Document:

<PAGE>   1
                                                                   EXHIBIT 10.86

                           FOURTH AMENDMENT AGREEMENT

         THIS FOURTH AMENDMENT AGREEMENT ("Agreement") is entered into as of the
30th day of September, 2000 by and between GOODY'S FAMILY CLOTHING, INC., a
Tennessee corporation, GOODY'S MS, L.P., a Tennessee limited partnership,
GOODY'S IN, L.P., a Tennessee limited partnership (collectively, the "Original
Borrowers"), GFCTX, L.P., a Tennessee limited partnership, GFCTN, L.P., a
Tennessee limited partnership, GFCGA, L.P., a Tennessee limited partnership, GFC
FS, LLC, a Delaware limited liability company (successor to GFC FS, Inc.
pursuant to a merger) (the "Additional Borrowers"; the Original Borrowers and
the Additional Borrowers are sometimes referred to herein as the "Borrowers"),
TREBOR of TN, INC., a Tennessee corporation, SYDOOG, INC., a Delaware
corporation, GOFAMCLO, INC., a Delaware corporation (collectively, the
"Guarantors"),those several lenders who are or become parties to the Credit
Agreement (as hereinafter defined) (collectively, the "Lenders" and,
individually, a "Lender"), and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a
national banking association with offices in Knoxville, Tennessee, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").

                                   WITNESSETH:

         WHEREAS, pursuant to that certain Credit Agreement dated May 25, 1995
between Goody's Family Clothing, Inc., the Administrative Agent and Lenders, as
amended and restated by that certain Amended and Restated Credit Agreement dated
as of October 31, 1996 between the Original Borrowers, the Guarantors, Lenders
and the Administrative Agent and as further amended by that certain Amendment
Agreement dated May 16, 1997 among the Original Borrowers, the Guarantors,
Lenders and the Administrative Agent, that certain Second Amendment Agreement
dated September 23, 1997 (the "Second Amendment Agreement") among the Original
Borrowers, GFCTX, L.P., the Guarantors, Lenders and the Administrative Agent and
that certain Third Amendment Agreement dated as of May 26, 1998 (the "Third
Amendment Agreement") among the Original Borrowers, the Additional Borrowers,
the Guarantors, the Lender and the Administrative Agent (collectively, the
"Credit Agreement"), Lenders have committed to make loans to the Original
Borrowers in the principal amount of $130,000,000 (the "Loans") pursuant to the
terms and provisions thereof;

         WHEREAS, pursuant to the Credit Agreement, the Original Borrowers
delivered a Third Amended and Restated Promissory Note dated May 26, 1998 to
each Lender (collectively, the "Original Notes") in the amount of such Lender's
Commitment (as defined in the Credit Agreement);

         WHEREAS, the parties wish to modify the Credit Agreement to extend the
Termination Date of the Credit Agreement, to change certain terms relating to
the issuance of Letters of Credit, to change certain covenants, to decrease the
total amount of the Commitments and modify the amount of certain Lender's
Commitments and to make certain related modifications; and

         WHEREAS, all terms capitalized herein and not otherwise defined shall
have the meanings ascribed to them in the Credit Agreement;

<PAGE>   2

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:

         1.       Termination Date. The definition of Termination Date in the
Credit Agreement is hereby amended in its entirety to state as follows:

                           "Termination Date" shall mean June 30, 2001 or such
                           Termination Date as may be extended pursuant to
                           Section 2.3.8.

                  All indebtedness of the Borrowers incurred under the Credit
Agreement shall be due and payable as of the Termination Date set forth above
except as provided in Section 2.3.

         2.       New Notes. The Borrowers shall deliver to each Lender a Fourth
Amended and Restated Promissory Note substantially in the form attached hereto
as Exhibit A (the "Fourth Amended Notes") reflecting the amount of such Lender's
Commitment. Upon the execution and delivery of the Fourth Amended Notes to the
Lenders, the Lender shall return the Original Notes to the Borrowers marked
"canceled".

         3.       Amendment Relating to Commitment Amounts. Section 2.1.1 of the
Credit Agreement is hereby amended to decrease the aggregate amount of the
Commitments from $130,000,000 to $115,000,000. Section 10 of the Third Amendment
Agreement is hereby deleted in its entirety. The Commitment and Percent of each
Lender as set forth on the signature pages to the Credit Agreement are hereby
amended to be as follows:

<TABLE>
<CAPTION>
                  Lender                 Commitment            Percentage
                  ------                 ----------            ----------

         <S>                             <C>                   <C>
         First Tennessee Bank            $27,250,000             23.70%
         National Association

         AmSouth Bank                    $26,000,000             22.61%

         Southtrust Bank,                $22,750,000             19.78%

         First Union National            $22,750,000             19.78%
         Bank

         Wachovia Bank, N.A.             $16,250,000             14.13%
</TABLE>

         4.       Amendments Relating to Commitment Amounts.

         (a)      Clause (a) of Section 2.3.1. is hereby deleted and replaced to
                  state as follows:

                                       2
<PAGE>   3

                  (a) each Letter of Credit by its terms shall terminate no
                  later than February 28, 2002 (other than Standby Letters of
                  Credit which shall terminate no later than June 30, 2002), and

         (b)      Section 2.3 is hereby amended to add the following
                  subsections:

                           2.3.5. Substitution of Letters of Credit on
                  Termination Date. Borrowers will use their best efforts to
                  include a provision in a form satisfactory to the
                  Administrative Agent (a "Substitution Provision") in each
                  Letter of Credit issued pursuant to the terms of this
                  Agreement that has an expiration date after June 30, 2001,
                  which provision will permit Borrowers to terminate each such
                  Letter of Credit and substitute for each such Letter of Credit
                  a letter of credit from a financial institution with a
                  long-term debt rating from a major rating agency not lower
                  than the long-term debt rating of the Administrative Agent. On
                  the Termination Date (prior to its extension pursuant to
                  Section 2.3.8), or the immediately preceding Business Day if
                  the Termination Date is not a Business Day, the Borrowers will
                  use its best efforts to be delivered to each beneficiary of a
                  Letter of Credit that includes a Substitution Provision a
                  substitute letter of credit as described above and will use
                  its best efforts to cause each Letter of Credit including such
                  Substitution Provision to be returned to the Administrative
                  Agent for cancellation. In the event each Letter of Credit
                  issued pursuant to this Agreement has not been cancelled
                  pursuant to the terms of this Section 2.3.5 as of the
                  Termination Date (prior to its extension pursuant to Section
                  2.3.8), the Borrowers shall comply with Sections 2.3.6 and
                  2.3.7.

                           2.3.6. Security Letters of Credit. In the event all
                  of the Letters of Credit are not cancelled as provided in
                  Section 2.3.5 as of the Termination Date (prior to its
                  extension pursuant to Section 2.3.8) or otherwise terminated
                  with the consent of each beneficiary of each such Letter of
                  Credit as of such Termination Date, the Borrowers will use
                  their best efforts to deliver to the Administrative Agent for
                  the benefit of Lenders one or more letters of credit in favor
                  of the Administrative Agent and in a form satisfactory to the
                  Administrative Agent (the "Security Letters of Credit") that
                  will permit the Administrative Agent to draw immediately on
                  such Security Letters of Credit to reimburse Lenders for
                  drawings under the Letters of Credit in the event the
                  Borrowers do not reimburse Lenders on the next business day
                  after receipt of Lender's written demand for the amounts of
                  such drawings on the Letters of Credit.

