 1, 1994, such a Participant who has made a
               rollover  contribution in accordance with Section 3.7 hereof
               may withdraw all or any portion of his Rollover Account;

          (ii) All or any portion of the employee  after-tax  contributions
               made to the Prior Reliance Electric Plan or its predecessors
               prior to October 1, 1983 (excluding earnings thereon);

          (iii)All  or any  portion  of the  Participant's  Basic  Employee
               Contribution Account and After-Tax Contribution Account;

          (iv) All or any  portion of the  Participant's  Company  Matching
               Contribution Account,  provided that if such Participant has
               participated  in the Plan  for less  than  five  years  such
               amount shall not include Company Matching Contributions made
               to the Plan within 24 months prior to the effective  date of
               the withdrawal;

          (v)  For  Participants  who  suffer a  Hardship  (as  defined  in
               Section 8.2), such portion of the Participant's Basic Salary
               Reduction  Contribution Account (excluding earnings credited
               to such Account after  December 31, 1988) as is permitted to
               be withdrawn pursuant to Section 8.2.

     (c)  Withdrawals  of  a  Vested   Interest  shall  be  made  from  the
          Investment  Funds  maintained  under  the  Plan in such  order of
          priority as the Administrative  Committee,  pursuant to a uniform
          and nondiscriminatory policy, such direct.

     (d)  Withdrawals  shall be  effective  as of the first day of the next
          calendar  year  quarter  provided the  Appropriate  Form has been
          filed with the Administrative Committee at least thirty (30) days
          prior to such quarterly date. Partial withdrawals from any of the
          above categories may be made only in multiples of $100.

     (e)  For periods on and after July 1, 1994 and before January 1, 2000,
          a Participant  who  withdraws any portion of his vested  Accounts
          under  Section  8.1(b)(i)  through  (iv) above shall be suspended
          from  receiving an allocation of Company  Matching  Contributions
          for a period of six months  following the effective  date of such
          withdrawal.  For  periods  on and after  January  1,  2000,  such
          suspension of Company  Matching  Contribution  allocations  shall
          apply only to a  Participant  who  withdraws  any  portion of his
          vested  Account under Section  8.1(b)(iv).  Except as provided in
          the two  preceding  sentences  and in  Section  8.2(b)  below,  a
          Participant  exercising the withdrawal provisions of this Section
          8.1 shall not have his  participation  in the Plan  restricted on
          account of such withdrawal.

8.2  Hardship Withdrawals:
     ---------------------

     For purposes of this Plan,  the term  "Hardship"  means a circumstance
     resulting   from  an  immediate  and  heavy   financial  need  of  the
     Participant.  The Administrative  Committee shall not allow a Hardship
     distribution  to be made to a Participant  unless the  requirements of
     subsections (a) and (b) below are satisfied:

     (a)  The  Participant  may incur a  Hardship  arising  from one of the
          following expenses:

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

          (ii) Costs  directly  related  to  the  purchase  of a  principal
               residence for the Participant  (excluding  mortgage payments
               thereon);

          (iii)The cost of tuition  and  related  educational  fees for the
               next  12  months  of   post-secondary   education   for  the
               Participant,   the  Participant's   spouse,   children,   or
               dependents; or

          (iv) The amount needed to prevent the eviction of the Participant
               from his principal residence or foreclosure of a mortgage on
               his principal residence.

     (b)  The distribution by reason of Hardship:

          (i)  May  not be  more  than  the  amount  of  the  Participant's
               immediate and heavy financial need, provided,  however, that
               such need may include amounts  necessary to pay income taxes
               and  penalties  reasonably  anticipated  to result  from the
               distribution;

          (ii) May not be made  unless the  Participant  has  obtained  all
               distributions,  other than hardship  distributions,  and all
               non-taxable  loans that are  currently  available  under all
               qualified  and  nonqualified  plans  of all  members  of the
               Group;

          (iii)May not be made unless the  Participant  is  suspended  from
               having  Basic  Salary  Reduction  Contributions  and Company
               Matching  Contributions  made on his behalf to the Plan (and
               he is  suspended  from  making  employee  contributions  and
               elective   contributions   to  all   other   qualified   and
               nonqualified  plans of deferred  compensation,  inclusive of
               stock option,  stock purchase,  and similar plans maintained
               by an Employer,  excluding mandatory employee  contributions
               to a  defined  benefit  plan or health  or  welfare  benefit
               plans)  for  the  twelve  month  period   beginning  on  the
               effective date of the Hardship  withdrawal  pursuant to this
               Section 8.2; and

          (iv) Will result in a  limitation  on the amount of Basic  Salary
               Reduction Contributions which may be made on a Participant's
               behalf under the Plan (and all other plans  maintained  by a
               member of the  Group) for the  taxable  year  following  the
               taxable  year  of  the  Hardship  distribution,   with  such
               limitation  being equal to the Code Section 402(g) limit for
               such  following   taxable  year  less  the  amount  of  such
               Participant's  Basic Salary Reduction  Contributions for the
               taxable year of the Hardship distribution.

          After the 12-month  period of  suspension  under  (b)(iii)  above
          ceases,  the  Participant may resume  contributions  hereunder by
          completing and returning the Appropriate  Form in accordance with
          Section 2.2.

     The determination of the existence of a Hardship and the determination
     of the amount  required to be  distributed to meet the need created by
     the Hardship shall be made by the Administrative Committee pursuant to
     uniform and nondiscriminatory  rules, consistent with the requirements
     of the Code and applicable regulations.  The Administrative  Committee
     may require  documentation from the Participant for this purpose.  The
     Administrative  Committee shall  reasonably rely on the  documentation
     submitted by the Participant,  unless the Administrative Committee has
     actual knowledge to the contrary.

     The Company  may, by  amendment,  change the  conditions  necessary to
     obtain  a  Hardship  withdrawal,  or may  modify  or  discontinue  the
     Hardship  withdrawal  provisions of this Plan, to the extent permitted
     by applicable law or regulation.

8.3  Payment of Withdrawals:
     -----------------------

     Any amounts  withdrawn  under  Sections 8.1 and 8.2 shall be paid to a
     Participant  in a lump sum in cash, as soon as  practicable  after the
     Valuation  Date as of which  the  withdrawal  election  is  effective;
     provided,  however,  that with respect to withdrawals made on or after
     February 1, 2000, the withdrawal may be in the form of cash or, to the
     extent all or a portion of the Participant's  applicable  Accounts are
     invested in the Mettler Toledo Stock Fund,  such amount shall be paid,
     at the  Participant's  election,  in either (i) whole  units of Common
     Stock (with fractional units being distributed in cash), (ii) cash, or
     (iii) a combination of Common Stock and cash.

8.4  Values:
     -------

     All  withdrawals  under  Sections  8.1 and 8.2  shall  be based on the
     values of Accounts as of the applicable  Valuation Date referred to in
     Section 8.1 and 8.2.

     Notwithstanding  the  foregoing,   the  Administrative  Committee  may
     require a valuation as of the  Valuation  Date  following the date the
     request for a withdrawal  was received in the event that it determines
     that,  due to a  decline  in the  market  value  of all  Participants'
     Accounts,  it  would  be in the  best  interest  of  Participants  and
     Beneficiaries to use the later Valuation Date. The preceding  sentence
     shall not apply unless the Administrative Committee determines a fixed
     period within which all withdrawal  requests will be valued as of such
     later Valuation Date, and announces such decision, and such period, to
     all Participants.

<PAGE>

                                 ARTICLE IX

                          DISTRIBUTION OF BENEFITS
                          ------------------------

9.1  Amount of Distribution:
     -----------------------

     Upon  a  Participant's   retirement,   death,  Disability,   or  other
     termination of employment with the Company or any other Employer,  the
     Participant or his Beneficiary,  as the case may be, shall be entitled
     to a distribution of the Vested  Interest in his Accounts,  subject to
     the following provisions of this Article IX. Notwithstanding  anything
     in  this  Section  9.1 to  the  contrary,  Section  2.5  applies  to a
     Participant who ceases to meet the definition of an Eligible  Employee
     but  continues  to be in the employ of an Employer or other  member of
     the Group.

9.2  Payment of Distribution:
     ------------------------

     (a)  As soon as practicable upon his termination of employment for any
          reason (including  Disability or an Early Retirement Date) or the
          occurrence of his Normal  Retirement Date, a Participant shall be
          eligible to elect payment of his Vested  Interest.  Payment shall
          be made in a single lump sum  distribution  equal to the value of
          his Vested Interest; provided, however, that effective January 1,
          2000 and subject to the  involuntary  distribution  provision  of
          Section  9.2(c),  the Participant may elect payment of his Vested
          Interest in the form of substantially equal periodic installments
          over  a  period   not  in   excess   of  his   life   expectancy.
          Notwithstanding  the foregoing,  any person who has satisfied the
          service   requirements  for  Early  Retirement,   but  terminates
          employment  prior to  attaining  the age  requirements  set forth
          therein shall  nevertheless be entitled upon satisfaction of such
          age requirements,  to receive distribution of his Plan benefit in
          the same manner as those  persons  who  satisfy  both the age and
          service requirements for an Early Retirement benefit hereunder.

     (b)  The value of the  Vested  Interest  in a  Participant's  Accounts
          shall be  determined  as of the  Valuation  Date that  authorized
          distribution  directions  are  received by the  Trustee  from the
          Administrative  Committee or its delegate.  Such  Valuation  Date
          shall  follow the  "Election  Period" (as  hereinafter  defined);
          provided,   however,   that  a  Participant  or  Beneficiary  may
          affirmatively elect an immediate account distribution  determined
          as of a Valuation Date which falls within the Election Period and
          on which authorized  distribution  directions are received by the
          Trustee from the  Administrative  Committee or its delegate.  For
          purposes  hereof,  the  "Election  Period"  shall mean the 30-day
          period  commencing  on  the  date  on  which  the  Administrative
          Committee or its delegate provides the Participant or Beneficiary
          with  information  regarding  Plan  distributions,  including the
          Participant's   or   Beneficiary's   rights  with  respect  to  a
          distribution  in the form of a direct rollover and, if the Vested
          Interest  is  in  excess  of  the  $5,000  threshold  (or  $3,500
          threshold,  if applicable)  described in subsection (c) below and
          the  Participant  has not attained  age 70-1/2,  the right of the
          Participant to defer receipt of the distribution.

     (c)  If a Participant's Vested Interest as of the applicable Valuation
          Date is not in excess  of $5,000  ($3,500  for  periods  prior to
          January 1, 2000) nor was,  at the time of any prior  distribution
          date,  in  excess of such  figure,  distribution  of such  Vested
          Interest  shall be made as soon as  practicable  thereafter  in a
          lump sum in cash.

     (d)  A Participant who terminated employment and whose Vested Interest
          may not be paid out under the  preceding  sentence  must elect to
          either have an immediate  distribution  of his Vested Interest or
          to defer said distribution. If a Participant elects to defer said
          distribution,  the  election  may remain in effect until the date
          stated in Section 9.6 (or as late as April 1  following  the year
          the individual attains age 70-1/2, if the Participant so elects);
          provided,   however,  that  subject  to  uniform   administrative
          procedures   adopted  by  the  Administrative   Committee,   such
          Participant  shall  have the  opportunity  to elect an  immediate
          distribution  of his Vested  Interest  as of any  Valuation  Date
          after  such  election  is made.  If a  Participant  dies while in
          deferred   status,   the  Account  will  be  distributed  to  the
          Participant's Beneficiary in accordance with Section 9.8.

     (e)  All distributions shall be made in cash; provided,  however, that
          to the extent all or a portion of a Participant's Vested Interest
          is invested in the Mettler  Toledo Stock Fund,  such amount shall
          be paid, at the election of the Participant,  in either (i) whole
          units of Common Stock (with fractional units being distributed in
          cash),  (ii) cash,  or (iii) a  combination  of Common  Stock and
          cash.  In the  event  distribution  is made in the  absence  of a
          Participant's  distribution election,  that portion of an Account
          that is invested in the Mettler  Toledo Stock Fund at the time of
          distribution shall be paid in cash.

     (f)  A  Participant  who  terminates  employment  shall  be  given  an
          Appropriate  Form,  which must be filled out and  returned to the
          Company within 60 days after the  termination.  Failure to return
          the form within 60 days after the Participant's  termination will
          result in his distribution being automatically deferred until the
          effective  date  of  a  Participant's   election  to  receive  an
          immediate distribution as described herein.

9.3  Deferred Accounts:
     ------------------

     In any case in  which a  Participant  has  terminated  employment  but
     distribution of his Accounts has not yet occurred, such Accounts shall
     be retained and  administered  under the Plan until such  Accounts are
     distributed.  Except as may otherwise be required by  applicable  law,
     the  Administrative  Committee  may  establish and change from time to
     time rules and restrictions  applicable to the  administration  of any
     Accounts  held on behalf  of any such  Participants  (which  rules and
     restrictions  may differ  from those  generally  applicable  to active
     Participants), and the Administrative Committee may assess against the
     Accounts of any such Participant any reasonable costs of administering
     the  same.  Notwithstanding  the  foregoing,  in no event  will such a
     Participant be allowed to make  withdrawals in accordance with Article
     VIII from such Accounts which have been deferred.

9.4  Distribution Requirements Applicable to Basic Salary
     Reduction Contributions:
     ----------------------------------------------------

     Basic Salary Reduction  Contributions and the income allocable thereto
     shall in no event be distributed to a Participant or  Beneficiary,  as
     the case may be, before the earlier of such Participant's  retirement,
     death, Disability, termination of employment, or before the occurrence
     of one of the following events:

     (a)  Termination of the Plan without the  establishment or maintenance
          of a successor  plan  within the  meaning of Treasury  Regulation
          Section 1.401(k)-1(d)(3).

     (b)  The  disposition  by an Employer to an unrelated  corporation  of
          substantially  all of the assets  (within  the meaning of Section
          409(d)(2)  of the  Code)  used in a  trade  or  business  of such
          Employer if the Employer continues to maintain the Plan after the
          disposition  and such  unrelated  corporation  that purchases the
          assets  does not  maintain  the Plan after the  disposition,  but
          distribution  may only be made  with  respect  to  Employees  who
          continue employment with the corporation acquiring such assets.

     (c)  The  disposition  by an Employer to an  unrelated  entity of such
          Employer's  interest  in a  subsidiary  (within  the  meaning  of
          Section  409(d)(3)  of the  Code) if the  Employer  continues  to
          maintain the Plan and such  unrelated  entity that  purchases the
          subsidiary does not maintain the Plan after the disposition,  but
          distribution  may only be made  with  respect  to  Employees  who
          continue employment with such subsidiary.

     (d)  The attainment by the Participant of age 59-1/2.

     (e)  The  Participant's  Hardship,  as described in Section 8.2 of the
          Plan.

     With respect to a distribution to a Participant on account of an event
     described in  Sections  9.4(a), (b), or (c) above,  such  distribution
     shall be paid in the form of a lump sum.

9.5  Alienation of Benefits:
     -----------------------

     Except as otherwise provided by law, no benefit,  interest, or payment
     under  the Plan  shall  be  subject  in any  manner  to  anticipation,
     alienation, sale, transfer, assignment, pledge, encumbrance or charge,
     whether  voluntary or  involuntary,  and no attempt to so  anticipate,
     alienate, sell, transfer,  assign, pledge, encumber or charge the same
     shall be valid nor shall any such benefit,  interest, or payment be in
     any way liable for or  subject to the debts,  contracts,  liabilities,
     engagements or torts of the person entitled to such benefit, interest,
     or payment or subject to attachment,  garnishment,  levy, execution or
     other legal or equitable process.

     Notwithstanding the foregoing, the creation, assignment or recognition
     of a right  to any  benefit  payable  with  respect  to a  Participant
     pursuant  to a  "qualified  domestic  relations  order" (as defined in
     Section  414(p) of the Code) shall not be treated as an  assignment or
     alienation  prohibited by this Section 9.5. Any other provision of the
     Plan  to  the  contrary  notwithstanding,   if  a  qualified  domestic
     relations  order  requires  the  distribution  of  all  or  part  of a
     Participant's   benefits   under  the  Plan,  the   establishment   or
     acknowledgment  of the alternate  payee's right to benefits  under the
     Plan in accordance with the terms of such qualified domestic relations
     order shall in all events be applied in a manner  consistent  with the
     terms of the Plan.  Notwithstanding  the foregoing,  in no event shall
     the recognition of an alternate payee's rights in accordance with this
     Section  9.5 be  deemed  to  include  the  right to make a  withdrawal
     pursuant to the  provisions of Article VIII or to receive any benefits
     in the form of a partial payment.

     Any Accounts  maintained on behalf of an alternate payee in accordance
     with  this  Section  9.5  shall  in all  events  be  invested  in such
     Investment Fund as the Administrative  Committee may from time to time
     specify.

     Any other provision of the Plan to the contrary  notwithstanding,  the
     Administrative  Committee is authorized,  pursuant to such uniform and
     nondiscriminatory   rules  as  it  shall   establish  which  shall  be
     consistent  with  applicable  law  and  the  terms  of the  applicable
     qualified  domestic  relations  order,  to cash out  benefits to which
     alternate payees may be entitled prior to the date such benefits would
     otherwise become payable in accordance with the applicable  provisions
     of the Plan.

9.6  Latest Commencement of Benefits:
     --------------------------------

     Unless a Participant otherwise elects, a Participant's  benefits under
     the Plan  shall  begin not later  than the 60th day after the close of
     the Plan Year in which the latest of the following  events occur:  (a)
     the Participant  attains age 65; (b) the 10th  anniversary of the date
     the  Participant's  participation  in  the  Plan  commences;  (c)  the
     Participant's   employment   with  the  Company  or  any  Employer  is
     terminated.

9.7  Mandatory Commencement of Benefits:
     -----------------------------------

     Subject to Proposed Treasury Regulation Section 1.401(a)(9)-1,

     (a)  a Participant  who attains age 70-1/2 after December 31, 1987, or
          who is a 5 percent  owner (as  defined in  Section  416(i) of the
          Code) at any time after the attainment of age 66-1/2, shall begin
          to receive the value of his Accounts no later than the April 1 of
          the  calendar  year  following  the  calendar  year in which such
          Participant  attains  age  70-1/2.  However,  a  Participant  who
          attained age 70-1/2 in 1988,  is not a 5 percent  owner,  and who
          had not  retired by  January  1, 1989,  will be treated as having
          attained  age  70-1/2 on January 1, 1989 with April 1, 1990 being
          the Participant's required beginning date;

     (b)  a  Participant  who  attained age 70-1/2 prior to January 1, 1988
          and who is not a 5 percent owner at any time after the attainment
          of age 66-1/2,  shall begin to receive the value of his  Accounts
          no later  than the April 1 of the  calendar  year  following  the
          later of (i) the calendar year in which the  Participant  attains
          age  70-1/2,  or (ii)  his  termination  of  employment  with the
          Company and any other Employer; and

     (c)  a  Participant  who attained age 70-1/2 prior to January 1, 1988,
          and who  becomes a 5 percent  owner after the  attainment  of age
          70-1/2,  but prior to termination  of employment,  shall begin to
          receive  the value of his  Accounts  no later than the April 1 of
          the  calendar  year  following  the  calendar  year in which such
          Participant becomes a 5 percent owner.

     Any   payments   under  this  Plan  shall  be  adjusted  to  meet  the
     requirements  of  Section  401(a)(9)  of the Code and the  regulations
     thereunder.  Payments  commencing on account of this Section 9.7 shall
     be  made  in the  form  of a lump  sum  or,  at  the  election  of the
     Participant and effective on and after January 1, 1997, in the form of
     substantially  equal  installments  over a designated  period,  not to
     exceed  the  Participant's  life  expectancy  as of the date  payments
     commence.

