Document:

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                                                                  Exhibit 10.59

                               SEVERANCE AGREEMENT

                  THIS AGREEMENT, dated June 9, 2000 (the "Effective Date"), is
made by and between Starwood Hotels and Resorts Worldwide, Inc., a Maryland
corporation (the "Company"), and David Norton (the "Executive").

                  WHEREAS, the Executive is employed by the Company as Executive
Vice President, Human Resources; and

                  WHEREAS, the Company considers it essential to the best
interests of its stockholders to foster the continued employment of key
management personnel; and

                  WHEREAS, the Board recognizes that, as is the case with many
publicly held corporations, the possibility of a Change in Control exists and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of senior
management personnel to the detriment of the Company and its stockholders; and

                  WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's senior management, including the
Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change in
Control.

                  NOW, THEREFORE, the Company and the Executive hereby agree as
follows:

         1. Defined Terms. The definitions of capitalized terms used in this
Agreement are provided in the last Section hereof.

         2. Term of Agreement. The Term of this Agreement shall commence on the
Effective Date and shall continue in effect through the third anniversary of the
Effective Date; provided, however, that on each anniversary of the Effective
Date during the Term of this Agreement, the Term shall automatically be extended
for one additional year unless, not later than 90 days prior to any such
anniversary, the Company or the Executive shall have given notice not to extend
the Term; and further provided, however, that if a Change in Control or a
Potential Change in Control shall have occurred during the Term, the Term shall
expire no earlier than twenty-four (24) months beyond the month in which such
Change in Control or a Potential Change in Control occurred.
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         3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments and the
other payments and benefits described herein. Except as provided in Section 10
hereof, no Severance Payments shall be payable under this Agreement unless
during the Term there shall have been (or, under the terms of the second
sentence of Section 6 hereof, there shall be deemed to have been) a termination
of the Executive's employment with the Company following a Change in Control.
This Agreement shall not be construed as creating an express or implied contract
of employment and, except as otherwise agreed in writing between the Executive
and the Company, the Executive shall not have any right to be retained in the
employ of the Company.

         4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs during the Term, the Executive will remain in the employ of the
Company until the earliest of (i) a date which is six (6) months from the date
of such Potential Change of Control, (ii) the date of a Change in Control, (iii)
the date of termination by the Executive of the Executive's employment for Good
Reason or by reason of death, Disability or Retirement, or (iv) the termination
by the Company of the Executive's employment for any reason.

         5. Compensation Other Than Severance Payments.

                  a. Payment of Salary During Disability. Following a Change in
Control and during the Term, during any period that the Executive is unable to
perform the Executive's full-time duties with the Company as a result of
incapacity due to physical or mental illness, the Company shall pay to the
Executive the full salary to which the Executive is entitled at the rate in
effect at the commencement of any such period, together with all compensation
and benefits payable to the Executive under the terms of any compensation or
benefit plan, program or arrangement maintained by the Company during such
period, until the Executive's employment is terminated by the Company for
Disability.

                  b. Accrued Salary. If the Executive's employment shall be
terminated for any reason following a Change in Control and during the Term, the
Company shall pay to the Executive such Executive's full salary through the Date
of Termination at the rate in effect immediately prior to the Date of
Termination or, if higher, the rate in effect immediately prior to the first
occurrence of an event or circumstance constituting Good Reason, together with
all compensation and benefits payable to the Executive through the Date of
Termination under the terms of the Company's compensation and benefit plans,
programs or arrangements as in effect immediately prior to the Date of
Termination or, if more favorable to the Executive, as in effect immediately
prior to the first occurrence of an event or circumstance constituting Good
Reason.

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                  c. Post-Termination Benefits. If the Executive's employment
shall be terminated for any reason following a Change in Control and during the
Term, the Company shall pay to the Executive the Executive's normal
post-termination compensation and benefits as such payments become due. Such
post-termination compensation and benefits shall be determined under, and paid
in accordance with, the Company's retirement, insurance and other compensation
or benefit plans, programs and arrangements as in effect immediately prior to
the Date of Termination or, if more favorable to the Executive, as in effect
immediately prior to the occurrence of the first event or circumstance
constituting Good Reason.

         6. Severance Payments.

                  a. If the Executive's employment is terminated following a
Change in Control and during the Term, other than (A) by the Company for Cause,
(B) by reason of death or Disability, or (C) by the Executive without Good
Reason, then, in any such case, the Company shall pay the Executive the amounts,
and provide the Executive the benefits, described in this Section 6 ("Severance
Payments") and Section 7, in addition to any payments and benefits to which the
Executive is entitled under Section 5 hereof. For purposes of this Agreement,
the Executive's employment shall be deemed to have been terminated following a
Change in Control by the Company without Cause or by the Executive with Good
Reason, if (i) the Executive's employment is terminated by the Company without
Cause prior to a Change in Control (whether or not a Change in Control ever
occurs) and such termination was at the request or direction of a Person who has
entered into an agreement with the Company the consummation of which would
constitute a Change in Control (an "Acquiring Person"), (ii) the Executive
terminates his employment for Good Reason prior to a Change in Control (whether
or not a Change in Control ever occurs) and the circumstance or event which
constitutes Good Reason occurs at the request or direction of an Acquiring
Person, or (iii) the Executive's employment is terminated by the Company without
Cause or by the Executive for Good Reason and such termination or the
circumstance or event which constitutes Good Reason is otherwise in connection
with or in anticipation of a Change in Control (whether or not a Change in
Control ever occurs). For purposes of any determination regarding the
applicability of the immediately preceding sentence, any position taken by the
Executive shall be presumed to be correct unless the Company establishes to the
Board by clear and convincing evidence that such position is not correct.

                      (1) Lump Sum Payment. In lieu of any further salary
          payments to the Executive for periods subsequent to the Date of
          Termination and in lieu of any severance benefit otherwise payable to
          the Executive, the Company shall pay to the Executive a lump sum
          severance payment, in cash, equal to two times the sum of (i) the
          Executive's base salary as in effect immediately prior to the Date of
          Termination or, if higher, in effect

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         immediately prior to the first occurrence of an event or circumstance
         constituting Good Reason, and (ii) the average of the annual bonuses
         earned by the Executive in the three fiscal years ending immediately
         prior to the fiscal year in which occurs the Date of Termination or, if
         higher, immediately prior to the fiscal year in which occurs the first
         event or circumstance constituting Good Reason. For purposes of the
         preceding sentence, in determining any bonus amount for any fiscal
         year, bonuses paid with respect to any year in which employment of the
         Executive commenced shall be annualized based on the number of days
         employed by the Company during such year.

                      (2) Continuation of Welfare Benefits. For the twenty-four
          (24) month period immediately following the Date of Termination, the
          Company shall arrange to provide the Executive and his dependents
          life, disability, accident and health insurance benefits and other
          benefits and perquisites (including employee stay rates) substantially
          similar to those provided to the Executive and his dependents
          immediately prior to the Date of Termination or, if more favorable to
          the Executive, those provided to the Executive and his dependents
          immediately prior to the first occurrence of an event or circumstance
          constituting Good Reason, at no greater cost to the Executive than the
          cost to the Executive immediately prior to such date or occurrence.
          Benefits otherwise receivable by the Executive pursuant to this
          Section 6(a)(2) shall be reduced to the extent benefits of the same
          type are received by the Executive from another employer during the
          twenty-four (24) month period following the Executive's termination of
          employment; provided, however, that the Company shall reimburse the
          Executive for the excess, if any, of the cost of such benefits to the
          Executive over such cost immediately prior to the Date of Termination
          or, if more favorable to the Executive, the first occurrence of an
          event or circumstance constituting Good Reason.

                      (3) Incentive Compensation. Notwithstanding any provision
          of any annual or long-term incentive plan to the contrary, the Company
          shall pay to the Executive a lump sum amount, in cash, equal to the
          sum of (i) any unpaid incentive compensation which has been allocated
          or awarded to the Executive for a completed fiscal year or other
          measuring period preceding the Date of Termination under any such plan
          and which, as of the Date of Termination, is contingent only upon the
          continued employment of the Executive to a subsequent date, and (ii)
          the aggregate value of all contingent incentive compensation awards
          allocated or awarded to the Executive for all then uncompleted periods
          under any such plan that the Executive would have earned on the last
          day of the performance award period, assuming the achievement, at the
          target level, of the individual and corporate performance goals
          established with respect to such award. Awards

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         for uncompleted periods shall be prorated based upon the number of days
         the Executive is employed by the Company during such year.

                      (4) Accelerated Vesting of Stock Options. All stock
          options and restricted stock held by the Executive under any stock
          option or incentive plan maintained by the Company (including the
          Company's 1995 and 1999 Long-Term Incentive Plans) shall immediately
          vest and become exercisable as of the Date of Termination, to be
          exercised in accordance with the terms of the applicable plan.

                      (5) Outplacement Services. The Company shall provide the
          Executive with outplacement services suitable to the Executive's
          position for a period of two (2) years or, if earlier, until the first
          acceptance by the Executive of an offer of employment. The cost of
          such outplacement services shall not exceed twenty percent (20%) of
          the Executive's base salary.

                      (6) Deferred Compensation. The Company shall pay the
          Executive a lump sum payment of any of the Executive's deferred
          compensation.

                      (7) 401(k) Contributions. All unvested 401(k)
          contributions in the Executive's 401(k) account shall immediately vest
          or the Company shall pay the Executive an amount equal to any such
          unvested amounts that are forfeited by reason of the Executive's
          termination of employment.

                      (8) Loans. The Company shall forgive in full any home,
          relocation and other loans from the Company to the Executive,
          identified on Schedule A hereto, that are outstanding as of the Date
          of Termination and execute and record any investments and documents
          necessary or desirable to evidence the satisfaction in full of such
          loans and the release of any lien securing such loan. In addition, the
          Company shall pay to Executive an amount required, in the good faith
          estimate of Executive's tax advisor, to permit Executive to pay any
          income tax incurred by Executive as a result of such loan forgiveness
          and the payment of such additional amounts by the Company.

         7. 280G Cap.

                  a. Notwithstanding any other provisions of this Agreement, in
         the event that any payment or benefit received or to be received by the
         Executive in

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         connection with a Change in Control or the termination of the
         Executive's employment (whether pursuant to the terms of this Agreement
         or any other plan, arrangement or agreement with the Company, any
         Person whose actions result in a Change in Control or any Person
         affiliated with the Company or such Person) (all such payments and
         benefits, including the Severance Payments, being hereinafter called
         "Total Payments") would not be deductible (in whole or part), by the
         Company, an affiliate or Person making such payment or providing such
         benefit as a result of section 280G of the Code, then, to the extent
         necessary to make such portion of the Total Payments deductible (and
         after taking into account any reduction in the Total Payments provided
         by reason of section 280G of the Code in such other plan, arrangement
         or agreement), the cash Severance Payments shall first be reduced (if
         necessary, to zero), and all other Severance Payments shall thereafter
         be reduced (if necessary, to zero); provided, however, that the
         Executive may elect to have the noncash Severance Payments reduced (or
         eliminated) prior to any reduction of the cash Severance Payments.

                  b. For purposes of this limitation, (i) no portion of the
         Total Payments the receipt or enjoyment of which the Executive shall
         have waived at such time and in such manner as not to constitute a
         "payment" within the meaning of section 280G(b) of the Code shall be
         taken into account, (ii) no portion of the Total Payments shall be
         taken into account which, in the opinion of tax counsel ("Tax Counsel")
         reasonably acceptable to the Executive and selected by the accounting
         firm which was, immediately prior to the Change in Control, the
         Company's independent auditor (the "Auditor"), does not constitute a
         "parachute payment" within the meaning of section 280G(b)(2) of the
         Code, including by reason of section 280G(b)(4)(A) of the Code, (iii)
         the Severance Payments shall be reduced only to the extent necessary so
         that the Total Payments (other than those referred to in clauses (i) or
         (ii)) in their entirety constitute reasonable compensation for services
         actually rendered within the meaning of section 280G(b)(4)(B) of the
         Code or are otherwise not subject to disallowance as deductions by
         reason of section 280G of the Code, in the opinion of Tax Counsel, and
         (iv) the value of any noncash benefit or any deferred payment or
         benefit included in the Total Payments shall be determined by the
         Auditor in accordance with the principles of sections 280G(d)(3) and
         (4) of the Code.

                  c. If it is established pursuant to a final determination of a
         court or an Internal Revenue Service proceeding that, notwithstanding
         the good faith of the Executive and the Company in applying the terms
         of this Section 7(c), the Total Payments paid to or for the Executive's
         benefit are in an amount that would result in any portion of such Total
         Payments being subject to the Excise Tax, then, if such repayment would
         result in (i) no portion of the remaining Total Payments being subject
         to the Excise Tax and (ii) a dollar-for-dollar reduction in the
         Executive's taxable income and wages for purposes of federal, state and
         local income and employment taxes, the Executive shall have an
         obligation to pay the Company upon demand an amount equal to the sum of
         (i) the excess of the Total Payments paid to or for the Executive's
         benefit over the Total Payments that could have been paid to or

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         for the Executive's benefit without any portion of such Total Payments
         being subject to the Excise Tax; and (ii) interest on the amount set
         forth in clause (i) of this sentence at the rate provided in section
         1274(b)(2)(B) of the Code from the date of the Executive's receipt of
         such excess until the date of such payment.

         8. Termination Procedures and Compensation During Dispute.

                  a. Notice of Termination. After a Change in Control and during
         the Term, any purported termination of the Executive's employment
         (other than by reason of death) shall be communicated by written Notice
         of Termination from one party hereto to the other party hereto in
         accordance with Section 12 hereof. For purposes of this Agreement, a
         "Notice of Termination" shall mean a notice which shall indicate the
         specific termination provision in this Agreement relied upon and shall
         set forth in reasonable detail the facts and circumstances claimed to
         provide a basis for termination of the Executive's employment under the
         provision so indicated. Further, a Notice of Termination for Cause is
         required to include a copy of a resolution duly adopted by the
         affirmative vote of not less than three-quarters (3/4) of the entire
         membership of the Board at a meeting of the Board which was called and
         held for the purpose of considering such termination (after reasonable
         notice to the Executive and an opportunity for the Executive, together
         with the Executive's counsel, to be heard before the Board) finding
         that, in the good faith opinion of the Board, the Executive was guilty
         of conduct set forth in clause (i) or (ii) of the definition of Cause
         herein, and specifying the particulars thereof in detail.

                  b. Date of Termination. "Date of Termination," with respect to
         any purported termination of the Executive's employment after a Change
         in Control and during the Term, shall mean (i) if the Executive's
         employment is terminated for Disability, thirty (30) days after Notice
         of Termination is given (provided that the Executive shall not have
         returned to the full-time performance of the Executive's duties during
         such thirty (30) day period), and (ii) if the Executive's employment is
         terminated for any other reason, the date specified in the Notice of
         Termination (which, in the case of a termination by the Company, shall
         not be less than thirty (30) days (except in the case of a termination
         for Cause) and, in the case of a termination by the Executive, shall
         not be less than fifteen (15) days nor more than sixty (60) days,
         respectively, from the date such Notice of Termination is given).

                  c. Dispute Concerning Termination. If within fifteen (15) days
         after any Notice of Termination is given, or, if later, prior to the
         Date of Termination (as determined without regard to this Section
         8(c)), the party receiving such Notice of Termination notifies the
         other party that a dispute exists concerning the termination, the Date
         of Termination shall be extended until the earlier of (i) the date on
         which the Term ends or (ii) the date on which the dispute is finally
         resolved, either by mutual written agreement of the parties or by a
         final judgment, order or decree of an arbitrator or a court of
         competent jurisdiction (which is not appealable or with respect to
         which the time for appeal therefrom has expired and no appeal has been

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         perfected); provided, however, that the Date of Termination shall be
         extended by a notice of dispute given by the Executive only if such
         notice is given in good faith and the Executive pursues the resolution
         of such dispute with reasonable diligence.

                  d. Compensation During Dispute. If a purported termination
         occurs following a Change in Control and during the Term and the Date
         of Termination is extended in accordance with Section 8(c) hereof, the
         Company shall continue to pay the Executive the full compensation in
         effect when the notice giving rise to the dispute was given (including,
         but not limited to, salary) and continue the Executive as a participant
         in all compensation, benefit and insurance plans in which the Executive
         was participating when the notice giving rise to the dispute was given,
         until the Date of Termination, as determined in accordance with Section
         8(c) hereof. Amounts paid under this Section 8(d) are in addition to
         all other amounts due under this Agreement (other than those due under
         Section 5(b) hereof) and shall not be offset against or reduce any
         other amounts due under this Agreement.