                           2.3.7. Deposit in Collateral Account. In the event
                  the Borrowers are unable to deliver Security Letters of Credit
                  as provided in Section 2.3.6, the Borrowers shall, on the
                  Termination Date (prior to its extension pursuant to Section
                  2.3.8), or the immediately preceding Business Day if the
                  Termination Date is not a Business Day, cause to be deposited
                  in the Collateral Account created and maintained pursuant to
                  Section 11.3 an amount equal to the amount of Letter of Credit
                  Liabilities in

                                       3
<PAGE>   4

                  immediately available (same day) funds for its benefit and the
                  ratable benefit of Lenders. The amounts in such Collateral
                  Account shall be administered and applied as provided in
                  Section 11.3.

                           2.3.8. Extension of Termination Date. In the event
                  the Borrowers comply fully with the requirements of Sections
                  2.3.6 and 2.3.7, the Termination Date shall automatically be
                  extended until February 28, 2002 (June 30, 2002 if any Standby
                  Letters of Credit remain outstanding at such time), subject to
                  the following conditions: (a) all Revolving Credit Loans shall
                  be due and payable on June 30, 2001, and Lenders shall have no
                  further obligation to make Revolving Credit Loans under this
                  Agreement thereafter; (b) Lenders shall have no further
                  obligation to issue Letters of Credit under this Agreement;
                  (c) after each Letter of Credit Borrowing occurs, payment
                  shall be due and payable on the next business day after
                  receipt of Lender's written demand; and (d) the Borrowers
                  shall not be required to comply with the covenants and
                  negative covenants in Articles 9 and 10 of this Agreement. In
                  the event the Borrowers do not comply fully with the
                  requirements of Sections 2.3.6 and 2.3.7, (i) the Termination
                  Date shall not be extended, (ii) an Event of Default shall be
                  deemed to have occurred hereunder, and Lenders shall be
                  entitled to exercise all remedies hereunder and at law or
                  equity, (iii) in addition to all other remedies available to
                  Lenders hereunder or at law or equity, Lenders shall be
                  entitled to seek and obtain specific performance of the
                  Borrowers' obligations under this Section 2.3 and (iv) an
                  amount equal to all Letter of Credit Liabilities as well as
                  all other amounts then due and payable under this Agreement
                  shall be due and payable to Lenders.

         5.       Commitment Fee; Interest and Fee Margins. The following
amendments are made to the provisions of Sections 2.11.1, 2.13.1, 2.13.2 and
2.13.3 of the Credit Agreement:

                  a.       Commitment Fees. Section 2.11.1 is hereby amended to
                  change the per annum fee for each Lender's agreement to
                  participate in the Facilities from eleven one-hundredths of
                  one percent (0.11%) to twenty one-hundredths of one percent
                  (0.20%).

                  b.       Applicable LIBOR Margin. Section 2.13.1 is hereby
                  amended to change the Applicable LIBOR Margin from thirty
                  one-hundredths of one percent (.30%) to one and fifty
                  one-hundredths of one percent (1.50%).

                  c.       Applicable Commercial Letter of Credit Fee
                  Percentage. Section 2.13.2 is hereby amended to change the
                  Applicable Commercial Letter of Credit Fee Percentage from
                  thirty one-hundredths of one percent (.30%) to sixty
                  one-hundredths of one percent (.60%).

                                       4
<PAGE>   5

                  d.       Applicable Standby Letter of Credit Fee Percentage.
                  Section 2.13.3 is hereby amended to change the Applicable
                  Standby Letter of Credit Fee Percentage from fifty
                  one-hundredths of one percent (.50%) to one and fifty
                  one-hundredths of one percent (1.50%).

         6.       Financial Covenants. Sections 10.1.1, 10.1.3 and 10.1.4 of the
Credit Agreement are hereby amended to state as follows:

                  10.1.1 Current Ratio. Permit on a consolidated basis in
                  accordance with GAAP the Current Ratio as of the end of any
                  Fiscal Quarter to be less than 1.15 to 1.00 or permit the
                  Current Ratio as of the end of any Fiscal Year to be less than
                  1.25 to 1.00.

                  10.1.3. Shareholders Equity. Permit on a consolidated basis in
                  accordance with GAAP the Shareholders Equity of Borrowers and
                  Guarantors in the aggregate (a) to be less than $206,500,000
                  as of October 28, 2000, (b) to be less than $215,000,000 as of
                  February 3, 2001, or (c) to be less than $216,000,000 as of
                  May 5, 2001.

                  10.1.4. Capital Expenditures. Permit Capital Expenditures made
                  by Borrowers and Guarantors in the aggregate to exceed
                  $60,000,000 during the Fiscal Year ending February 3, 2001.

         7.       Miscellaneous Amendments.

         (a)      Section 11.3.1. is hereby deleted and replaced to state as
follows:

                           11.3.1. Collateral Account. If an Event of Default
                  shall have occurred and be continuing, the Administrative
                  Agent may, and upon the request of Requisite Lenders shall,
                  whether in addition to the taking by the Administrative Agent
                  of any of the actions described in Section 11.2 or otherwise,
                  make demand upon the Borrowers and Guarantors to, and
                  forthwith upon such demand such Person(s) will, pay to the
                  Administrative Agent at its Lending Office, for its benefit
                  and the ratable benefit of the Lenders, in immediately
                  available (same day) funds for deposit in a Collateral Account
                  to be maintained for the benefit of the Administrative Agent
                  and the ratable benefit of the Lenders at such place as shall
                  be designated by the Administrative Agent, an amount equal to
                  the amount of the Letter of Credit Liabilities. Such
                  Collateral Account shall also be created and funded in such
                  amount if the Borrowers are required to deposit amounts in the
                  Collateral Account pursuant to Section 2.3.7 hereof.

         (b)      Section 13.2.1. is hereby amended to add the following
sentence at the end of such section:

                  Upon any such assignment, the assignor shall pay an assignment
                  fee of $2,500 to the Administrative Agent.

                                       5
<PAGE>   6

         (c)      Section 14.3.4. is hereby amended to delete the period at the
end of that section, to insert a semi-colon followed by the word "or" in place
of such period, and to add the following clause at the end of such Section:

                  (i)      amend Section 2.3 or 11.3 of this Agreement.

         8.       Continuing Effect of Documents. Except as expressly modified
by or provided for in this Agreement, the terms and provisions of the Credit
Agreement and all other documents relating to the Loans shall remain in full
force and effect as originally executed.

         9.       Representations and Warranties. The representations and
warranties of the Borrowers and Guarantors in the Credit Agreement are true and
correct on and as of the date hereof as though made on this date.

         10.      No Default. As of the date hereof, each Borrower and Guarantor
is in full compliance with all of the terms and provisions set forth in the
Credit Agreement as amended hereby, including without limitation the covenants
and agreements set forth in Articles 8, 9 and 10 of the Credit Agreement, and
all of the instruments and documents executed in connection therewith, and no
Event of Default, as defined in Article 11 of the Credit Agreement, nor any
event which, upon notice, lapse of time or both, would constitute an Event of
Default, has occurred or is continuing.