     Notwithstanding   any   provision   of  the  Plan  to  the   contrary,
     distributions  made under this  Section 9.7 shall be deemed to satisfy
     any   distribution   options   provided  for  in  the  Plan  that  are
     inconsistent  with  Section  401(a)(9) of the Code.  In addition,  any
     distribution  required  under the  incidental  death  benefit  rule of
     Section  401(a)(9)(G)  of the Code shall be treated as a  distribution
     required under this Section.

9.8  Death Benefits:
     ---------------

     (a)  If a Participant  shall die before  complete  distribution of his
          Vested  Interest,   the  undistributed  balance  of  such  Vested
          Interest shall be distributed to his Beneficiary.

     (b)  Before August 1, 1992, each Participant shall have the right from
          time to time to file with the Administrative Committee:

          (i)  a designation of Beneficiary to receive death benefits, and

          (ii) a direction to the  Administrative  Committee that the death
               benefits are to be distributed to his Beneficiary in:

               (A)  a lump sum distribution, or

               (B)  in approximately  equal annual  installments  over more
                    than one year but not more than 5 years.

     (c)  On and after  August 1,  1992,  and prior to July 1,  1994,  each
          Participant  shall  have the right from time to time to file with
          the  Administrative  Committee a designation  of  Beneficiary  to
          receive death benefits.  Upon the death of the  Participant,  the
          Beneficiary may give a direction to the Administrative  Committee
          that the death benefits are to be distributed to him in:

          (i)  a lump sum distribution, or

          (ii) in approximately  equal annual  installments  over more than
               one year but not more than 5 years.

     (d)  On or after July 1, 1994, each  Participant  shall have the right
          from time to time to file  with the  Administrative  Committee  a
          designation of Beneficiary  to receive death  benefits.  Upon the
          death  of  the   Participant,   the  remaining   balance  of  the
          Participant's   Vested  Interest  shall  be  distributed  to  his
          Beneficiary in a lump sum. Such lump sum must be paid within five
          years after the date of the Participant's death.

9.9  Distributions Upon Plan Termination or other Events:
     ----------------------------------------------------

     Upon termination of the Plan, complete discontinuance of contributions
     by Employers,  or closing or divestment of any Employer (but only with
     respect to Eligible  Employees of such Employer),  Vested Interests of
     Participants shall be distributed at the time and in the manner as may
     be decided on by the Administrative  Committee upon rules that will be
     uniformly and nondiscriminatorily applied.

9.10 Identity and Competence of Payees:
     ----------------------------------

     If the Administrative  Committee receives evidence  satisfactory to it
     that a person  entitled  to  receive  any  benefit  under  the Plan is
     physically or mentally incompetent to receive such benefit and to give
     a valid release therefor, or is a minor, and that another person or an
     institution is then maintaining or has custody of such person,  unless
     claim  shall have been made  therefor  by a duly  appointed  guardian,
     committee or other legal representative,  the Administrative Committee
     may  authorize  payment  of such  benefit  to  such  other  person  or
     institution and the release of such other person or institution  shall
     be a valid and complete discharge for the payment of such benefit.

     Every person  becoming  entitled to any benefits  under the Plan shall
     furnish the  Administrative  Committee with such information as it may
     require,  including,  but not  limited  to,  proof of age  relating to
     himself and any person nominated as a Beneficiary.

9.11 Direct Rollover of Eligible Rollover Distribution:
     --------------------------------------------------

     Notwithstanding   any   provision  of  the  Plan  to  the  contrary  a
     Distributee   may  elect,   subject  to  provisions   adopted  by  the
     Administrative  Committee  which shall be  consistent  with income tax
     regulations,  to have any portion of an Eligible Rollover Distribution
     paid  directly  to  an  Eligible  Retirement  Plan  specified  by  the
     Distributee  in a Direct  Rollover to such plan.  For purposes of this
     Section:

     (a)  The term "Distributee" shall mean an Employee or former Employee.
          In addition,  such an  individual's  surviving  Spouse or such an
          individual's  spouse or former  spouse who is an alternate  payee
          within  the  meaning  of  Section   414(p)(8)  of  the  Code  are
          Distributees with respect to the interest of the spouse or former
          spouse.

     (b)  The  term  "Eligible  Rollover   Distribution"   shall  mean  any
          distribution  of all or any  portion of the balance to the credit
          of the Distributee  other than: any distribution that is one of a
          series of substantially equal periodic payments made for the life
          (or life  expectancy)  of the  Distributee or the joint lives (or
          joint life  expectancies) of the Distributee and his beneficiary,
          or for a specified  period of ten years or more; any distribution
          to  the  extent  such  distribution  is  required  under  Section
          401(a)(9) of the Code;  for periods on and after January 1, 1999,
          that portion of a Hardship  withdrawal  that is  attributable  to
          Basic  Salary  Reduction  Contributions;  and the  portion of any
          distribution that is not includible in gross income.

     (c)  The term  "Eligible  Retirement  Plan"  shall mean an  individual
          retirement  account or annuity,  as  described  in Code  Sections
          408(a) and 408(b),  respectively,  an annuity  plan  described in
          Section  403(a) of the Code,  or a qualified  trust  described in
          Section  401(a)  of the  Code  that  accepts  that  Distributee's
          Eligible  Rollover  Distribution.  However,  in  the  case  of an
          Eligible   Rollover   Distribution  to  a  surviving  spouse,  an
          "Eligible Retirement Plan" is an individual retirement account or
          annuity.

     (d)  The term  "Direct  Rollover"  shall mean a payment by the Plan to
          the Eligible Retirement Plan specified by the Distributee.

<PAGE>

                                 ARTICLE X

                         ADMINISTRATION OF THE PLAN
                         --------------------------

10.1 Plan Administrator:
     -------------------

     The Company shall be the "plan  administrator"  of the Plan within the
     meaning   of  ERISA.   Administration   of  the  Plan   shall  be  the
     responsibility of the Company except to the extent that:

     (a)  Administrative   responsibilities  have  been  delegated  to  the
          Administrative Committee in accordance with this Article X; and

     (b)  Authority  to hold the Trust Fund of the Plan has been  delegated
          to the  Trustee  and  authority  to  direct  the  investment  and
          reinvestment  of  the  Trust  Fund  has  been  delegated  to  the
          Administrative Committee; and

     (c)  Authority to act for the Company has  otherwise  been reserved to
          the Board of Directors.

     The  Company  shall be the "named  fiduciary"  for  purposes of ERISA;
     provided,  however,  that Participants and Beneficiaries with Accounts
     maintained on their behalf under the Plan shall be  considered  "named
     fiduciaries"  solely  to the  extent  of those  fiduciary  duties  and
     responsibilities  which are directly related to the exercise of voting
     rights with respect to Plan  interests  invested in the Mettler Toledo
     Stock  Fund  (and  not to  other  aspects  of  Plan  operation  and/or
     administration).

10.2 Appointment of the Administrative Committee:
     --------------------------------------------

     The  Administrative  Committee  shall  consist  of not less than three
     persons  appointed  from time to time by the Board of  Directors.  The
     members of the Administrative Committee shall serve at the pleasure of
     the Board of Directors without  compensation and without bond or other
     security  at  the   pleasure   of  such  Board.   Any  member  of  the
     Administrative   Committee  may  resign  by  delivering   his  written
     resignation to the Board of Directors.

     The members of the  Administrative  Committee  may appoint  from their
     number such committees with such powers as they shall  determine;  may
     authorize  one or more of their  number  or any  agent to  execute  or
     deliver  any   instrument  or  make  any  payment  on  behalf  of  the
     Administrative  Committee;  and may retain counsel,  employ agents and
     obtain  clerical,  medical,  actuarial and accounting  services as the
     Administrative  Committee may require or deem  advisable  from time to
     time. The Administrative Committee shall hold meetings upon notice, at
     such place or places, and at such time or times as it may from time to
     time  determine.

     A majority  of the  members of the  Administrative  Committee  then in
     office shall  constitute a quorum for the  transaction  of business at
     any  meeting  of  the  Administrative  Committee.  All  action  by the
     Administrative   Committee   shall  be  taken  at  a  meeting  of  the
     Administrative  Committee.  The  vote  of a  majority  of the  members
     present at the time of the vote,  if a quorum is present at such time,
     shall be the act of the Administrative  Committee. Any action required
     or  permitted  to be  taken  at  any  meeting  of  the  Administrative
     Committee may be taken without a meeting, if a majority of the members
     of the Administrative Committee consent thereto in writing.

     Members of the Administrative Committee may be reimbursed for expenses
     properly and actually incurred in the performance of their duties.

10.3 Powers of the Administrative Committee:
     ---------------------------------------

     The Administrative  Committee shall have sole and absolute  discretion
     to interpret  and apply the  provisions  of the Plan to determine  the
     rights and status of Eligible  Employees,  Participants and all others
     under the Plan, to decide disputes arising under the Plan, and to make
     any  determinations  and  findings  of fact with  respect to  benefits
     payable  hereunder and the persons entitled thereto as may be required
     for any purpose under the Plan. Without limiting the generality of the
     above,  the  Administrative  Committee is hereby granted the following
     authority which it shall discharge in its sole and absolute discretion
     in   accordance   with  Plan   provisions   as   interpreted   by  the
     Administrative Committee:

     (a)  To make all determinations of fact relating to the eligibility of
          any  Employee  to  become a  Participant,  to make  Basic  Salary
          Reduction  Contributions,   to  receive  allocations  of  Company
          Matching  Contributions  and to  receive  distributions  from the
          Plan.

     (b)  To  authorize  the Trustee to make  payment of benefits  from the
          Trust Fund to  Participants  and  Beneficiaries  entitled to such
          benefits under the Plan and to establish procedures governing the
          manner in which such authorizations will be made.

     (c)  To develop  procedures for the  establishment and verification of
          service and  Compensation of  Participants,  and, after affording
          Participants  and the Employer an  opportunity  to make objection
          with respect thereto,  to establish such facts  conclusively from
          time to time in advance of retirement.

     (d)  To obtain from the Employer,  Participants and Beneficiaries such
          information  as shall be necessary for the proper  administration
          of the Plan.

     (e)  To establish rules and procedures  relating to the administration
          of the Plan and the  transaction  of its  business and to enforce
          the rules and  procedures in the manner in which it sees fit.

     (f)  To retain  counsel,  employ agents and provide for such clerical,
          accounting  and  consulting  services  as  may  be  necessary  or
          appropriate in connection with the administration of the Plan.

     (g)  To perform all reporting and disclosure requirements imposed upon
          the Plan by  ERISA,  the Code,  the  Securities  Act of 1933,  as
          amended,  the Securities and Exchange Act of 1934, as amended, or
          any other lawful authority.

     (h)  To ensure that procedures are established which are sufficient to
          safeguard  the  confidentiality  of  information  relating to the
          purchase,  holding,  and sale of Common Stock held in the Mettler
          Toledo Stock Fund and the exercise of voting, tender, and similar
          rights with  respect to Common  Stock held in the Mettler  Toledo
          Stock Fund and to ensure that such procedures are being followed.

     (i)  To appoint and remove an independent fiduciary for the purpose of
          carrying-out  activities  relating  to any  situations  which the
          Administrative  Committee  determines  involves  an  unreasonable
          potential for undue Employer  influence with regard to the direct
          or indirect exercise of shareholder rights with respect to Common
          Stock holdings in the Mettler Toledo Stock Fund.

     (j)  To take such steps as it, in its discretion,  considers necessary
          or appropriate to remedy any inequity under the Plan that results
          from incorrect  information  received or  communicated  or as the
          consequence of administrative error.

     (k)  To correct any defect,  reconcile any inconsistency or supply any
          omission under the Plan.

     (l)  To allocate  among its members or,  except as provided  otherwise
          herein,  to  delegate  to other  persons  all or a portion of its
          powers and duties as it sees fit.

     (m)  To  exercise  such  other  authority  and  responsibility  as  is
          specifically  assigned  to it under  the terms of the Plan and to
          perform any other acts necessary to the performance of its powers
          and duties.

     All powers of the  Administrative  Committee  shall be  exercised in a
     uniform manner  consistent  with all provisions of the Plan unless the
     power is being  exercised in order to correct or reconcile  provisions
     which are inconsistent. All decisions of the Administrative Committee,
     including those regarding the facts of any case, the interpretation of
     any provision of the Plan or its  application  to any case,  and as to
     any other  interpretative  matter or other  determination  or question
     under the Plan shall be final and binding upon the Employer,  Eligible
     Employees, Participants,  Beneficiaries and all other persons, subject
     to  the   provisions  of  Section  10.5.   Any  action  taken  by  the
     Administrative Committee with respect to the rights or benefits of any
     person  under  the  Plan  shall  be  revocable  by the  Administrative
     Committee  as to  payments  or  distributions  from the Trust Fund not
     theretofore made pursuant to such action; and appropriate  adjustments
     may be made in future  payments or  distributions  to a Participant or
     Beneficiary   to  offset  any  excess  payment  or  make  up  for  any
     underpayment  previously made to such  Participant or Beneficiary from
     the Trust Fund. No ruling or decision of the Administrative  Committee
     in any one case shall  create a basis for an  adjustment  in any other
     case prior to the date of written filing of each specific claim.

10.04 Individual Accounts:
      --------------------

     The   Administrative   Committee  shall  maintain,   or  cause  to  be
     maintained,  records  showing the individual  balances in each Account
     maintained on behalf of Participants and other persons under the Plan.
     However,  maintenance  of those records and Accounts shall not require
     any segregation of the funds of the Plan.

10.05 Claim Procedures:
      -----------------

     For purposes of the Plan, a claim for benefit is a written application
     for  benefit  filed on an  Appropriate  Form  with the  Administrative
     Committee.  In the event that any Participant or other payee claims to
     be  entitled  to a  benefit  under the  Plan,  and the  Administrative
     Committee  determines  that such claim should be denied in whole or in
     part, the  Administrative  Committee  shall,  in writing,  notify such
     claimant  within 90 days of  receipt  of such claim that his claim has
     been denied,  setting forth the specific reasons for such denial. Such
     notification  shall be written in a manner  reasonably  expected to be
     understood by such  Participant or other payee and shall set forth the
     pertinent  sections of the Plan relied on, and where  appropriate,  an
     explanation  of how the  claimant  can obtain  review of such  denial.
     Within 90 days after the  mailing or  delivery  by the  Administrative
     Committee of such  notice,  such  claimant may request,  by mailing or
     delivery of written notice to the Administrative  Committee,  a review
     and/or hearing by the Administrative Committee of the decision denying
     the  claim.  If the  claimant  fails to request  such a review  and/or
     hearing within such 90 day period, it shall be conclusively determined
     for all  purposes  of this Plan that the  denial of such  claim by the
     Administrative  Committee  is  correct.  If such  claimant  requests a
     hearing within such 90 day period, the Administrative  Committee shall
     designate a time (which time shall be not less than 7 nor more than 60
     days from the date of such  claimant's  notice  to the  Administrative
     Committee)  and a place for such hearing,  and shall  promptly  notify
     such  claimant of such time and place.  If only a review is requested,
     the  Participant  or other  payee  shall have 30 days  after  filing a
     request for review to submit additional written material in support of
     the claim.  After  such  review  and/or  hearing,  the  Administrative
     Committee shall determine whether such denial of the claim was correct
     and shall  notify such  claimant in writing of its  determination.  If
     such  determination is favorable to the claimant,  it shall be binding
     and conclusive.  If such determination is adverse to such claimant, it
     shall be binding  and  conclusive  unless the  claimant  notifies  the
     Administrative  Committee within 90 days after the mailing or delivery
     to him by the  Administrative  Committee of its determination  that he
     intends to institute legal  proceedings  challenging the determination
     of the Administrative  Committee,  and actually  institutes such legal
     proceeding within 180 days after such mailing or delivery.

10.6 Appointment of Accountant:
     --------------------------

     The Company shall engage a "qualified  public  accountant"  to prepare
     such  audited  financial  statements  of the  operation of the Plan as
     shall be required by ERISA.

10.7 Indemnification of Certain Persons:
     -----------------------------------

     The Company  shall  indemnify and hold harmless all present and future
     fiduciaries of the Plan,  including the  Administrative  Committee and
     Trustee,  from any and all liability imposed,  whether individually or
     jointly,  under ERISA and under any similar legislation,  with respect
     to any action or  omission  as a  fiduciary  of the Plan,  unless such
     persons have knowingly  participated in, or have knowingly  undertaken
     to conceal an act or omission  knowing that such act or omission was a
     breach of their fiduciary duty.

10.8 Special Withdrawal Period:
     --------------------------

     The   Administrative   Committee   may,  once  a  year,   suspend  the
     requirements  of  Section  8.1 of the Plan to  provide  for a "special
     withdrawal  period" which shall be subject to the  limitations  of the
     Plan  and/or  permit  an  additional   increase  or  decrease  in  the
     contribution rate as stated in Section 3.3 of the Plan.

10.9 Plan Expenses:
     --------------

     All   reasonable   expenses,   taxes  and  fees  of  the   Plan,   the
     Administrative   Committee   and   the   Trustee   incurred   in   the
     administration of the Plan and Trust Fund shall be paid from the Trust
     Fund;  provided,  however that the obligation of the Trust Fund to pay
     such expenses,  taxes and fees shall cease to exist to the extent that
     the same are paid, at the discretion of the Company, by the Employers.

<PAGE>

                                 ARTICLE XI

                        OPERATION OF THE TRUST FUND
                        ---------------------------

11.1 Trust Fund; Trustee:
     --------------------

     (a)  All the funds of the Plan shall be held by a Trustee or  Trustees
          appointed  from time to time by the Board of Directors,  in trust
          under a Trust Agreement adopted, or as amended, by such Board for
          use  in  providing  the  benefits  of the  Plan  and  paying  its
          reasonable  expenses not paid  directly by any  Employer;  and no
          part of the corpus or income of the Trust Fund shall be used for,
          or diverted to, purposes other than for the exclusive  benefit of
          Participants  or their  beneficiaries  under the Plan and for the
          payment  of the  reasonable  expense  of the  Plan,  prior to the
          satisfaction  of all liabilities  with respect to them,  provided
          that any forfeitures  arising from  termination of service or for
          other  reasons  shall be used to  reduce  Employer  contributions
          otherwise payable, in accordance with Article VI. No person shall
          have any  interest in or right to any part of the earnings of the
          Trust  Fund or any  rights  in, or to, or under the Trust Fund or
          any  part of the  assets  thereof,  except  as and to the  extent
          expressly provided in the Plan and in the Trust Agreement.

     (b)  The  Trustee  or  Trustees   also  shall  conform  to  procedures
          established  by the  Administrative  Committee  for  disbursal of
          funds of the Plan.  The Trustee or  Trustees  shall not be liable
          for  any  act  performed  while  subject  to  directions  of  the
          Administrative Committee made in accordance with the terms of the
          Plan.

11.2 Appointment of Investment Manager:
     ----------------------------------

     The Board of  Directors  may, in its  discretion,  appoint one or more
     investment  managers (within the meaning of Section 3(38) of ERISA) to
     manage all or part of the assets of the Plan,  including  the power to
     acquire and dispose of said assets,  as the Board shall designate.  In
     that event,  authority over and  responsibility  for the management of
     the  assets so  designated  shall be the sole  responsibility  of that
     investment manager.

<PAGE>

                                ARTICLE XII

                ADOPTION, AMENDMENT, TERMINATION AND MERGER
                -------------------------------------------

12.1 Adoption of the Plan:
     ---------------------

     The  adoption  of this Plan,  and of any  amendments  thereof  adopted
     subsequently,  shall be conditioned on qualification of the Plan under
     Section 401(a) of the Code.