         9. No Mitigation. The Company agrees that, if the Executive's
employment with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts
payable to the Executive by the Company pursuant to Section 6 hereof or Section
8(d) hereof. Further, the amount of any payment or benefit provided for in this
Agreement (other than Section 6(a)(2) hereof) shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.

         10. Successors; Binding Agreement.

                  a. In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.

                  b. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while

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any amount would still be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the Executive) if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive's estate.

         11. Indemnification. The Company shall indemnify and hold Executive
harmless for acts and omissions in his capacity as an officer, director or
employee of the Company to the maximum extent permitted under applicable law.
The Company shall maintain a Director's and Officer's Liability Insurance
Policy, which shall provide liability coverage for Executive's benefit, and the
Executive shall remain covered under such policy for a period of at least six
(6) years following the earlier of termination of employment or the occurrence
of a Change in Control.

         12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's signature on the final
page hereof and, if to the Company, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon actual receipt:

                           To the Company:

                           Starwood Hotels and Resorts Worldwide, Inc.
                           777 Westchester Avenue
                           White Plains, NY  10604
                           Attention:  General Counsel

         13. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or of any lack of compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. This Agreement supersedes any other
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which have been made by either party;
provided, however, that this Agreement shall supersede any agreement setting
forth the terms and conditions of the Executive's employment with the Company
only in the event that the Executive's employment with the Company is terminated
on or following a Change in Control, by the Company other than for Cause or by
the Executive other than for Good Reason. The validity, interpretation,
construction and performance of this

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Agreement shall be governed by the laws of the State of New York. All references
to sections of the Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments provided for hereunder shall
be paid net of any applicable withholding required under federal, state or local
law and any additional withholding to which the Executive has agreed. The
obligations of the Company and the Executive under this Agreement which by their
nature may require either partial or total performance after the expiration of
the Term (including, without limitation, those under Sections 6, 7, 8, and 9
hereof) shall survive such expiration.

         14. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

         15. Settlement of Disputes; Arbitration.

                  a. All claims by the Executive for benefits under this
Agreement shall be directed to and determined by the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied.

                  b. Any further dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
New York, in accordance with the rules of the American Arbitration Association
then in effect; provided, however, that the evidentiary standards set forth in
this Agreement shall apply. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. Notwithstanding any provision of this Agreement
to the contrary, the Executive shall be entitled to seek specific performance of
the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.

         16. Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:

                  a. "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.

                  b. "Auditor" shall have the meaning set forth in Section 7
hereof.

                  c. "Base Amount" shall have the meaning set forth in section
280G(b)(3) of the Code.

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                  d. "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 under the Exchange Act.

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

                  f. "Cause" for termination by the Company of the Executive's
employment shall mean (i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company after a written
demand for substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive's duties, and
Executive has not cured any such failure that is capable of being cured in all
material respects within ten (10) days of receiving such written demand, or (ii)
the willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the best
interest of the Company and (y) in the event of a dispute concerning the
application of this provision, no claim by the Company that Cause exists shall
be given effect unless the Company establishes to the Board by clear and
convincing evidence that Cause exists.

                  g. A "Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:

                      (1) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired directly
from the Company or its affiliates) representing 25% or more of the combined
voting power of the Company's then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a transaction described
in clause (i) of paragraph (3) below; or

                      (2) the following individuals cease for any reason to
constitute a majority of the number of directors then serving: individuals who,
on the date hereof, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors on the date
hereof or whose appointment, election or nomination for election was previously
so approved or recommended; or

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                      (3) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other
corporation, other than (i) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 70% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation and in proportion to
their relative voting power immediately prior to such merger or consolidation,
or (ii) a merger or consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities; or

                      (4) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets, other than a sale or disposition by the Company of all
or substantially all of the Company's assets to an entity, at least 70% of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale. Notwithstanding the
foregoing, a "Change in Control" shall not be deemed to have occurred by virtue
of the consummation of any transaction or series of integrated transactions
immediately following which the record holders of the common stock of the
Company immediately prior to such transaction or series of transactions continue
to have substantially the same proportionate ownership in an entity which owns
all or substantially all of the assets of the Company immediately following such
transaction or series of transactions.

                  h. "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

                  i. "Company" shall mean Starwood Hotels and Resorts Worldwide,
Inc., and, except in determining under Section 17(g) hereof whether or not any
Change in Control of the Company has occurred, shall include any successor to
its business and/or assets which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

                  j. "Date of Termination" shall have the meaning set forth in
Section 8 hereof.

                                       12
<PAGE>   13
                  k. "Disability" shall be deemed the reason for the termination
by the Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the Company
for a period of six (6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within thirty (30) days
after such Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive's duties.

                  l. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.

                  m. "Excise Tax" shall mean any excise tax imposed under
section 4999 of the Code.

                  n. "Executive" shall mean the individual named in the first
paragraph of this Agreement.

                  o. "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) after any Change in Control, or prior to a Change in
Control under the circumstances described in clauses (ii) and (iii) of the
second sentence of Section 6(a) hereof (treating all references in paragraphs
(1) through (7) below to a "Change in Control" as references to a "Potential
Change in Control"), of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to act
described in paragraph (1), (5), (6) or (7) below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:

                           (1) the assignment to the Executive of any duties
                  inconsistent with the Executive's status as a senior executive
                  officer of the Company or a substantial adverse alteration in
                  the nature or status of the Executive's responsibilities from
                  those in effect immediately prior to the Change in Control;

                           (2) a reduction by the Company in the Executive's
                  annual base salary as in effect on the date hereof or as the
                  same may be increased from time to time;

                           (3) the relocation of the Executive's principal place
                  of employment to a location more than 35 miles from the
                  Executive's principal place of employment immediately prior to
                  the Change in Control or the Company's requiring the Executive
                  to be based anywhere other than such principal place of
                  employment (or permitted relocation thereof) except for
                  required travel on the Company's

                                       13
<PAGE>   14
                  business to an extent substantially consistent with the
                  Executive's present business travel obligations;

                           (4) the failure by the Company to pay to the
                  Executive any portion of the Executive's current compensation,
                  or to pay to the Executive any portion of an installment of
                  deferred compensation under any deferred compensation program
                  of the Company, within seven (7) days of the date such
                  compensation is due;

                           (5) the failure by the Company to continue in effect
                  any compensation plan in which the Executive participates
                  immediately prior to the Change in Control which is material
                  to the Executive's total compensation, including but not
                  limited to the Company's stock option, bonus and other plans
                  or any substitute plans adopted prior to the Change in
                  Control, unless an equitable arrangement (embodied in an
                  ongoing substitute or alternative plan) has been made with
                  respect to such plan, or the failure by the Company to
                  continue the Executive's participation therein (or in such
                  substitute or alternative plan) on a basis not materially less
                  favorable, both in terms of the amount or timing of payment of
                  benefits provided and the level of the Executive's
                  participation relative to other participants, as existed
                  immediately prior to the Change in Control;

                           (6) the failure by the Company to continue to provide
                  the Executive with benefits substantially similar to those
                  enjoyed by the Executive under any of the Company's pension,
                  savings, life insurance, medical, health and accident, or
                  disability plans in which the Executive was participating
                  immediately prior to the Change in Control, the taking of any
                  other action by the Company which would directly or indirectly
                  materially reduce any of such benefits or deprive the
                  Executive of any material fringe benefit enjoyed by the
                  Executive at the time of the Change in Control, or the failure
                  by the Company to provide the Executive with the number of
                  paid vacation days to which the Executive is entitled on the
                  basis of years of service with the Company in accordance with
                  the Company's normal vacation policy or any employment
                  agreement in effect at the time of the Change in Control; or

                           (7) any purported termination of the Executive's
                  employment which is not effected pursuant to a Notice of
                  Termination satisfying the requirements of Section 8(a)
                  hereof; for purposes of this Agreement, no such purported
                  termination shall be effective.

                  The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's incapacity due to
physical or

                                       14
<PAGE>   15
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.

                  For purposes of any determination regarding the existence of
Good Reason, any claim by the Executive that Good Reason exists shall be
presumed to be correct unless the Company establishes to the Board by clear and
convincing evidence that Good Reason does not exist.

                  p. "Notice of Termination" shall have the meaning set forth in
Section 8 hereof.

                  q. "Person" shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.

                  r. "Potential Change in Control" shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:

                           (8) the Company enters into an agreement, the
                  consummation of which would result in the occurrence of a
                  Change in Control;

                           (9) the Company or any Person publicly announces an
                  intention to take or to consider taking actions which, if
                  consummated, would constitute a Change in Control;

                           (10) any Person becomes the Beneficial Owner,
                  directly or indirectly, of securities of the Company
                  representing 15% or more of either the then outstanding shares
                  of common stock of the Company or the combined voting power of
                  the Company's then outstanding securities (not including in
                  the securities beneficially owned by such Person any
                  securities acquired directly from the Company or its
                  affiliates); or

                           (11) the Board adopts a resolution to the effect
                  that, for purposes of this Agreement, a Potential Change in
                  Control has occurred.

                                       15
<PAGE>   16
                  s. "Retirement" shall be deemed the reason for the termination
by the Executive of the Executive's employment if such employment is terminated
in accordance with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.

                  t. "Severance Payments" shall have the meaning set forth in
Section 6 hereof.

                  u. "Tax Counsel" shall have the meaning set forth in Section 7
hereof.

                  v. "Term" shall mean the period of time described in Section 2
hereof (including any extension, continuation or termination described therein).

                  w. "Total Payments" shall mean those payments so described in
Section 7 hereof.

                             STARWOOD HOTELS AND RESORTS
                               WORLDWIDE, INC.

                             By: /s/ Thomas C. Janson
                                ------------------------------------------------
                             Name:   Thomas C. Janson
                             Title:  Executive Vice President
                                     and General Counsel
                             Dated:  June 12, 2000

                             EXECUTIVE

                                 /s/ David Norton
                             --------------------------------
                                     David Norton
                             Dated: June 9, 2000

                             Address:

                                       16
<PAGE>   17
                                          -------------------------

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

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

                                          (Please print carefully)

                                       17NATIONAL PENN BANCSHARES, INC.

                                  PENSION PLAN

                              AMENDED AND RESTATED
                            EFFECTIVE JANUARY 1, 1989

<PAGE>
                          NATIONAL PENN BANCSHARES,INC.
                                  PENSION PLAN

                               TABLE OF CONTENTS

                                                                            Page

ARTICLE I.          DEFINITIONS                                                1

ARTICLE II.         TRANSITION AND ELIGIBILITY TO PARTICIPATE                 10

ARTICLE III.        VESTING SERVICE AND CREDITED SERVICE                      11

ARTICLE IV.         ELIGIBILITY FOR BENEFITS                                  14

ARTICLE V.          CALCULATION OF BENEFITS                                   14

ARTICLE VI.         VESTING                                                   25

ARTICLE VII.        PAYMENT OF BENEFITS                                       28

ARTICLE VIII.       THE FUND AND FUNDING                                      35

ARTICLE IX.         ADMINISTRATION                                            37

ARTICLE X.          AMENDMENT AND TERMINATION                                 39

ARTICLE XI.         TOP-HEAVY PROVISIONS                                      42

ARTICLE XII.        GENERAL PROVISIONS                                        48

SCHEDULE A          ACTUARIAL EQUIVALENTS                                     51

SCHEDULE B          MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLE             52

<PAGE>
                         NATIONAL PENN BANCSHARES, INC.

                                  PENSION PLAN

          WHEREAS, the National Bank of Boyertown adopted The National Bank of
Boyertown Pension Plan for Full-Time Employees, effective January 1, 1974, for
certain of its employees; and

          WHEREAS, The National Bank of Boyertown Pension Plan for Full-Time
Employees has been amended from time to time, and was amended in its entirety
and restated, effective January 1, 1977, and effective January 1, 1984 when
National Penn Bancshares, Inc. assumed sponsorship of the Plan and renamed it
the National Penn Bancshares, Inc. Pension Plan; and

          WHEREAS, the National Penn Bancshares, Inc. and National Bank of
Boyertown, desire at this time to amend and restate the National Penn
Bancshares, Inc. Pension Plan to comply with the requirements of the Employee
Retirement Income Security Act of 1974 and with the Internal Revenue Code of
1986, as amended;

          NOW, THEREFORE, effective January 1, 1989 (except as otherwise set
forth herein), the National Penn Bancshares, Inc. Pension Plan is continued,
amended, and restated as hereinafter set forth:

                                   ARTICLE I

                                  DEFINITIONS

          Except where otherwise clearly indicated by context, the masculine
shall include the feminine and the singular shall include the plural, and
vice-versa. Any term used herein without an initial capital letter that is used
in a provision of the Code with which this Plan must comply to satisfy section
401(a) of the Code, shall be interpreted as having the meaning used in such
provision of the Code, if necessary for the Plan to comply with such provision.

          "Accrued Benefit" means, for any Participant as of any date, subject
to Sections 5.2 and 7.8(c), the amount of benefit earned to such date, payable
as a single life annuity beginning at the Participant's Normal Retirement Date
(or immediately, if the Participant has passed his Normal Retirement Date and is
still an Employee) calculated in accordance with Section 5.1 as

<PAGE>
if the Participant had continued as an Active  Participant  until Age 65 (or his
attained Age, if he is past Age 65), with Final Average  Compensation  as of the
date of reference, and if the Participant has not attained Age 65, multiplied by
a fraction, as follows:

               (a) the portion of the benefit described in Paragraph (a)(1) of
Section 5.1 shall be multiplied by a fraction, no greater than one (1), the
numerator of which is the Participant's Years of Credited Service as of the date
of reference and the denominator of which is the aggregate number of Years of
Credited Service the Participant will have accumulated if he continues as an
Active Participant until Age 65, and

               (b) the portion of the benefit described in Paragraph (a)(2) of
Section 5.1 shall be multiplied by a fraction, not greater than (1), the
numerator of which is the Participant's Years of Credited Service as of the date
of reference, not exceeding 35 years, and the denominator of which is the lesser
of (1) 35 or (2) the aggregate number of Years of Credited Service the
Participant will have accumulated if he continues as an Active Participant until
Age 65.

          "Active Participant" means a an individual who has become an Active
Participant as provided in Article II and has remained an Employee in the
Covered Class at all times thereafter.

          "Actuarial Equivalent or Actuarially Equivalent" means of equal
actuarial value on the basis of the assumptions and factors described in
Schedule A.

          "Actuary" means the actuarial firm or individual selected by the
Committee from time to time.

          "Affiliated Company" means, with respect to any Participating
Company, (a) any corporation that is a member of the same controlled group of
corporations (within the meaning of section 414(b) of the Code) as such
Participating Company; (b) any member of an affiliated service group, as
determined under section 414(m) of the Code, of which such Participating Company
is a member; (c) any trade or business that is under common control with such
Participating Company, as determined under section 414(c) of the Code and (d)
any other entity which is required to be aggregated with a Participating Company
pursuant to regulations under section 414(o) of the Code. "50% Affiliated
Company" means an Affiliated Company, but determined with "more than 50%"
substituted for the phrase "at least 80%" in section 1563(a) of the Code, when
applying sections 414(b) and 414(c) of the Code.