         11.      Completeness and Modification. This Agreement constitutes the
entire agreement between the parties hereto as to the transactions contemplated
hereby and supersedes all prior discussions, understandings or agreements
between the parties hereto.

         12.      No Novation. Except as set forth herein, this Agreement does
not constitute a discharge or novation of any promissory note existing prior to
this Agreement or any other documents executed in connection with the Loans, and
such documents shall continue in full force and effect and shall be fully
binding upon all parties hereto.

         13.      Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and assigns.

         14.      Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

                                       6
<PAGE>   7

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

                                        BORROWERS:

                                        GOODY'S FAMILY CLOTHING, INC.

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

                                        GOODY'S MS, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GOODY'S IN, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GFCTX, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                       7
<PAGE>   8

                                        GFCTN, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GFCGA, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GFC FS, LLC

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

                                        GUARANTORS:

                                        SYDOOG, INC., a Delaware corporation

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

                                        GOFAMCLO, INC., a Delaware corporation

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

                                        TREBOR OF TN, INC., a Tennessee
                                         corporation

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

                        [LENDERS' SIGNATURE PAGES FOLLOW]

                                       8
<PAGE>   9

    [Lender's Signature Page to Amendment Agreement dated September 30, 2000]

                                      FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
                                      as a Lender and as Administrative Agent

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

                                      Address:  First Tennessee Bank National
                                                 Association
                                                Corporate Lending Group
                                                Plaza Tower
                                                800 S. Gay Street
                                                Knoxville, Tennessee  37929
                                                Attn: James H. Atchley
                                                Telecopy No. 423-971-2883

                                      Initial Commitment: $27,250,000
                                      Percentage: 23.70%

                                       9
<PAGE>   10

    [Lender's Signature Page to Amendment Agreement dated September 30, 2000]

                                        AMSOUTH BANK, as a Lender

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

                                        Address:  505 S. Gay Street, Mezzanine
                                                  Knoxville, Tennessee  37902
                                                  Attn: Eric V. Schwarzentraub
                                                  Telecopy No. 615-521-5352

                                        Initial Commitment: $26,000,000
                                        Percentage: 22.61%

                                       10
<PAGE>   11

    [Lender's Signature Page to Amendment Agreement dated September 30, 2000]

                                    SOUTHTRUST BANK,
                                    as a Lender

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

                                    Address:  230 4th Avenue North, 8th Floor
                                              Nashville, Tennessee 37219
                                              Attn: Marcy Harris/Bradford Vieira
                                              Telecopy No. 615-880-4004

                                    Initial Commitment: $22,750,000
                                    Percentage: 19.78%

                                       11
<PAGE>   12

    [Lender's Signature Page to Amendment Agreement dated September 30, 2000]

                                        FIRST UNION NATIONAL BANK,
                                         as a Lender

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

                                        Address:  One South Penn Square
                                                  Widener Building, 12th Floor
                                                   (PA4843)
                                                  Philadelphia, PA  19107
                                                  Attn: Joan Anderson:
                                                  Telecopy No. (215) 786-2877

                                        Initial Commitment: $22,750,000
                                        Percentage: 19.78%

                                       12
<PAGE>   13

    [Lender's Signature Page to Amendment Agreement dated September 30, 2000]

                                  WACHOVIA BANK, N.A., as a Lender

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

                                  Address:  191 Peachtree Street, NE, 29th floor
                                            Atlanta, Georgia 30303
                                            Attn: John Tibe
                                            Telecopy No. 404-332-5016

                                  Initial Commitment: $16,250,000
                                  Percentage: 14.13%

                                       13
<PAGE>   14

                                    EXHIBIT A

                   FOURTH AMENDED AND RESTATED PROMISSORY NOTE

$__________                    Knoxville, Tennessee           September __, 2000

         FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation, GOODY'S MS, L.P., a Tennessee limited
partnership, GOODY'S IN, L.P., a Tennessee limited partnership, GFCTX, L.P., a
Tennessee limited partnership, GFCTN, L.P., a Tennessee limited partnership,
GFCGA, L.P., a Tennessee limited partnership, and GFC FS, LLC, a Delaware
limited liability company (successor to GFC FS, Inc. pursuant to a merger)
(collectively, "Maker"), jointly and severally, promise to pay to the order of
_______________________ ____________ ("Payee"; Payee, and any subsequent
holder[s] hereof, being hereinafter referred to collectively as "Holder"), the
principal sum of _____________________________ AND 00/100THS DOLLARS
($_____________) or, if less, the aggregate unpaid principal amount of all Loans
advanced here against pursuant to that certain Amended and Restated Credit
Agreement dated October 31, 1996, by and among Maker, certain guarantors, First
Tennessee Bank National Association, a national banking association, as
Administrative Agent, and the Lenders party thereto, as amended by that certain
Amendment Agreement dated as of May 16, 1997, by that certain Second Amendment
Agreement dated September 23, 1997, by that certain Third Amendment Agreement as
of May 26, 1998, and by that certain Fourth Amendment Agreement dated as of even
date herewith (together with any amendments thereto and/or modifications
thereof, herein referred to as the "Credit Agreement"; capitalized terms used
but not otherwise defined herein shall have the same meanings as in the Credit
Agreement), together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event shall the interest and loan charges payable in respect of the
indebtedness evidenced hereby exceed the maximum amounts from time to time
allowed to be collected under applicable law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.

         Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In

                                       14
<PAGE>   15

lieu of making recordation or endorsement, Holder hereby is authorized, at its
option, to record the date and principal amount of each Loan made by it, and the
amount of each payment of principal and interest made to such Holder with
respect to such Loans, on its books and records in accordance with its usual and
customary practice, which recordation shall constitute prima facie evidence of
the Loans made by Holder to Maker and payments in respect thereof made by Maker
to Holder, absent manifest error.

         Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the aggregate principal amount of
$115,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:

                  (a)      if for any reason whatsoever the interest or loan
         charges paid or contracted to be paid by Maker to any of the Lenders in
         respect of the Loans shall exceed the maximum amount collectible under
         the law applicable to such Lender, then, in that event, and
         notwithstanding anything to the contrary in the Credit Agreement, the
         Notes or any other Loan Document (i) the aggregate of all consideration
         that constitutes interest or loan charges under the law applicable to
         such Lender that is contracted for, taken, reserved, charged or
         received under the Credit Agreement, the Notes or any other Loan
         Document or otherwise in connection with the Obligations under no
         circumstances shall exceed the maximum amounts allowed by such
         applicable law, and any excess paid to any Lender shall be credited by
         such Lender on the principal amount of the Obligations (or, to the
         extent the principal amount outstanding under the Credit Agreement, the
         Notes and the other Loan Documents has been or thereby would be paid in
         full, refunded to Maker), and (ii) in the event that the maturity of
         any or all of the Obligations is accelerated by reason of an election
         of the Lenders resulting from any Default under the Credit Agreement or
         otherwise, or in the event of any required or permitted prepayment,
         then such consideration that constitutes interest or loan

                                       15
<PAGE>   16

         charges under the law applicable to any Lender may never include more
         than the maximum amounts allowed by the law applicable to such Lender,
         and any excess interest or loan charges provided for in the Credit
         Agreement or otherwise shall be canceled automatically as of the date
         of such acceleration or prepayment and, if theretofore paid, shall be
         credited by such Lender on the principal amount of the Obligations (or,
         to the extent the principal amount of the Obligations has been or
         thereby would be paid in full, refunded by such Lender to Maker);

                  (b)      all sums paid or agreed to be paid to the Lenders for
         the use, forbearance or detention of sums due under the Credit
         Agreement shall, to the extent permitted by applicable law, be
         prorated, allocated and spread throughout the full term of the
         Obligations until payment in full so that the rate or amount of
         interest and loan charges on account of the Obligations will not exceed
         any applicable legal limitation; and

                  (c)      the right to accelerate the maturity of the
         Obligations does not include the right to accelerate the maturity of
         any interest or loan charges not otherwise accrued on the date of such
         acceleration, and the Lenders do not intend to charge or collect any
         unearned interest or loan charges in the event of any such
         acceleration.