12.2 Right to Amend:
     ---------------

     This Plan may be wholly or partially amended or otherwise  modified at
     any time by written  instrument  executed by the  President  or a Vice
     President of the Company, provided, however, that:

     (a)  No amendment or  modification  may be made,  at any time prior to
          the  satisfaction of all liabilities  under the Plan with respect
          to Participants and their  beneficiaries  and with respect to the
          expenses of the Plan,  which would  permit any part of the corpus
          or  income  of the  Trust  Fund to be  used  for or  diverted  to
          purposes  other than for the  exclusive  benefit of such  persons
          under the Plan and for the payment of the expenses of the Plan;

     (b)  No amendment or modification shall have any retroactive effect so
          as to deprive any person of any benefit already  accrued,  except
          that any amendment may be made retroactive  which is necessary to
          bring the Plan into conformity with  governmental  regulations in
          order  to  qualify  the  Plan  for  tax  purposes  and  meet  the
          requirements of ERISA; and

     (c)  No amendment or modification may be made which shall increase the
          duties  or  liabilities  of  the  Trustee,   the   Administrative
          Committee or of any Employer  without the written  consent of the
          party so affected.

12.3 Termination or Discontinuance of Contributions:
     -----------------------------------------------

     (a)  The Plan may be  terminated at any time by the Board of Directors
          by  written  notice  to  the  Employers,  to  the  Administrative
          Committee  and to the Trustee at the time acting  hereunder,  but
          only upon  condition that such action is taken as shall render it
          impossible for any part of the corpus or income of the Trust Fund
          to be  used  for or  diverted  to  purposes  other  than  for the
          exclusive  benefit of the  Participants  and their  Beneficiaries
          under the Plan and for the payment of the administrative costs of
          the Plan.

     (b)  If the Plan is terminated  under Section  12.3(a) above or in the
          event the Plan is deemed to be partially  terminated with respect
          to one or more groups of Eligible  Employees,  written  notice of
          such  determination  shall  be  given  to the  Employers,  to the
          Administrative  Committee  and to the  Trustee at the time acting
          hereunder, the Trust Fund shall be revalued as if the termination
          date  were  the  Valuation  Date,  and the  current  value of the
          Account  of each  affected  Participant  who is then an  Eligible
          Employee shall become nonforfeitable, and shall be distributed in
          accordance  with  Article  IX to  the  extent  permissible  under
          applicable law and regulations.

     (c)  If the Plan is terminated by the Board of Directors but the Board
          of  Directors  determines  that the Trust Fund shall be continued
          pursuant  to its terms and the  provisions  of this  Section,  no
          further contributions shall be made by either Participants or any
          Employer,  but the Trust Fund shall be administered as though the
          Plan were  otherwise in full force and effect.  If the Trust Fund
          is  subsequently  terminated,  the provisions of Section  12.3(b)
          above shall then apply.

     (d)  In  addition  to the right to amend or  terminate  the Plan,  any
          Employer  may  at  any  time,  by  resolution  of  its  board  of
          directors,  discontinue any or all contributions  under the Plan.
          Unless  additional  action is taken by the Employer in connection
          with a  discontinuance  of contributions to the Plan, it shall be
          deemed that Section 12.3(c) is applicable.

12.4 Merger, Consolidation or Transfer:
     ----------------------------------

     The Company may merge or consolidate  the Plan with,  transfer  assets
     and  liabilities  of the Plan to, or receive a transfer  of assets and
     liabilities  from,  any other plan  without  the  consent of any other
     Employer or other person if such merger,  consolidation or transfer is
     effectuated  in  accordance  with  applicable  law and such other plan
     meets the  requirements  of Sections 401(a) and 501(a) of the Code. No
     merger or consolidation with, or transfer of assets or liabilities to,
     any other plan,  shall be made unless the benefit each  Participant in
     this Plan would receive if the Plan were terminated  immediately after
     such merger or  consolidation,  or transfer of assets and liabilities,
     would be at least as great as the benefit he would have  received  had
     the Plan terminated  immediately before such merger,  consolidation or
     transfer.

<PAGE>

                                ARTICLE XIII

                               MISCELLANEOUS
                               -------------

13.1 Uniform Administration:
     -----------------------

     Whenever, in the administration of the Plan, any action is required by
     an Employer or the Administrative Committee, including, but not by way
     of limitation, action with respect to eligibility or classification of
     employees,  contributions or benefits, such action shall be uniform in
     nature as applied to all persons similarly situated and no such action
     shall be taken which will  discriminate in favor of  Participants  who
     are Highly Compensated Employees.

13.2 Payments from Trust Fund:
     -------------------------

     The  benefits  under the Plan shall be payable  solely  from the Trust
     Fund and each Participant, Beneficiary or other person who shall claim
     the right to any payment under the Plan shall be entitled to look only
     to the Trust Fund for such  payment.  No liability  for the payment of
     benefits or any other  payments  under the Plan shall be imposed  upon
     the  Administrative  Committee,  the  Company,  any  Employer,  or the
     officers, directors or stockholders of the Company.

     Except as expressly provided in the Plan, no Participant,  Beneficiary
     or other  person  entitled  to  benefits  may  withdraw or receive any
     monies from the Trust Fund.

13.3 Plan Not a Contract of Employment:
     ----------------------------------

     Nothing herein contained shall be deemed to give any Eligible Employee
     or  Participant  the right to be retained in the employ of an Employer
     or to  interfere  with the  right of the  Employer  to  discharge  any
     Eligible Employee or Participant at any time.

13.4 Applicable Law:
     ---------------

     Except to the  extent  governed  by  Federal  law,  the Plan  shall be
     administered  and interpreted in accordance with the laws of the State
     of Ohio.

13.5 Unclaimed Amounts:
     ------------------

     It shall  be the sole  duty and  responsibility  of a  Participant  or
     Beneficiary  to keep  the  Administrative  Committee  apprised  of his
     whereabouts and of his most current mailing address. If any benefit to
     be paid under the Plan is  unclaimed,  within  such time period as the
     Administrative  Committee shall  prescribe,  it shall be forfeited and
     applied to reduce Company  Matching  Contributions  in accordance with
     Section  4.1;  provided,   however,  that  such  forfeiture  shall  be
     reinstated if a claim is made by the  Participant or  Beneficiary  for
     the forfeited benefit.

13.6 Severability:
     -------------

     If any provisions of this Plan is held to be invalid or unenforceable,
     such determination shall not affect the other provisions of this Plan.
     In such event,  this Plan shall be  construed  and enforced as if such
     provisions had not been included herein.

13.7 Employer Records:
     -----------------

     The  records  of a  Participant's  Employer  shall be  presumed  to be
     conclusive of the facts  concerning his employment or  non-employment,
     Periods of Service, Periods of Severance and Compensation unless shown
     beyond a reasonable doubt to be incorrect.

13.8 Application of Plan Provisions:
     -------------------------------

     This Plan shall be binding on all Participants and  Beneficiaries  and
     upon heirs, executors, administrators,  successors, and assigns of all
     persons  having an interest  herein.  The provisions of the Plan in no
     event  shall be  considered  as giving  any such  person  any legal or
     equitable  right  against  the  Company  or any  Employer,  any of its
     officers,  Employees,  directors,  or  shareholders,  or  against  the
     Trustee,  except such rights as are  specifically  provided for in the
     Plan or hereafter created in accordance with the terms of the Plan.

13.9 IRC 414(u) Compliance Provision:
     --------------------------------

     Notwithstanding   any   provision   of  the  Plan  to  the   contrary,
     contributions,  benefits and service  credit with respect to qualified
     military  service shall be provided in accordance  with Section 414(u)
     of the Code.

<PAGE>

                                ARTICLE XIV

                    PARTICIPATION IN PLAN BY AFFILIATES
                    -----------------------------------

14.1 Participation by Affiliate:
     ---------------------------

     Any parent,  subsidiary or affiliate of the Company, for itself or any
     of its  divisions,  may,  with the  written  consent  of the  Board of
     Directors of the Company,  become a party to this Plan by adopting the
     Plan for  some or all of its  employees  and by  executing  the  Trust
     Agreement  with the consent of the  Trustee,  if  required  under such
     Trust Agreement;  provided, however, that the Company has a 50 percent
     direct or indirect ownership interest in, or is directly or indirectly
     50 percent owned by, such parent,  affiliate or  subsidiary.  Upon the
     filing  with the  Trustee of a certified  copy of the  resolutions  or
     other documents evidencing the adoption of this Plan and the notice to
     the Company,  and upon the  execution  of the Trust  Agreement by such
     parent,  subsidiary  or  affiliate,  and the consent of the Trustee if
     required under such Trust Agreement, it shall thereupon be included in
     the Plan as an Employer,  and shall be bound by all the terms  thereof
     as they relate to its employees. Any contributions provided for in the
     Plan and made by such  Employer  shall become a part of the Trust Fund
     and shall be held by the Trustee  subject to the terms and  provisions
     of the Trust Agreement.

14.2 Withdrawal by Affiliate:
     ------------------------

     In the event that an  organization  which has become an Employer shall
     cease  to be a 50  percent  parent,  subsidiary  or  affiliate  of the
     Company, such organization shall forthwith be deemed to have withdrawn
     from the  Plan and the  Trust  Agreement.  Also,  any 1 or more of the
     Employers may  voluntarily  withdraw from the Plan by giving 6 months'
     notice in writing of  intention  to withdraw to the Board of Directors
     of the  Company  and the  Administrative  Committee  (unless a shorter
     notice shall be agreed to by the Board of Directors of the Company and
     the  Administrative  Committee).  The Company may, with the consent of
     the Board of  Directors  withdraw  from the Plan at any time,  and the
     Board of  Directors  may in its  discretion  at any time  withdraw the
     authorization  of any subsidiary or any Employer to participate in the
     Plan.

     In any of these circumstances the affected Employees shall cease to be
     Participants  under the Plan, and the  Administrative  Committee shall
     arrange for the withdrawal or segregation of such Employees'  share of
     the assets of the Plan, as determined by a valuation as of the date of
     the event. The Administrative Committee shall have the full discretion
     as to the nature of the funds to be withdrawn or  segregated,  and its
     valuation  thereof  for that  purpose  shall be  conclusive.  Unless a
     savings and investment plan substantially  similar in form to the Plan
     or such other form as may be approved by the Internal  Revenue Service
     under  Section  401(a)  of  the  Code  is  continued  by  a  successor
     corporation  for its  Employees,  the  Plan  shall be  deemed  to have
     terminated with respect to such Employees and such  segregated  assets
     shall be fully vested to them in  accordance  with the  provisions  of
     Section  12.3.  The  Administrative  Committee  shall  arrange for the
     disposition of such assets through  transfers to a successor trust, as
     assignment  of all or a portion  of the  rights  under  any  insurance
     contract or by any other means it shall determine.

14.3 Special Rule for Corporate Reorganizations:
     -------------------------------------------

     In the event the  Company  acquires  control  of any  organization  by
     purchase of assets or stock,  merger,  amalgamation,  consolidation or
     any other similar event, or in the event control of the Company should
     be acquired  by some other  organization  by such means,  the Board of
     Directors,  or the  Administrative  Committee,  or any  officer of the
     Company who has been delegated  appropriate  authority by the Board of
     Directors, may authorize such other organization to participate in the
     Plan upon agreement that contributions shall be made as required under
     the Plan,  and shall  determine  to what  extent,  if any,  credit for
     employment  with such  other  organization  shall be granted as to the
     employees of such other  organization  for the purpose of  determining
     eligibility and vesting rights hereunder.

<PAGE>

                                 ARTICLE XV

                                   LOANS
                                   -----

15.1 Availability:
     -------------

     The Administrative Committee is authorized to establish and maintain a
     Participant  loan  program  and may  authorize  loans from the Plan to
     Participants in such amounts and pursuant to such terms and procedures
     as the Administrative  Committee determines in its sole discretion are
     appropriate,   provided   that  such  loans  are   available   to  any
     creditworthy Participant who is an Employee, excluding Participants on
     leave of absence or lay-off,  temporary  or  part-time  Employees  and
     terminated  Participants,  on a uniform and  nondiscriminatory  basis.
     Loans shall be permitted for any purpose.

15.2 Terms and Procedures:
     ---------------------

     All loans shall be granted in accordance  with the following terms and
     procedures:

     (a)  The  amount of any loan to a  Participant  shall not  exceed  the
          lesser of:  (1)  $50,000  reduced  by the  excess of the  highest
          outstanding loan balance of the  Participant's  loans outstanding
          during the  immediately  prior  12-month  period  (ending the day
          before the new loan is granted) over the  outstanding  balance of
          all loans to the Participant on the date the new loan is made; or
          (2) 50 percent of the  Participant's  Vested Interest.  All loans
          shall be for a minimum amount of $1,000.

     (b)  All loans shall be subject to the approval of the  Administrative
          Committee or its agent.

     (c)  An  application  for a loan by a Participant  shall be made on an
          Appropriate  Form  sent to the  Administrative  Committee  or its
          agent, whose action thereon shall be final.

     (d)  The  period of  repayment  for any loan  shall be  arrived  at by
          mutual  agreement  between the  Administrative  Committee  or its
          agent  and the  borrower,  but all  loans  shall  become  due and
          payable upon termination of employment and the period in no event
          shall exceed 5 years.

     (e)  Each  loan  shall  bear  a  reasonable  rate  of  interest  to be
          determined  by the  Administrative  Committee to be comparable to
          commercial lending rates on bank loans secured by certificates of
          deposit  in the area at the time the loan is made.  The  interest
          rate on any new loan that is granted shall be  redetermined  from
          time to time pursuant to such uniform and nondiscriminatory rules
          as the Administrative Committee shall prescribe.  Each loan shall
          be secured by the present and future balance in the Participant's
          account,   or  by  such  other  security  as  the  Administrative
          Committee may deem to be adequate.

     (f)  Each loan shall be treated as a separate  investment of the funds
          credited to such Participant's Accounts. Loans shall be made from
          the Investment  Funds  maintained under the Plan in such order of
          priority as the Administrative  Committee,  pursuant to a uniform
          and  nondiscriminatory   policy,  shall  direct.  Payments  by  a
          Participant   on  any  such  loan  shall  be   credited  to  such
          Participant's account in the various Investment Funds in the same
          proportions  as  the  Participant's   current  investment  option
          election at the time loan payments are made.

     (g)  No  distribution  shall  be made  to any  Participant  or  former
          Participant  or to a Beneficiary of any such  Participant  unless
          and  until  all  unpaid  loans  to  such  Participant  or  former
          Participant,  including accrued interest thereon, have been paid.
          In the event of termination of employment,  any  distribution  of
          Account  balances  shall be reduced  by and  applied to repay the
          amount  of  any  outstanding  plan  loans  and  accrued  interest
          thereon.

     (h)  A Participant may not have more than one loan  outstanding at any
          time.

     (i)  Repayment  of  loans  shall  be by  payroll  deduction,  or other
          approved method,  on a level  amortization  basis,  except that a
          Participant  may repay the outstanding  principal  balance of his
          loan at any time after one year.

     (j)  In the event a  Participant  defaults on a Plan loan,  the entire
          unpaid   balance  of  the  loan  shall  become  due  and  payable
          immediately.  A Participant  will default on a loan if any of the
          following events occur:

          (i)  the  termination  of the  Participant's  employment  with an
               Employer for any reason (including death);

          (ii) failure of the  Participant to make any payment of principal
               or interest  on the loan on or before the date such  payment
               is due;

          (iii)failure of the  Participant to perform or observe any of his
               covenants,  duties or agreements  under the promissory  note
               executed by the Participant with respect to the loan;

          (iv) receipt by the Plan of opinion of counsel to the effect that
               (A) the Plan will, or could,  lose its status as a qualified
               plan under Code section  401(a) unless the loan is repaid or
               (B) the loan violates,  or may violate, any provision of the
               ERISA;

          (v)  any  portion  of the  Participant's  account  that is not in
               excess of the amount that has been  pledged as security  for
               the loan becomes  payable from the Plan to the  Participant,
               to any Beneficiary of the Participant,  or to any "alternate
               payee" of the Participant pursuant to any qualified domestic
               relations order (as defined in Code section 414(p)); or

          (vi) the  Participant  makes an  assignment  for the  benefit  of
               creditors,  files a petition in  bankruptcy,  is adjudicated
               insolvent  or  bankrupt,  or  becomes a subject  of any wage
               earner plan under the federal  Bankruptcy  Code or under any
               applicable  state  insolvency  law,  or there  is  commenced
               against the Participant any bankruptcy, insolvency, or other
               similar proceeding which remains undismissed for a period of
               60 days (or the  Participant by an act indicates his consent
               to, approval of, or acquiescence in any such proceeding).

          In the event a  default  on a  Participant  loan  occurs  and the
          Participant  does not pay the entire  unpaid  balance of the loan
          (with accrued unpaid  interest)  within 5 business days after the
          date the default occurs, the Participant's  Vested Interest under
          the Plan that has been pledged as security  for  repayment of the
          Plan loan shall be applied  immediately,  to the extent required,
          to pay the entire  unpaid  balance  of the loan (and all  accrued
          unpaid  interest  thereon).  Notwithstanding  the  foregoing,  no
          portion  of  the   Participant's   account   consisting   of,  or
          attributable to, the Participant's elective deferrals (as defined
          in  Code  section  402(g))  shall  be  actually  distributed  for
          purposes  of   eliminating   the  default  before  the  date  the
          Participant  terminates  employment  with  the  Employer,  or  if
          earlier, attains age 59-1/2.

          Failure by the Administrative  Committee to strictly enforce Plan
          rights  with  respect  to a  default  on a Plan  loan  shall  not
          constitute a waiver of such rights.

<PAGE>

                                ARTICLE XVI

                     DETERMINATION OF TOP-HEAVY STATUS
                     ---------------------------------

16.1 General:
     --------

     Notwithstanding any other provisions of the Plan to the contrary,  for
     any Plan Year in which the Plan is a Top-Heavy Plan or Super Top-Heavy
     Plan,  the  provisions  of this Article  shall apply,  but only to the
     extent required by Section 416 of the Code.

16.2 Top-Heavy Plan:
     ---------------

     This Plan  shall be  Top-Heavy  and an  Aggregation  Group  shall be a
     Top-Heavy Group if, as of the  Determination  Date for such Plan Year,
     the sum of the Cumulative Accrued Benefits and Cumulative  Accounts of
     Key Employees for the Plan Year exceeds 60 percent of the aggregate of
     all the Cumulative Accounts and Cumulative Accrued Benefits.

     (a)  If the Plan is not included in a Required  Aggregation Group with
          other  plans,  then  it  shall  be  Top-Heavy  only  if (i)  when
          considered  by itself it is a  Top-Heavy  Plan and (ii) it is not
          included  in  a  Permissive  Aggregation  Group  that  is  not  a
          Top-Heavy Group.

     (b)  If the Plan is  included  in a  Required  Aggregation  Group with
          other  plans,   it  shall  be  Top-Heavy  only  if  the  Required
          Aggregation Group,  including any permissively  aggregated plans,
          is Top-Heavy.

16.3 Super Top-Heavy Plan:
     ---------------------

     This Plan shall be a Super  Top-Heavy  Plan if it would be a Top-Heavy
     Plan under Section 16.2, by substituting 90 percent for 60 percent.

16.4 Cumulative Accrued Benefits and Cumulative Accounts:
     ----------------------------------------------------

     The  determination  of the Cumulative  Accrued Benefits and Cumulative
     Accounts  under the Plan  shall be made in  accordance  with  Treasury
     Regulation Section 1.416-1 T-24 and 25.

16.5 Definitions:
     ------------

     (a)  "Aggregation Group" means either a Required  Aggregation Group or
          a Permissive Aggregation Group.

     (b)  "Determination  Date"  means with  respect to any Plan Year,  the
          last day of the preceding  Plan Year, or in the case of the first
          Plan Year of any plan,  the last day of such Plan  Year,  or such
          other date as permitted  by the  Secretary of the Treasury or his
          delegate.

     (c)  "Key  Employee"  means any employee or former  employee  (and the
          beneficiaries  of  such  employee)  who at any  time  during  the
          determination  period  was an  officer  of the  Company  if  such
          individual's annual compensation exceeds 50 percent of the dollar
          limitation  under Section  415(b)(1)(A) of the Code, an owner (or
          considered an owner under Section 318 of the Code) of 1 of the 10
          largest   interests   in  the   Company   if  such   individual's
          compensation  exceeds 100 percent of the dollar  limitation under
          Section  415(c)(1)(A)  of the  Code,  a  5-percent  owner  of the
          Company,  or a  1-percent  owner of the Company who has an annual
          compensation of more than $150,000.  The determination  period is
          the  Plan  Year  containing  the  Determination  Date or the four
          preceding Plan Years. For purposes of this subparagraph,  no more
          than 50 Employees  (or if lesser,  the greater of 3 or 10 percent
          of the Employees) shall be treated as officers.