                                       2

<PAGE>
          "Age" means, for any individual, his age on last birthday, except that
an individual attains Age 70-1/2 on the corresponding date in the sixth calendar
month following the month in which his 70th birthday falls (or the last day of
such sixth month if there is no such corresponding date therein).

          "Benefit Commencement Date" means, for any Participant, the date as of
which his first periodic benefit payment or a single sum payment is due.
"Benefit Commencement Date" also means, with respect to a Surviving Spouse or
beneficiary, the date on which the benefit under Section 5.9 or 5.10 commences
to the Surviving Spouse or beneficiary.

          "Board of Directors" means the board of directors of the Company

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

          "Committee" means the individual(s), if any, appointed by the Board of
Directors to supervise the administration of the Plan, as provided in Article
IX.

          "Company " means National Penn Bancshares, Inc., and its successors.

          "Compensation" means, for any Employee:

               (a) except as otherwise provided below in this definition, the
amount of his total taxable income paid by a Participating Company with respect
to any Plan Year, plus elective deferrals under section 401(k) or section 125 of
the Code made on his behalf under any plan in which the Employee participates,
excluding bonuses, taking into account only amounts earned while he is an Active
Participant. An Employee's Compensation shall not include amounts that are
taxable to him but are not paid to him in cash.

               (b) for the purposes of Article XI, and Section 5.12, except as
otherwise provided therein, his "compensation" as reported on Form W-2 for the
applicable period.

               (c) for the purposes of determining highly compensated employees
and former employees under Section 10.3, his "compensation" as reported on Form
W-2 for the applicable period, but including amounts that are excluded from
gross income under a plan described in section 125, 401(k) or 403(b) of the
Code.

               (d) with respect to any Plan Year, including Plan Years beginning
before January 1, 1989, the first $200,000 (or such other amount as may be
applicable under Code section

                                        3

<PAGE>
401(a)(17)) of the amount otherwise described in Subsections (a) and (b) of this
definition, except that this Subsection (d) shall not apply for purposes of
Section 5.12. In no event, however, shall this Subsection (d) cause the Accrued
Benefit of any Participant to be less than his Accrued Benefit as of December
31, 1988. In determining Compensation for purposes of this limitation, the rules
of section 414(q)(6) of the Code shall apply, except that "family members" shall
include only the spouse of the Employee and any lineal descendants who have not
attained Age 19 before the close of the Plan Year.

          "Covered Class" means the class consisting of each Employee who (a) is
employed by a Participating Company, and (b) is not covered by a collective
bargaining agreement, unless such agreement specifically provides for
participation hereunder, and (c) is not covered by another qualified defined
benefit pension plan to which the Participating Company makes contributions. An
Employee who is such solely by reason of being a leased employee shall not be in
the Covered Class.

          "Covered Compensation" means, for any Participant for any Plan Year,
the average of the taxable wage bases in effect for each calendar year during
the 35-year period ending with the last day of the calendar year in which the
Participant attains or will attain his retirement age under the federal Social
Security Act determined using the rounded table. In determining a Participant's
Covered Compensation for a Plan Year, the taxable wage base for the Plan Year of
reference and any subsequent Plan Year shall be assumed to be the same as the
taxable wage base in effect as of the beginning of the Plan Year of reference. A
Participant's Covered Compensation for any Plan Year commencing after the
35-year period described above is the Participant's Covered Compensation for the
Plan Year during which the Participant attained his retirement age under the
federal Social Security Act. A Participant's Covered Compensation for a Plan
Year commencing prior to the 35-year period described above is the taxable wage
base in effect as of the beginning of such Plan Year. For purposes of this
Section, "taxable wage base" means the maximum amount of earnings which may be
considered wages for Social Security purposes under section 3121(a)(1) of the
Code.

          "Early Retirement Date" means, for any Participant, the first day of
the calendar month coincident with or next following the date on which he has a
Separation from Service; provided, however, that such date shall not be an Early
Retirement Date unless, as of the date of the Participant's Separation from
Service, he has attained Age 55 and has to his credit 10 or more Years of
Vesting Service.

          "Effective Date" means (except as otherwise set forth herein) January
1, 1989, the effective date of this amended and restated Plan.

                                       4

<PAGE>
          "Employee" means an individual who is employed by a Participating
Company or an Affiliated Company. An individual who is not otherwise employed by
a Participating Company or Affiliated Company shall be deemed to be employed by
such Company if he is a leased employee with respect to whose services such
Participating Company or Affiliated Company is the recipient within the meaning
of Code section 414(n) or 414(o), but to whom Code section 414(n)(5) does not
apply.

          "Employment Commencement Date" means, for any Employee, the date on
which he is first entitled to be credited with an "Hour of Service" described in
Paragraph (a)(1) of the definition of Hour of Service in this Article.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

          "Final Average Compensation" means, for any Participant, the average
of his Compensation for the five full consecutive calendar years in the final 10
(or fewer) full consecutive calendar years of employment as an Active
Participant which yield the highest average. For this purpose, nonconsecutive
calendar years interrupted by periods in which the Participant is not an Active
Participant shall be treated as consecutive. If a Participant does not have five
full consecutive calendar years of employment as an Active Participant, his
Final Average Compensation shall be the annual amount determined by dividing his
Compensation during the period in which he is an Active Participant by the
number of years and fractional years thereof (basing fractional years on
completed months). Compensation earned by an Active Participant for employment
after his Normal Retirement Date shall be taken into account.

          "Fund" means the fund established for this Plan, administered under
the Trust Agreement, out of which benefits payable under this Plan shall be
paid.

          "Hour of Service" means, for any Employee, a credit awarded with
respect to:

               (a) except as provided in (b) or (c),

                    (1) each hour for which he is directly or indirectly paid or
entitled to payment by a Participating Company or an Affiliated Company for the
performance of employment duties; or

                    (2) each hour for which he is entitled, either by award or
agreement, to back pay from a Participating

                                       5

<PAGE>
Company or an Affiliated Company, irrespective of mitigation of damages; or

                    (3) each hour for which he is directly or indirectly paid or
entitled to payment by a Participating Company or an Affiliated Company on
account of a period of time during which no duties are performed due to
vacation, holiday, illness, incapacity (including disability), jury duty,
layoff, leave of absence, or military duty.

               (b) For any period that includes any hours for which an Hour of
Service would otherwise be credited to an Employee under (a), above, the
Committee may, in accordance with rules applied in a uniform and
non-discriminatory manner, elect instead to credit Hours of Service using one or
more of the following equivalencies:

Basis Upon Which Records               Credit Granted to Individual
    Are Maintained                             For Period
------------------------               ----------------------------
     shift                               actual hours  for full shift
     day                                  10 Hours of  Service
     week                                 45 Hours of  Service
     semi-monthly period                  95 Hours of  Service
     month                               190 Hours of  Service

               (c) Anything to the contrary in Subsection (a) or(b)
notwithstanding:

                    (1) No Hours of Service shall be credited to an Employee for
any period during which payments are made or due him under a plan maintained
solely for the purpose of complying with applicable workers' compensation,
unemployment compensation, or disability insurance laws.

                    (2) No more than 501 Hours of Service shall be credited to
an Employee under Paragraph (a)(3) of this definition on account of any single
continuous period during which no duties are performed by him, except to the
extent otherwise provided in the Plan.

                    (3) No Hours of Service shall be credited to an Employee
with respect to payments solely to reimburse for medical or medically related
expenses.

                    (4) No Hours of Service shall be credited twice.

                    (5) Hours of Service shall be credited at least as liberally
as required by the rules set forth in U.S. Department of Labor
Reg.ss.2530.200b-2(b) and (c).

                                       6

<PAGE>
                    (6) In the case of an Employee who is such solely by reason
of service as a leased employee, Hours of Service shall be credited as if such
Employee were employed and paid with respect to such service (or with respect to
any related absences or entitlements) by the Participating Company or Affiliated
Company that is the recipient thereof.

          "Late Retirement Date" means, for any Participant, the first day of
the calendar month coincident with or next following the date on which he has a
Separation from Service, if such Separation from Service occurs after the
Participant's Normal Retirement Date.

          "Limitation Year" means the calendar year.

          "Month of Service" means a calendar month during which an individual
(a) is credited with at least one Hour of Service or (b) is deemed employed. For
purposes of this definition, an individual shall be "deemed employed" during any
period of 12 consecutive months or less during which the individual fails to
complete an Hour of Service, between the last day of the last calendar month in
which he is credited with at least one Hour of Service and the earlier of the
date he is again credited with an Hour of Service or his Separation from
Service. An individual shall also be "deemed employed" for each month during a
12-consecutive-month period measured from the first day of the calendar month
coincident with or next following his Separation from Service during which he
has not incurred a One-Year Period of Severance.

          "Normal Retirement Date" means, for any Participant, the first day of
the calendar month coincident with or next following the date on which he
attains Age 65.

          "One-Year Period of Severance" means a severance from employment
described in Section 3.4.

          "Participant" means an individual who is an Active Participant, a
former Active Participant receiving benefits under the Plan, or a former Active
Participant who has a present or future right to receive benefits under the
Plan, or an Employee who was once an Active Participant and has been transferred
out of the Covered Class.

          "Participating Company" means the Company, National Bank of
Boyertown, and each other organization which is authorized by the Board of
Directors to adopt this Plan by action of its board of directors or other
governing body.

          "Period of Severance" means the period of time commencing on an
Employee's Separation from Service and ending on the date on which the Employee
is again entitled to be credited

                                       7

<PAGE>
with an Hour of Service described in Paragraph (a)(1) of the definition of "Hour
of Service" in this Article.

          "Plan" means the National Penn Bancshares, Inc. Pension Plan, as set
forth herein (including any Schedules).

          "Plan Year" means each 12-consecutive month period that begins on
January 1 or any anniversary thereof and ends on the next following December 31.

          "Reemployment Commencement Date" means the first day following a
One-Year Period of Severance on which an Employee is entitled to be credited
with an Hour of Service described in Paragraph (a)(1) of the definition of "Hour
of Service" in this Article.

          "Required Beginning Date" means, for any Participant:

               (a) if he attained Age 70-1/2 before January 1, 1988, and is not
a 5-percent owner (within the meaning of section 416 of the Code) of a
Participating Company at any time within the five-Plan-Year period ending in the
calendar year in which he attains Age 70-1/2. or thereafter, April 1 of the
calendar year following the later of the calendar year in which he has a
Separation from Service or the calendar year in which he attained Age 70-1/2;

               (b) if he attained Age 70-1/2 before January 1, 1988, and is a
5-percent owner (within the meaning of section 416 of the Code) of a
Participating Company at any time within the five-Plan-Year period ending in the
calendar year in which he attains Age 70-1/2, or thereafter, the later of (1)
December 31, 1987, (2) April 1 of the calendar year following the calendar year
in which he attained Age 70-1/2, or (3) April 1 of the calendar year following
the calendar year in which he becomes a 5-percent owner;

               (c) except as provided in Subsection (d) below, if he attains Age
70-1/2 on or after January 1, 1988, April 1 of the calendar year next following
the calendar year in which he attains Age 70-1/2;

               (d) if he attained Age 70-1/2 before January 1, 1989 and after
December 31, 1987, is not a 5-percent owner (within the meaning of section 416
of the Code) of a Participating Company, and has not had a Separation from
Service before January 1, 1989, April 1, 1990.

          "Separation from Service" means the date, as recorded on the records
of a Participating Company or an Affiliated Company, on which an Employee of
such company quits, retires, is discharged, or dies, or, if earlier, the first
anniversary of the

                                       8

<PAGE>
first day of a period during which the Employee remains absent from service with
all Participating Companies and Affiliated Companies (with or without pay) for
any other reason, except if the Employee is absent from work beyond the first
anniversary of the first day on which he/she is absent by reason of pregnancy,
childbirth, or placement in connection with adoption, or for purposes of the
care of such Employee's child immediately after birth or placement in connection
with adoption, such Employee's Separation from Service, solely for the purpose
of determining whether a One-Year Period of Severance under Section 3.4 has
occurred, shall be the second anniversary of the first day of such absence.

          "Social Security Retirement Age" means (a) for any individual born
before January 1, 1938, Age 65, (b) for any individual born after December 31,
1937, but before January 1, 1955, Age 66, or (c) for any individual born after
December 31, 1954, Age 67.

          "Spouse" means, with respect to any Participant, the individual to
whom such Participant is married as of the date of reference.

          "Surviving Spouse" means, with respect to any Participant:

               (a) for purposes of the survivor's benefit described in Section
5.10, the individual, if any, who is such Participant's Spouse the date of the
Participant's death; and

               (b) for purposes of the joint and survivor annuity described in
Section 7.2, the individual, if any, who is such Participant's Spouse on the
Participant's Benefit Commencement Date.

          "Trust Agreement" means the agreement and declaration of trust
executed for purposes of the Plan.

          "Trustee" means the corporate trustee or one or more individuals
collectively appointed and acting under the Trust Agreement.

          "Year of Credited Service" means, for any Participant, the number of
full and partial years counted with respect to determining a Participant's
Accrued Benefit under the Plan, as further described in Article III.

          "Year of Eligibility Service" means, for any Employee, a credit used
to determine his eligibility to become an Active Participant, as further
described in Article II.

                                       9

<PAGE>
          "Year of Vesting Service" shall mean, for any Employee, the number of
full and partial years counted with respect to determining a Participant's
eligibility for benefits and vested status under the Plan, as further described
in Article III.

                                   ARTICLE II

                   TRANSITION AND ELIGIBILITY TO PARTICIPATE

          2.1 Rights Affected. Except as provided to the contrary herein, any
former Employee who has retired or whose employment has terminated prior to the
Effective Date who is not in the Covered Class on or after the Effective Date
shall have no additional rights as a result of this amended and restated Plan
and shall be entitled to benefits under this Plan only if and to the extent such
former Employee was entitled to benefits under the terms and conditions of the
Plan as in effect on the date of such retirement or termination. Any former
Employee who is reemployed as an Employee in the Covered Class on or after the
Effective Date shall have the rights and benefits provided hereunder.

          2.2 Eligibility to Participate.

               (a) Each Employee who was an Active Participant immediately prior
to the Effective Date and is in the Covered Class on the Effective Date shall
continue to be an Active Participant as of the Effective Date. Each other
Employee who has completed six Months of Service and has attained Age 20-1/2
shall become an Active Participant on the later of the Effective Date or the
January 1st or July 1st coincident with or next following the date on which he
completes one Year of Eligibility Service, if he is then in the Covered Class.
For purposes of this Subsection, "January 1, 1988" shall be substituted for the
"Effective Date" with respect to any Employee who would have been an Active
Participant under the provisions of the Plan immediately prior to the Effective
Date but for the fact that his Employment Commencement Date occurred within five
years of his attainment of Age 65.

               (b) A Participant (or a former Participant) who has a Separation
from Service and who is later reemployed in the Covered Class shall become an
Active Participant as of the date on which he first again completes an Hour of
Service in the Covered Class; but, if he has had a One-Year Period of Severance,
only if he (1) had any nonforfeitable interest in his Accrued Benefit as of his
prior Separation from Service or (2) again completes one Hour of Service at a
time when his consecutive One-Year Periods of Severance do not equal or exceed
the greater

                                       10

<PAGE>
of (A) five or (B) the number of Years of Eligibility Service he had to his
credit prior to his Period of Severance.

               (c) If an individual is not in the Covered Class on the date on
which he would become an Active Participant (but for the fact that he is not
then in the Covered Class), he shall become an Active Participant as of the
first date thereafter on which he is in the Covered Class; but, if he has had a
One-Year period of Severance, only if he (1) had any nonforfeitable interest in
his Accrued Benefit as of his prior Separation from Service or (2) he again
completes one Hour of Service at a time when his consecutive One-year Periods of
Severance do not equal or exceed the greater of (A) five or (B) the number of
Years of Eligibility Service he had to his credit prior to his Period of
Severance.