         This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note amends and restates that certain Third Amended and Restated
Promissory Note of Maker in favor of Payee dated May 26, 1998 in its entirety.

         It is anticipated by Maker and the Lenders that additional parties
affiliated with Maker ("Additional Makers") will assume the obligations of and
become additional Makers of this Note. Each such Additional Maker shall be added
as a Maker of this Note by the execution of a Promissory Note Assumption
Agreement in the form attached hereto to be annexed to this Note. No signatures
by Lender or Maker (other than an Additional Maker) shall be required to add an
Additional Maker as a party to this Note.

                                       16
<PAGE>   17

                  IN WITNESS WHEREOF, the undersigned Maker has caused this Note
to be executed by its duly authorized officers as of the date first above
written.

                                        MAKER:

                                        GOODY'S FAMILY CLOTHING, INC.

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

                                        GOODY'S MS, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GOODY'S IN, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GFCTX, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                       17
<PAGE>   18

                                        GFCTN, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GFCGA, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GFC FS, LLC

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

                                       18
<PAGE>   19

                      PROMISSORY NOTE ASSUMPTION AGREEMENT

         This Promissory Note Assumption Agreement is executed this ____ day of
_________________, 199___ by ______________________________, a
___________________ (the "Additional Maker") to be affixed to the original
Fourth Amended and Restated Promissory Note dated September __, 2000, in the
original principal amount of _________________________ Dollars
($_______________) made by GOODY'S FAMILY CLOTHING, INC., a Tennessee
corporation, GOODY'S MS, L.P., a Tennessee limited partnership, GOODY'S IN,
L.P., a Tennessee limited partnership, GFCTX, L.P., a Tennessee limited
partnership, GFCTN, L.P., a Tennessee limited partnership, GFCGA, L.P., a
Tennessee limited partnership, and GFC FS, LLC, a Delaware limited liability
company (successor to GFC FS, Inc. pursuant to a merger) (the "Original
Borrowers"), to the order of __________________ _____________________ (the
"Promissory Note") and any additional makers who have joined in the execution of
a prior Promissory Note Assumption Agreement.

         The undersigned Additional Maker hereby assumes and promises to pay to
the order of ___________________________________, jointly and severally with the
Original Borrowers and any other person or entity who has assumed the payment
obligations with respect thereto, the principal sum of
__________________________ ______________ Dollars ($__________________) with
interest on the disbursed and unpaid principal balance from the date of
disbursement, until paid, at the rate of interest specified in the Promissory
Note. The undersigned Additional Maker, jointly and severally with the Original
Borrower and any other person or entity who has assumed the payment obligations
with respect thereto, assumes all obligations under the Promissory Note as
specified therein.

         IN WITNESS WHEREOF, the undersigned Additional Maker has executed this
Agreement on the ___ day of _________________, 2000, which Agreement shall be so
firmly affixed to the Promissory Note as to become a part thereof.

                                    ADDITIONAL MAKER

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

                                       19
<PAGE>   20

                   FOURTH AMENDED AND RESTATED PROMISSORY NOTE

$27,250,000                    Knoxville, Tennessee           September 30, 2000

         FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation, GOODY'S MS, L.P., a Tennessee limited
partnership, GOODY'S IN, L.P., a Tennessee limited partnership, GFCTX, L.P., a
Tennessee limited partnership, GFCTN, L.P., a Tennessee limited partnership,
GFCGA, L.P., a Tennessee limited partnership, and GFC FS, LLC, a Delaware
limited liability company (successor to GFC FS, Inc. pursuant to a merger)
(collectively, "Maker"), jointly and severally, promise to pay to the order of
FIRST TENNESSEE BANK NATIONAL ASSOCIATION ("Payee"; Payee, and any subsequent
holder[s] hereof, being hereinafter referred to collectively as "Holder"), the
principal sum of TWENTY-SEVEN MILLION TWO HUNDRED FIFTY THOUSAND AND 00/100THS
DOLLARS ($27,250,000) or, if less, the aggregate unpaid principal amount of all
Loans advanced here against pursuant to that certain Amended and Restated Credit
Agreement dated October 31, 1996, by and among Maker, certain guarantors, First
Tennessee Bank National Association, a national banking association, as
Administrative Agent, and the Lenders party thereto, as amended by that certain
Amendment Agreement dated as of May 16, 1997, by that certain Second Amendment
Agreement dated September 23, 1997, by that certain Third Amendment Agreement as
of May 26, 1998, and by that certain Fourth Amendment Agreement dated as of even
date herewith (together with any amendments thereto and/or modifications
thereof, herein referred to as the "Credit Agreement"; capitalized terms used
but not otherwise defined herein shall have the same meanings as in the Credit
Agreement), together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event shall the interest and loan charges payable in respect of the
indebtedness evidenced hereby exceed the maximum amounts from time to time
allowed to be collected under applicable law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.

         Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the
<PAGE>   21

Loans made by Holder to Maker and payments in respect thereof made by Maker to
Holder, absent manifest error.

         Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the aggregate principal amount of
$115,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:

                  (a)      if for any reason whatsoever the interest or loan
         charges paid or contracted to be paid by Maker to any of the Lenders in
         respect of the Loans shall exceed the maximum amount collectible under
         the law applicable to such Lender, then, in that event, and
         notwithstanding anything to the contrary in the Credit Agreement, the
         Notes or any other Loan Document (i) the aggregate of all consideration
         that constitutes interest or loan charges under the law applicable to
         such Lender that is contracted for, taken, reserved, charged or
         received under the Credit Agreement, the Notes or any other Loan
         Document or otherwise in connection with the Obligations under no
         circumstances shall exceed the maximum amounts allowed by such
         applicable law, and any excess paid to any Lender shall be credited by
         such Lender on the principal amount of the Obligations (or, to the
         extent the principal amount outstanding under the Credit Agreement, the
         Notes and the other Loan Documents has been or thereby would be paid in
         full, refunded to Maker), and (ii) in the event that the maturity of
         any or all of the Obligations is accelerated by reason of an election
         of the Lenders resulting from any Default under the Credit Agreement or
         otherwise, or in the event of any required or permitted prepayment,
         then such consideration that constitutes interest or loan charges under
         the law applicable to any Lender may never include more than the
         maximum amounts allowed by the law applicable to such Lender, and any
         excess interest or loan charges provided for in the Credit Agreement or
         otherwise shall be canceled automatically

                                        2

<PAGE>   22

         as of the date of such acceleration or prepayment and, if theretofore
         paid, shall be credited by such Lender on the principal amount of the
         Obligations (or, to the extent the principal amount of the Obligations
         has been or thereby would be paid in full, refunded by such Lender to
         Maker);

                  (b)      all sums paid or agreed to be paid to the Lenders for
         the use, forbearance or detention of sums due under the Credit
         Agreement shall, to the extent permitted by applicable law, be
         prorated, allocated and spread throughout the full term of the
         Obligations until payment in full so that the rate or amount of
         interest and loan charges on account of the Obligations will not exceed
         any applicable legal limitation; and

                  (c)      the right to accelerate the maturity of the
         Obligations does not include the right to accelerate the maturity of
         any interest or loan charges not otherwise accrued on the date of such
         acceleration, and the Lenders do not intend to charge or collect any
         unearned interest or loan charges in the event of any such
         acceleration.