     (d)  "Non-Key  Employee"  means  those  individuals  who  are  not Key
          Employees and includes former Key Employees.

     (e)  "Permissive Aggregation Group" means a Required Aggregation Group
          plus any other plans  selected by the Company  provided  that all
          such plans when considered  together  satisfy the requirements of
          Section 401(a)(4) and 410 of the Code.

     (f)  "Required  Aggregation  Group"  means  a plan  maintained  by the
          Company in which a Key Employee is a participant or which enables
          any plan in which a Key  Employee  is a  participant  to meet the
          requirements  of Section  401(a)(4) of the Code or Section 410 of
          the Code. The Required  Aggregation  Group shall include any plan
          which would,  but for the fact it terminated,  be included in the
          terms of this definition.

16.6 Vesting:
     --------

     For each Plan Year in which the Plan is Top-Heavy or Super  Top-Heavy,
     the minimum  vesting  requirements of Section 416(b) of the Code shall
     be satisfied by use of the following schedule:

          Years of Vesting Service           Vested Percentage
          ------------------------           -----------------
          Less than 3 years                        0 percent
          3 years or more                        100 percent

16.7 Compensation:
     -------------

     For each Plan Year  Compensation  shall not exceed the  limitation  in
     effect under Section 1.16 for such year.

16.8 Minimum Contributions:
     ----------------------

     For each Plan Year in which the Plan is Top-Heavy or Super  Top-Heavy,
     minimum  Company  Contributions  for a  Participant  who is a  Non-Key
     Employee  shall be required  to be made on behalf of each  Participant
     who is employed  by the Company on the last day of the Plan Year.  The
     amount of minimum  contribution  shall be the lesser of the  following
     percentages  of IRC 415  compensation  (as  defined in Section 4.2 for
     purposes of Annual Additions):

     (a)  Three percent, or

     (b)  The  highest   percentage  at  which  Company   Contributions  or
          forfeitures  are made  under the Plan for the Plan Year on behalf
          of any Key Employee.

     For purposes of this Section 16.8(b),  all defined  contribution plans
     included in a Required Aggregation Group shall be treated as one plan.

     In the case of a Participant  under this Plan who also participates in
     a defined benefit pension plan of a member of the Group which contains
     provisions  intended  to comply  with  Section  416 of the Code in the
     event such plan  becomes a  Top-Heavy  plan,  the  provisions  of this
     Section  16.8(a)  shall be  inapplicable  to the extent  such  defined
     benefit  pension plan provides for a defined  benefit  minimum pension
     benefit in accordance with Section 416(c)(1) of the Code.

16.9 Defined Benefit and Defined Contribution Plan Fractions:
     --------------------------------------------------------

     In order to comply  with the  requirements  of  Section  416(h) of the
     Code, in the case of a Participant who is or has also  participated in
     a defined  benefit  plan of the  Company or any member of the Group in
     any Plan Year in which the Plan is  Top-Heavy,  there shall be imposed
     under this Plan the following limitation in addition to any limitation
     which may be imposed as  described  in Section  4.2.  In any such year
     beginning  before  January 1, 2000,  for  purposes of  satisfying  the
     aggregate  limit on  contributions  and  benefits  imposed  by Section
     415(e) of the Code,  benefits payable from this Plan shall,  except as
     hereinafter  described,  be  reduced  so as to  comply  with  a  limit
     determined in accordance with Section 415(e) of the Code, but with the
     number "1.0" substituted for the number "1.25" in the "defined benefit
     plan fraction" (as defined in Section 415(e)(3) of the Code).

     Notwithstanding  the foregoing,  if the  application of the additional
     limitation  set  forth  in  this  Section  16.9  would  result  in the
     reduction of accrued benefits of any Participant under this Plan, such
     additional  limitation shall not become  operative,  so long as (1) no
     additional  contributions  by Group members,  forfeitures or voluntary
     nondeductible   contributions  are  allocated  to  such  Participant's
     accounts under any defined contribution plan maintained by the Company
     including  this  Plan and (2) no  additional  benefits  accrue to such
     Participant under any defined benefit plan maintained by the Company.

16.10 Method of Determining Accrued Benefit:
      --------------------------------------

     Solely for the purpose of  determining  if the Plan, or any other plan
     included in a Required  Aggregation Group of which this Plan is a part
     is Top-Heavy,  the accrued  benefit of a Participant  other than a Key
     Employee  shall be  determined  under  (1) the  method,  if any,  that
     uniformly  applies for the accrual purposes under all plans maintained
     by the Company or any other Group  member,  or (2) if there is no such
     method,  as if such benefit  accrued not more rapidly than the slowest
     accrual rate permitted  under the  fractional  accrual rate of Section
     411(b)(1)(C) of the Code.

16.11 Change in Statute Automatically Incorporated:
      ---------------------------------------------

     In the event that Congress should provide by statute,  or the Treasury
     Department   should   provide  by  regulation  or  ruling,   that  the
     limitations  provided in this Article XVI are no longer  necessary for
     the Plan to meet the  requirements of Section 401 of the Code or other
     applicable law then in effect,  such limitations shall become void and
     shall no longer apply,  without the necessity of further  amendment to
     the Plan.

Adopted by Mettler-Toledo, Inc., this ____ day of __________, ____.

                                    By:
                                       ----------------------------------

                                       Title:
                                             ----------------------------

<PAGE>

                                 APPENDIX A

           SPECIAL PROVISIONS PERTAINING TO CERTAIN EMPLOYEES OF
                       METTLER INSTRUMENT CORPORATION

A.1  Purpose and Construction:
     -------------------------

     The  purpose of this  Appendix  A is to  evidence  special  provisions
     applicable  to certain  employees  of Mettler  Instrument  Corporation
     ("MICo")  affected  by the  merger  of the MICo  Plan  into the  Plan,
     effective  July 1, 1994. The provisions of this Appendix A shall apply
     to the individuals as specified  herein.  To the extent the provisions
     of the Plan, as applicable to these individuals, are inconsistent with
     the  provisions of this Appendix A, the provisions of Appendix A shall
     govern.  Words and phrases  used herein with initial  capital  letters
     which  are  defined  in  Article  I of the Plan are used  herein as so
     defined.

A.2  Eligibility of Certain MICo Employees:
     --------------------------------------

     Notwithstanding Section 2.1(a) of the Plan, any employee hired by MICo
     prior to July 1, 1994 and who is an  Eligible  Employee  as of July 1,
     1994, shall be eligible to become an active Participant in the Plan as
     of July 1, 1994.  Such an Employee  may become a  Participant  on such
     date or as of the first day of any month  thereafter by complying with
     the  provisions of Section 2.2 of the Plan. Any MICo Employee hired on
     or after July 1, 1994 shall be eligible to  participate in the Plan in
     accordance with Section 2.1(a) hereof.

A.3  Pre-Merger Date Service of MICo Employees:
     ------------------------------------------

     The period of  employment of an employee of MICo prior to July 1, 1994
     which  shall be  recognized  as  Period(s)  of Service  and Year(s) of
     Vesting Service hereunder as of July 1, 1994 shall be determined under
     Sections 1.36 and 1.51 respectively, treating MICo for such purpose as
     having been an Employer hereunder for all relevant periods;  provided,
     however,  that in no event shall such determination  result in Periods
     of  Service  or Years of  Vesting  Service  which  are less  than that
     Service accumulated under the MICo Plan as of June 30, 1994.

A.4  Vesting of Certain Participants in MICo Plan:
     ---------------------------------------------

     Notwithstanding  the  provisions  of Section  6.1,  the Accounts of an
     individual  who, as of July 1, 1994, is both an Employee of MICo and a
     Participant in the Plan shall be 100% nonforfeitable at all times. All
     Eligible Employees of MICo other than those described in the preceding
     sentence shall become vested in Company Matching Contributions made on
     his behalf on and after July 1, 1994 in accordance with the provisions
     of Section 6.1, reflecting for this purpose, the provisions of Section
     A.3 above.  In no event shall this  Section A.4 alter a  Participant's
     vested   percentage   in  his   Account   attributable   to   employer
     contributions  made  under  the MICo  Plan  prior to July 1,  1994 and
     earnings on such contributions.

<PAGE>

                                 APPENDIX B

                              BONUS DEFERRALS

B.1  Purpose and Construction:
     -------------------------

     The  purpose of this  Appendix  B is to  evidence  special  provisions
     applicable  to certain  Employees  who are  provided  herein  with the
     opportunity  to defer all or part of specified  bonuses which they may
     otherwise receive from the Employers.  The provisions of this Appendix
     B shall apply to the Employees described herein and shall be effective
     for Plan Years  beginning on and after  January 1, 1996. To the extent
     the  provisions of the Plan, as  applicable  to these  Employees,  are
     inconsistent with the provisions of this Appendix B, the provisions of
     Appendix B shall  govern.  Words and phrases  used herein with initial
     capital  letters  which are  defined in Article I of the Plan are used
     herein as so defined.

B.2  Eligibility:
     ------------

     (a)  Notwithstanding Sections 2.1 and 3.1 of the Plan, an Employee who
          satisfies the criteria specified in this Section B.2 with respect
          to a given  Plan  Year  shall be  eligible  to defer a  specified
          portion (as described in Section B.3) of a given Bonus Amount (as
          hereinafter  defined)  applicable  to such Plan Year by filing an
          Appropriate  Form on or before the Bonus  Deferral  Election Date
          specified  in  this  Section  B.2.  With  respect  to  any  given
          Employee,  "Bonus Amount" shall mean the annual bonus that may be
          payable for any given year beginning on and after January 1, 1996
          under the Employer's Performance Dividend Plan.

     (b)  An  Employee  shall  be  eligible  to defer a Bonus  Amount  with
          respect to a given Plan Year if:

          (i)  the  Employee is  expected to be an Eligible  Employee as of
               the January 1 of the Plan Year in which the Bonus  Amount is
               otherwise payable;

          (ii) the Administrative  Committee, in its discretion,  elects to
               treat  Bonus  Amounts  applicable  to the given Plan Year as
               eligible for deferral under the Plan; and

          (iii)the Employee is not a Highly Compensated  Employee as of the
               Bonus Deferral Election Date (as hereinafter defined);

          provided, however, that an election to defer a Bonus Amount shall
          only be  given  effect  if the  Employee  is in fact an  Eligible
          Employee as of the date the Bonus  Amount is  otherwise  payable.
          For purposes  hereof,  the "Bonus  Deferral  Election  Date" with
          respect to any given Bonus  Amount shall be the December 1 of the
          calendar  year  immediately  preceding the calendar year in which
          the Bonus Amount is otherwise payable. No Participant may suspend
          or otherwise  change the  deferral of any Bonus Amount  following
          the expiration of 30 days from the Bonus Deferral Election Date.

B.3  Bonus Amount Deferrals:
     -----------------------

     Subject to the  limitations of Sections 3.4 and 3.5 of the Plan,  that
     portion of a Bonus Amount that may be deferred by an Eligible Employee
     who  satisfies  the criteria  specified in Section B.2 shall be from 0
     percent to 100  percent  of such  Bonus  Amount,  in  multiples  of 25
     percent.  The Bonus Amount which an Eligible  Employee elects to defer
     shall be credited to the Employee's Basic Salary Reduction Account and
     a corresponding  reduction shall be made in the Bonus Amount otherwise
     payable to the Eligible Employee in cash. The election with respect to
     the  deferral of a Bonus  Amount for any given year shall not apply to
     any subsequent  year.  Except as provided under Section B.5, any Bonus
     Amount  deferred  hereunder  shall be invested in accordance  with the
     elections  in  effect  under  Section  7.2 of the  Plan at the time of
     deferral.

B.4  Treatment of Bonus Amount Deferrals:
     ------------------------------------

     Notwithstanding any provision of the Plan to the contrary:

     (a)  In no event shall  Company  Matching  Contributions  be made with
          respect to any deferral of a Bonus Amount;

     (b)  A Participant  who is  ineligible to make Basic Salary  Reduction
          Contributions  under  Section  2.5 of the Plan shall  likewise be
          ineligible to make a deferral of any Bonus Amount; and

     (c)  The limitations on Basic Salary Reduction  Contributions  and the
          provisions pertaining to Basic Salary Reduction  Contributions in
          the  following  Plan  sections  shall be  equally  applicable  to
          deferrals of Bonus Amounts as follows:

          (i)  Section 3.4:  deferrals of Bonus Amounts shall be treated as
               Basic Salary  Reduction  Contributions  for the Plan Year in
               which the Bonus Amounts are otherwise payable;

          (ii) Section 4.2: deferrals of Bonus Amounts shall be included in
               "Annual  Additions"  for the Plan  Year in which  the  Bonus
               Amounts are otherwise  payable and shall be treated as Basic
               Salary   Reduction   Contributions   for   purposes  of  the
               corrective mechanisms described;

          (iii)Section  4.3(l):  deferrals of Bonus  Amounts may be treated
               as Basic Salary Reduction Contributions for the Plan Year in
               which  the  Bonus  Amounts  are  otherwise  payable  in  the
               discretion of the Administrative Committee;

          (iv) Section  8.2(b)(iii)  and (iv):  deferrals of Bonus  Amounts
               shall be treated as Basic Salary Reduction Contributions for
               the Plan  Year in which  the  Bonus  Amounts  are  otherwise
               payable for purposes of the limitations described;

          (v)  Section 9.4:  deferrals of Bonus Amounts shall be treated as
               Basic  Salary  Reduction  Contributions  for purposes of the
               limitations described.

B.5  New Participants:
     -----------------

     In the event an  Eligible  Employee  first  becomes a  Participant  in
     connection  with his election to defer a Bonus Amount,  such Employee,
     in completing  the  Appropriate  Form  specified in Section B.2, shall
     make an investment  election  from among those options then  available
     under Section 7.1 and shall designate a Beneficiary on the Appropriate
     Form  provided by the  Administrative  Committee.  Such  election  and
     designation   may  be  changed  in  accordance   with  the  applicable
     provisions of the Plan,  treating,  to the extent necessary under Plan
     Section  7.2,  the  deferral  of a  Bonus  Amount  as a  Basic  Salary
     Reduction Contribution.

<PAGE>

                                 APPENDIX C

           SPECIAL PROVISIONS PERTAINING TO CERTAIN EMPLOYEES OF
                         ASI APPLIED SYSTEMS, INC.

C.1  Purpose and Construction:
     -------------------------

     The  purpose of this  Appendix  C is to  evidence  special  provisions
     applicable to ASI Employees. To the extent the provisions of the Plan,
     as  applicable  to  these  individuals,   are  inconsistent  with  the
     provisions  of this  Appendix  C, the  provisions  of Appendix C shall
     govern.

C.2  Definitions:
     ------------

     (a)  "ASI" means ASI Applied Systems, Inc., a wholly-owned  subsidiary
          of the  Company  formed in  connection  with the  acquisition  of
          certain assets of Former ASI.

     (b)  "ASI Employee" means any Employee in the employ of ASI, including
          a Former ASI Employee.

     (c)  "ASI Plan" means the ASI Employees'  Profit Sharing Plan & Trust,
          and  any  successor  thereto,  in  effect  as  of  a  given  date
          hereunder.

     (d)  "Employer  Profit  Sharing  Contribution"  means  a  contribution
          which, in the discretion of the Board, may be made to the Plan on
          behalf of certain ASI  Employees  with  respect to any given Plan
          Year. Any Employer Profit Sharing Contribution shall be allocated
          as provided in Section C.7 of this Appendix.

     (e)  "Employer Profit Sharing Contribution Account" means the separate
          Account  maintained  for a Participant  who is an ASI Employee to
          record  his  share of the Trust  Fund  attributable  to  Employer
          Profit Sharing Contributions made on his behalf.

     (f)  "Former ASI" means ASI Applied Systems, LLC as said entity was in
          effect prior to the date as of which the Company  acquired assets
          relating to said entity's reaction monitoring operations.

     (g)  "Former ASI Employee" means any employee of Former ASI who became
          an Employee of ASI in connection  with the Company's  acquisition
          of  assets   relating  to  Former   ASI's   reaction   monitoring
          operations.

C.3  Eligibility of ASI Employees:
     -----------------------------

     Notwithstanding  Section 2.1(a) of the Plan, any ASI Employee employed
     by ASI as of May 31, 1999 and who is an  Eligible  Employee as of June
     1, 1999,  shall become a Participant in the Plan and shall be eligible
     to commence Basic Salary  Reduction  Contributions  in accordance with
     Section C.6 below.

     Any ASI Employee with an Employment Commencement Date on or after June
     1, 1999 shall become a Participant as of the first day of the calendar
     year quarter  coincident  with or next following the latest of (i) the
     date on which he  becomes an ASI  Employee,  (ii) the date on which he
     becomes an Eligible Employee, and (iii) the date on which he completes
     a 1-year Period of Service.  Such an ASI Employee shall be eligible to
     commence  Basic Salary  Reduction  Contributions  as of any Enrollment
     Date on or following such date of participation.

C.4  Pre-Merger Date Service of ASI Employees:
     -----------------------------------------

     A Former ASI  Employee's  Period of Service shall  include  periods of
     service with ASI and Former ASI in addition to periods of service with
     Spectra-Tech,  Inc. and Spectra-Tech Applied Systems, Inc. as provided
     for in the ASI Plan.

C.5  Vesting of Certain Participants in ASI Plan:
     --------------------------------------------

     Notwithstanding  the  provisions  of Section  6.1,  the Accounts of an
     individual  who, as of May 31, 1999, is an ASI Employee  shall be 100%
     nonforfeitable  at all  times.  Any ASI  Employee  with an  Employment
     Commencement  Date on or after June 1, 1999 shall become vested in the
     Employer Profit Sharing  Contribution Account maintained on his behalf
     in accordance with the provisions of Section 6.1 of the Plan.

C.6  Basic Salary Reduction Contribution:
     ------------------------------------

     Any ASI Employee in the employ of ASI as of May 31,  1999,  and who is
     an Eligible  Employee as of June 1, 1999,  may  commence  Basic Salary
     Reduction  Contributions  as  soon  as  administratively   practicable
     following June 1, 1999, or as of any Enrollment  Date  thereafter,  by
     satisfying the procedural  requirements set forth in Article II of the
     Plan.  Notwithstanding the percentage limitations set forth in Section
     3.1 of the Plan (but subject to such other  restrictions  contained in
     Article III  thereof),  such an ASI  Employee  may elect Basic  Salary
     Reduction Contributions in an amount from 1 percent through 25 percent
     (in whole  percentages)  of  Compensation  otherwise  payable  for pay
     periods ending after his Basic Salary Reduction  Contribution election
     is first effective and before January 1, 2000.

     Effective for Plan Years  beginning on and after January 1, 2000, each
     ASI  Employee  shall be eligible to designate  Basic Salary  Reduction
     Contributions in accordance with Article III of the Plan.

C.7  Employer Profit Sharing Contributions:
     --------------------------------------

     As of any given  Plan Year,  the Board may  decide  whether to make an
     Employer  Profit  Sharing  Contribution  on  behalf  of  eligible  ASI
     Employees  participating in the Plan. To be eligible for an allocation
     of any  Employer  Profit  Sharing  Contribution  made for a given Plan
     Year,  the ASI  Employee  must be an Eligible  Employee,  must earn at
     least  1,000  Hours of  Service  during  such Plan  Year,  and must be
     employed  as of the last day of such Plan Year.  The  Employer  Profit
     Sharing  Contribution  shall be  allocated  to eligible  ASI  Employee
     Participants  in the  ratio  that  each  such  eligible  Participant's
     Compensation  for the given Plan Year bears to the total  Compensation
     of all such eligible Participants for the given Plan Year.