          2.3 Year of Eligibility Service. An Employee shall be credited with a
Year of Eligibility Service upon his completion of 1,000 Hours of Service within
any single computation period irrespective of whether the computation period has
ended. An individual's computation period shall be the 12-consecutive-month
period beginning on the date he is first credited with an Hour of Service and
each Plan Year thereafter.

                                  ARTICLE III

                      VESTING SERVICE AND CREDITED SERVICE

          3.1 Years of Vesting Service.

               (a) An Employee shall accrue Years of Vesting Service for all
employment with all Participating Companies and any Affiliated Company. Years of
Vesting Service shall be calculated from the Employee's Employment Commencement
Date or Reemployment Commencement Date to his Separation from Service, subject
to the rules set forth herein.

               (b) Years of Vesting Service shall be calculated on the basis
that twelve completed months equal one year and each additional completed month
equals one-twelfth (1/12) of a year. For the purposes of this Subsection, a
"completed month" shall mean a calendar month in which an Employee is credited
with at least one Hour of Service.

               (c) If a former Employee is reemployed by a Participating Company
or an Affiliated Company before he incurs a One-Year Period of Severance and if
such Employee's Period of Severance commenced with a quit, discharge, or
retirement, the Employee shall be credited with Years of Vesting Service for the
Period of Severance.

                                       11

<PAGE>
               (d) If an Employee severs from service by reason of a quit,
discharge, or retirement during an absence from service for 12 months or less
for any reason other than a quit, discharge, or retirement, and if he then
performs an Hour of Service within 12 months of the date on which he was first
absent from service, he shall be credited with Years of Vesting Service for his
Period of Severance.

          3.2 Years of Credited Service

               (a) Except as provided in this Article, a Participant shall
accrue Years of Credited Service for the period from his Employment Commencement
Date or Reemployment Commencement Date to his Separation from Service,
disregarding Years of Credited Service during which he is not an Employee in the
Covered Class.

               (b) Years of Credited Service shall be calculated on the basis
that twelve completed months equal one year and each additional completed month
equals one-twelfth (1/12) of a year. For the purposes of this Subsection, a
"completed month" shall mean a calendar month in which an Employee in the
Covered Class is credited with at least one Hour of Service.

               (c) If a Participant is reemployed by a Participating Company or
an Affiliated Company before he incurs a One-Year Period of Severance, and if
such Participant's Period of Severance commenced with a quit, discharge, or
retirement, the Participant shall not be credited with Years of Credited Service
for any portion of such Period of Severance.

          3.3 Additional Rules.

               (a) Notwithstanding any provisions of this Plan to the contrary,
an Employee shall not be credited with any Years of Credited Service or Years of
Vesting Service for service (1) prior to the date on which the vesting rules
contained in ERISA and in the Code, as amended by ERISA, became effective with
respect to the Plan, or (2) prior to the first day of the first Plan Year
beginning on or after January 1, 1985, if such service prior to the effective
date of ERISA or prior to the first day of such Plan Year would have been
disregarded under the rules of the Plan with regard to breaks in service as in
effect on the applicable date.

               (b) Years of Vesting Service and Years of Credited Service shall
be credited with respect to service with First National Bank of Oley and First
National Bank of Boyertown.

                                       12

<PAGE>
               (c) For purposes of determining a Participant's Years of Vesting
Service, service prior to his attainment of Age 18 shall be disregarded.

          3.4 One-Year Period of Severance. A One-Year Period of Severance means
a 12-consecutive-month period beginning on the first day of the calendar month
coincident with or next following the Employee's Separation from Service during
which the former Employee is credited with no Hours of Service. Solely for the
purpose of determining whether an Employee has incurred a One-Year Period of
Severance, Hours of Service shall be recognized for an authorized leave of
absence. An "authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Company or a Participating Company pursuant to
an established nondiscriminatory policy, whether occasioned by illness, military
service, or any other reason.

          3.5 Aggregation of Service.

               (a) A Participant who has at any time had a vested interest in
his Accrued Benefit and who incurs a One-Year Period of Severance shall have his
Years of Vesting Service and his Years of Credited Service with all
Participating Companies and all Affiliated Companies before and after his
Separation from Service aggregated for Plan purposes upon his Reemployment
Commencement Date.

               (b) A Participant who does not have a vested interest under
Section 6.1 and who incurs a One-Year Period of Severance shall have his Years
of Vesting Service and Years of Credited Service before and after his Separation
from Service aggregated, if his Reemployment Commencement Date occurs at a time
when the number of his consecutive one-Year Periods of Severance is less than
the greater of (1) the number of full Years of Vesting Service he had accrued
prior to his Separation from Service or (2) five. If the number of his
consecutive One-Year Periods of Severance is equal to or greater than the number
of his full Years of Vesting Service before his Separation from Service or five,
if greater, he shall receive no credit for his Years of Vesting Service and
Years of Credited Service before his Separation from Service and shall be
treated as if he were not an Employee (or a Participant) at any time prior to
his Separation from Service.

                                       13

<PAGE>
                                   ARTICLE IV

                            ELIGIBILITY FOR BENEFITS

          4.1 Normal Retirement. A Participant who has a Separation from Service
on his Normal Retirement Date shall be entitled to a pension. Such Participant's
Benefit Commencement Date shall be his Normal Retirement Date.

          4.2 Late Retirement. A Participant who has a Separation from Service
after his Normal Retirement Date shall be entitled to a pension. Such
Participant's Benefit Commencement Date shall be the earlier of his Late
Retirement Date or his Required Beginning Date.

          4.3 Early Retirement. A Participant who has an Early Retirement Date
shall be entitled to a pension. Such Participant's Benefit Commencement Date
shall be his Normal Retirement Date; provided, that he may elect as his Benefit
Commencement Date the first day of any month coinciding with or following his
Early Retirement Date and not after his Normal Retirement Date. Such election
must be made no earlier than 90 days prior to the Benefit Commencement Date
elected by the Participant.

          4.4 Furnishing Data. Each Employee and beneficiary shall furnish such
information as the Committee may consider necessary for the determination of the
Employee's rights and benefits under the Plan and shall otherwise cooperate
fully with the Committee in the administration of the Plan. Payment of benefits
shall be deferred until all of such information is supplied.

                                   ARTICLE V

                            CALCULATION OF BENEFITS

          5.1 Accrued Benefit at Normal Retirement Date

               (a) Subject to Sections 5.2 and 7.8(c), a Participant's Accrued
Benefit as of any date on or after his Normal Retirement Date shall be equal to
the sum (computed to the nearest multiple of twelve dollars) of:

                    (1) one percent (1.0%) of his Final Average Compensation
multiplied by his Years of Credited Service; plus

                    (2) Seventy-five hundredths percent (.75%) of his Final
Average Compensation in excess of the Participant's

                                       14

<PAGE>
integration level as determined under Subsection (b) multiplied by his Years of
Credited Service up to a maximum of 35 years; provided, however, that the
percentage in this Paragraph (2) shall be .70% with respect to a Participant
whose Social Security Retirement Age is Age 66 and .65% with respect to a
Participant whose Social Security Retirement Age is Age 67.

               (b) For purposes of determining a Participant's Accrued Benefit
under Subsection (a), his integration level shall be his Covered Compensation.

          5.2 Minimum Accrued Benefit. Notwithstanding any provision of the Plan
to the contrary, a Participant's Accrued Benefit, determined in any Plan Year
that begins on or after January 1, 1989, shall not be less than his accrued
benefit, determined as of December 31, 1988, under the terms of the Plan as in
effect on December 31, 1988, based on his Years of Credited Service and Final
Average Compensation determined on December 31, 1988.

          5.3 Normal Retirement. A Participant who is entitled to a pension
under Section 4.1 shall receive an annual pension, payable monthly. Subject to
Section 5.12, such pension shall be the Actuarial Equivalent, in the form set
forth in Article VII, of the Participant's Accrued Benefit as of his Normal
Retirement Date.

          5.4 Late Retirement.

               (a) A Participant who is entitled to a pension under Section 4.2
shall receive an annual pension, payable monthly. Subject to Section 5.12, such
pension shall be the Actuarial Equivalent, in the form set forth in Article VII,
of the greater of (1) the Actuarial Equivalent, in the form of a single life
annuity beginning on the earlier of his Late Retirement Date or his Required
Beginning Date, of the Participant's Accrued Benefit as of his Normal Retirement
Date; or (2) his Accrued Benefit as of the earlier of his Late Retirement Date
or his Required Beginning Date.

               (b) If a Participant's Required Beginning Date, and therefore his
Benefit Commencement Date, precedes his Late Retirement Date, the amount of the
pension payable to the Participant shall be determined as of his Required
Beginning Date and adjusted as of January 1 in each calendar year following his
Required Beginning Date, up to and including the January 1 next following his
Late Retirement Date. The adjustment shall include any increase (but not any
decrease) determined in accordance with Section 5.1 to reflect Years of Credited
Service and Compensation earned after the Participant's Benefit Commencement
Date. In addition, the Actuarial Equivalent of such adjustment shall be reduced
(but not below zero) by the Actuarial Equivalent of any

                                       15

<PAGE>
benefits paid to the Participant since his Benefit Commencement Date; provided,
however, that the amount, if any, of the benefits paid to the Participant which
exceeds the amount the Participant would have received if distribution had been
made in the normal form of benefits described in Section 7.2 for such
Participant shall be disregarded in determining the Actuarial Equivalent of such
benefits.

          5.5 Early-Retirement. A Participant who is entitled to a pension under
Section 4.3 shall receive an annual pension, payable monthly. Subject to Section
5.12, such pension shall be the Actuarial Equivalent, in the form set forth in
Article VII, of the Participant's Accrued Benefit as of his Early Retirement
Date, reduced as follows:

               (a) if the Participant's Social Security Retirement Age is Age
65, (1) 1/180 for-each of the first 60 full calendar months and (2) 1/360 for
each of the next 60 full calendar months, by which his Benefit Commencement Date
precedes his Normal Retirement Date.

               (b) if the Participant's Social Security Retirement Age is Age
66, the portion of the Participant's Accrued Benefit described in Paragraph
(a)(1) of Section 5.1 shall be reduced as described in Subsection (a) above and
the portion described in Paragraph (a)(2) of Section 5.1 shall be reduced by (1)
1/180 for each of the first 48 full calendar months, (2) 1/360 for each of the
next 60 full calendar months, and (3) an Actuarial Equivalent reduction for each
of the next 12 full calendar months, by which his Benefit Commencement Date
precedes his Normal Retirement Date.

               (c) if the Participant's Social Security Retirement Age is Age
67, the portion of the Participant's Accrued Benefit described in Paragraph
(a)(1) of Section 5.1 shall be reduced as described in Subsection (a) above and
the portion described in Paragraph (a)(2) of Section 5.1 shall be reduced by (1)
1/180 for each of the first 36 full calendar months, (2) 1/360 for each of the
next 60 full calendar months, and (3) by an Actuarial Equivalent reduction for
each of the next 24 full calendar months, by which his Benefit Commencement Date
precedes his Normal Retirement Date.

          5.6 Transfers out of the Plan. The Accrued Benefit of a Participant
who has ceased to be in the Covered Class but who is still an Employee shall be
calculated on the basis of his Final Average Compensation and the benefit
formula in effect under Section 5.1 as of the last date on which he is in the
Covered Class.

          5.7 Transfers into the Plan. If an Employee transfers into employment
in the Covered Class, including a transfer from

                                       16

<PAGE>
the employ of an Affiliated Company that is not a Participating Company, his
employment with any Participating Company or Affiliated Company while he is not
in the Covered Class shall he considered in determining his eligibility to
become an Active Participant under Article II and his Years of Vesting Service
under Section 3.1, but shall not be considered in determining his Years of
Credited Service under Section 3.2.

          5.8 Prohibition Against Decrease in Benefits Payable. A Participant's
Accrued Benefit as of his Normal Retirement Date shall not be less than the
pension, in the form of an immediate single life annuity, that would have been
payable to him if he had separated from service and commenced to receive his
pension on any earlier retirement date provided under the Plan; provided,
however, that this Section shall not apply if the reduction in the amount
payable is due solely to an increase in Covered Compensation which takes place
prior to the earlier of the Participant's Separation from Service or Benefit
Commencement Date.

          5.9 Death Before Commencement of Benefits.

               (a) Upon the death of a Participant prior to his Benefit
Commencement Date, the Participant's designated beneficiary shall be paid a
death benefit in the form of a single sum equal to:

                    (1) If an Active Participant dies prior to his Early, Normal
or Late Retirement Date, the Actuarial Equivalent single-sum value of the
Participant's vested Accrued Benefit as of the first day of the calendar month
coinciding with or next following the date of his death.

                    (2) If a Participant who has a Normal, Early or Late
Retirement Date dies subsequent to such date, the Actuarial Equivalent
single-sum value of the benefit the Participant would have received at his
Early, Normal or Late Retirement Date.

                    (3) If a former Active Participant dies after his Separation
from Service, the Actuarial Equivalent single-sum value of the Participant's
vested Accrued Benefit as of the first day of the calendar month coinciding with
or next following the date of his death.

               (b) The death benefit determined in accordance with Subsection
(a) of this Section shall be payable to the Participant's designated beneficiary
as soon as practicable after the Participant's death. This benefit shall not
apply to a Participant with respect to whom the survivor's benefit under Section
5.10 is payable and has not been properly waived.

                                       17

<PAGE>
               (c) The Committee may require such proper proof of death and such
evidence of the right of any individual to receive the death benefit payable as
a result of the death of a Participant as the Committee may deem desirable. The
Committee' determination of death and the right of any person to receive payment
shall be conclusive.

               (d) In no event shall the death benefit payable to a Surviving
Spouse be less than the Actuarial Equivalent of the benefit such Surviving
Spouse would have received if the Participant (1) had had a Separation from
Service on the date of his death (if he is then an Employee) (2) had survived to
the Spouse's Benefit Commencement Date (3) had then begun to receive an
immediate retirement benefit in the normal form under Subsection (b) of Section
7.2, and (4) had died on the following day. If the Participant dies before his
Benefit Commencement Date but after he has elected an optional form of benefit
that is a joint and survivor annuity with the Participant's Spouse that provides
for periodic payments after the Participant's death each of which is not less
than fifty percent (50%) nor more than one hundred percent (100%) of the
periodic payment to the Participant, the survivor's benefit described in the
preceding sentence shall be the benefit to which the Spouse is entitled under
the optional form elected by the Participant.

          5.10 Survivor's Benefit for Surviving Spouse.

               (a) Subject to Subsection (b) of this Section, if a Participant
who has any vested interest in his Accrued Benefit under the Plan, dies before
his Benefit Commencement Date leaving a Surviving Spouse, such Surviving Spouse
shall receive a survivor's benefit. Such benefit shall commence, as elected in
writing by the Surviving Spouse, on the first day of any month following the
earliest date on which the Participant could have elected to receive immediate
retirement benefits, but not later than the date that would have been the
Participant's Normal Retirement Date. If the Participant dies after his Normal
Retirement Date, benefits shall commence on the first day of the month following
the month of the Participant's death. Subject to Section 5.12, the survivor's
benefit shall be a single life annuity with equal monthly installments payable
to the Surviving Spouse for her lifetime that is the Actuarial Equivalent of the
Participant's vested Accrued Benefit as of the Benefit Commencement Date elected
by the Surviving Spouse, except that, if the Participant would have been
eligible to receive a benefit under Section 5.3, 5.4 or 5.5 had he not died, the
survivor's benefit shall be the Actuarial Equivalent of the benefit the
Participant would have been entitled to receive under Section 5.3, 5.4 or 5.5,
whichever applies.