         This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note amends and restates that certain Third Amended and Restated
Promissory Note of Maker in favor of Payee dated May 26, 1998 in its entirety.

         It is anticipated by Maker and the Lenders that additional parties
affiliated with Maker ("Additional Makers") will assume the obligations of and
become additional Makers of this Note. Each such Additional Maker shall be added
as a Maker of this Note by the execution of a Promissory Note Assumption
Agreement in the form attached hereto to be annexed to this Note. No signatures
by Lender or Maker (other than an Additional Maker) shall be required to add an
Additional Maker as a party to this Note.

                                        3

<PAGE>   23

                  IN WITNESS WHEREOF, the undersigned Maker has caused this Note
to be executed by its duly authorized officers as of the date first above
written.

                                        MAKER:

                                        GOODY'S FAMILY CLOTHING, INC.

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

                                        GOODY'S MS, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GOODY'S IN, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GFCTX, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        4

<PAGE>   24

                                        GFCTN, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GFCGA, L.P.

                                        By: TREBOR of TN, Inc., General Partner

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

                                        GFC FS, LLC

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

                                       5
<PAGE>   25

                   FOURTH AMENDED AND RESTATED PROMISSORY NOTE

$26,000,000                 Knoxville, Tennessee             September 30, 2000

         FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation, GOODY'S MS, L.P., a Tennessee limited
partnership, GOODY'S IN, L.P., a Tennessee limited partnership, GFCTX, L.P., a
Tennessee limited partnership, GFCTN, L.P., a Tennessee limited partnership,
GFCGA, L.P., a Tennessee limited partnership, and GFC FS, LLC, a Delaware
limited liability company (successor to GFC FS, Inc. pursuant to a merger)
(collectively, "Maker"), jointly and severally, promise to pay to the order of
AMSOUTH BANK ("Payee"; Payee, and any subsequent holder[s] hereof, being
hereinafter referred to collectively as "Holder"), the principal sum of TWENTY
SIX MILLION AND 00/100THS DOLLARS ($26,000,000) or, if less, the aggregate
unpaid principal amount of all Loans advanced here against pursuant to that
certain Amended and Restated Credit Agreement dated October 31, 1996, by and
among Maker, certain guarantors, First Tennessee Bank National Association, a
national banking association, as Administrative Agent, and the Lenders party
thereto, as amended by that certain Amendment Agreement dated as of May 16,
1997, by that certain Second Amendment Agreement dated September 23, 1997, by
that certain Third Amendment Agreement as of May 26, 1998, and by that certain
Fourth Amendment Agreement dated as of even date herewith (together with any
amendments thereto and/or modifications thereof, herein referred to as the
"Credit Agreement"; capitalized terms used but not otherwise defined herein
shall have the same meanings as in the Credit Agreement), together with interest
on the unpaid principal balance of the Loans evidenced hereby at the rate(s)
specified in the Credit Agreement; provided that in no event shall the interest
and loan charges payable in respect of the indebtedness evidenced hereby exceed
the maximum amounts from time to time allowed to be collected under applicable
law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.

         Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the

<PAGE>   26

Loans made by Holder to Maker and payments in respect thereof made by Maker to
Holder, absent manifest error.

         Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the aggregate principal amount of
$115,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:

                  (a)      if for any reason whatsoever the interest or loan
         charges paid or contracted to be paid by Maker to any of the Lenders in
         respect of the Loans shall exceed the maximum amount collectible under
         the law applicable to such Lender, then, in that event, and
         notwithstanding anything to the contrary in the Credit Agreement, the
         Notes or any other Loan Document (i) the aggregate of all consideration
         that constitutes interest or loan charges under the law applicable to
         such Lender that is contracted for, taken, reserved, charged or
         received under the Credit Agreement, the Notes or any other Loan
         Document or otherwise in connection with the Obligations under no
         circumstances shall exceed the maximum amounts allowed by such
         applicable law, and any excess paid to any Lender shall be credited by
         such Lender on the principal amount of the Obligations (or, to the
         extent the principal amount outstanding under the Credit Agreement, the
         Notes and the other Loan Documents has been or thereby would be paid in
         full, refunded to Maker), and (ii) in the event that the maturity of
         any or all of the Obligations is accelerated by reason of an election
         of the Lenders resulting from any Default under the Credit Agreement or
         otherwise, or in the event of any required or permitted prepayment,
         then such consideration that constitutes interest or loan charges under
         the law applicable to any Lender may never include more than the
         maximum amounts allowed by the law applicable to such Lender, and any
         excess interest or loan charges provided for in the Credit Agreement or
         otherwise shall be canceled automatically

                                       2
<PAGE>   27

         as of the date of such acceleration or prepayment and, if theretofore
         paid, shall be credited by such Lender on the principal amount of the
         Obligations (or, to the extent the principal amount of the Obligations
         has been or thereby would be paid in full, refunded by such Lender to
         Maker);

                  (b)      all sums paid or agreed to be paid to the Lenders for
         the use, forbearance or detention of sums due under the Credit
         Agreement shall, to the extent permitted by applicable law, be
         prorated, allocated and spread throughout the full term of the
         Obligations until payment in full so that the rate or amount of
         interest and loan charges on account of the Obligations will not exceed
         any applicable legal limitation; and

                  (c)      the right to accelerate the maturity of the
         Obligations does not include the right to accelerate the maturity of
         any interest or loan charges not otherwise accrued on the date of such
         acceleration, and the Lenders do not intend to charge or collect any
         unearned interest or loan charges in the event of any such
         acceleration.

         This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note amends and restates that certain Third Amended and Restated
Promissory Note of Maker in favor of Payee dated May 26, 1998 in its entirety.

         It is anticipated by Maker and the Lenders that additional parties
affiliated with Maker ("Additional Makers") will assume the obligations of and
become additional Makers of this Note. Each such Additional Maker shall be added
as a Maker of this Note by the execution of a Promissory Note Assumption
Agreement in the form attached hereto to be annexed to this Note. No signatures
by Lender or Maker (other than an Additional Maker) shall be required to add an
Additional Maker as a party to this Note.

                                       3
<PAGE>   28

         IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.

                                    MAKER:

                                    GOODY'S FAMILY CLOTHING, INC.