     The  following  shall also be applicable  to Employer  Profit  Sharing
     Contributions:

     (a)  An  Employer  Profit  Sharing   Contribution   Account  shall  be
          maintained on behalf of each eligible ASI Employee Participant;

     (b)  Investment  direction of the Employer Profit Sharing Contribution
          Account   maintained  on  behalf  of  a   Participant   shall  be
          implemented in accordance with Article VII of the Plan; and

     (c)  The  forfeiture  provisions in Section 6.2 of the Plan shall also
          apply to nonvested Employer Profit Sharing Contribution Accounts.

C.8  Company Matching Contributions Not Applicable:
     ----------------------------------------------

     ASI  Employees  participating  in the Plan  shall not be  eligible  to
     participate in the Company Matching Contribution provisions of Article
     IV of the Plan.

C.9  Transfer of Accounts of Former ASI Employees:
     ---------------------------------------------

     Effective  as  of  July  1,  1999,   or  as  soon   thereafter  as  is
     administratively  practicable,  accounts maintained under the ASI Plan
     on behalf of Former ASI Employees  shall be  transferred  from the ASI
     Plan to the Plan.  Records of such transferred  accounts shall be kept
     in  such  manner  as the  Administrative  Committee  shall  determine,
     provided that all protected benefits,  rights and features appurtenant
     to such transferred  accounts shall be preserved under the Plan to the
     extent preservation is required under Section 411(d)(6) of the Code.

<PAGE>

                                 APPENDIX D

           SPECIAL PROVISIONS PERTAINING TO CERTAIN EMPLOYEES OF
                               SAFELINE, INC.

D.1  Purpose and Construction:
     -------------------------

     The  purpose of this  Appendix  D is to  evidence  special  provisions
     applicable  to  employees  of  Safeline,  Inc.  ("Safeline")  who were
     participants in the Safeline, Inc. 401(k) Plan ("Safeline Plan") as of
     October 1, 1999, the effective date of the merger of the Safeline Plan
     into the Plan.  Except as otherwise  provided in this  Appendix D, the
     provisions  of the Plan  other  than this  Appendix  D shall  apply to
     employees of Safeline on and after  October 1, 1999. To the extent the
     provisions  of the  Plan,  as  applicable  to these  individuals,  are
     inconsistent with the provisions of this Appendix D, the provisions of
     Appendix D shall govern.

D.2  Pre-Merger Date Service of Safeline Employees:
     ----------------------------------------------

     The  period(s)  of  employment  of an employee  of  Safeline  prior to
     October 1, 1999 which shall be  recognized as Period(s) of Service and
     Year(s) of Vesting  Service  hereunder  as of October 1, 1999 shall be
     determined  under  Sections  1.38  and  1.55  respectively,   treating
     Safeline for such purpose as having been an Employer hereunder for all
     relevant  periods;  provided,  however,  that in no event  shall  such
     determination result in Periods of Service or Years of Vesting Service
     which are less than the service accumulated under the Safeline Plan as
     of October 1, 1999.

D.3  Vesting of Safeline Plan Participant:
     -------------------------------------

     Notwithstanding  the  provisions  of Section  6.1,  the Accounts of an
     individual  who, as of September 30, 1999,  was both an Employee and a
     participant  in  the  Safeline  Plan  shall  become  100%  vested  and
     nonforfeitable,  without  regard  to  Periods  of  Service,  upon such
     individual's attainment of age 55, provided such individual is then an
     Employee.

D.4  Distribution Option Applicable to Safeline Plan Participant:
     ------------------------------------------------------------

     Notwithstanding the provisions of Section 9.2 and effective October 1,
     1999, a Participant  who had also been a  participant  in the Safeline
     Plan and whose  Vested  Interest,  at the time  payment of such Vested
     Interest is to commence, is in excess of $3,500 ($5,000 for periods on
     and after January 1, 2000), may elect to receive payment of his vested
     Accounts  in the form of periodic  installments  (over a period not to
     exceed the Participant's life expectancy) made at intervals not longer
     than one year. A Participant's  election of such form of payment shall
     be made in accordance with the procedures set forth in Article IX.<PAGE>

                                                                   EXHIBIT 10.15

THIS COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENT (the "Agreement") is made
as of the 19th day of January, 2000 (the "Effective Date")

BETWEEN

TECHNOLOGICAL RESOURCES PTY LIMITED (ACN 002 183 557) through its business unit,
Research and Technology Development, of 55 Collins Street, Melbourne, Victoria
3000, a wholly owned subsidiary of Rio Tinto Limited ("TRPL")

AND

MAXYGEN INC. of 515 Galveston Drive, Redwood City, CA 94063, United States of
America ("MAXYGEN")

PURPOSE OF AGREEMENT

      A.    TRPL wishes to develop Carbon Sequestration technologies for use in
            connection with *******, and for other purposes more generally.

      B.    MAXYGEN has expertise in developing biotechnologies, particularly
            those relating to gene shuffling, across a broad range of
            applications.

      C.    TRPL and MAXYGEN wish to collaborate through the sharing of their
            expertise to develop a particular technology for Carbon
            Sequestration.

      D.    The purpose of this Agreement is to establish the terms and
            conditions upon which the Project will be established, carried out
            and commercialized by TRPL and MAXYGEN.

IT IS AGREED

1.    DEFINITIONS AND INTERPRETATION

      For purposes of this Agreement, the following defined words shall have the
      meanings indicated:

1.1   "Affiliate" means any corporation, firm, limited liability company,
      partnership or other entity that directly or indirectly controls or is
      controlled by or is under common control with MAXYGEN. As used in this
      paragraph, control includes, without limitation, ownership, directly or
      through one or more affiliates, of fifty percent (50%) or more of the
      shares of stock entitled to vote for the election of directors, in the
      case of a corporation, or fifty percent (50%) or more of the equity
      interests in the case of any other type of legal entity, status as a
      general partner in any partnership, or any other arrangement whereby a
      party controls or has the right to control the board of directors or
      equivalent governing body of a corporation or other entity, or if such
      level of ownership or control is prohibited in any country, any entity
      owned or controlled by or owning or

THE SYMBOL "*******" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

      controlling at the maximum control or ownership right permitted in the
      country where such entity exists;

1.2   "Agreement" means this agreement, including its Schedules, and any
      amendment to it agreed to in writing by the Parties;

1.3   "Applications" means each of the TRPL Coal Applications, the Non-TRPL Coal
      Applications, the Biomass Applications, the Non-Renewable Energy
      Applications, and the Value Added Products Applications;

1.4   "Background Technology" means the MAXYGEN Background Technology and/or the
      TRPL Background Technology, as appropriate;

1.5   "Biomass" means organisms, living or dead, or the products of living
      organisms;

1.6   "Biomass Applications" means *******;

1.7   "Business Unit" means the TRPL Business unit, Research and Technology
      Development;

1.8   "Carbon Entity" means the joint venture vehicle or any other legal entity
      (if any) established by the Parties or with the authority of the Parties,
      to Exploit the Project Technology for the Applications;

1.9   "Carbon Sequestration" means *******;

1.10  "Confidential Information" means all know-how, financial information and
      other commercially valuable information in whatever form including
      unpatented inventions, trade secrets, formulae, graphs, drawings, designs,
      biological materials, samples, devices, models and other materials of
      whatever description which a Party discloses to the other Party and
      designates as Confidential Information at the time of disclosure. The
      following are exceptions to such information:

      (a)   information which is already in the public domain;

      (b)   information which hereafter becomes part of the public domain
            otherwise than as a result of an unauthorized disclosure by the
            recipient Party or its representatives;

      (c)   information which is or becomes available to the recipient Party,
            other than under an obligation of confidentiality, from a Third
            Party lawfully in possession of such information and who has the
            lawful power to disclose such information to the recipient Party;

      (d)   information which is rightfully known by the recipient Party (as
            shown by its written records) prior to the date of disclosure to it
            hereunder; or

      (e)   information which is independently developed by the recipient Party
            without any use of or reference to any Confidential Information of
            the other Party;

                                       2
<PAGE>

1.11  "Contributions" means the contributions (including funding, personnel,
      research activities and equipment, etc.) a Party will make to the Project
      as specified in the Project Plan;

1.12  "Control" or "Controlled" means possession of the ability to grant the
      licenses or sublicenses as provided for herein without violating the terms
      of any agreement or other arrangement with any Third Party;

1.13  "Exploit" and/or "Exploitation" means to use, make, have made, import,
      lease, sell, sublicense or otherwise dispose of to a Third Party, or offer
      to use, make, lease, sell, sublicense or otherwise dispose of to a Third
      Party;

1.14  "Feasibility Milestone" means Decision Milestone 2 (as defined in the
      Project Plan) for the Project established in the Project Plan;

1.15  "Gene" means any gene selected for Shuffling in the Project by the
      Management Committee pursuant to clause 3.2;

1.16  "Gene Variant" means any altered form of a Gene which meets the applicable
      criteria agreed by the Management Committee and is made in connection with
      the Project through the use of Shuffling Technology;

1.17  "Improvements" means any enhancement, modification, adaptation or
      extension to the Materials made by MAXYGEN or jointly by TRPL and MAXYGEN,
      and all Intellectual Property Rights subsisting in them;

1.18  "Intellectual Property Rights" means statutory and other proprietary
      rights in respect of trade marks, patents, circuit layouts, copyrights,
      confidential information, know-how and all other rights with respect to
      Intellectual Property as defined in Article 2 of the Convention
      Establishing the World Intellectual Property Organization of July 1967;

1.19  "Management Committee" means the management committee established pursuant
      to clause 3;

1.20  "Manufacturing Costs" means, with respect to Products sold by MAXYGEN
      (and/or its Affiliates) or TRPL (and/or RIO TINTO Group Members), as the
      case may be, (i) ******* costs related to the manufacture of Products, by
      MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO TINTO Group Members),
      as the case may be, including without limitation, costs for personnel,
      materials, quality control, regulatory compliance, administrative
      expenses, subcontractors, fixed and variable manufacturing overhead costs
      and business unit or division *******, and the like, as determined and
      allocated in accordance with generally accepted accounting principles
      (GAAP), consistently applied by the applicable Party, excluding *******,
      or (ii) with respect to Products purchased by MAXYGEN (and/or its
      Affiliates) or TRPL (and/or RIO TINTO Group Members), as the case may be,
      from a Third Party manufacturer, ******* paid to the manufacturer for such
      Products;

                                       3
<PAGE>

1.21  "Materials" means any chemical or biological substances including, without
      limitation, any: (a) organic or inorganic chemical element or compound;
      (b) gene; (c) vector or construct, plasmid, phage or virus; (d) host
      organism, including bacteria and plant cells; (e) eukaryotic or
      prokaryotic cell line or expression system; (f) protein, including any
      peptide or amino acid sequence, enzyme, antibody or protein conferring
      targeting properties and any fragment of a protein or peptide or enzyme;
      (g) genetic material, including any genetic control element (e.g.,
      promoters), Gene, Gene Variant or Shuffled Gene; or (h) assay or reagent;

1.22  "MAXYGEN Background Technology" means all Materials provided by MAXYGEN
      for use in the Project and Intellectual Property Rights of MAXYGEN which
      are necessary for the conduct of the Project and made available by MAXYGEN
      for the conduct of the Project;

1.23  "MAXYGEN Field" means all uses except *******;

1.24  "Net Revenues" with respect to a particular Product means Net Sales for
      such Product, less:

      (a)   an amount for such manufacturing equal to ******* of the
            Manufacturing Costs related to such Products; and

      (b)   any expenses incurred or accrued in connection with the
            installation, packaging, labeling, marketing, sale or other
            disposition of the Products by MAXYGEN (and/or its Affiliates) or
            TRPL (and/or RIO TINTO Group Members), as the case may be, and
            general and administrative expenses relating to the preceding, as
            determined and allocated in accordance with generally accepted
            accounting principles, consistently applied by the applicable Party.

1.25  "Net Sales" means the amounts (including, without limitation, *******)
      received by MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO TINTO
      Group Members), as the case may be, from Third Parties (including without
      limitation Sublicensees) with respect to the Exploitation of Products,
      less: (i) rebates, credits and cash, trade and quantity discounts,
      actually taken, (ii) excise taxes, sales, use, value added, and other
      consumption taxes and other compulsory payments to governmental
      authorities, actually paid, (iii) the cost of any shipping packages and
      packing, if billed separately, (iv) insurance costs and outbound
      transportation charges prepaid or allowed, (v) import and/or export duties
      and tariffs actually paid, and (vi) amounts allowed or credited due to
      returns or *******. All transfers of Products between MAXYGEN and/or its
      Affiliates or TRPL and/or RIO TINTO Group Members, as the case may be,
      shall be disregarded for purposes of computing Net Sales, unless the
      purchaser is the end-user of such Product;

1.26  "Non-Renewable Energy Applications" means *******;

1.27  "Non-TRPL Coal Applications" means *******;

                                       4
<PAGE>

1.28  "Objective" means the development, through the use of Shuffling
      Technology, of Shuffled Genes which have an enhanced capability in Carbon
      Sequestration with a view to Exploitation by the Parties as set forth in
      this Agreement;

1.29  "Parties" means the parties to this Agreement and their successors and
      permitted assigns and "Party" means one of them;

1.30  "Phase I" means the first phase of the Project as described in the Project
      Plan, up to achievement of the Feasibility Milestone;

1.31  "Phase II" means the second phase of the Project involving further
      research for the scale-up the development of a prototype apparatus for the
      Applications utilizing Shuffled Genes or proteins expressed therefrom;

1.32  "Phase II Milestones" means the milestones established by the Parties in
      writing at the commencement of Phase II which milestones are directed at
      achieving the Objective;

1.33  "Product" means any product that is, or incorporates or is made through
      the use of one or more Shuffled Genes or proteins expressed therefrom. Any
      process utilizing one or more Shuffled Genes or proteins expressed
      therefrom shall also be considered a Product;

1.34  "Project" means the research activities comprised in Phase I and Phase II
      which are to be undertaken by the Parties pursuant to this Agreement as
      described more particularly in the Project Plan;

1.35  "Project Commencement Date" means the date thirty (30) days after the
      Effective Date or such earlier date as the Parties may agree in writing to
      commence Phase I of the Project;

1.36  "Project Plan" means the initial plan referred to in clause 2.1 which has
      been agreed by the parties as of the Effective Date for the conduct of the
      Project, which plan may be amended from time to time by the Management
      Committee;

1.37  "Project Technology" means all ideas, inventions, discoveries,
      innovations, data, software, databases, results, information, reports,
      samples, Materials, Improvements, Shuffled Genes, prototypes and
      artifacts, whether or not patentable, instructions, processes and
      formulae, including, without limitation, biological, chemical, physical
      and analytical, safety, manufacturing and quality control data and
      information, in each case, which is/are conceived or reduced to practice
      or otherwise developed or made or the utility of which for the Objective
      is determined or discovered by either Party, or a Third Party on behalf of
      a Party, as part of the conduct of the Project during the Project Term,
      and all Intellectual Property Rights subsisting in the foregoing;

1.38  "Project Term" means the period beginning on the Project Commencement Date
      and ending on the third anniversary of the Project Commencement Date or as
      extended or subject to earlier termination in accordance with clause 2.2;

                                       5
<PAGE>

1.39  "Revenues" shall mean:

      (a)   the ******* by MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO
            TINTO Group Members), as the case may be, for:

                  (1)   ******* from Sublicensees with respect to *******;

                  (2)   ******* from Sublicensees with respect to *******;

                  (3)   ******* of Products by Sublicensees;

                  (4)   ******* for Products; and

                  (5)   all other consideration (including, without limitation,
            ******* received by MAXYGEN (and/or its Affiliates) or TRPL (and/or
            RIO TINTO Group Members), as the case may be, attributable to the
            use of one or more Products;

            LESS, in the case of (3), (4) and/or (5) above, on a Product-by-
            Product basis, amounts paid by MAXYGEN (and/or its Affiliates) or
            TRPL (and/or RIO TINTO Group Members), as the case may be, to Third
            Parties for Intellectual Property Rights to manufacture, use, import
            or sell such Product.

      (b)   In the event that a Product is sold in combination with one or more
            other product(s), components, ingredients or active agent(s) which
            are not Products, Revenues from such sales of such Product shall be
            calculated by multiplying the Revenues of that combination by the
            fraction A/(A + B), where A is the gross selling price of the
            Product sold separately and B is the gross selling price of the
            other product, components, ingredient or active agent(s) sold
            separately. In the event that no such separate sales are made by the
            Party, Net Sales for revenue sharing determination shall be as
            reasonably allocated by the Party between such Product and such
            other product, components, ingredient or agent, based upon their
            relative importance and proprietary protection. In the event that
            the other Party believes such allocation is inequitable and the
            Parties are unable to resolve such dispute after bona fide
            negotiations in good faith, the matter may be submitted to
            arbitration pursuant to clause 23 below.

1.40  "RIO TINTO Associate" means a corporation or unincorporated joint venture
      or other business association regulated by contractual arrangement in
      which, as of December 31, 1999, a RIO TINTO Group Member has:

      (a)   not less than a 40% shareholding or participating interest; or

      (b)   if less than a 40% shareholding or participating interest, a
            shareholding or participating interest of at least 25%, provided
            that such shareholding or participating interest is equal to or
            greater than any other shareholding or participating interest;

                                       6
<PAGE>

1.41  "RIO TINTO Group Member" means Technological Resources Pty Limited, Rio
      Tinto Corporation plc (of 6 St James's Square, London, England), Rio Tinto
      Limited, and all RIO TINTO Associates having such status as of 31 December
      1999;

1.42  "Schedule" means any schedule to this Agreement;

1.43  "Shuffled Gene" means (i) any Gene Variant that the Management Committee
      designates as meeting applicable criteria established by the Management
      Committee, and (ii) any Shuffled Gene Derivative;

1.44  "Shuffled Gene Derivative" means any modified form of a Shuffled Gene
      designated by the Management Committee, which modification is developed
      from or made to the Shuffled Gene by any means, including without
      limitation, any codon modified variant, splice variant, mutation,
      derivative or variant of a Shuffled Gene, and any fragment(s) of the
      preceding;

1.45  "Shuffle", "Shuffled" and "Shuffling" means the recombination and/or
      rearrangement and/or mutation of genetic material for the creation of
      genetic diversity using intellectual property and/or tangible property
      owned or Controlled by MAXYGEN;

1.46  "Shuffling Technology" means techniques, methodologies, processes,
      materials and/or instrumentation useful for Shuffling, and generally
      applicable screening techniques, methodologies, or processes of using the
      resulting genetic material to identify potential usefulness;

1.47  "Sublicensee" means an entity (other than Affiliates in the case of
      MAXYGEN and RIO TINTO Group Members in the case of TRPL) to whom TRPL or
      MAXYGEN, as the case may be, has granted a license or sublicense to
      Exploit Products;

1.48  "Third Party" means any person other than TRPL, a RIO TINTO Group Member,
      MAXYGEN, or an Affiliate of MAXYGEN;

1.49  TRPL Background Technology" means all Materials provided by TRPL for use
      in the Project and Intellectual Property Rights of TRPL which are
      necessary for the conduct of the Project and made available by TRPL for
      the conduct of the Project;

1.50  "TRPL Coal Applications" means *******;

1.51  "TRPL Field" means *******.

1.52  "Value Added Products Applications" means *******.

1.53  Interpretation.  In this Agreement, except where the context indicates to
      the contrary:

      (a)   the expression "person" includes an individual, a body corporate, a
            joint venture, a trust, an agency or other body;

                                       7
<PAGE>

      (b)   words importing the singular will include the plural (and vice
            versa) and words denoting a given gender will include all other
            genders;

      (c)   headings are for convenience only and will not affect interpretation
            of this Agreement;

      (d)   all monetary amounts are expressed in United States currency;

      (e)   the Schedule forms part of this Agreement.