               (b) The survivor's benefit under this Section shall not be
payable and the death benefit under Section 5.9

                                       18

<PAGE>
shall be payable instead with respect to a Participant who either has
established to the satisfaction of the Committee that he has no Spouse, or who
elects in accordance with the following rules to waive the survivor's benefit
under this Section and to have the death benefit under Section 5.9 be payable
instead. Such election may be made at any time during the period that begins on
the first day of the Plan Year in which the Participant attains Age 35 (or, in
the case of a Participant who has a Separation from Service prior to his
attainment of Age 35, with respect to his Accrued Benefit earned prior to such
separation, the date of his Separation from Service) and ends on the date of the
Participant's death; provided that such election shall be effective only if:

                    (1) (A) the Participant's Spouse (or the Spouse's legal
guardian if the Spouse is legally incompetent) executes a written instrument
whereby such Spouse either:

                              (i) consents to such election, but only insofar as
such election waives the survivor's benefit under this Section and, if
applicable, names a specific beneficiary or beneficiaries to receive the death
benefit under Section 5.9; or

                              (ii) consents to such election and consents
prospectively to any subsequent designation of someone other than the Spouse to
receive all or part of the death benefit under Section 5.9 (provided such
instrument acknowledges the Spouse's right to limit consent to a specific
beneficiary); and

                         (B) such instrument acknowledges the effect of the
election to which the Spouse's consent is being given, that the Spouse's consent
is irrevocable, and is witnessed by a Plan representative or a notary public; or

                    (2) the Participant establishes to the satisfaction of the
Committee that his Spouse cannot be located or furnishes a court order to the
Committee establishing that the Participant is legally separated or has been
abandoned (within the meaning of local law), unless a qualified domestic
relations order pertaining to such Participant provides that the Spouse's
consent must be obtained.

The consent of a Spouse in accordance with this Subsection (b) shall not be
effective with respect to other Spouses of the Participant, and an election to
which Paragraph (b)(2) of this Section applies shall become void if the
circumstances causing the consent of the Spouse not to be required cease to
exist prior to the Participant's Benefit Commencement Date.

               (c) A Participant may revoke his election to waive the survivor's
benefit. Such revocation may be made at any time prior to the Participant's
death.

                                       19

<PAGE>
               (d) The Committee shall provide to each Participant a written
explanation of:

                    (1) the terms and conditions of the survivor's benefit under
this Section and the death benefit under Section 5.9;

                    (2) the Participant's right to waive the survivor's benefit
and the effect of such waiver;

                    (3) the rights of the Participant's Spouse with respect to
such waiver; and

                    (4) the Participant's right to revoke a waiver of the
survivor's benefit and the effect of such revocation.

The written explanation described in this Subsection shall be provided once
during either (A) the three-year period that begins on the first day of the Plan
Year in which the Participant attains Age 32, or (B) the one-year period that
begins on the day he becomes a Participant. With regard to a Participant who has
a Separation from Service before attaining Age 35, such written notice shall be
provided no earlier than one year before, and no later than one year after, the
Participant's Separation from Service.

          5.11 Death Benefit After Retirement. If a Participant dies after his
Benefit Commencement Date, his beneficiary shall be entitled to receive any
amount payable under the form of benefit that is in effect for such Participant
or under any annuity contract that has been distributed to the Participant to
provide benefits hereunder.

          5.12 Maximum Benefit. The provisions of this Section shall be
effective for Limitation Years beginning in 1987 and thereafter and shall be
construed to comply with section 415 of the Code.

               (a) (1) Notwithstanding anything in this Article to the contrary,
in no event shall the combined annual benefit payable with respect to a
Participant on a single life basis, under this and any other defined benefit
plan to which a Participating Company or a 50% Affiliated Company contributes,
exceed the lesser of (A) $90,000 (or such other dollar limitation as in effect
for the Limitation Year under section 415(b)(1)(A) of the Code) or (B) one
hundred percent (100%) of the Participant's average Compensation during the
three consecutive calendar years as an Active Participant in which such
Compensation is the highest.

                                       20

<PAGE>
               (2) (A) If the benefit is payable with respect to a Participant
who has been an Active Participant for fewer than 10 full years at the time that
retirement benefits begin, the dollar limitation described in Subparagraph
(a)(1)(A) of this Section shall be multiplied by a fraction, the numerator of
which is the number of the Participant's years as an Active Participant and the
denominator of which is 10.

                         (B) If the benefit is payable with respect to a
Participant who has fewer than 10 Years of Vesting Service, the limitations
described in Subparagraph (a)(1)(B), Paragraph (a)(4) and Subparagraphs
(c)(1)(A) and (c)(1)(B) of this Section shall be multiplied by a fraction, the
numerator of which is the number of the Participant's Years of Vesting Service
and the denominator of which is 10.

                         (C) The limitations of Subparagraph (a)(2)(A) of this
Section shall be applied separately with respect to each change in the benefit
structure of any qualified defined benefit plan of a Participating Company or
50% Affiliated Company, to the extent provided by the Secretary of the Treasury.

               (3) If a Participant's (or beneficiary's) Benefit Commencement
Date is not the date on which the Participant attains (or would have attained,
if living) his Social Security Retirement Age, the dollar limitation in
Subparagraphs (a)(1)(A) and (c)(1)(A) shall be adjusted as follows:

                         (A) If the Participant's (or beneficiary's) Benefit
Commencement Date occurs before the Participant attains (or would have attained,
if living) his Social Security Retirement Age, but on or after the date he
attains (or would have attained, if living) Age 62, the dollar limitation shall
be reduced by five-ninths percent (5/9 of 1%) for each of the first 36 months
and five-twelfths percent (5/12 of 1%) for each additional month by which the
Participant's (or beneficiary's) Benefit Commencement Date precedes the date he
attains (or would have attained, if living) his Social Security Retirement Age.

                         (B) If the Participant's (or beneficiary's) Benefit
Commencement Date occurs before the Participant attains (or would have attained,
if living) his Social Security Retirement Age and before he attains (or would
have attained, if living) Age 62, the dollar limitation shall be reduced in
accordance with Subparagraph (a)(3)(A) as if retirement benefits were
commencing to the Participant at Age 62, and this reduced dollar limitation
shall be further reduced to its Actuarial Equivalent beginning at the
Participant's (or beneficiary's) Benefit Commencement Date, using an interest
rate equal to the greater of five percent (5%) or the rate set forth

                                       21

<PAGE>
in Schedule A and the mortality decrement shall be ignored to the extent that a
forfeiture does not occur at death;

                         (C) If the Participant's (or beneficiary's) Benefit
Commencement Date occurs after the date the Participant attains (or would have
attained, if living) his Social Security Retirement Age, the dollar limitation
shall be adjusted to its Actuarial Equivalent beginning at the Participant's (or
beneficiary's) Benefit Commencement Date, using an interest rate equal to the
lesser of five percent (5%) or the rate set forth in Schedule A and the
mortality decrement shall be ignored to the extent that a forfeiture does not
occur at death.

                    (4) The annual benefit payable with respect to a Participant
may exceed 100% of his average Compensation for the highest three consecutive
calendar years as an Active Participant (but not in excess of the amount
applicable under Subparagraph (a)(1)(A) of this Section), if (A) the annual
benefit does not exceed $10,000 for the current Plan Year or for any prior Plan
Year, and (B) the Participant has at no time participated in a defined
contribution plan maintained by a Participating Company or a 50% Affiliated
Company.

               (b) If a Participant's benefits are otherwise limited by this
Section, the benefit payable to the Participant's Surviving Spouse or
beneficiary under Section 5.9 or 5.10 or Section 7.2 or Section 7.3 shall be
based upon the Participant's benefit determined without regard to this Section,
and the limitations of this Section shall apply to the resulting benefit payable
to the Surviving Spouse or beneficiary.

               (c) If in any Limitation Year a Participant is a participant in
one or more defined contribution plans sponsored by a Participating Company or a
50% Affiliated Company, the annual benefit referred to in Subsection (a) shall
be reduced, if necessary, so that the sum of the fractions described in
Paragraphs (1) and (2) of this Subsection does not exceed 1.0 for such
Limitation Year.

                    (1) Defined Benefit Fraction - A fraction, the numerator of
which is the Participant's projected annual benefit under all defined benefit
plans to which a Participating Company or 50% Affiliated Company contributes,
determined as of the close of the limitation years of such plans, and the
denominator of which is the lesser of: (A) 1.25 x $90,000 (or such other dollar
limitation in effect for the Limitation Year under section 415(b)(1)(A) of the
Code) or (B) one hundred forty percent (140%) of the Participant's highest
average Compensation over any three consecutive calendar years

                    (2) Defined Contribution Fraction - A fraction, the
numerator of which is the sum of the annual

                                       22

<PAGE>
additions to the Participant's accounts under such defined contribution plans
for all limitation years, and the denominator of which is the sum of the lesser
of the following amounts, determined for each of such limitation years with a
Participating Company or a 50% Affiliated Company: (A) 1.25 x $30,000 (or such
dollar limitation as in effect for such Limitation Year under section
415(c)(1)(A) for the Limitation Year) or (B) thirty-five percent (35%) of the
Participant's Compensation for such limitation year.

                    (3) Definitions - For the purpose of this Subsection,
"projected annual benefit" shall mean the annual benefit to which a Participant
would be entitled under the terms of a defined benefit plan if he had continued
employment until his normal retirement date under such plan and if his
compensation for the purpose of such plan had continued at the same rate.
"Annual additions" to a Participant's accounts under any defined contribution
plan for any limitation year shall mean the sum of (A) employer contributions;
(B) forfeitures; and (C) (i) for Limitation Years beginning on or after January
1, 1987, the Participant's own contributions, if any, and (ii) for Limitation
Years beginning before January 1, 1987, the lesser of (I) one-half of the
Participant's own contributions, if any, or (II) the Participant's own
contributions in excess of six percent (6%) of his compensation for such
limitation year.

               (d) The limitations described in Subsections (a) and (b) shall
not reduce any benefit which was accrued by a Participant under the Plan prior
to the first day of its Limitation Year beginning in 1987, using the applicable
maximum dollar limitations then in effect; provided, however, that this sentence
shall not apply to any Participant who was not a Participant as of the first day
of the first Limitation Year that began in 1987. For the purpose of this
Paragraph (c)(2), no change in the Plan after May 6, 1986 and no cost of living
adjustment after May 6, 1986 shall be taken into account.

               (e) (1) The Committee may elect to apply Paragraph (c)(2) with
respect to any Plan Year ending after December 31, 1982 by calculating the
denominator under Paragraph (c)(2) using an alternate amount for all Plan Years
ending before January 1, 1983. The alternate amount shall be equal to the amount
determined for the denominator under Paragraph (c)(2) as in effect for the Plan
Year ending in 1982 multiplied by the "transition fraction."

                    (2) The "transition fraction" shall be a fraction determined
as follows:

                         (A) The numerator shall consist of the lesser of: (i)
$51,875 or (ii) thirty-five percent (35%) of the Participant's compensation for
the Plan Year ending in 1981.

                                       23

<PAGE>
                         (B) The denominator shall consist of the lesser of: (i)
$41,500 or (ii) twenty-five percent (25%) of the Participant's compensation for
the Plan Year ending in 1981.

          5.13 Suspension of Benefits on Reemployment.

               (a) (1) If a Participant is employed after his Normal Retirement
Date in "qualified reemployment," (as defined in Subsection (c)), benefits
otherwise payable to the Participant shall be suspended for each calendar month
before his Required Beginning Date in which he continues his qualified
reemployment. In addition, no benefits shall be paid before a Participant's
Required Beginning Date during the qualified reemployment of such a Participant
who remains an Employee after his Normal Retirement Date. The rules relating to
such a suspension of benefits and the subsequent resumption of benefits are
described in this Section.

                    (2) The Committee shall notify the Participant by personal
delivery or first class mail of the suspension of his benefits during the first
month in which such suspension of benefits occurs.

                    (3) Each Participant receiving benefits under the Plan shall
be required to give notice to the Committee of any employment relationship which
such Participant has with a Participating Company or any Affiliated Company. The
Committee shall have the right to use all reasonable efforts to determine
whether such employment constitutes qualified reemployment. The Committee shall
also have the right to require the Participant to provide information sufficient
to prove that such employment is not qualified reemployment.

                    (4) A Participant may ask the Committee in writing to make a
determination as to whether specific contemplated employment will be qualified
reemployment. The Committee shall respond to such a request in writing within 60
days of its receipt of the request.

                    (5) Benefit payments suspended under this Section shall
resume (or commence, in the case of a Participant who continues in service after
his Normal Retirement Date) no later than the earlier of (A) the first day of
the third calendar month following the month in which the Participant's
qualified reemployment ceases or, if later, the first day of the calendar month
following receipt by the Committee of the Participant's notice that his
qualified reemployment has ceased or (B) the Participant's Required Beginning
Date. The initial resumption payment shall include payment for the current month
and for any previous calendar months since the cessation of the Participant'
qualified reemployment.

                                       24

<PAGE>
                    (6) The resumed benefit payments shall be recalculated on
the basis of Compensation earned and Years of Credited Service credited (if any)
during such period of reemployment and the provisions of the Plan as then in
effect. The resumed benefit payments shall be paid in the form determined
pursuant to Section 7.4. Resumed benefits shall be reduced by an amount equal to
any benefits which were paid to the Participant with respect to a calendar month
in which the Participant was engaged in qualified reemployment. However, the
reduction in any monthly benefit, other than the initial resumption payment,
shall not exceed twenty-five percent (25%) of such monthly benefit. Any
remaining reduction shall be applied to benefits payable in subsequent months.

               (b) Except as provided in Subsection (d) of this Section, if a
Participant is employed or reemployed by a Participating Company or an
Affiliated Company under any circumstances other than as described in Subsection
(a), the benefits otherwise payable to the Participant shall be continued during
such period of reemployment.

               (c) "Qualified reemployment" shall mean the employment of a
Participant by any Participating Company or Affiliated Company in such a
capacity that the Participant receives pay for or is entitled to be paid for at
least 40 Hours of Service (not including Hours of Service credited as a result
of back pay) during a calendar month.

               (d) If a Participant is reemployed before his Normal Retirement
Date as an Employee, benefits otherwise payable to the Participant shall be
suspended during his period of reemployment. Upon his subsequent Separation from
Service, his pension shall be recalculated on the basis of his current Age,
Compensation earned and Years of Credited Service credited (if any) during such
period of reemployment, and the provisions of the Plan as then in effect, but
shall be reduced by the Actuarial Equivalent of payments previously made prior
to his Normal Retirement Date. The resumed benefit payments shall be paid in the
form determined pursuant to Section 7.4.

                                   ARTICLE VI

                                     VESTING

          6.1 Nonforfeitable Amounts.

               (a) A Participant who is credited with one or more Hours of
Service as an Employee on or after January 1, 1989 shall have a 100%
nonforfeitable interest in his Accrued Benefit

                                       25

<PAGE>
when he has to his credit five Years of Vesting Service. A Participant who has
fewer than five Years of Vesting Service to his credit shall have no
nonforfeitable interest in his Accrued Benefit.

               (b) Notwithstanding the foregoing, a Participant who is an
Employee shall have a 100% nonforfeitable interest in his Accrued Benefit upon
the date on which he attains Age 65.

          6.2 Treatment of Terminated Vested Participant.

               (a) A Participant who has a Separation from Service, other than
by death or as provided in Article IV, when he has a nonforfeitable interest in
his Accrued Benefit under Section 6.1 shall be eligible for a deferred pension.
His Benefit Commencement Date shall be his Normal Retirement Date, if he is then
living. Subject to Section 5.12, the pension payable under this Section shall be
equal to the Participant's vested Accrued Benefit as of the date of his
Separation from Service. If the Participant has no nonforfeitable interest in
his Accrued Benefit, he shall forfeit his Accrued Benefit.

               (b) If a Participant who is eligible for a deferred pension under
Subsection (a) of this Section has 10 or more Years of Vesting Service to his
credit as of the date of his Separation from Service, he may elect as his
Benefit Commencement Date (1) the first day of the calendar month coincident
with or next following his 55th birthday, or (2) the first day of any month
after such birthday and before his Normal Retirement Date. Such election must be
made no earlier than 90 days prior to the Benefit Commencement Date elected by
the Participant.

               (c) A Participant who elects a Benefit Commencement Date under
Subsection (b) of this Section shall receive the benefit described in Subsection
(a) of this Section in an amount reduced under Section 5.5.