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

                                    GOODY'S MS, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GOODY'S IN, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFCTX, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                       4
<PAGE>   29

                                    GFCTN, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFCGA, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFC FS, LLC

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

                                       5
<PAGE>   30

                   FOURTH AMENDED AND RESTATED PROMISSORY NOTE

$22,750,000                 Knoxville, Tennessee             September 30, 2000

         FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation, GOODY'S MS, L.P., a Tennessee limited
partnership, GOODY'S IN, L.P., a Tennessee limited partnership, GFCTX, L.P., a
Tennessee limited partnership, GFCTN, L.P., a Tennessee limited partnership,
GFCGA, L.P., a Tennessee limited partnership, and GFC FS, LLC, a Delaware
limited liability company (successor to GFC FS, Inc. pursuant to a merger)
(collectively, "Maker"), jointly and severally, promise to pay to the order of
SOUTHTRUST BANK ("Payee"; Payee, and any subsequent holder[s] hereof, being
hereinafter referred to collectively as "Holder"), the principal sum of
TWENTY-TWO MILLION SEVEN HUNDRED FIFTY THOUSAND AND 00/100THS DOLLARS
($22,750,000) or, if less, the aggregate unpaid principal amount of all Loans
advanced here against pursuant to that certain Amended and Restated Credit
Agreement dated October 31, 1996, by and among Maker, certain guarantors, First
Tennessee Bank National Association, a national banking association, as
Administrative Agent, and the Lenders party thereto, as amended by that certain
Amendment Agreement dated as of May 16, 1997, by that certain Second Amendment
Agreement dated September 23, 1997, by that certain Third Amendment Agreement as
of May 26, 1998, and by that certain Fourth Amendment Agreement dated as of even
date herewith (together with any amendments thereto and/or modifications
thereof, herein referred to as the "Credit Agreement"; capitalized terms used
but not otherwise defined herein shall have the same meanings as in the Credit
Agreement), together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event shall the interest and loan charges payable in respect of the
indebtedness evidenced hereby exceed the maximum amounts from time to time
allowed to be collected under applicable law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.

         Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the

<PAGE>   31

Loans made by Holder to Maker and payments in respect thereof made by Maker to
Holder, absent manifest error.

         Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the aggregate principal amount of
$115,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:

                  (a)      if for any reason whatsoever the interest or loan
         charges paid or contracted to be paid by Maker to any of the Lenders in
         respect of the Loans shall exceed the maximum amount collectible under
         the law applicable to such Lender, then, in that event, and
         notwithstanding anything to the contrary in the Credit Agreement, the
         Notes or any other Loan Document (i) the aggregate of all consideration
         that constitutes interest or loan charges under the law applicable to
         such Lender that is contracted for, taken, reserved, charged or
         received under the Credit Agreement, the Notes or any other Loan
         Document or otherwise in connection with the Obligations under no
         circumstances shall exceed the maximum amounts allowed by such
         applicable law, and any excess paid to any Lender shall be credited by
         such Lender on the principal amount of the Obligations (or, to the
         extent the principal amount outstanding under the Credit Agreement, the
         Notes and the other Loan Documents has been or thereby would be paid in
         full, refunded to Maker), and (ii) in the event that the maturity of
         any or all of the Obligations is accelerated by reason of an election
         of the Lenders resulting from any Default under the Credit Agreement or
         otherwise, or in the event of any required or permitted prepayment,
         then such consideration that constitutes interest or loan charges under
         the law applicable to any Lender may never include more than the
         maximum amounts allowed by the law applicable to such Lender, and any
         excess interest or loan charges provided for in the Credit Agreement or
         otherwise shall be canceled automatically

                                       2
<PAGE>   32

         as of the date of such acceleration or prepayment and, if theretofore
         paid, shall be credited by such Lender on the principal amount of the
         Obligations (or, to the extent the principal amount of the Obligations
         has been or thereby would be paid in full, refunded by such Lender to
         Maker);

                  (b)      all sums paid or agreed to be paid to the Lenders for
         the use, forbearance or detention of sums due under the Credit
         Agreement shall, to the extent permitted by applicable law, be
         prorated, allocated and spread throughout the full term of the
         Obligations until payment in full so that the rate or amount of
         interest and loan charges on account of the Obligations will not exceed
         any applicable legal limitation; and

                  (c)      the right to accelerate the maturity of the
         Obligations does not include the right to accelerate the maturity of
         any interest or loan charges not otherwise accrued on the date of such
         acceleration, and the Lenders do not intend to charge or collect any
         unearned interest or loan charges in the event of any such
         acceleration.

         This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note amends and restates that certain Third Amended and Restated
Promissory Note of Maker in favor of Payee dated May 26, 1998 in its entirety.

        It is anticipated by Maker and the Lenders that additional parties
affiliated with Maker ("Additional Makers") will assume the obligations of and
become additional Makers of this Note. Each such Additional Maker shall be added
as a Maker of this Note by the execution of a Promissory Note Assumption
Agreement in the form attached hereto to be annexed to this Note. No signatures
by Lender or Maker (other than an Additional Maker) shall be required to add an
Additional Maker as a party to this Note.

                                       3
<PAGE>   33

         IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.

                                    MAKER:

                                    GOODY'S FAMILY CLOTHING, INC.

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

                                    GOODY'S MS, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GOODY'S IN, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFCTX, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                       4
<PAGE>   34

                                    GFCTN, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFCGA, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFC FS, LLC

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

                                       5
<PAGE>   35

                   FOURTH AMENDED AND RESTATED PROMISSORY NOTE

$22,750,000               Knoxville, Tennessee               September 30, 2000

         FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation, GOODY'S MS, L.P., a Tennessee limited
partnership, GOODY'S IN, L.P., a Tennessee limited partnership, GFCTX, L.P., a
Tennessee limited partnership, GFCTN, L.P., a Tennessee limited partnership,
GFCGA, L.P., a Tennessee limited partnership, and GFC FS, LLC, a Delaware
limited liability company (successor to GFC FS, Inc. pursuant to a merger)
(collectively, "Maker"), jointly and severally, promise to pay to the order of
FIRST UNION NATIONAL BANK ("Payee"; Payee, and any subsequent holder[s] hereof,
being hereinafter referred to collectively as "Holder"), the principal sum of
TWENTY-TWO MILLION SEVEN HUNDRED FIFTY THOUSAND AND 00/100THS DOLLARS
($22,750,000) or, if less, the aggregate unpaid principal amount of all Loans
advanced here against pursuant to that certain Amended and Restated Credit
Agreement dated October 31, 1996, by and among Maker, certain guarantors, First
Tennessee Bank National Association, a national banking association, as
Administrative Agent, and the Lenders party thereto, as amended by that certain
Amendment Agreement dated as of May 16, 1997, by that certain Second Amendment
Agreement dated September 23, 1997, by that certain Third Amendment Agreement as
of May 26, 1998, and by that certain Fourth Amendment Agreement dated as of even
date herewith (together with any amendments thereto and/or modifications
thereof, herein referred to as the "Credit Agreement"; capitalized terms used
but not otherwise defined herein shall have the same meanings as in the Credit
Agreement), together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event shall the interest and loan charges payable in respect of the
indebtedness evidenced hereby exceed the maximum amounts from time to time
allowed to be collected under applicable law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.

         Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the

<PAGE>   36

Loans made by Holder to Maker and payments in respect thereof made by Maker to
Holder, absent manifest error.

         Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the aggregate principal amount of
$115,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:

                  (a)      if for any reason whatsoever the interest or loan
         charges paid or contracted to be paid by Maker to any of the Lenders in
         respect of the Loans shall exceed the maximum amount collectible under
         the law applicable to such Lender, then, in that event, and
         notwithstanding anything to the contrary in the Credit Agreement, the
         Notes or any other Loan Document (i) the aggregate of all consideration
         that constitutes interest or loan charges under the law applicable to
         such Lender that is contracted for, taken, reserved, charged or
         received under the Credit Agreement, the Notes or any other Loan
         Document or otherwise in connection with the Obligations under no
         circumstances shall exceed the maximum amounts allowed by such
         applicable law, and any excess paid to any Lender shall be credited by
         such Lender on the principal amount of the Obligations (or, to the
         extent the principal amount outstanding under the Credit Agreement, the
         Notes and the other Loan Documents has been or thereby would be paid in
         full, refunded to Maker), and (ii) in the event that the maturity of
         any or all of the Obligations is accelerated by reason of an election
         of the Lenders resulting from any Default under the Credit Agreement or
         otherwise, or in the event of any required or permitted prepayment,
         then such consideration that constitutes interest or loan charges under
         the law applicable to any Lender may never include more than the
         maximum amounts allowed by the law applicable to such Lender, and any
         excess interest or loan charges provided for in the Credit Agreement or
         otherwise shall be canceled automatically

                                       2
<PAGE>   37

         as of the date of such acceleration or prepayment and, if theretofore
         paid, shall be credited by such Lender on the principal amount of the
         Obligations (or, to the extent the principal amount of the Obligations
         has been or thereby would be paid in full, refunded by such Lender to
         Maker);

                  (b)      all sums paid or agreed to be paid to the Lenders for
         the use, forbearance or detention of sums due under the Credit
         Agreement shall, to the extent permitted by applicable law, be
         prorated, allocated and spread throughout the full term of the
         Obligations until payment in full so that the rate or amount of
         interest and loan charges on account of the Obligations will not exceed
         any applicable legal limitation; and

                  (c)      the right to accelerate the maturity of the
         Obligations does not include the right to accelerate the maturity of
         any interest or loan charges not otherwise accrued on the date of such
         acceleration, and the Lenders do not intend to charge or collect any
         unearned interest or loan charges in the event of any such
         acceleration.

         This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note amends and restates that certain Third Amended and Restated
Promissory Note of Maker in favor of Payee dated May 26, 1998 in its entirety.

         It is anticipated by Maker and the Lenders that additional parties
affiliated with Maker ("Additional Makers") will assume the obligations of and
become additional Makers of this Note. Each such Additional Maker shall be added
as a Maker of this Note by the execution of a Promissory Note Assumption
Agreement in the form attached hereto to be annexed to this Note. No signatures
by Lender or Maker (other than an Additional Maker) shall be required to add an
Additional Maker as a party to this Note.

                                       3
<PAGE>   38

         IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.

                                    MAKER:

                                    GOODY'S FAMILY CLOTHING, INC.

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

                                    GOODY'S MS, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GOODY'S IN, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFCTX, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                       4
<PAGE>   39

                                    GFCTN, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFCGA, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFC FS, LLC

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

                                       5
<PAGE>   40

                   FOURTH AMENDED AND RESTATED PROMISSORY NOTE

$16,250,000               Knoxville, Tennessee               September 30, 2000

         FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation, GOODY'S MS, L.P., a Tennessee limited
partnership, GOODY'S IN, L.P., a Tennessee limited partnership, GFCTX, L.P., a
Tennessee limited partnership, GFCTN, L.P., a Tennessee limited partnership,
GFCGA, L.P., a Tennessee limited partnership, and GFC FS, LLC, a Delaware
limited liability company (successor to GFC FS, Inc. pursuant to a merger)
(collectively, "Maker"), jointly and severally, promise to pay to the order of
WACHOVIA BANK, N.A. ("Payee"; Payee, and any subsequent holder[s] hereof, being
hereinafter referred to collectively as "Holder"), the principal sum of SIXTEEN
MILLION TWO HUNDRED FIFTY THOUSAND AND 00/100THS DOLLARS ($16,250,000) or, if
less, the aggregate unpaid principal amount of all Loans advanced here against
pursuant to that certain Amended and Restated Credit Agreement dated October 31,
1996, by and among Maker, certain guarantors, First Tennessee Bank National
Association, a national banking association, as Administrative Agent, and the
Lenders party thereto, as amended by that certain Amendment Agreement dated as
of May 16, 1997, by that certain Second Amendment Agreement dated September 23,
1997, by that certain Third Amendment Agreement as of May 26, 1998, and by that
certain Fourth Amendment Agreement dated as of even date herewith (together with
any amendments thereto and/or modifications thereof, herein referred to as the
"Credit Agreement"; capitalized terms used but not otherwise defined herein
shall have the same meanings as in the Credit Agreement), together with interest
on the unpaid principal balance of the Loans evidenced hereby at the rate(s)
specified in the Credit Agreement; provided that in no event shall the interest
and loan charges payable in respect of the indebtedness evidenced hereby exceed
the maximum amounts from time to time allowed to be collected under applicable
law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.

         Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the

<PAGE>   41

Loans made by Holder to Maker and payments in respect thereof made by Maker to
Holder, absent manifest error.

         Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the aggregate principal amount of
$115,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:

                  (a)      if for any reason whatsoever the interest or loan
         charges paid or contracted to be paid by Maker to any of the Lenders in
         respect of the Loans shall exceed the maximum amount collectible under
         the law applicable to such Lender, then, in that event, and
         notwithstanding anything to the contrary in the Credit Agreement, the
         Notes or any other Loan Document (i) the aggregate of all consideration
         that constitutes interest or loan charges under the law applicable to
         such Lender that is contracted for, taken, reserved, charged or
         received under the Credit Agreement, the Notes or any other Loan
         Document or otherwise in connection with the Obligations under no
         circumstances shall exceed the maximum amounts allowed by such
         applicable law, and any excess paid to any Lender shall be credited by
         such Lender on the principal amount of the Obligations (or, to the
         extent the principal amount outstanding under the Credit Agreement, the
         Notes and the other Loan Documents has been or thereby would be paid in
         full, refunded to Maker), and (ii) in the event that the maturity of
         any or all of the Obligations is accelerated by reason of an election
         of the Lenders resulting from any Default under the Credit Agreement or
         otherwise, or in the event of any required or permitted prepayment,
         then such consideration that constitutes interest or loan charges under
         the law applicable to any Lender may never include more than the
         maximum amounts allowed by the law applicable to such Lender, and any
         excess interest or loan charges provided for in the Credit Agreement or
         otherwise shall be canceled automatically

                                       2
<PAGE>   42

         as of the date of such acceleration or prepayment and, if theretofore
         paid, shall be credited by such Lender on the principal amount of the
         Obligations (or, to the extent the principal amount of the Obligations
         has been or thereby would be paid in full, refunded by such Lender to
         Maker);

                  (b)      all sums paid or agreed to be paid to the Lenders for
         the use, forbearance or detention of sums due under the Credit
         Agreement shall, to the extent permitted by applicable law, be
         prorated, allocated and spread throughout the full term of the
         Obligations until payment in full so that the rate or amount of
         interest and loan charges on account of the Obligations will not exceed
         any applicable legal limitation; and

                  (c)      the right to accelerate the maturity of the
         Obligations does not include the right to accelerate the maturity of
         any interest or loan charges not otherwise accrued on the date of such
         acceleration, and the Lenders do not intend to charge or collect any
         unearned interest or loan charges in the event of any such
         acceleration.