2.    PROJECT AND REPORTING

2.1   Project Plan.  The Parties will conduct the Project with the goal of
      achieving the Objective in accordance with the Project Plan. The Project
      Plan will establish: (i) the scope of the development activities which
      will be performed during each of Phase I and, if applicable, Phase II;
      (ii) objectives, work plan activities and time schedules with respect to
      the Project; and (iii) the Feasibility Milestone for Phase I and, if
      applicable, Phase II Milestone(s). The initial Project Plan has been
      agreed by the Parties in writing as of the Effective Date. The Management
      Committee will review the Project Plan on an ongoing basis and may make
      changes to it.

2.2   Term.  The term of Phase I of the Project will commence on the Project
      Commencement Date and, unless terminated earlier due to the termination of
      the Agreement pursuant to clause 2.11 or clause 14, or extended by mutual
      agreement of the Parties, will terminate upon completion of the Project
      Term. The term of Phase II of the Project, if any, shall be as agreed by
      the Parties.

2.3   Phase I and Phase II.

      (a)   Completion of Phase I.  Phase I will be completed upon achievement
            of the Feasibility Milestone or, if earlier, expiration of the
            Project Term.

      (b)   Negotiation of Phase II.  Upon achievement of the Feasibility
            Milestone, the Parties will promptly negotiate bona fide in good
            faith (i) whether to conduct Phase II, (ii) the duration of Phase
            II, (iii) the research funding to be provided in connection with
            Phase II, and (iv) appropriate modifications to the Project Plan to
            establish the Phase II Milestone(s) and the activities to be
            undertaken by the Parties in Phase II. MAXYGEN agrees for a period
            of six (6) months following the earlier of (a) achievement of
            *******, or (b) the expiration of the Project Term (such six month
            period the "Phase II Negotiation Period"), that TRPL shall be
            MAXYGEN's preferred partner for the conduct of Phase II or, subject
            to clauses 2.12 and 12.4, *******, and that during the Phase II
            Negotiation Period MAXYGEN will not, without TRPL's consent,
            negotiate with any Third Party to enter into a collaboration to
            conduct Phase II research or, subject to clauses 2.12 and 12.4,
            *******. TRPL agrees that if it is not interested in pursuing Phase
            II or other *******, it will promptly notify MAXYGEN in writing. If
            TRPL notifies MAXYGEN that it is not interested in pursuing Phase II
            research prior to expiration of the Phase II Negotiation Period, or
            if the Parties do not agree in

                                       8
<PAGE>

            writing upon the items referred to in (i) through (iv) above during
            the Phase II Negotiation Period, then (a) the Project shall
            terminate, (b) neither Party shall have any obligation to conduct
            research in Phase II, (c) TRPL shall have no obligations to provide
            research funding for Phase II, (d) MAXYGEN shall be free to pursue
            such research on its own or with any Third Party, and (e) TRPL shall
            have no rights to use any Project Technology for any purpose.

      (c)   Phase II.  If the Parties agree in writing (i) to conduct Phase II,
            (ii) the duration of Phase II, (iii) the research funding to be
            provided in connection with Phase II, and (iv) appropriate
            modifications to the Project Plan to establish the Phase II
            Milestone(s) and the activities to be undertaken by the Parties in
            Phase II, then the Parties shall devote the agreed-upon resources to
            undertake the Phase II research activities, and TRPL shall provide
            further development funding at the agreed level for the conduct of
            Phase II. Phase II will be completed upon completion of the Phase II
            Milestones or, if earlier, expiration of the time period agreed by
            the Parties for the conduct of Phase II, unless terminated earlier
            in accordance with clause 14.

2.4   Efforts.  Each of MAXYGEN and TRPL will conduct activities in connection
      with the Project as described in the Project Plan. The Parties agree to
      use reasonable efforts to carry out the Project and make their
      Contributions in the manner and at the times specified in the Project
      Plan.

2.5   Project Funding.

      (a)   TRPL Expenses.  TRPL shall be responsible for the expense of its own
            participation in the Project.

      (b)   TRPL Funding.  TRPL shall pay to MAXYGEN funding for Phase I of the
            Project of U.S. ******* each year of Phase I of the Project for
            total amount of U.S. *******. The amount of funding TRPL will pay to
            MAXYGEN for Phase II of the Project, if any, shall be agreed by the
            parties pursuant to clause 2.3(c). MAXYGEN shall have no obligation
            to expend any amount or incur any expense in connection with the
            Project except the amounts paid by TRPL to MAXYGEN pursuant to this
            clause 2.5(b). All payments pursuant to this clause 2.5(b) will be
            made inclusive of any taxes or any other charge payable in respect
            of such payment or the satisfaction by a Party of its obligations
            under this Agreement or any other matter arising out of, connected
            with or related to, this Agreement (including, without limitation,
            any applicable goods and services taxes or value added taxes, sales
            taxes or withholding taxes).

      (c)   Timing of Payments.  The amounts to be paid to MAXYGEN in connection
            with the Project will be paid quarterly, in advance. The initial
            payment for the first quarter of the first year of the Project will
            be made within fourteen (14) days after the Project Commencement
            Date, and subsequent payments will be made on or before the
            applicable quarterly anniversaries of the Project Commencement Date.

                                       9
<PAGE>

      (d)   Third Party Technology. MAXYGEN will be responsible for all payments
            due to Third Parties for the acquisition of licenses to intellectual
            property necessary for the practice of Shuffling Technology per se
            in the Project, and the costs of negotiating and preparing such
            licenses. If the Management Committee agrees that it is necessary
            for MAXYGEN to acquire any license to any other intellectual
            property or technology (e.g., a gene or Gene) from a Third Party for
            the conduct of MAXYGEN's activities in connection with the Project,
            the Management Committee will determine how such arrangements might
            proceed and what costs TRPL and/or MAXYGEN should contribute (if
            any) to the cost of acquiring the necessary license; provided, if
            the Management Committee does not agree upon allocation of costs
            between the Parties, then MAXYGEN shall have no liability hereunder
            for not acquiring or maintaining such licenses, or for failing to
            undertake or perform any research activities set forth in the
            Project Plan for which such license is necessary.

      (e)   Subcontracts.  With the prior written approval of the Management
            Committee, MAXYGEN may enter into agreements with Third Parties for
            the performance of activities in furtherance of the Project. If any
            such agreement is for the performance of activities in furtherance
            of the Project for which TRPL will be responsible for paying, TRPL
            shall be responsible for directly paying to the third party all
            compensation required to be paid pursuant to such Agreement and/or
            for reimbursing MAXYGEN for all expenses incurred by MAXYGEN in
            connection with such agreements, including, without limitation, the
            out-of-pocket costs of negotiating and preparing such agreements.

      (f)   Capital Expenditures.  If the conduct of the Project necessitates
            the purchase of specialized capital equipment, the Management
            Committee will determine whether such equipment will be purchased;
            provided, it is understood that TRPL shall not be obligated without
            its consent to provide funding in excess of the amounts set forth in
            clause 2.5(b) for Phase I or such funding as the Parties may agree
            for Phase II pursuant to clause 2.3. If the Management Committee
            approves any such purchase, TRPL and MAXYGEN in proportions to be
            agreed by them, will pay the full cost (including costs for taxes,
            shipping, etc.) for such purchases. Neither Party will have any
            obligation to purchase or to contribute to the purchase of any such
            equipment unless both Parties agree pursuant to this clause and
            provide reimbursement as agreed, and neither Party will have any
            liability hereunder for not purchasing or otherwise obtaining access
            to such equipment.

2.6   Technology Advancement Fees.  TRPL will pay to MAXYGEN an annual
      technology advancement fee of ******* each year during Phase I of the
      Project. Such funds shall be used by MAXYGEN for the development of
      Materials or Intellectual Property Rights which may be useful for the
      conduct of the Project. The first such fee will be paid to MAXYGEN on or
      before the Project Commencement Date and each subsequent fee will be paid
      to MAXYGEN on or before each anniversary of the Project Commencement Date.
      Such amounts will not be refundable nor creditable against other amounts
      due to MAXYGEN under this Agreement, and will be paid in addition to any
      amounts due from TRPL pursuant to Section 2.5(b).

                                      10
<PAGE>

2.7   Contributions to Project.

      (a)   Phase I.  During Phase I of the Project, (i) TRPL will provide
            funding for the Project as set forth in clause 2.5 and will provide
            representatives on the Management Committee appropriately qualified
            to perform their supervisory and management functions on the
            Management Committee, and (ii) MAXYGEN will:

            (i)   Use reasonable endeavors to ensure the success of the Project,
                  including without limiting the foregoing, (where required by
                  the Project Plan) devoting sufficient research personnel, and
                  laboratory facilities;

            (ii)  Engage personnel appropriately qualified to perform (where
                  required by the Project Plan), supervise, analyze and report
                  on all the results conducted pursuant to the Project; and

            (iii) Deploy such scientific, technical, financial and other
                  resources to accord the Project such priority as is necessary
                  to conduct the Project as specified in the Project Plan.

      (b)   Phase II.  During Phase II of the Project, each Party will:

            (i)   Use reasonable endeavors to ensure the success of the Project,
                  including without limiting the foregoing, (where required by
                  the Project Plan) devoting sufficient research personnel, and
                  laboratory facilities;

            (ii)  Engage personnel appropriately qualified to perform (where
                  required by the Project Plan), supervise, analyze and report
                  on all the results conducted pursuant to the Project; and

            (iii) Deploy such scientific, technical, financial and other
                  resources to accord the Project such priority as is necessary
                  to conduct the Project as specified in the Project Plan.

2.8   Selection of Genes for Shuffling.  With respect to any gene that the
      Management Committee considers for Shuffling in the Project, both Parties
      shall inform the Management Committee of any information of which it is
      aware with respect to Third Party patent applications or patents which may
      relate to the use of the gene in the Project and/or the development or
      commercialization of Products based on Shuffled Genes resulting from the
      Shuffling of such gene in the Project; provided, neither Party shall have
      any obligation to provide the Management Committee with any document which
      would result in (i) a breach of the attorney/client privilege with respect
      thereto or (ii) a breach of an obligation of confidentiality owed to a
      Third Party. It is understood that the Parties anticipate that MAXYGEN
      will propose genes for Shuffling in the Project. The Management Committee
      shall have the sole authority to select the Genes for use in the Project.
      The Management Committee shall consider technical feasibility and freedom
      to operate risks for the commercialization of Products in the selection of
      Genes.

                                      11
<PAGE>

2.9   Materials; Limited Use.  MAXYGEN shall provide reasonable quantities of
      Materials (which may include, without limitation, Shuffled Genes and/or
      Gene Variants which are potential Shuffled Genes) to TRPL as set forth in
      the Project Plan, which TRPL shall use solely for research activities in
      the conduct of the Project approved in advance by the Management
      Committee. TRPL shall provide a written summary of the results of all such
      research activity to the Management Committee. In the event that TRPL
      obtains rights to Exploit one or more Shuffled Genes as set forth in
      clause 5.2 or 5.3, TRPL shall also have the right to use Shuffled Genes
      provided hereunder for such purpose. Except in connection with the
      practice of the rights granted to TRPL in clause 5.2 and/or 5.3 hereof,
      TRPL shall not without the express prior written consent of MAXYGEN, (i)
      transfer any of the Shuffled Genes, Gene Variants or other Materials
      provided by MAXYGEN to any Third Party, (ii) use the data and information
      obtained from the research activities conducted using such Shuffled Genes,
      Gene Variants or other Materials provided by MAXYGEN (including without
      limitation any sequence information regarding the Shuffled Genes or Gene
      Variants or the proteins expressed therefrom) for any purpose other than
      the purpose of conducting research activities in the Project approved in
      advance by the Management Committee, (iii) authorize any Third Party to
      obtain or use any of the Shuffled Genes, Gene Variants or other Materials
      provided by MAXYGEN for any purpose, or (iv) use any data relating to any
      Shuffled Genes, Gene Variants or other Materials provided by MAXYGEN,
      including without limitation consensus sequences or structural motifs, to
      reverse engineer, reconstruct, synthesize or otherwise modify or copy any
      Shuffled Gene or Gene Variant or any other gene or product with similar
      biological activities, or to attempt the same.

2.10  Reporting. MAXYGEN will provide quarterly written reports (the "Report")
      to the Management Committee no less than fourteen (14) days prior to any
      scheduled meeting. Each Report will document the conduct of the Project,
      the results of the Project, expenditures incurred and milestones achieved
      for the previous quarter.

2.11  Termination.

      (a)   In the event that either Party materially breaches its obligations
            with respect to the conduct of the Project, the other Party shall
            have the right to terminate the Project and this Agreement as set
            forth in clause 14.2 below.

      (b)   In the event that Decision Milestone 1 (as set forth in the Project
            Plan) has not been met on or before the date ******* months
            following the Project Commencement Date, with three (3) months
            written notice, TRPL shall have the right to terminate the Project
            and the Agreement. In the event of such termination, (i) TRPL shall
            have no further obligation to provide Contributions following the
            effective date of such termination, and (ii) MAXYGEN shall retain
            all rights to the Project Technology as set forth in clause 5.1.

      (c)   The Parties may mutually agree to terminate the Project and the
            Agreement as provided in clause 14.3, below.

                                      12
<PAGE>

2.12  Further Agreements Relating to *******.  If Maxygen wishes to enter an
      agreement with a Third Party during the Project with respect to research
      relating to *******, Maxygen shall have the right to do so provided that
      (i) such agreement would not diminish MAXYGEN's obligations to the Project
      nor affect the rights and licenses granted to TRPL in clause 5.2(a) below,
      and (ii) MAXYGEN provides TRPL notice of the agreement prior to its
      execution. MAXYGEN agrees to discuss with TRPL in bona fide good faith the
      impact of any such an agreement on the Project, and subject to its
      confidentiality obligations, to identify to TRPL the other party to such
      agreement, the nature of the arrangement and the activities to be
      performed under such an agreement.

3.    PROJECT MANAGEMENT

3.1   Membership.  The management of the Projects will be carried out by the
      Management Committee consisting of two (2) representatives of each of TRPL
      and MAXYGEN. One representative from each of TRPL and MAXYGEN will have
      technical expertise and one representative from each of TRPL and MAXYGEN
      will have management/commercial expertise. A MAXYGEN representative will
      serve as chairperson of the Management Committee. A Party may change any
      of its appointments to the Management Committee at any time by written
      notice to the other Party. From time to time, the Management Committee may
      establish subcommittees to oversee particular activities.

3.2   Authority.  The Management Committee will be responsible for the
      oversight, direction and management of the Project. The responsibilities
      of the Management Committee will include: (i) selection of the Genes which
      will be Shuffled in the Project as set forth in clause 2.8, (ii)
      establishment of the criteria for identification of Shuffled Genes, (iii)
      designation of Gene Variants as Shuffled Genes (iv) review and
      modification of the Project Plan, (v) ensuring satisfactory flow of
      information by the review of quarterly reports and (vi) approving the
      acquisition of capital equipment and Third Party licenses. Quarterly
      reports will be available to all members of the Management Committee at
      least fourteen (14) days prior to the meeting.

3.3   Decisions.  A quorum for the Management Committee will be the full
      membership of the Management Committee as defined in clause 3.1. All
      decisions of the Management Committee must be unanimous and recorded in
      writing. If the Management Committee is unable to make a unanimous
      decision, the terms of the then-current Project Plan shall remain in
      effect. In the event that a member of the Management Committee believes
      that the then-current Project Plan should be changed and the Management
      Committee cannot agree, then the chairperson of the Management Committee
      will seek to resolve the matter pursuant to clause 23.1, but clauses 23.2,
      23.3 and 23.4 shall not apply to the resolution of such matters.

3.4   Meetings.  The Management Committee will meet on a quarterly basis in
      person or as otherwise agreed and will, additionally, communicate
      regularly by telephone, facsimile and/or video conference. Attendance at
      meetings may be in person, by telephone or by televideo conference, and
      will be at the respective expense of the participating Parties. Each Party
      recognizes the importance of the Management Committee to the success of
      the Project and will use diligent efforts to cause all of its
      representatives to attend all

                                      13
<PAGE>

      meetings of the Management Committee. With the prior approval of the
      Management Committee, other personnel of the Parties may attend Management
      Committee meetings.

3.5   Minutes.  The chairperson of the Management Committee will appoint a
      person to keep accurate minutes of its meetings. Draft minutes will be
      prepared and delivered to each Party within twenty (20) days after each
      meeting. Draft minutes will be edited by each Party's Management Committee
      representatives and will be adopted in final form with their approval and
      agreement and will record the final decisions made by the Management
      Committee. Minutes of the Management Committee meetings will be treated as
      Confidential Information of each Party.

4.    INTELLECTUAL PROPERTY RIGHTS

4.1   Ownership.

      (a)   Background Technology.  All rights to a Party's Background
            Technology remain vested solely in that Party.

      (b)   Project Technology.  MAXYGEN will own all Project Technology
            regardless of which Party conceives, reduces to practice or
            otherwise develops such Project Technology. Subject to clause 4.1(a)
            and the license rights granted pursuant to this Agreement to TRPL,
            TRPL agrees to assign and hereby irrevocably assigns to MAXYGEN its
            entire right, title and interest in the Project Technology and
            Improvements. TRPL agrees to execute in a timely manner such
            documents as MAXYGEN may request to document and perfect MAXYGEN's
            sole ownership of the Project Technology, including all Intellectual
            Property Rights subsisting in it.

      (c)   Governing Law.  It is understood and agreed that inventorship of
            Project Technology (whether or not patentable) will be determined in
            accordance with United States patent laws or the law of California,
            as applicable.

4.2   Research Licenses.  Each Party grants to the other Party a royalty-free,
      non-exclusive, non-transferable right to use its Background Technology to
      the extent necessary for the carrying out of the Project during the
      Project Term, and solely to carry out the Project; provided, (i) nothing
      hereunder grants TRPL any right or license under the MAXYGEN Background
      Technology to practice any Shuffling Technology, and (ii) nothing
      hereunder grants MAXYGEN any right or license under the TRPL Background
      Technology for any use other than performance of the Project.

4.3   Cooperation.  Each Party will do all things reasonably necessary to give
      effect to the ownership and licensing arrangements referred to in this
      clause 4.

4.4   Third Party Rights.  TRPL agrees that MAXYGEN is in the business of
      Shuffling genes on behalf of Third Parties, and that, subject to the
      limitations expressed in clause 12.4 of this Agreement, MAXYGEN has
      granted and will grant to Third Parties rights to acquire licenses for
      genes derived from Shuffling, provided always that MAXYGEN will not,

                                      14
<PAGE>

      during the Project, grant any licenses that are inconsistent with, or
      would prevent the granting of, the licenses to TRPL described in clause
      5.2(a).

      It is understood and agreed by TRPL that, even if MAXYGEN complies with
      its obligations under this Agreement, genes derived through Shuffling
      activities that MAXYGEN conducted with Third Parties in the course of
      MAXYGEN's other business activities may result in Third Party patent
      applications and patents, including patent applications and patents owned
      by such Third Parties, or owned jointly by MAXYGEN and such Third Parties,
      which could conflict with patent applications and patents owned by TRPL.
      MAXYGEN will use its reasonable efforts to avoid such conflict and, unless
      TRPL is damaged as a proximate result of such a material breach by MAXYGEN
      of this clause 4.4, then MAXYGEN will have no liability under this
      Agreement with respect to any such conflict.

4.5   No Implied Licenses.  No rights or licenses with respect to any
      intellectual property owned by MAXYGEN or TRPL are granted or will be
      deemed granted under this Agreement or in connection with it, other than
      those rights expressly granted in this Agreement.

5.    COMMERCIALIZATION OF PROJECT TECHNOLOGY

5.1   Phase I.  Except as provided in clause 5.2 or 12.4 below, or as the
      Parties may agree in writing as set forth in clause 5.3 below, MAXYGEN
      shall have the right to use, sublicense and otherwise Exploit the Project
      Technology without obligation to obtain consent of, pay royalties to, or
      otherwise account to, TRPL, and TRPL will have no rights to use MAXYGEN
      Background Technology or Project Technology for any purpose.