               (d) Notwithstanding any other provision in the Plan, an increase
in the Social Security taxable wage base or benefit level shall not reduce the
value of the nonforfeitable benefit payable to a Participant who has had a
Separation from Service with respect to service prior to his Separation from
Service, regardless of whether the Participant returns to employment in the
Covered Class.

               (e) Notwithstanding the above, a Participant described in Section
6.1(a) may elect as his Benefit Commencement Date, the first day of any calendar
month following the date he first incurs a One-Year Period of Severance and
prior to the date he is otherwise eligible for a distribution under Section
6.1(a) or 6.1(b) above; provided that, at the time of his election, the
Actuarial Equivalent single-sum value of his vested Accrued

                                       26

<PAGE>
Benefit is $10,000 or less. Such election must be made no earlier than 90 days
and not less than 30 days prior to the Benefit Commencement Date elected by the
Participant. A Participant who elects a Benefit Commencement Date under this
Subsection shall receive the benefit described in Subsection (a) of this Section
in the normal form described in Section 7.2 in an amount reduced as described
under Section 5.5 for the first 120 full calendar months and by an Actuarial
Equivalent reduction for each of the remaining full calendar months by which his
Benefit Commencement Date precedes his Normal Retirement Date, unless such
Participant elects to receive the optional form of benefit described in Section
7.3(d) in accordance with Section 7.4.

          6.3 Form and Payment of Benefit. Deferred vested benefits shall be
paid in a form provided for in Article VII.

          6.4 Termination of Benefit. The last deferred vested benefit payment
hereunder shall be made in accordance with the provisions of Article VII.

          6.5 Special Rules for Certain Terminated Participants.

               (a) Notwithstanding Section 2.1, if a Participant:

                    (1) is eligible for a deferred vested benefit under the
Plan,

                    (2) has been credited with at least one Hour of Service on
or after September 2, 1974,

                    (3) had a Separation from Service prior to the first day of
the first Plan Year beginning after December 31, 1975,

                    (4) has not thereafter been an Employee, and

                    (5) is alive on August 23, 1984 and has not begun to receive
benefit payments as of that date, such Participant's retirement benefits shall
be paid in accordance with Article VII. However, the consent of the
Participant's Spouse to a form of benefit other than the normal form of benefit
under Section 7.2(b) shall not be required.

               (b) Notwithstanding Section 2.1, if a Participant:

                    (1) has at least one Hour of Service after the first day of
the Plan Year beginning on or immediately after January 1, 1976,

                                       27

<PAGE>
                    (2) has not been credited with any Hours of Service after
August 22, 1984,

                    (3) has at least 10 Years of Vesting Service and a vested
right to all or a portion of his Accrued Benefit, and

                    (4) is alive on August 23, 1984 and has not begun to receive
benefit payments as of that date, he may elect to be covered by the survivor's
benefit described in Section 5.10.

                                  ARTICLE VII

                              PAYMENT OF BENEFITS

          7.1 Minimum Distribution Requirements.

               (a) Except as required by Subsection (c) of this Section, a
Participant's Benefit Commencement Date shall be no earlier than the date of his
Separation from Service.

               (b) Except as required by Subsection (c) of this Section, unless
a Participant elects otherwise, his Benefit Commencement Date shall be no later
than the 60th day after the close of the Plan Year in which the Participant
attains Age 65 or has a Separation from Service, whichever occurs last.

               (c) Except as provided in a valid deferral election filed by the
Participant with the Committee before January 1, 1984 and not subsequently
revoked, a Participant's Benefit Commencement Date shall be no later than his
Required Beginning Date.

               (d) Notwithstanding anything in the Plan to the contrary, if a
Participant dies before his Benefit Commencement Date, his entire interest under
the Plan, to the extent not forfeited, shall be distributed either:

                    (1) not later than December 31 of the calendar year
containing the fifth anniversary of the date of the Participant's death, or

                    (2) over the life or life expectancy of the Participant's
beneficiary, commencing no later than (A) December 31 of the calendar year
following the year of the Participant's death, or (B) if the beneficiary is the
Participant's Spouse, December 31 of the later of (i) the calendar year
following the year of the Participant's death or

                                       28

<PAGE>
(ii) the calendar year in which the Participant would have attained Age 70 1/2.

               (e) Notwithstanding anything in the Plan to the contrary, the
form and the timing of all distributions under the Plan shall be in accordance
with regulations issued by the Department of the Treasury under section
401(a)(9) of the Code, including the incidental death benefit requirements of
section 401(a)(9)(G) of the Code; provided, however, that subject to the
spouse's right to consent, the restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a written designation
to have his retirement benefit paid in an alternate method acceptable under
section 401(a) of the Code as in effect prior to the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982.

               (f) This Section shall apply to all Participants, including
Participants who had a Separation from Service or ceased to be an Employee in
the Covered Class prior to January 1, 1989.

          7.2 Normal Form of Benefit.

               (a) Benefits under the Plan shall be paid in the normal form of
benefit described in Subsection (b) or (c), as the case may be, unless the
Participant elects an optional form of benefit under Section 7.3. No spousal
consent shall be required for payment of benefits in the normal form.

               (b) The normal form of benefit for a Participant who does not
establish to the satisfaction of the Committee that he has no Spouse as of his
Benefit Commencement Date shall be a joint and survivor annuity, with monthly
installments payable after the death of the retired Participant to his Surviving
Spouse, if he leaves one, for the life of such Surviving Spouse in an amount
equal to fifty percent (50%) of the benefit paid to the retired Participant.

               (c) The normal form of benefit for a Participant who establishes
to the satisfaction of the Committee that he has no Spouse as of his Benefit
Commencement Date shall be a single life annuity with equal monthly installments
payable to the retired Participant for his lifetime.

          7.3 Optional Form of Benefit. In lieu of the normal form of benefit as
determined under Section 7.2, the Participant may elect, subject to the rules of
Section 7.4, one of the following optional forms of benefit:

               (a) a single life annuity with equal monthly installments payable
to the retired Participant for his lifetime; or

                                       29

<PAGE>
               (b) a joint and survivor annuity with any individual designated
beneficiary, payable in monthly installments to the Participant for his lifetime
and with fifty percent (50%), seventy-five percent (75%) or one hundred percent
(100%) of the amount of such monthly installment payable after the death of the
Participant to the designated beneficiary of such Participant, if then living,
for the life of such designated beneficiary. Notwithstanding the foregoing, the
percentage payable to the Participant's beneficiary (unless the beneficiary is
the Participant's Spouse) after the Participant's death may not exceed the
applicable percentage from the table in Schedule B; or

               (c) a single life annuity payable in equal monthly installments
to the retired Participant for his lifetime, with one hundred and twenty (120)
or one hundred and eighty (180) payments guaranteed. If the Participant dies
before he has received one hundred and twenty (120) or one hundred and eighty
(180) monthly payments, whichever applies, then beginning on the first day of
the month in which the Participant's death occurs and continuing until the
balance of the guaranteed payments have been made, payments in the amount
payable to the Participant shall be made to the Participant's beneficiary. If
the Participant's beneficiary dies before the full number of guaranteed monthly
payments have been made, the Actuarial Equivalent of any balance of guaranteed
payments shall be paid in a single sum to the estate of the last to survive of
the Participant or the beneficiary.

               (d) if the Actuarial Equivalent single-sum value of the
Participant's vested Accrued Benefit is $10,000 or less, a single sum payment in
lieu of any other benefits under the Plan in complete discharge of all
obligations to the Participant under the Plan.

          7.4 Rules for Election of Optional Form of Benefit. A Participant may
elect an optional form of benefit under Section 7.3 by filing a written notice
with the Committee in the form and manner prescribed by the Committee and in no
other. The following rules shall be applied in a uniform and nondiscriminatory
manner with respect to the election of optional forms of benefit.

          A Participant may elect an optional form of benefit at any time during
the period that begins 90 days prior to the first day of the calendar month in
which his Benefit Commencement Date falls and ends on his Benefit Commencement
Date. If a Participant's Benefit Commencement Date is less than ninety days
after the date on which the Participant notifies the Committee of his intent to
begin receiving benefits, the election

                                       30

<PAGE>
period shall end 90 days after the date such notice is given, and benefit
payments shall begin on the first day of the month coincident with or next
following the end of such election period, with benefit payments made
retroactively to the Participant's Benefit Commencement Date.

                    (2) Each Participant whose benefits have been suspended
during a period of reemployment pursuant to Section 5.13 may make the election
described in Paragraph (1) of this Subsection upon the resumption of benefit
payments, with respect to his entire Accrued Benefit. For purposes of applying
Paragraph (1) to the preceding sentence, the Participant's Benefit Commencement
Date shall be the date on which suspended benefits resume.

               (b) A Participant who does not establish to the satisfaction of
the Committee that he has no Spouse on his Benefit Commencement Date may elect
to receive an optional form of benefit under Section 7.3 only if:

                    (1) The benefit is a joint and survivor annuity with the
Participant's Spouse that provides for periodic payments after the Participant's
death each of which is equal to not less than fifty percent (50%) nor more than
one hundred percent (100%) of the periodic payment to the Participant; or

                    (2) (A) his Spouse (or the Spouse's legal guardian if the
Spouse is legally incompetent) executes a written instrument whereby such
Spouse:

                         (i) consents not to receive the normal form of benefit
described in Subsection (b) of Section 7.2;

                         (ii) consents to the specific optional form elected by
the Participant, or (provided such instrument acknowledges the Spouse's right to
limit consent to a specific optional form) to the Participant's right to choose
any optional form without any further consent by the Spouse; and

                         (iii) if applicable, consents in writing to either the
specific beneficiary or beneficiaries designated by the Participant pursuant to
his election or (provided such instrument acknowledges the Spouse's right to
limit consent to a specific beneficiary) to the Participant's right to designate
any beneficiary or beneficiaries without any further consent by the Spouse; and

                         (B) such instrument acknowledges the effect of the
election to which the Spouse's consent is being given, that the Spouse's consent
is irrevocable, and is witnessed by a Plan representative or a notary public; or

                                       31

<PAGE>
                    (3) the Participant (A) establishes to the satisfaction of
the Committee that his Spouse cannot be located or (B) furnishes a court order
to the Committee establishing that the Participant is legally separated or has
been abandoned (within the meaning of local law), unless a qualified domestic
relations order pertaining to such Participant provides that the Spouse's
consent must be obtained, or (C) that he is a Participant described in Section
6.5(a).

The consent of a Spouse in accordance with this Subsection (b) shall not be
effective with respect to other Spouses of the Participant, and an election to
which Paragraph (3) of this Subsection applies shall become void if the
circumstances causing the consent of the Spouse not to be required cease to
exist prior to the Participant's Benefit Commencement Date.

               (c) A Participant may revoke an election under Subsection (b) of
this Section. Such revocation may be made at any time during the election period
in which such election can be made. Such revocation shall not void any
prospectively effective consent given by his Spouse in connection with the
revoked election.

               (d) If a Participant's Spouse or other designated beneficiary
dies before the Participant's Benefit Commencement Date, but after an election
of a joint and survivor annuity has been made hereunder, the election shall be
automatically revoked.

               (e) (1) In the event of the divorce of a Participant prior to his
Benefit Commencement Date, but following the Participant's election of a form of
benefit, the election shall remain in effect unless the election is revoked by
the Participant, the Participant remarries, or a qualified domestic relations
order provides otherwise.

                    (2) Notwithstanding Subsection (a), if a Participant who is
receiving a joint and survivor annuity with his Spouse is divorced subsequent to
his Benefit Commencement Date, the joint and survivor annuity shall remain in
effect unless specifically revoked by a qualified domestic relations order. In
the event that the joint and survivor benefit is revoked under this Paragraph
(e)(2), the Participant's benefit shall be paid in the normal form under Section
7.2, unless the Participant elects an optional form of benefit under Section
7.3. The Participant may elect an optional form of benefit at any time during
the 90-day period that commences on the date the Participant is notified that
the order revoking the joint and survivor annuity is a qualified domestic
relations order.

          7.5 Explanations to Participants. The Committee shall provide to each
Participant no less than 30 days and no more than

                                       32

<PAGE>
90 days before his Benefit Commencement Date a written explanation of:

               (a) the terms and conditions of the normal form of benefit and
each optional form of benefit, including information explaining the relative
values of each form of benefit and, if the benefit is immediately distributable
within the meaning of section 411(a)(11) of the Code, the Participant's right to
defer receipt of his benefit until his Normal Retirement Date;

               (b) the Participant's right to waive the normal form of benefit
and the effect of such waiver;

               (c) the rights of the Participant's Spouse with respect to such
waiver; and

               (d) the right to revoke an election to receive an optional form
of benefit and the effect of such revocation.

          7.6 Termination of Benefits. The last benefit payment hereunder with
respect to any Participant shall be:

               (a) in the case of a single life annuity, the payment due on the
first day of the month in which occurs the death of the retired Participant;

               (b) in the case of a surviving Spouse's benefit or a joint and
survivor benefit, the payment due on the first day of the month in which occurs
the later of the death of the Participant or the death of the Spouse (or, if
applicable, the death of the designated beneficiary of such Participant); or

               (c) in the case of a single life annuity with 120 or 180 monthly
payments guaranteed, the later of the payment due on the first day of the month
in which the death of the Participant occurs or the 120th or 180th monthly
payment, whichever applies; or

               (d) in the case of a single sum payment, such benefit payment.

          7.7 Beneficiary Designation.

               (a) A Participant's designation of a beneficiary to receive any
remainder of a guaranteed number of payments may be made or changed until the
earlier of the Participant's death or the expiration of the guaranteed period.

               (b) Subject to the provisions of Subsection (a) and to the
provisions set forth above and in Section 5.10 relating to the rights of Spouses
to survivor benefit payments,

                                       33

<PAGE>
each Participant may designate or change the previous designation of the
beneficiary or beneficiaries who shall receive benefits, if any, after his
death. Such designation or change of designation shall be made by executing and
filing with the Committee a form prescribed by the Committee and in no other
manner. No designation, revocation, or change of beneficiaries shall be valid
and effective unless and until filed with the Committee. If no designation is
made, or if all of the beneficiaries named in such designation predecease the
Participant or cannot be located by the Committee, the interest, if any, of the
deceased Participant shall be paid to the Participant's Spouse, if living, or,
otherwise, to the Participant's estate.

          7.8 Small Benefit Payments and Repayment of Prior Distributions.

               (a) Notwithstanding any other provision of the Plan, if the
Actuarially Equivalent single-sum value of (1) a Participant's vested Accrued
Benefit or (2), if the Participant has died, the benefit payable under Section
5.9 or 5.10, is less than $3,500, such benefit shall be paid in a single sum as
soon as administratively practicable after the Participant's Separation from
Service, or death, if applicable.

               (b) If the value of the benefit described in Subsection (a) of
this Section is zero, the Participant shall be deemed to have received a
single-sum distribution under this Section of his entire vested Accrued Benefit
as of the date of his Separation from Service.

               (c) In the event a former Participant who has received a single
sum distribution of his entire vested Accrued Benefit under this Section or any
other provision of the Plan again becomes an Active Participant, such
Participant's Accrued Benefit determined at any time thereafter shall be reduced
by the Actuarial Equivalent of such distribution unless the Participant repays
the full amount of such distribution, plus interest at the rate described in
Section 411(c)(2)(C) of the Code, to the Plan not later than the earlier of (1)
the fifth anniversary of the date he again becomes an Active Participant or (2)
the first date on which he completes a period of five one-Year Periods of
Severance beginning after the distribution.

          7.9 Failure to Apply for Pension. Benefit payments shall commence when
properly written application for same is received by the Committee. In the event
that a Participant fails to apply to the Committee for pension benefits by the
earlier of (a) his Normal Retirement Date or by the date on which he has a
Separation from Service, if later, or (b) the end of the calendar year in which
he attains Age 70-1/2, the Committee shall make diligent efforts to locate such
Participant and obtain such

                                       34

<PAGE>
application and, in the case of a benefit described in Section 7.8, may file an
application for him if it has sufficient information to do so. In the event the
Participant fails to make application by his Required Beginning Date, the
Committee shall commence distribution as of the Required Beginning Date without
such application. No payments shall be made for the period in which benefits
would have been payable if the Participant had made timely application therefor.

          7.10 Mailing Address. Benefit payments and notifications hereunder
shall be deemed made when mailed to the last address furnished to the Committee
by the Participant or beneficiary to whom they are due.

          7.11 No Reduction for Changes in Social Security. Notwithstanding any
other provision of the Plan, an increase in the Social Security taxable wage
base or benefit level after a Participant's Separation from Service (or his
Benefit Commencement Date, if earlier) shall not reduce the amount of any
benefit to which the Participant or his beneficiary was entitled prior to such
increase with respect to service prior to the Participant's Separation from
Service (or his Benefit Commencement Date, if earlier). Furthermore, if the
Participant returns to employment as an Employee in the Covered Class, the
amount of any benefit payable to such Participant at his subsequent retirement
(or his Required Beginning Date, if earlier) shall not be less than the benefit
that the Participant was receiving prior to his return to employment, except as
provided in Section 5.13.

                                  ARTICLE VIII

                              THE FUND AND FUNDING

          8.1 Designation of Trustee. The Company, by appropriate resolution of
its Board of Directors, shall name and designate a Trustee and shall enter into
a Trust Agreement with such Trustee. The Company shall have the power, by
appropriate resolution of its Board of Directors, to amend the Trust Agreement,
remove the Trustee, and designate a successor Trustee, all as provided in the
Trust Agreement. All of the assets of the Plan shall be held by the Trustee for
use in accordance with the Plan.

          8.2 Contributions to the Fund. The benefits provided under the Plan
shall be financed exclusively by contributions made from time to time to the
Trustee by the Participating Companies, and by the Fund created thereby. Subject
to the provisions of applicable law, the liability of the Participating
Companies under the Plan shall be limited to the contributions

                                       35

<PAGE>
determined by the Participating Companies from time to time in accordance with
the advice and counsel of the Actuary. The funding policy applicable to the Fund
shall be established by the Committee and shall be reviewed from time to time.
All contributions are conditioned on their deductibility for Federal income tax
purposes.

          8.3 Use of Contributions to the Fund. The contributions deposited
under the terms of this Plan shall constitute the Fund held for the benefit of
Participants and their eligible survivors under and in accordance with this
Plan. No part of the corpus or income of the Fund shall be used for or diverted
to purposes other than exclusively for the benefit of such Participants and
their eligible survivors, and for necessary administrative costs; provided,
however, that in the event of the termination of the Plan, and after all fixed
and contingent liabilities have been satisfied, and upon compliance with section
4041 of ERISA, any remaining funds attributable to contributions by the
Participating Companies shall revert to those companies; and further provided
that in the case of a contribution (a) made by a Participating Company as a
mistake of fact, or (b) which is conditioned upon the initial qualification of
the Plan under section 401(a) of the Code, or (c) for which a tax deduction is
disallowed, in whole or in part, by the Internal Revenue Service, the
Participating Company shall be entitled to a refund of said contribution within
one year after payment of a contribution made as a mistake of fact, or within
one year of the date on which the initial qualification of the Plan is denied by
the Internal Revenue Service, or within one year after disallowance of the tax
deduction, to the extent of such disallowance, as the case may be.

          8.4 Trustee. The Trustee shall be the named fiduciary with respect to
management and control of Plan assets held by it and shall have exclusive and
sole responsibility for the custody and investment thereof in accordance with
the Trust Agreement.

          8.5 Forfeitures. Forfeitures shall not be applied to increase the
benefits of any Participant, but shall reduce the contributions of the
Participating Companies hereunder.

          8.6 Expenses of Administration. All expenses of administration of this
Plan shall be paid from the Fund unless they are paid directly by the
Participating Companies.

          8.7 Sole Source of Benefits. The Fund shall be the sole source for the
provision of benefits under the Plan. Neither the Participating Companies nor
any other person shall be liable therefor.

                                       36

<PAGE>
                                   ARTICLE IX

                                 ADMINISTRATION

          9.1 Committee. The Committee shall be the named fiduciary which shall
control and manage the operation of the Plan and shall administer the Plan. The
Committee members may, but need not, be Employees, and they shall serve at the
pleasure of the Company. They shall be entitled to reimbursement of expenses,
but those members of the Committee who are also Employees of a Participating
Company shall receive no compensation for their service on the Committee. Any
reimbursement of expenses of the Committee members shall be paid directly by the
Company. The Committee shall be responsible for the general administration of
the Plan under the policy guidance of the Company.

          9.2 Duties and Powers of Committee. In addition to the duties and
powers described elsewhere hereunder, the Committee shall have the following
specific duties and powers:

               (a) to retain such consultants, accountants, attorneys, and
Actuaries as may be deemed necessary or desirable to render statements, reports,
and advice with respect to the Plan and to assist the Committee in complying
with all applicable rules and regulations affecting the Plan; any consultants,
accountants, attorneys, and Actuaries may be the same as those retained by the
Company;

               (b) to decide appeals under this Article;

               (c) to establish a funding policy consistent with the objectives
of the Plan;

               (d) to enact uniform and nondiscriminatory rules and regulations
to carry out the provisions of the Plan;

               (e) to resolve questions or disputes relating to eligibility for
benefits or the amount of benefits under the Plan and authorizing the payment of
benefits;

               (f) to construe and interpret the provisions of the Plan,
including the supplying of any omissions in accordance with the intent of the
Plan;

               (g) to determine whether any domestic relations order received by
the Plan is a qualified domestic relations order as provided in section 414(p)
of the Code;

               (h) to evaluate administrative procedures;

                                       37

<PAGE>
               (i) to determine the size and type of any insurance contract to
be purchased by the Fund from any insurer and to designate the insurer from
which such insurance contract shall be purchased. All policies shall be issued
on a uniform basis as of each January 1 with respect to all Participants under
similar circumstances; and

               (j) to delegate such duties and powers as the Committee shall
determine from time to time to any person or persons.

          Any determination made by the Committee pursuant to this Article shall
be conclusive and binding upon all parties.

          The expenses incurred by the Committee in connection with the
operation of the Plan, including, but not limited to, the expenses incurred by
reason of the engagement of professional assistants and consultants, shall be
expenses of the Plan and shall be payable from the Fund at the direction of the
Committee. The Participating Companies shall have the option, but not the
obligation, to pay any such expenses, in whole or in part, and, by so doing, to
relieve the Fund from the obligation of bearing such expenses. Payment of any
such expenses by a Participating Company on one occasion shall not bind that
company to pay any similar expenses on any subsequent occasion.

          9.3 Functioning of Committee. The Committee and those persons or
entities to whom the Committee has delegated responsibilities shall keep
accurate records and minutes of meetings, interpretations, and decisions. The
Committee shall act by majority vote of the members, and such action shall be
evidenced by a written document.

          9.4 Disputes.

               (a) In the event that the Committee denies, in whole or in part,
a claim for benefits by a Participant or his beneficiary, the Committee shall
furnish notice of the denial to the claimant, setting forth:

                    (1) the specific reasons for the denial,

                    (2) specific reference to the pertinent Plan provisions on
which the denial is based,

                    (3) a description of any additional information necessary
for the claimant to perfect the claim and an explanation of why such information
is necessary, and

                    (4) appropriate information as to the steps to be taken if
the claimant wishes to submit his claim for review.

                                       38

<PAGE>
          Such notice shall be forwarded to the claimant within 90 days of the
Committee's receipt of the claim; provided, however, that in special
circumstances the Committee may extend the response period for up to an
additional 90 days, in which event it shall notify the claimant in writing of
the extension, and shall specify the reason or reasons for the extension.

               (b) Within 60 days of receipt of a notice of claim denial, a
claimant or his duly authorized representative may petition the Committee in
writing for a full and fair review of the denial. The claimant or his duly
authorized representative shall have the opportunity to review pertinent
documents and to submit issues and comments in writing to the Committee. The
Committee shall review the denial and shall communicate its decision and the
reasons therefor to the claimant in writing within 60 days of receipt of the
petition; provided, however, that in special circumstances the Committee may
extend the response period for up to an additional 60 days, in which event it
shall notify the claimant in writing prior to the commencement of the extension.

          9.5 Indemnification. Each member of the Committee, and any other
person who is an Employee or director of a Participating Company or an
Affiliated Company shall be indemnified and held harmless by the Company against
and with respect to all damages, losses, obligations, liabilities, liens
deficiencies, costs and expenses, including without limitation, reasonable
attorney's fees and other costs incident to any suit action, investigation,
claim or proceedings to which he may be party by reason of his performance of
administrative functions and duties under the Plan, except in relation to
matters as to which he shall be held liable for an act of willful misconduct in
the performance of his duties. The foregoing right to indemnification shall be
in addition to such other rights as the Committee member, or other person may
enjoy as a matter of law or by reason of insurance coverage of any kind. Rights
granted hereunder shall be in addition to and not in lieu of any rights to
indemnification to which the Committee member, or other person may be entitled
pursuant to the by-laws of the Participating Company.

                                   ARTICLE X

                           AMENDMENT AND TERMINATION

          10.1 Power of Amendment and Termination.

               (a) It is the intention of each Participating Company that this
Plan will be permanent. However, each

                                       39

<PAGE>
Participating Company reserves the right to terminate its participation in this
Plan at any time by action of its board of directors or other governing body.
Furthermore, the Company reserves the power to amend or terminate the Plan at
any time by action of the Board of Directors.

               (b) Each amendment to the Plan shall be binding on each
Participating Company if such Participating Company (1) consents to such
amendment at any time, or (2) fails to object thereto within thirty days after
receiving notice thereof.

               (c) Any amendment or termination of the Plan shall become
effective as of the date designated by the Board of Directors. Except as
expressly provided elsewhere in the Plan, prior to the satisfaction of all
liabilities with respect to the benefits provided under this Plan, no amendment
or termination shall cause any part of the monies contributed hereunder to
revert to the Participating Companies or to be diverted to any purpose other
than for the exclusive benefit of Participants and their beneficiaries.

          10.2 Disposition on Termination.

               (a) Upon the termination or partial termination of the Plan, each
Active Participant with respect to whom the Plan is terminating who would not
have a nonforfeitable right to one hundred percent (100%) of his Accrued Benefit
if his employment terminated on the date of the termination or partial
termination of the Plan shall become fully vested and shall have a
nonforfeitable right to his Accrued Benefit. However, in the event of such a
termination, each Participant and beneficiary shall have recourse toward
satisfaction of his nonforfeitable right to a pension only from Plan assets or
from the Pension Benefit Guaranty Corporation, to the extent that it guarantees
benefits.

               (b) The amount of the Fund shall be determined and, after
providing for expenses incident to termination and liquidation, the remaining
assets thereof shall be allocated for the purpose of paying benefits
proportionately among each of the priority groups described below in the
following order of precedence:

                    (1) to provide benefits to retired Participants and
beneficiaries who began receiving benefits at least three years before the
Plan's termination (including those benefits which would have been received for
at least three years if the Participant had retired that long ago), based on
Plan provisions in effect five years prior to termination during which period
such benefit would be the least, provided that the lowest benefit in pay status
during a three-year period shall be considered the benefit in pay status for
such period;

                                       40

<PAGE>
                    (2) to provide all other Accrued Benefits guaranteed by
Federal law (or which would be so guaranteed but for section 4022(b)(5) or 4022B
of ERISA);

                    (3) to provide all other vested Accrued Benefits (determined
before application of Subsection (a) of this Section);

                    (4) to provide all remaining non-vested Accrued Benefits.

               (c) If the assets available for allocation under any priority
group (other than as provided in priority groups (3) and (4)) are insufficient
to satisfy in full the Accrued Benefits of all Participants and beneficiaries,
the assets shall be allocated pro rata among such Participants and beneficiaries
on the basis of the Actuarial Equivalent single-sum value of their respective
benefits (as of the termination date). The foregoing payments, and payments in
the event that assets are insufficient to pay the Accrued Benefits provided in
priority groups (3) and (4), will be paid in accordance with regulations
prescribed by the Pension Benefit Guaranty Corporation. The allocation of assets
upon termination of the Plan will be carried out in such a manner as to preserve
the qualification of the Plan under section 401(a) of the Code.

          In the event that all Accrued Benefits described above have been fully
funded, any remaining funds shall revert to the Participating Companies in such
proportion as the Participating Companies shall determine.

          10.3 Limitation on Benefits.

               (a) In the event of Plan termination, the benefit payable to any
highly compensated employee or any highly compensated former employee (as
defined in section 414(q) of the Code and regulations thereunder) shall be
limited to a benefit that is nondiscriminatory under section 401(a)(4) of the
Code. If payment of benefits is restricted in accordance with this Subsection
(a), assets in excess of the amount required to provide such restricted benefits
shall become a part of the assets available under Section 10-2 for allocation
among Participants and their joint annuitants and beneficiaries whose benefits
are not restricted under this Subsection (a).

               (b) The restrictions of this Subsection (b) shall apply prior to
termination of the Plan to any Participant who is a highly compensated employee
or a highly compensated former employee and who is one of the 25 highest paid
employees or former employees of a Participating Company for any Plan Year. The
annual payments to any such Participant shall be limited to

                                       41

<PAGE>
an amount equal to the payments that would have been made to the Participant
under a single life annuity that is the Actuarial Equivalent of the sum of the
Participant's Accrued Benefit and any other benefits under the Plan.

               (c) The restrictions in Subsection (b) shall not apply:

                    (1) if, after the payment of benefits to such Participant,
the value of the Plan assets equals or exceeds 110 percent of the value of the
current liabilities (within the meaning of section 412(l)(7) of the Code); or

                    (2) if the value of the benefit is less than one percent
(1%) of the value of current liabilities.

          10.4 Merger, Consolidation, or Transfer. In case of any merger or
consolidation with, or transfer of assets or liabilities to, any other plan, as
provided in the Code, the benefit of any Participant or beneficiary immediately
after such merger, consolidation, or transfer (if the Plan had then terminated)
shall be at least equal to the benefit such Participant or beneficiary would
have received immediately before such merger, consolidation, or transfer (if the
Plan had then terminated).

                                   ARTICLE XI

                              TOP-HEAVY PROVISIONS

          11.1 General. The following provisions shall apply automatically to
the Plan and shall supersede any contrary provisions for each Plan Year in which
the Plan is a Top-Heavy Plan (as defined below). It is intended that this
Article shall be construed in accordance with the provisions of section 416 of
the Code.

          11.2 Definitions. The following definitions shall supplement those set
forth in Article I of the Plan:

               (a) "Aggregation Group" means, for any Plan Year,

                    (1) each qualified retirement plan (including a frozen plan
or a plan which has been terminated during the 60-month period ending on the
Determination Date) of Participating Company or an Affiliated Company in which a
Key Employee is a participant,

                    (2) each other qualified retirement plan (including a frozen
plan or a plan which has been terminated

                                       42

<PAGE>
during the 60-month period ending on the Determination Date) of a Participating
Company or an Affiliated Company which enables any plan in which a Key Employee
participates to meet the requirements of sections 401(a)(4) or 410 of the Code,
and

                    (3) any or all other qualified retirement plans (including a
frozen plan or a plan which has been terminated during the 60-month period
ending on the Determination Date) of a Participating Company or an Affiliated
Company if (A) the plans in the Aggregation Group would be Top-Heavy Plans if
each such plan were not included in the Aggregation Group but are not Top-Heavy
Plans when such plan is included in the Aggregation Group, and (B) the
Aggregation Group, including such plan, meets the requirements of sections
401(a)(4) and 410 of the Code.

               (b) "Determination Date" means, for any Plan Year, the last day
of the preceding Plan Year, except that for the first Plan Year it shall mean
the last day thereof.