5.2   Phase II.  If the Parties commence the conduct of Phase II as described in
      clause 2.3 above, then each Party will have the right to Exploit the
      Project Technology and the Intellectual Property Rights subsisting in that
      technology for the Applications as set out in this clause 5.2, unless the
      Parties agree otherwise in writing as set forth in clause 5.3, below.

      (a)   To TRPL.

            (i)   Commercial License. Subject to sharing of Revenues as set
                  forth in clause 5.2(c) below, TRPL will be granted an
                  exclusive, irrevocable, worldwide, royalty-bearing license,
                  including the right to sub-license, to Exploit the Project
                  Technology in the TRPL FIELD.

            (ii)  Background Technology.  In furtherance of the license granted
                  in (i), above, and solely to the extent it is necessary to
                  exercise the foregoing license, MAXYGEN will also grant TRPL a
                  non-exclusive, irrevocable, worldwide license under the
                  MAXYGEN Background Technology to Exploit the Project
                  Technology in the TRPL Field in accordance with the foregoing
                  license, provided, in no event shall TRPL have any right or
                  license under the MAXYGEN Background Technology to practice
                  any Shuffling Technology. TRPL will not be obligated, as a
                  result of this

                                      15
<PAGE>

                  license, to pay any additional royalties to MAXYGEN beyond
                  those specified in clause 5.2(c).

      (b)   To MAXYGEN.  Subject to sharing of Revenues as set forth in clause
            5.2(c) below, and solely to the extent it is necessary for MAXYGEN
            to Exploit the Project Technology in the MAXYGEN Field, MAXYGEN will
            be granted a non-exclusive, irrevocable, royalty-bearing license to
            Exploit the TRPL Background Technology for the MAXYGEN Field.

      (c)   Revenue Sharing.  MAXYGEN and TRPL shall share in all Revenues on
            the following basis:

            Exploitation by TRPL (and/or
             RIO TINTO Group Members):                       Share of Revenues-
            ----------------------------

                                                               TRPL     MAXYGEN
                                                             --------   -------
            (i)   TRPL Coal Applications                      *******   *******

            (ii)  Non-TRPL Coal Applications                  *******   *******

            Exploitation by MAXYGEN (and/or
                   its Affiliates):                          Share of Revenues-
            -------------------------------

                                                               TRPL     MAXYGEN
                                                             --------   -------

            (iii) Biomass Applications                        *******   *******

            (iv)  Non-Renewable Energy Applications           *******   *******

            (iv)  Value Added Products Applications           *******   *******

            It is understood and agreed that the revenue sharing set forth in
            this clause 5.2(c) applies with respect to Revenues received by
            MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO TINTO Group
            Members), as the case may be, attributable to the Exploitation of
            Products.

      (d)   Payment Term.  The Revenue sharing payments due from each Party
            under clause 5.2(c) shall be payable on a country-by-country and
            Product-by-Product basis, until the earlier of (i) ******* years
            following the first commercial sale or other Exploitation of such
            Product in such country or (ii) ******* years following the first
            commercial sale or other Exploitation of any Product by such Party.

      (e)   Convenience.  The Parties acknowledge that the other Party may not
            own or control patent applications or patents covering the
            manufacture, sale or use of a particular Product. However, the
            Parties agree that substantial value is contributed by the Parties'
            conduct and support of the Project in accelerated time to market,
            enhanced probability of success and the potential for multiple
            Products and, for the convenience of the Parties, the Parties (for
            their convenience) agree to

                                      16
<PAGE>

            make Revenue sharing payments set forth in clause 5.2(c) during the
            applicable period set forth in clause 5.2(d), regardless of whether
            any particular Product is covered by a patent application or patent.

      (f)   Non-Cash Consideration.  MAXYGEN (and/or its Affiliates) and TRPL
            (and/or RIO TINTO Group Members) shall not transfer Products for
            consideration other than cash or cash equivalents without providing
            the other Party fair compensation therefore consistent with this
            Agreement. If MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO
            TINTO Group Members) receives any consideration in a form other than
            cash or a cash equivalent (e.g., a license under other intellectual
            property owned or Controlled by a Third Party) as part or all of the
            consideration included in the definition of Net Sales and/or
            Revenue, then MAXYGEN or TRPL, as the case may be, shall notify the
            other Party, and the fair market value of the non-cash consideration
            received by MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO
            TINTO Group Members), as the case may be, for such Product shall be
            agreed by MAXYGEN and TRPL, or if the Parties are unable to agree on
            such fair market value, either Party may submit such matter to
            arbitration pursuant to clause 23 below, in order to determine the
            fair market value of such consideration.

5.3   Negotiation of Carbon Entity.  Upon completion of Phase II, the Parties
      will negotiate bona fide in good faith, for a period of three (3) months
      or, if the Phase II Milestones have been achieved in the Project, for a
      period of six (6) months (the applicable period referred to as the
      "Negotiation Period"), whether and on what terms the Parties may be
      willing to (i) establish a joint venture vehicle (the "Carbon Entity") for
      Exploitation of Project Technology for some or all Applications or (ii)
      provide for another arrangement for Exploiting the Project Technology
      (whether by grant to both Parties of non-exclusive rights, with right to
      sublicense, for Exploitation of the Project Technology for the
      Applications, or otherwise). It is understood that such negotiations will
      need to address, among other things, corporate structure of any such
      Carbon Entity, appropriate licenses to be granted to the Carbon Entity
      with respect to the Project Technology and Background Technology of the
      Parties, respective rights of the Parties in connection with the Carbon
      Entity or other agreed means of Exploitation, and appropriate revenue
      sharing terms. The Parties shall have no obligation to continue such
      negotiations after expiration of the Negotiation Period. It is understood
      and agreed that, except to the extent the Parties may otherwise expressly
      agree in writing, the exploitation rights and corresponding revenue
      sharing obligations set forth in clause 5.2 shall remain in effect.

6.    PAYMENTS; BOOKS AND RECORDS

6.1   Reports and Payments.  After the first commercial sale of a Product by a
      Party or its Sublicensees, or RIO TINTO Group Members in the case of TRPL,
      or Affiliates in the case of MAXYGEN, such Party shall make quarterly
      written reports to the other Party within ninety (90) days after the end
      of each calendar quarter, stating in each such report the Revenues
      received by such Party, by country, with respect to each applicable
      Product during the calendar quarter upon which payments are due under
      clause 5.2 and/or 5.3

                                      17
<PAGE>

      above. Concurrently with making such reports, the Party making the report
      shall pay the other Party all amounts due under clause 5.2 and/or 5.3 for
      such calendar quarter.

6.2   Payment Method.  All payments due under this Agreement shall be made by
      bank wire transfer in immediately available funds to a bank account
      designated by the receiving Party. All payments hereunder shall be made in
      U.S. dollars. In the event that the due date of any payment subject to
      clause 5 hereof is a Saturday, Sunday or national holiday, such payment
      may be paid on the following business day. Any payments that are not paid
      on the date such payments are due under this Agreement shall bear interest
      at the prime rate as reported by the Chase Manhattan Bank, New York, New
      York, on the date such payment is due, plus an additional two percent
      (2%), or, if less, at the maximum rate permitted by law, in each case
      calculated on the number of days such payment is delinquent. If any
      currency conversion shall be required in connection with the calculation
      of royalties hereunder, such conversion shall be made using the selling
      exchange rate for conversion of the foreign currency into U.S. Dollars,
      quoted for current transactions reported in The Wall Street Journal for
      the last business day of the calendar quarter to which such payment
      pertains.

6.3   Withholding Taxes.  Except as otherwise provided in clause 2.5(b), all
      amounts required to be paid pursuant to this Agreement may be paid with
      deduction for withholding for or on account of any taxes (other than taxes
      imposed on or measured by the paying Party's net income) or similar
      governmental charge imposed by an applicable jurisdiction ("Withholding
      Taxes"). Upon request, the Party making payment with such deduction shall
      provide to the other Party a certificate evidencing the payment of any
      Withholding Taxes hereunder.

6.4   Other Factors Affecting Payment.  As to countries covered by this
      Agreement which require governmental approval for remitting payments out
      of the country or which limit the amount of payments payable within the
      country, if the payments made hereunder by a Party in respect of Net
      Revenues from sales of Products exceed the rate approved or permitted by
      such country, then the rate of payment payable in respect of sales of
      Products sold in such country shall be the maximum rate approved or
      permitted by that country.

6.5   Local Payment.  If any portion of the payments due hereunder cannot be
      remitted from a country because of government control, and it is legally
      permissible to remit such payments within the country, then the Party
      obligated to make such payment shall have the obligation and the right to
      deposit in a bank of the other Party's election in such country, and in
      trust for the other Party, that portion of payments that could not be
      remitted from the country.

6.6   Inspection of Books and Records.  Each Party shall maintain accurate books
      and records which enable the calculation of the portions of Net Proceeds
      payable hereunder to be verified. The Parties shall retain the books and
      records for each quarterly period for ******* years after the submission
      of the corresponding report under clause 6.1 hereof or such shorter time
      as may be required by applicable law. Upon thirty (30) days prior notice,
      each Party (the "Audited Party") shall make its books and records
      available to

                                      18
<PAGE>

      independent accountants selected by the other Party (the "Auditing
      Party"), which accountants are reasonably acceptable to the Audited Party
      and have entered into a reasonable confidentiality agreement with the
      Audited Party, to conduct a review or audit once per calendar year, for
      the sole purpose of verifying the accuracy of the Audited Party's payments
      in compliance with this Agreement. The accounting firm shall report to the
      Auditing Party only whether there has been a royalty underpayment and, if
      so, the amount thereof.

7.    PATENT PROSECUTION AND ENFORCEMENT

7.1   Treatment of Project Technology.  MAXYGEN will have the sole discretion to
      decide which of the Project Technology will be:

      (a)   retained as its Confidential Information; or

      (b)   included in any patent application or other application for
            registered Intellectual Property Rights.

7.2   Filing of Patents.  If MAXYGEN decides that the Project Technology or any
      part of it will be included in any patent application or other application
      for registered Intellectual Property Rights protection, the application
      will be made by MAXYGEN in its own name and at its cost. TRPL will, at
      MAXYGEN's cost, render such assistance as MAXYGEN reasonably requires in
      the preparation, filing and prosecution of the patent.

7.3   Notice.  Each Party will give the other prompt notice of:

      (a)   any claim or allegation that the exercise of the rights under this
            Agreement constitute an infringement of the rights of any Third
            Party; and

      (b)   any Third Party's infringement or threatened infringement of a
            Party's Intellectual Property Rights in and to Project Technology
            (including without limitation, copyright, design and patent rights),
            of which it becomes aware.

7.4   Enforcement.  If either Party hereto becomes aware that any Intellectual
      Property Rights in and to Project Technology are being or have been
      infringed by any Third Party, such party shall promptly notify the other
      Party in writing describing the facts relating thereto in reasonable
      detail. MAXYGEN shall have the initial right, but not the obligation, to
      institute, prosecute and control any action, suit or proceeding with
      respect to such infringement, including any declaratory judgment action
      (each an "Action"), at its expense; using counsel of its choice. In the
      event that TRPL has exclusive rights to Project Technology in the TRPL
      Field pursuant to clause 5.2 and/or clause 5.3 and MAXYGEN fails to
      initiate or defend any Action involving an infringement that is within the
      scope of such exclusive rights of TRPL within ******* months of receiving
      notice of any infringement, TRPL shall have the right, but not the
      obligation, to initiate and control such an Action, at its expense. In any
      such event, TRPL shall promptly give MAXYGEN written notice thereof, and
      MAXYGEN shall cooperate reasonably with TRPL in connection with any such
      Action, at TRPL's expense; including without limitation, by joining such
      Action as a party if requested by TRPL. Any amounts

                                      19
<PAGE>

      recovered by TRPL in such an Action in excess of amounts paid to reimburse
      MAXYGEN and amounts expended by TRPL for the expenses incurred in
      connection with such Action, shall be *******.

7.5   In the event that TRPL has exclusive rights to Project Technology in the
      TRPL Field pursuant to clause 5.2 and/or 5.3, MAXYGEN will keep TRPL
      reasonably informed regarding any Action as described in clause 7.4
      instituted by MAXYGEN with respect to infringement within the TRPL Field.

8.    INDEPENDENT RESEARCH

8.1   Independent Research.  Subject to clauses 2.3(b), 2.12 and 12.4, each
      Party is entitled to conduct research outside of the Project free of any
      obligation to the other Party. Neither Party will have any obligation to
      conduct any research in the Project except as expressly described in the
      Project Plan.

8.2   No Reverse Engineering.  Except as expressly provided in this Agreement or
      other express written agreement between MAXYGEN and TRPL, TRPL shall not,
      and shall not authorize a RIO TINTO Group Member to, develop or
      commercialize, or authorize the development or commercialization of, or
      Exploit any process or product utilizing in any way any Gene Variant or
      Shuffled Gene, or any gene (or genetic element) which is based on or
      derived from any Gene Variant or Shuffled Gene, regardless of whether such
      gene (or genetic element) is made or obtained through synthesis, or
      mutation of a starting gene (or genetic element), or any product derived
      therefrom which contains or is made with the use of such a gene (or
      genetic element) or a Gene Variant or Shuffled Gene, or protein expressed
      from any of the foregoing. Except pursuant to a further written agreement
      between MAXYGEN and TRPL, TRPL will not itself, or through any Third
      Party, use any Project Technology and/or Improvements or structure-
      function data relating to any Gene Variants, including without limitation,
      consensus sequences or structural motifs, to reverse engineer,
      reconstruct, synthesize or otherwise modify or copy any Gene Variant or
      Shuffled Gene or any other gene or product with similar biological
      activities, or to attempt the same.

9.    CONFIDENTIALITY

9.1   Confidential Information.  Except as expressly provided herein, the
      Parties agree that the receiving Party will keep completely confidential
      and will not publish or otherwise disclose and will not use for any
      purpose except for the purposes contemplated by this Agreement any
      Confidential Information of the other Party (the "Disclosing Party")
      furnished to it by the Disclosing Party pursuant to this Agreement.
      Project Technology shall be deemed Confidential Information of MAXYGEN. In
      addition, except as expressly provided herein or to comply with applicable
      law, regulation or the order of a court of competent jurisdiction, the
      Parties agree that each Party will keep completely confidential and will
      not publish or otherwise disclose the terms of this Agreement.

                                      20
<PAGE>

9.2   Permitted Disclosures.  Confidential Information and/or the terms of this
      Agreement may be disclosed:

      (a)   to employees, agents, consultants and actual or bona fide potential
            Sublicensees of the non-Disclosing Party or its Affiliates (in the
            case of MAXYGEN) or of RIO TINTO Group Members (in the case of
            TRPL), but only to the extent reasonably required to accomplish the
            purposes of this Agreement and only if the non-Disclosing Party
            obtains prior written agreement from such employees, agents,
            consultants and actual or bona fide potential Sublicensees of the
            non-Disclosing Party or its Affiliates (in the case of MAXYGEN) or
            of RIO TINTO Group Members (in the case of TRPL) to whom disclosure
            is to be made to hold in confidence and not make use of such
            information for any purpose other than those permitted by this
            Agreement. Each Party will use at least the same standard of care as
            it uses to protect proprietary or confidential information of its
            own to ensure that such employees, agents and consultants do not
            disclose or make any unauthorized use of the Confidential
            Information; and

      (b)   to the extent reasonably necessary in prosecuting or defending
            litigation, complying with applicable governmental regulations, laws
            or court orders, or otherwise submitting required information to tax
            or other governmental authorities; provided that, if a Party is
            required to make any such disclosure of the terms of this Agreement
            or the other Party's Confidential Information, it will give
            reasonable advance notice to the other Party of such disclosure and,
            will use its reasonable efforts to secure confidential treatment of
            such Confidential Information (whether through protective orders or
            otherwise).

10.   PUBLIC STATEMENTS AND PUBLICATION

10.1  Use of Names.  Except to the extent required to comply with the law or a
      court order, neither Party will use the name or logo of the other Party
      without its written consent. In no event will either Party knowingly make
      any inaccurate or misleading statement concerning the other Party or the
      Project.

10.2  No Prejudice.  Subject to the provisions of clause 10.3, the Parties will
      use their reasonable efforts to ensure nothing is done which might
      prejudice the subsistence or Exploitation of the Project Technology or
      which would preclude the grant of a patent or cause the loss of
      Intellectual Property Rights protection. The Parties agree and acknowledge
      that this clause 10 is subject to the obligations of confidentiality
      contained in clause 9.

10.3  Publicity.  All publicity, press releases and other announcements relating
      to this Agreement and/or the Project will be reviewed in advance by, and
      will be subject to the approval of, both Parties; provided, approval shall
      be deemed to have been given if the reviewing Party does not respond
      within seven (7) days. Notwithstanding the foregoing, either Party may,
      without review or approval of the other Party, (i) publicize the existence
      and general subject matter of this Agreement without the other Party's
      approval, and (ii) disclose the terms of this Agreement to the extent
      required to comply with applicable

                                      21
<PAGE>

      securities laws. The Parties agree to release within ten (10) days after
      the Project Commencement Date a joint press release in an agreed form.
      Once a particular disclosure has been approved for disclosure, either
      Party may make disclosures which do not differ materially from it
      following review and approval by the other Party; provided, such approval
      shall be deemed to have been given if the reviewing Party does not respond
      within two (2) working days of the reviewing Party having received the
      material for review and approval.

10.4  Publication. The Parties (through their Management Committee members for
      so long as it exists, and afterward through such representatives as each
      Party may designate) will cooperate in appropriate publication of the
      results of research and development work performed pursuant to this
      Agreement, but subject to the predominating interest to obtain patent
      protection for any patentable subject matter. To this end, it is agreed
      that prior to any public disclosure of such results, the Party proposing
      disclosure will send the representatives of the other Party described
      above a copy of the information to be disclosed, and will allow the other
      Party thirty (30) days from the date of receipt in which to determine
      whether the information to be disclosed contains subject matter for which
      patent protection should be sought prior to disclosure, or otherwise
      contains Confidential Information of the reviewing Party which such Party
      desires to maintain as a trade secret. If notification is not received
      during the thirty (30) day period, the Party proposing disclosure will be
      free to proceed with the disclosure. If due to a valid business reason or
      a reasonable belief by the non-disclosing Party that the disclosure
      contains (i) Confidential Information of the non-disclosing Party, or (ii)
      subject matter for which a patentable invention should be sought, then
      prior to the expiration of the thirty (30) day period, the non-disclosing
      Party will so notify the representative of the disclosing Party, and the
      disclosing Party will then (a) at the request of the non-disclosing Party
      delete any Confidential Information of the non-disclosing Party, and/or
      (b) delay public disclosure for an additional period of up to sixty (60)
      days to permit the preparation and filing of a patent application on the
      subject matter to be disclosed or other protective action to be taken. The
      determination of authorship for any paper will be in accordance with
      accepted scientific practice.

11.   LIMITATION OF LIABILITY

      Subject to the provisions of clause 12 and clause 13, each Party will
      carry out the Project and use the other Party's Background Technology at
      its own risk. To the full extent permitted at law each Party excludes all
      warranties applicable to the Project, the Project Technology, and its
      Background Technology. Where under law any warranty cannot be excluded,
      each Party's liability is, at the option of the other Party, limited to
      the reperformance of its Contributions to the Project or the payment of
      the cost of having its Contributions to the Projects performed again. TO
      THE FULL EXTENT LAWFUL, NEITHER PARTY IS LIABLE TO THE OTHER PARTY FOR ANY
      SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING UNDER OR PURSUANT TO
      THIS AGREEMENT, WHETHER IN RESPECT OF ITS NEGLIGENCE OR OTHER DEFAULT, OR
      OTHERWISE.