               (c) "Key Employee" means, with respect to any Plan Year:

                    (1) any Employee or former Employee who at any time during
the 60-month period ending on the Determination Date was:

                         (A) an officer of a Participating Company having
compensation as defined in section 414(q)(7) of the Code for a Plan Year during
such period greater than fifty percent (50%) of the amount in effect under
section 415(b)(1)(A) of the Code for the calendar year in which such Plan Year
ends; provided, that no more than 50 Employees (or, if less, the greater of
three Employees or ten percent (10%) of the greatest number of Employees,
including leased employees within the meaning of section 414(n) or 414(o) of the
Code, employed by all Participating Companies and all Affiliated Companies
during such 60-month period, but excluding Employees described in section
414(q)(8) of the Code) shall be treated as officers; or

                         (B) one of the 10 Employees having compensation as
defined in section 414(q)(7) of the Code for a Plan Year during such period
greater than the amount described in section 415(c)(1)(A) of the Code for the
calendar year in which such Plan Year ends and owning (or considered as owning,
within the meaning of section 318 of the Code) the largest interests in any
Participating Company or Affiliated Company, provided that such interest exceeds
one-half of one percent (0.5%) of the total share ownership of the Participating
Company or Affiliated Company, the total number of individuals described in this
Subparagraph (B) being limited to 10 for the entire 60-month period; or

                                       43

<PAGE>
                         (C) a five-percent (5%) owner of a Participating
Company; or

                         (D) a one-percent (1%) owner of a Participating Company
having compensation as defined in section 414(q)(7) of the Code for a Plan Year
during such period in excess of $150,000; or

                    (2) a beneficiary of an individual described in Paragraph
(1) of this Subsection. For purposes of this Subsection, Compensation shall
include elective deferrals under sections 125, 402(a)(8), 402(h), and 403(b) of
the Code. Determinations under this Subsection shall be made in accordance with
section 416(i) of the Code.

               (d) "Key Employee Ratio" means, for any For purposes of this
Subsection, Compensation shall include elective deferrals under sections 125,
402(a)(8), 402(h) and 403(b) of the Code. Determination Date, the ratio of the
amount described in Paragraph (1) of this Subsection to the amount described in
Paragraph (2) of this Subsection, after deducting from each such amount any
portion thereof described in Paragraph (3) of this Subsection, where:

                    (1) the amount described in this Paragraph is the sum of (A)
the present value of all accrued benefits of Key Employees under all qualified
defined benefit plans included in the Aggregation Group, (B) the balances in all
of the accounts of Key Employees under all qualified defined contribution plans
included in the Aggregation Group, and (C) the amounts distributed from all
plans in such Aggregation Group to or on behalf of any Key Employee during the
period of five Plan Years ending on the Determination Date, except any benefit
paid on account of death to the extent it exceeds the accrued benefits or
account balances immediately prior to death;

                    (2) the amount described in this Paragraph is the sum of (A)
the present value of all accrued benefits of all participants under all
qualified defined benefit plans included in the Aggregation Group, (B) the
balances in all of the accounts of all participants under all qualified defined
contribution plans included in the Aggregation Group, and (C) the amounts
distributed from all plans in such Aggregation Group to or on behalf of any
participant during the period of five Plan Years ending on the Determination
Date; and

                    (3) the amount described in this Paragraph is the sum of (A)
all rollover contributions (or fund to fund transfers) to the Plan by an
Employee after December 31, 1983 from a plan sponsored by an employer which is
not a Participating

                                       44

<PAGE>
Company or an Affiliated Company; (B) any amount that is included in Paragraphs
(1) and (2) of this Subsection for a person who is a Non-Key Employee as to the
Plan Year of reference but who was a Key Employee as to any earlier Plan Year;
and (C) for Plan Years beginning after December 31, 1984, any amount that is
included in Paragraphs (1) and (2) of this Subsection for a person who has not
performed any services for any Participating Company during the five-year period
ending on the Determination Date.

The present value of accrued benefits under any defined benefit plan shall be
determined on the basis of the assumptions described in Schedule A and,
effective January 1, 1987, under the method used for accrual purposes for all
plans maintained by all Participating Companies and Affiliated Companies if a
single method is used by all such plans, or, otherwise, the slowest accrual
method permitted under section 411(b)(1)(C) of the Code.

               (e) "Non-Key Employee" means, for any Plan Year, (1) an Employee
or former Employee who is not a Key Employee with respect to such Plan Year; and
(2) a beneficiary of an individual described in Paragraph (1) of this
Subsection.

               (f) "Super Top-Heavy Plan" means, for any Plan Year, each plan in
the Aggregation Group for such Plan Year if, as of the applicable Determination
Date, the Key Employee Ratio exceeds ninety percent (90%).

               (g) "Top-Heayy Compensation" means, for any Participant for any
Plan Year, the average of his annual Compensation over the period of five
consecutive Plan Years (or, if shorter, the longest period of consecutive Plan
Years during which the Participant was in the employ of any Participating
Company) yielding the highest average, disregarding (1) Compensation for Plan
Years ending prior to January 1, 1984 and (2) Compensation for Plan Years after
the close of the last Plan Year in which the Plan was a Top-Heavy Plan.

               (h) "Top-Heavy Plan" means, for any Plan Year, each plan in the
Aggregation Group for such Plan Year if, as of the applicable Determination
Date, the Key Employee Ratio exceeds sixty percent (60%).

               (i) "Year of Top-Heayy Service" means, for any Participant, a
Plan Year in which he completes 1,000 or more Hours of Service, excluding (1)
Plan Years commencing prior to January 1, 1984 and (2) Plan Years in which the
Plan is not a Top-Heavy Plan.

          11.3 Minimum Benefit for Non-Key Employees.

               (a) If the Plan is a Top-Heavy Plan in any Plan Year, each
Participant who is a Non-Key Employee in such Plan

                                       45

<PAGE>
Year (other than a Participant who was a Key Employee as to any earlier Plan
Year) shall have a minimum Accrued Benefit. Such Accrued Benefit shall be the
lesser of:

                    (1) two percent (2%) of the Participant's Top-Heavy
Compensation multiplied by the Participant's Years of Top-Heavy Service, or

                    (2) twenty percent (20%) of the Participant's Top-Heavy
Compensation.

               (b) If a Non-Key Employee described in Subsection (a) of this
Section participates in both a defined benefit plan and a defined contribution
plan described in Paragraphs (a)(1) and (2) of this Section, he shall have the
minimum Accrued Benefit described in this Section.

          11.4 Vesting.

               (a) Change in Schedule. Each Participant's vested interest in his
Accrued Benefit shall be determined in accordance with the following schedule
for any Plan Year in which the Plan is a Top-Heavy Plan unless Section 6.1
provides more rapid vesting for such Participant:

          Years of Vesting Service    Percent Vested
            Less than two years               0%
                      two years              20%
                      three years            40%
                      four years             60%
                      five years             80%
                      six years             100%

               (b) Shift Out of Top-Heayy Status. If the Plan ceases to be a
Top-Heavy Plan, the vesting schedule set forth in Section 6.1 shall again apply
to all Years of Vesting Service. However, a Participant shall maintain the same
vested interest in his Accrued Benefit determined under the schedule in
Subsection 11.4(a) as of the date on which the Plan ceases to be a Top-Heavy
Plan until the Participant's vested percentage under Section 6.1 exceeds the
percentage maintained under the schedule in Section 11.4(a).

               (c) Special Election of Vesting Schedule. Each Participant with
at least three Years of Vesting Service at the time that the Plan ceases to be a
Top-Heavy Plan may elect to continue to have his vested percentage computed
under the Plan in accordance with the vesting schedule set forth in Section
11.4(a). The period during which the election may be made shall commence on the
date on which the Participant is informed that

                                       46

<PAGE>
the Plan is no longer a Top-Heavy Plan and shall end 60 days thereafter.

          11.5 Adjustment to Maximum Benefit Limitation.

               (a) For each Plan Year in which the Plan is (1) a Super Top-Heavy
Plan or (2) a Top-Heavy Plan and the Board of Directors does not make the
election to amend the Plan to provide the minimum benefit described in
Subsection (c) the 1.25 factor in the defined benefit and defined contribution
fractions described in Article V shall be reduced to 1.0. The adjustment
described in this Subsection shall not apply to a Participant during any period
in which the Participant earns no additional accrued benefit under any defined
benefit plan and has no employer contributions, forfeitures, or voluntary
nondeductible contributions allocated to his accounts under any defined
contribution plan.

               (b) In the case of any Top-Heavy Plan to which Section 5.12(e)
applies, "$41,500" shall be substituted for "$51,875" in the calculation of the
numerator of the transition fraction.

               (c) If, in any Plan Year in which the Plan is a Top-Heavy Plan
but not a Super Top-Heavy Plan, the Aggregation Group also includes a defined
contribution plan, the Board of Directors may elect to use a factor of 1.25 in
computing the denominator of the defined benefit and defined contribution
fractions described in Article V. In the event of such election, the minimum
benefit described in Section 11.3(a) for each Non-Key Employee who is not
covered under a defined contribution plan providing the minimum benefit
described in the following sentence shall be increased as follows:

                    (1) "three percent (3%)" shall be substituted for "two
percent (2%)" in Section 11.3(a)(1), and

                    (2) Section 12.3(a)(2) shall be deemed to read, "the
Participant's Top-Heavy Compensation multiplied by the sum of (A) twenty percent
(20%) and (B) one percent (1%) for each Year of Top-Heavy Service, up to a
maximum of 10 such Years of Top-Heavy Service."

The minimum benefit in the preceding sentence shall not apply to any Non-Key
Employee who is covered under a defined contribution plan (as described in
Section 11.3(b)) providing a minimum contribution for such Non-Key Employee of
seven and one-half percent (7 1/2%) of the Non-Key Employee's annual
compensation.

          11.6 Suspension of Benefits. Notwithstanding the other provisions of
the Plan, the payment of a Participant's benefits

                                       47

<PAGE>
shall not be suspended during the Participant's reemployment during any period
in which the Plan is a Top-Heavy Plan.

                                  ARTICLE XII

                               GENERAL PROVISIONS

          12.1 No Employment Rights. Neither the action of the Company in
establishing the Plan, nor of any Participating Company in adopting the Plan,
nor any provisions of the Plan, nor any action taken by the Company, any
Participating Company or the Committee shall be construed as giving to any
Employee the right to be retained in the employ of the Company or any
Participating Company, or any right to payment except to the extent of the
benefits provided in the Plan to be paid from the Fund.

          12.2 Governing Law. Except to the extent superseded by ERISA, all
questions pertaining to the validity, construction, and operation of the Plan
shall be determined in accordance with the laws of the state in which the
principal place of business of the Company is located.

          12.3 Severability of Provisions. If any provision of this Plan is
determined to be void by any court of competent jurisdiction, the Plan shall
continue to operate and, for the purposes of the jurisdiction of that court
only, shall be deemed not to include the provisions determined to be void.

          12.4 No Interest in Fund. No person shall have any interest in, or
right to, any part of the principal or income of the Fund, except as and to the
extent expressly provided in this Plan and in the Trust Agreement.

          12.5 Spendthrift Clause. No benefit payable at any time under this
Plan and no interest or expectancy herein shall be anticipated, assigned, or
alienated by any Participant or beneficiary, or subject to attachment,
garnishment, levy, execution, or other legal or equitable process, except for
(1) a Federal tax levy made pursuant to section 6331 of the Code and (2) any
benefit payable pursuant to a domestic relations order which is determined to be
a qualified domestic relations order as defined in the Code. Any attempt to
alienate or assign a benefit hereunder, whether currently or hereafter payable,
shall be void.

          12.6 Incapacity. If the Committee deems any Participant who is
entitled to receive payments hereunder incapable of receiving or disbursing the
same by reason of Age, illness, infirmity, or incapacity of any kind, the
Committee may direct the Trustee to apply such payments directly for the
comfort, support, and maintenance of such Participant, or to pay

                                       48

<PAGE>
the same to any responsible person caring for the Participant who is determined
by the Committee to be qualified to receive and disburse such payments for the
Participant's benefit; and the receipt of such person shall be a complete
acquittance for the payment of the benefit. Payments pursuant to this Section
shall be complete discharge to the extent thereof of any and all liability of
the Participating Companies, the Committee, the Trustee, and the Fund.

          12.7 Withholding . The Committee and the Trustee shall have the right
to withhold any and all state, local, and Federal taxes which may be withheld in
accordance with applicable law.

          12.8 Missing Participants. In the event that all, or any portion, of
the distribution payable to a Participant or his beneficiary hereunder shall, at
the expiration of five (5) years after it shall become payable, remain unpaid
solely by reason of the inability of the Committee, after sending a registered
letter, return receipt requested, to the last known address, and after further
diligent effort, to ascertain the whereabouts of such Participant or his
beneficiary, the amount so distributable shall be forfeited and shall be used to
reduce the cost of the Plan. In the event a Participant or beneficiary is
located subsequent to his benefit being forfeited, such benefit shall be
restored.

          12.9 Receipt and Release. Subject to the provisions of ERISA and to
the extent permitted by ERISA, any final payments or distribution to any
Participant, his Spouse or beneficiary or his legal representative in accordance
with this Plan shall be in full satisfaction of all claims against the Fund, the
Trustee, the Committee and the Participating Companies. The Trustee, the
Participating Company, the Committee, or any combination of them may require a
Participant, his Spouse or beneficiary, or legal representative to execute a
receipt and release of all claims under this Plan upon final payment or
distribution or a receipt to the extent of any partial payment or distribution;
and the form of any such receipt and release shall be determined by the Trustee,
the Participating Company, the Committee or any combination of them.

                                       49

<PAGE>
     Effective as of January 1, 1989.

                                       NATIONAL PENN, BANCSHARES, INC.

                                       By:/s/Wayne R. Weidner
                                          ------------------------
                                          Executive Vice President

<PAGE>
                                   SCHEDULE A

                             ACTUARIAL EQUIVALENTS

          I. The following assumptions will be used for determining Actuarially
Equivalent benefits, except as specified to the contrary in the Plan: 7%
interest and the 1984 Unisex Pension Mortality Table. Any factors not included
herein will be determined by the Committee.

          II. Notwithstanding the foregoing, effective January 1, 1987, for
purposes of determining Actuarially Equivalent single-sum amounts, the
applicable interest rate shall be used; provided, however, that the single-sum
amount of a Participant's Accrued Benefit determined under this Part II shall
not be less than the single-sum amount of a Participant's Accrued Benefit
determined as of the date of reference using the interest rate in effect under
the Plan on such date.

For purposes of this Schedule A, "applicable interest rate" means the interest
rate which would be used as of the first day of the Plan Year containing the
date of the distribution by the Pension Benefit Guaranty Corporation for
purposes of determining the present value of a lump sum distribution on plan
termination.

                                       51

<PAGE>
                                   SCHEDULE B

                 MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLE

                                    TABLE I

     Excess of Age of employee                              Applicable
     over Age of beneficiary                                percentage
     -----------------------                                ----------

          10 years or less.....................................100%
          11 ...................................................96%
          12 ...................................................93%
          13 ...................................................90%
          14 ...................................................87%
          15 ...................................................84%
          16 ...................................................82%
          17 ...................................................79%
          18 ...................................................77%
          19 ...................................................75%
          20 ...................................................73%
          21 ...................................................72%
          22 ...................................................70%
          23 ...................................................68%
          24 ...................................................67%
          25 ...................................................66%
          26 ...................................................64%
          27 ...................................................63%
          28 ...................................................62%
          29 ...................................................61%
          30 ...................................................60%
          31 ...................................................59%
          32 ...................................................59%
          33 ...................................................58%
          34 ...................................................57%
          35 ...................................................56%
          36 ...................................................56%
          37 ...................................................55%
          38 ...................................................55%
          39 ...................................................54%
          40 ...................................................54%
          41 ...................................................53%
          42 ...................................................53%
          43 ...................................................53%
          44 and greater........................................52%

                                       52

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}]]