                                      22
<PAGE>

12.   REPRESENTATIONS AND WARRANTIES

12.1  Each Party represents and warrants to the other that it has the legal
      power, authority and right to enter into this Agreement and to perform its
      respective obligations set forth herein.

12.2  Each Party represents and warrants that as of the Effective Date of this
      Agreement it is not a Party to any agreement or arrangement with any Third
      Party or under any obligation or restriction, including pursuant to its
      certificate of incorporation or bylaws or rules, which in any way limits
      or conflicts with its ability to fulfill any of its obligations under this
      Agreement, and will not enter into any such agreement during the term of
      this Agreement.

12.3  Each Party represents and warrants that, to the best of its belief as of
      the Effective Date of this Agreement, there are no actions, suits,
      investigations, claims or proceedings pending or threatened in any way
      relating to its Background Technology.

12.4  MAXYGEN warrants to TRPL that it has not and will not during the period
      the Project is being conducted enter into any arrangement or understanding
      with any Third Party which arrangement or understanding requires MAXYGEN
      or any of its Affiliates, to provide Material or to conduct any project
      for the primary purpose of using Shuffling Technology for *******.
      Notwithstanding the above, it is understood and agreed that MAXYGEN shall
      have the right, at all times, to provide Material or conduct any projects
      alone or with Third Parties (a) where the primary purpose of such
      activities is *******.

12.5  Subject to clauses 12.3 and 12.4, MAXYGEN and TRPL each specifically
      disclaim that the Project will be successful, in whole or part or that any
      activities undertaken by one or both of them with respect to the Project
      will be successful. MAXYGEN AND TRPL EXPRESSLY DISCLAIM ANY WARRANTIES OR
      CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE
      CONFIDENTIAL INFORMATION, INTELLECTUAL PROPERTY RIGHTS OF SUCH PARTY
      INCLUDING WITHOUT LIMITATION, PATENTS OR KNOW-HOW, MATERIALS,
      IMPROVEMENTS, SHUFFLING TECHNOLOGY, PROGRAM TECHNOLOGY, GENE(S), GENE
      VARIANT(S), OR SHUFFLED GENE(S), INCLUDING, WITHOUT LIMITATION, ANY
      WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY
      OF ANY SHUFFLING TECHNOLOGY OR PROJECT TECHNOLOGY, PATENTED OR UNPATENTED,
      OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

13.   INDEMNIFICATION AND INSURANCE

13.1  MAXYGEN.  MAXYGEN will indemnify, defend and hold harmless TRPL and its
      officers, employees and agents from and against any and all Third Party
      actions, claims, demands, costs, liabilities or expenses (including actual
      legal costs) (each a "Liability") made, sustained, brought or prosecuted
      or in any manner based upon, occasioned by or attributable to any injury
      to any person (including death) or loss of or damage to property

                                      23
<PAGE>

      which may arise from or as a direct result of MAXYGEN's conduct of
      activities in connection with the Project; except, in each case, to the
      extent due to the negligence or willful misconduct of TRPL.
      Notwithstanding the above, the foregoing obligations shall not apply to
      any Liability arising out of or in connection with the use of any
      particular Gene or Shuffled Gene in the Project.

13.2  TRPL.  TRPL will indemnify, defend and hold harmless MAXYGEN and its
      officers, employees and agents from and against any and all Third Party
      actions, claims, demands, costs, liabilities or expenses (including actual
      legal costs) (each a "Liability") made, sustained, brought or prosecuted
      or in any manner based upon, occasioned by or attributable to any injury
      to any person (including death) or loss of or damage to property which may
      arise from or as a direct result of TRPL's conduct of activities in
      connection with the Project; except, in each case, to the extent due to
      the negligence or willful misconduct of MAXYGEN.

13.3  Insurance.  Each Party will procure adequate insurances such as are
      customary and appropriate in their industry, including product liability
      insurance at the time of Exploitation by such Party, and Third Party
      liability insurance in respect of its participation in the Project and its
      use and permitted Exploitation of the Background Technology and Project
      Technology. Each such insurance policy held by MAXYGEN and TRPL will note
      the other Party's interest as a named insured under the policy and include
      a waiver of the insurers' right of subrogation against the other Party.
      Each Party will, on the request of the other Party, produce evidence of
      the currency of the insurance policies referred to in this clause 13. Each
      Party undertakes at all times to comply with the terms of its insurance
      policies the subject of clause 13.

14.   TERM AND TERMINATION

14.1  Term.  The initial term of this Agreement will commence on the Effective
      Date, and, unless terminated earlier as provided in this clause 14,
      continue in full force and effect on a country-by-country and Product-by-
      Product basis until there are no remaining payment obligations for such
      Product in such country.

14.2  Termination for Breach.  A Party may terminate this Agreement and the
      Project by notice in writing to the other Party on the happening of one or
      more of the following:

      (a)   if a Party commits a material breach or default of any of the terms
            and conditions contained herein, and does not within sixty (60) days
            of receipt of notice in writing from the other Party requiring the
            breach to be remedied cure the breach within such time; or

      (b)   if a material warranty, representation or statement given or made by
            a Party in this Agreement is not complied with or proves to be
            untrue and is not otherwise compensable in an award of damages.

14.3  Termination by Mutual Agreement.  The Parties may terminate this Agreement
      by written mutual agreement. In the event that such termination occurs
      during the conduct of the Project, the Parties shall negotiate bona fide
      in good faith an orderly and

                                      24
<PAGE>

      reasonably prompt wind-down of the Project and the associated funding
      obligations of TRPL.

14.4  Termination for Insolvency.  TRPL may, in its sole discretion, terminate
      this Agreement (together with the Project, if such termination is during
      the Project Term) by providing MAXYGEN with written notice on the
      happening of any of the following events:

      (a)   if MAXYGEN is the subject of winding up or liquidation proceedings,
            whether voluntary or compulsory, otherwise than for the purpose of
            and followed by, a reconstruction, amalgamation or reorganization;

      (b)   if MAXYGEN has become insolvent, bankrupt or is subject to the
            appointment of a mortgagee, a receiver or manager or an inspector to
            investigate its affairs, enters into any arrangement or composition
            with its creditors generally, or is unable to pay its debts as and
            when they become due;

      (c)   if execution is levied upon all or any part of the assets of
            MAXYGEN, provided that no breach will take place hereunder if the
            execution is contested in good faith or if within thirty (30) days
            after it is levied payment is made in full to the judgment creditor
            in question of all amounts owing to such judgment creditor,

      such termination to be effective immediately upon receipt of the above
      mentioned written notice. In the event of termination of this Agreement by
      TRPL pursuant to this clause 14.4 during Phase I and/or the Phase II
      Negotiation Period described in clause 2.3, MAXYGEN shall grant to TRPL
      the licenses described in clause 5.2(a), which license shall be subject to
      the sharing of Revenues as set forth in clause 5.2(c).

14.5  Effect of Termination.

      (a)   Accrued Obligations.  Termination of this Agreement for any reason
            will not release either Party hereto from any liability which, at
            the time of such termination, has already accrued to the other Party
            or which is attributable to a period prior to such termination nor
            preclude either Party from pursuing all rights and remedies it may
            have at law or in equity with respect to any breach of this
            Agreement.

      (b)   Return of Confidential Information and Background Technology.  Upon
            termination of this Agreement, TRPL and MAXYGEN will each promptly
            return to the other Party all Confidential Information received from
            the other Party (except one copy of which may be retained by legal
            counsel for archival purposes and ensuring compliance with clause
            9), and all MAXYGEN Background Technology will be returned to
            MAXYGEN.

      (c)   Sublicenses.  Upon termination of this Agreement, any sublicenses
            granted by each Party shall remain in force and effect and shall be
            assigned by the Party granting such sublicense (the "Sublicensing
            Party") to the other Party, provided, however, that the financial
            obligations of each Sublicensee to the non-

                                      25
<PAGE>

            Sublicensing Party shall be limited to the amounts the Sublicensing
            Party would have been obligated to pay to non-Sublicensing Party for
            the activities of such Sublicensee pursuant to this Agreement.

      (d)   Stock on Hand.  In the event this Agreement is terminated for any
            reason after the first commercial sale of one or more Products by a
            Party, such Party and its Sublicensees and its Affiliates (in the
            case of MAXYGEN) and RIO TINTO Group Members (in the case of TRPL)
            shall have right to sell or otherwise dispose of the stock of any
            such Product then on hand, subject to all applicable revenue sharing
            or other payment obligations.

      (e)   Licenses.

            (i)   In the event of any termination by MAXYGEN pursuant to clause
                  14.2(a) for TRPL's failure to make Revenue sharing payments
                  due under clause 5.2(c), the licenses, if any, granted to TRPL
                  pursuant to clause 5.2(a) shall terminate concurrently.

            (ii)  In the event of any termination by TRPL pursuant to clause
                  14.2(a) for MAXYGEN's failure to make Revenue sharing payments
                  due under clause 5.2(c), the licenses, if any, granted to
                  MAXYGEN pursuant to clause 5.2(a) shall terminate
                  concurrently. In the event of any termination by TRPL pursuant
                  to clause 14.4, the licenses, if any, granted to MAXYGEN
                  pursuant to clause 5.2(b) shall terminate concurrently.

            (iii) Except as provided in this clause 14.5(e), the licenses and
                  rights granted to the Parties under this Agreement in effect
                  at the effective date of such termination shall survive;
                  provided, nothing in this clause 14.5(e) shall prohibit, or be
                  construed to prohibit, the later termination of such a
                  surviving license in accordance with clause 14.2(a) and/or
                  14.4 and this clause 14.5(e).

      (f)   Liquidated Damages.  If MAXYGEN terminates this Agreement pursuant
            to clause 14.2 during Phase II of the Project, then TRPL shall pay
            to MAXYGEN as liquidated damages for the failure to pay such amount,
            *******. The payment of such amount shall not limit MAXYGEN's right
            to seek or obtain any other remedies available to it at law or in
            equity.

14.6  Survival.  The provisions of clauses 2.9, 4.1, 4.4, 4.5, 5.1, 5.2(c),
      5.2(d), 5.2(e), 5.2(f), 6, 7.1, 7.2, 7.3, 8, 9, 10, 11, 12.5, 13.1, 13.2,
      14.5, 14.6, 15, 16, 21, 22, 23 and 25 will survive the expiration or
      termination of this Agreement for any reason.

15.   GOVERNING LAW

      This Agreement and any dispute arising from the performance or any breach
      of it, including without limitation, any arbitration, will be governed by
      and construed in accordance with the laws of the State of California.
      without reference to conflicts of laws

                                      26
<PAGE>

      principles. Each Party submits to the jurisdiction of the federal and
      state courts in, and for, the State of California and the courts of appeal
      therefrom.

16.   ASSIGNMENT

      This Agreement will not be assigned by either Party to any third Party
      hereto without the written consent of the other Party, and any purported
      assignment prohibited by this provision shall be null and void; except
      either Party may assign this Agreement, without such consent, to (i) an
      Affiliate, in the case of MAXYGEN, or to a RIO TINTO Group Member, in the
      case of TRPL; or (ii) an entity that acquires all or substantially all of
      the business or assets of such Party to which this Agreement pertains,
      whether by merger, reorganization, acquisition, sale or otherwise. The
      terms and conditions of this Agreement shall be binding on and inure to
      the benefit of the permitted successors and assigns of the Parties.

17.   SEVERABILITY

      Each word, phrase, sentence, paragraph, section, clause and subclause ("a
      provision") of this Agreement is severable and if a court determines that
      a provision is unenforceable, illegal or void then the court may sever
      that provision without affecting the validity of the other provisions of
      this Agreement.

18.   WAIVER

      The failure by TRPL or MAXYGEN to exercise or delay in exercising a power
      or right does not operate as a waiver of that power or right. The exercise
      of a power or right does not preclude its future exercise or the exercise
      of any other power or right.

19.   AMENDMENT

      This Agreement can only be amended by written agreement between the
      Parties.

20.   NOTICES

      Any notice required or permitted by this Agreement will be in writing and
      will be sent by prepaid registered or certified mail, return receipt
      requested, internationally recognized courier or personal delivery, or by
      fax with confirming letter mailed under the conditions described above in
      each case addressed to the other party at the address shown below or at
      such other address for which such party gives notice hereunder. Such
      notice will be deemed to have been given when delivered:

                  If to MAXYGEN:  Maxygen, Inc.
                                  515 Galveston Drive
                                  Redwood City, CA  94063
                                  Attn: Chief Executive Officer

                                      27
<PAGE>

                  If to TRPL:     Technological Resources Pty Limited
                                  55 Collins Street
                                  South Melbourne
                                  Victoria 3000
                                  Attn: General Manager Commercial
21.   ENTIRE AGREEMENT

      This Agreement, together with its Schedules, which are hereby incorporated
      by reference, contains the whole agreement of the Parties relating to its
      subject matter and it supersedes any and all agreements, understandings or
      commitments in connection with the same subject matter.

22.   RELATIONSHIP

      The Parties agree that this document does not create or evidence a
      relationship between them of joint venture, partnership, employer and
      employee or principal and agent.

23.   DISPUTE RESOLUTION

23.1  Senior Executives.  The Parties agree to co-operate and to use all
      reasonable endeavors to resolve any disputes or differences between them.
      Disputes between the Parties representative on the Management Committee
      which remain unresolved for thirty (30) days will be referred to the Chief
      Executive Officer in the case of MAXYGEN and the Managing Director-
      Research & Technology, in the case of TRPL, for resolution.

23.2  Mediation.  If a dispute arises out of or relates to this Agreement, or
      the breach of it, and if said dispute cannot be settled through
      negotiation, the parties agree first to try in good faith to settle the
      dispute by non-binding mediation under the appropriate rules, if any, for
      such mediation under the rules of the International Chamber of Commerce
      ("ICC") or, if there are no such rules at the time of such mediation,
      under the Commercial Mediation Rules of the American Arbitration
      Association, before resorting to arbitration, or some other dispute
      resolution procedures.

23.3  Arbitration.  If the Parties are unable to resolve any dispute,
      controversy or claim between them arising out of or relating to the
      validity, construction, enforceability or performance of this Agreement,
      including disputes relating to alleged breach or to termination of this
      Agreement (each, a "Dispute"), the Dispute will be finally settled by
      binding arbitration conducted pursuant to the applicable rules of the ICC
      then in effect by one (1) arbitrator appointed in accordance with such
      rules. The arbitration shall take place in Melbourne, Australia, if
      initiated by MAXYGEN, and in Palo Alto, California, if initiated by TRPL.
      The arbitrator will determine what discovery will be permitted, consistent
      with the goal of limiting the cost and time which the parties will expend
      for discovery; provided the arbitrator will permit such discovery as they
      deem necessary to permit an equitable resolution of the dispute; provided,
      the arbitrator shall not order or permit discovery against one Party of a
      type and scope such Party cannot obtain against the other Party for use in
      the arbitration as a result of the laws of the country of residence of the
      other Party. The costs of any arbitration, including administrative fees
      and fees of

                                      28
<PAGE>

      the arbitrator, will be shared equally by the Parties. Each Party will
      bear the cost of its own attorneys' fees and expert fees. The decision
      and/or award rendered by the arbitrator will be written (specifically
      stating the arbitrator's findings of facts as well as the reasons upon
      which the arbitrator's decision is based), final and non-appealable
      (except for an alleged act of corruption or fraud on the part of the
      arbitrator) and may be entered in any court of competent jurisdiction. The
      Parties agree that, any provision of applicable law notwithstanding, they
      will not request, and the arbitrator will have no authority to award,
      punitive or exemplary damages against any Party. The arbitrator will have
      the authority to grant injunctive relief and order specific performance.
      The Parties and the arbitrator will use their best efforts to complete any
      such arbitration within one (1) year, unless a Party can demonstrate to
      the arbitrator that the complexity of the issues or other reasons warrant
      the extension of the time table. In such case, the arbitrator may extend
      such time table as reasonably required. The arbitrator will, in rendering
      its decision, apply the substantive law of the State of California,
      without regard to its conflict of laws provisions.

23.4  Interlocutory Relief.  Compliance with this clause 23 is a condition
      precedent to seeking relief in any court or tribunal in respect of a
      dispute, but nothing in this clause 23 will prevent a Party from seeking
      interlocutory relief in courts of appropriate jurisdiction, pending the
      establishment of the arbitral tribunal or pending the arbitral tribunal's
      determination of the merits of the controversy, if necessary to protect
      the Confidential Information, rights or property of that Party.

24.   FORCE MAJEURE

      Neither Party will be liable for any failure to carry out its obligations
      under this Agreement where such failure is due to any cause beyond the
      reasonable control of such party.

25.   MISCELLANEOUS

25.1  Advice of Counsel.  MAXYGEN and TRPL have each consulted counsel of their
      choice regarding this Agreement, and each acknowledges and agrees that
      this Agreement will not be deemed to have been drafted by one Party or
      another and will be construed accordingly.

25.2  Further Assurances.  At any time or from time to time on and after the
      date of this Agreement, either Party will at the request of the other
      Party (i) deliver to the requesting Party such records, data or other
      documents consistent with the provisions of this Agreement, (ii) execute,
      and deliver or cause to be delivered, all such consents, documents or
      further instruments of assignment, transfer or license, and (iii) take or
      cause to be taken all such actions, as the requesting Party may reasonably
      deem necessary or desirable in order for the requesting Party to obtain
      the full benefits of this Agreement.

25.3  Compliance with Laws.  Each Party will furnish to the other Party any
      information requested or required by that Party during the term of this
      Agreement or any extension of it to enable that Party to comply with the
      requirements of any federal, state or

                                      29
<PAGE>

      government agency. Each Party will comply with all applicable U.S. and
      Australian state, regional and local laws, rules and regulations relating
      to its activities to be performed pursuant to this Agreement, and will
      obtain, at its own expense, all necessary approvals, consents and permits
      required by the applicable agencies of the government of the United States
      and foreign jurisdictions.

25.4  Headings.  The captions to the several clauses and subclauses are not a
      part of this Agreement, but are included for convenience of reference only
      and will not affect its meaning or interpretation.

25.5  Binding Effect.  This Agreement will be binding upon and inure to the
      benefit of the parties and their respective legal representatives,
      successors and permitted assigns.

25.6  Counterparts.  This Agreement may be executed in two counterparts, each of
      which will be deemed an original and which together will constitute one
      instrument.

25.7  Business Unit.  The obligations of TRPL under this Agreement are
      obligations of the Business Unit and MAXYGEN acknowledges that nothing in
      this Agreement binds any other Business Unit of TRPL in so far as the
      obligations of TRPL relate to the conduct of the Project.

25.8  Performance Warranty.  Notwithstanding clause 25.7, TRPL and MAXYGEN
      hereby respectively warrant and guarantee the performance of any and all
      rights and obligations of this Agreement by their Sublicensees and
      Affiliates, in the case of MAXYGEN, and RIO TINTO Group Members, in the
      case of TRPL.

                                      30
<PAGE>

EXECUTED BY THE PARTIES AS AN AGREEMENT

Signed for and on behalf of             )
TECHNOLOGICAL                           )
RESOURCES PTY LIMITED                   )
                                        )
By R. Batterham                         )  /s/ R. Batterham
  -----------------------------------   )
(print name)                            )
                                        )
Chief Technologist                      )
-------------------------------------   )
Title                                   )
                                        )
                                        )
a duly authorized officer of TRPL       )
and in the presence of:                 )
                                        )
   J. M. Elliott                        ) /s/ J. M. Elliott
-------------------------------------   )
Witness                                 )
                                        )
                                        )
Signed for and on behalf of             )
MAXYGEN INC.                            )
                                        )
                                        )
By /s/ Russell Howard                   )
  -----------------------------------   )
   Russell Howard                       )
   Chief Executive Officer              )
                                        )
                                        )
a duly authorized officer of            )
MAXYGEN INC.                            )
and in the presence of:                 )
                                        )
   /s/ Michael Rabson                   )
-------------------------------------   )
Witness                                 )

                                      31

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