         This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note amends and restates that certain Third Amended and Restated
Promissory Note of Maker in favor of Payee dated May 26, 1998 in its entirety.

         It is anticipated by Maker and the Lenders that additional parties
affiliated with Maker ("Additional Makers") will assume the obligations of and
become additional Makers of this Note. Each such Additional Maker shall be added
as a Maker of this Note by the execution of a Promissory Note Assumption
Agreement in the form attached hereto to be annexed to this Note. No signatures
by Lender or Maker (other than an Additional Maker) shall be required to add an
Additional Maker as a party to this Note.

                                       3
<PAGE>   43

         IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.

                                    MAKER:

                                    GOODY'S FAMILY CLOTHING, INC.

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

                                    GOODY'S MS, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GOODY'S IN, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFCTX, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                       4
<PAGE>   44

                                    GFCTN, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFCGA, L.P.

                                    By: TREBOR of TN, Inc., General Partner

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

                                    GFC FS, LLC

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

                                       5<PAGE>   1
                                                                    EXHIBIT 10.4

                              ROBBINS & MYERS, INC.

                              EMPLOYEE SAVINGS PLAN

                (REVISED AND RESTATED EFFECTIVE JANUARY 1, 1996)

<PAGE>   2

                              ROBBINS & MYERS, INC.

                              EMPLOYEE SAVINGS PLAN

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                             ----
<S>                                                                                                       <C>
ARTICLE I - NAME, PURPOSE AND HISTORY OF PLAN .............................................................    1

ARTICLE II - DEFINITIONS AND CONSTRUCTION .................................................................    1
         Section 2.01.     Definitions ....................................................................    1
         Section 2.02.     Construction ...................................................................    5

ARTICLE III - PARTICIPATION ...............................................................................    6
         Section 3.01.     Eligibility to Participate .....................................................    6
         Section 3.02.     Election to Participate ........................................................    7

ARTICLE IV - CONTRIBUTIONS ................................................................................    7
         Section 4.01.     Amount of Participant's Contributions ..........................................    7
         Section 4.02.     Limitations on Basic Contributions .............................................    7
         Section 4.03.     Suspension of Contributions ....................................................    8
         Section 4.04.     Payment of Basic Contributions to Trustee ......................................    9
         Section 4.05.     Employer Matching Contributions ................................................    9
         Section 4.06.     Limitations on Contributions For Nondiscrimination Testing Purposes ............   10
         Section 4.07.     Maximum Annual Additions .......................................................   14

ARTICLE V - TRUST AGREEMENT; INVESTMENT FUNDS
                           AND PARTICIPANT INVESTMENT ELECTIONS ...........................................   17
         Section 5.01.     Trust Agreement ................................................................   17
         Section 5.02.     Investment Funds ...............................................................   17
         Section 5.03.     Allocation and Reallocation of Contributions Among Investment Funds ............   18
         Section 5.04.     Fees and Expenses ..............................................................   18
         Section 5.05.     Exclusive Benefit and Funding Policy ...........................................   18
         Section 5.06.     Special Rules Relating to Certain Participants Subject to Section 16(b) ........   18

ARTICLE VI - PARTICIPANT ACCOUNTS .........................................................................   19
         Section 6.01.     Establishment of Accounts ......................................................   19
         Section 6.02.     Adjustment of Participants' Accounts ...........................................   19

ARTICLE VII - VESTING; DISTRIBUTION OF ACCOUNTS ...........................................................   20
         Section 7.01.     Vesting ........................................................................   20
         Section 7.02.     Distribution Upon Termination of Employment ....................................   20
         Section 7.03.     Designation of Beneficiary .....................................................   21
         Section 7.04.     Manner and Timing of Distributions .............................................   21
         Section 7.05.     Years of Service ...............................................................   23
         Section 7.06.     One Year Break in Service ......................................................   23

ARTICLE VIII - WITHDRAWALS AND LOANS ......................................................................   24
         Section 8.01.     Withdrawal of Supplemental Contributions .......................................   24
         Section 8.02.     Withdrawal of After-Tax Contributions ..........................................   24
</TABLE>

<PAGE>   3

<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                             ----
<S>                                                                                                       <C>
         Section 8.03.     Withdrawals After Age 59-1/2 ...................................................   24
         Section 8.04.     Hardship Withdrawals ...........................................................   24
         Section 8.05.     Source of Funds for Withdrawals ................................................   25
         Section 8.06.     Loans to Participants ..........................................................   26

ARTICLE IX - ADMINISTRATION ...............................................................................   27
         Section 9.01.     Designation of Fiduciaries .....................................................   27
         Section 9.02.     Board ..........................................................................   27
         Section 9.03.     Corporate Benefits Committee ...................................................   27
         Section 9.04.     Action of Committee ............................................................   29
         Section 9.05.     Trustee ........................................................................   30
         Section 9.06.     Employer Records ...............................................................   30
         Section 9.07.     Indemnification. ...............................................................   30
         Section 9.08.     Discrimination Prohibited ......................................................   30
         Section 9.09.     Representation in Proceedings ..................................................   30
         Section 9.10.     Time of Delivery ...............................................................   31

ARTICLE X - MISCELLANEOUS .................................................................................   31
         Section 10.01.    Rights to Trust Assets .........................................................   32
         Section 10.02.    Non-Recommendation of Investment ...............................................   32
         Section 10.03.    Non-Alienation .................................................................   32
         Section 10.04.    Facility of Payment ............................................................   32
         Section 10.05.    Unclaimed Benefits .............................................................   32

ARTICLE XI - TOP-HEAVY PLAN PROVISIONS ....................................................................   33
         Section 11.01.    Effect of Top-Heavy Status .....................................................   33
         Section 11.02.    Additional Definitions .........................................................   33
         Section 11.03.    Minimum Benefits ...............................................................   34
         Section 11.04.    Maximum Benefit Limits .........................................................   35

ARTICLE XII - AMENDMENT ...................................................................................   35
         Section 12.01.    General Amendment ..............................................................   35
         Section 12.02.    Amendment of Vesting Schedule ..................................................   35

ARTICLE XIII - SUSPENSION, DISCONTINUANCE OR TERMINATION ..................................................   36
         Section 13.01.    Termination or Partial Termination of the Plan .................................   36
         Section 13.02.    Termination of the Trust .......................................................   36
         Section 13.03.    Discontinuance of Employer Contributions .......................................   36

ARTICLE XIV - GENERAL .....................................................................................   37
         Section 14.01.    Severability ...................................................................   37
         Section 14.02.    Merger of Plans ................................................................   37
         Section 14.03.    Plan Not a Contract of Employment ..............................................   37
         Section 14.04.    Successors; Reorganizations ....................................................   37
         Section 14.05.    Expenses .......................................................................   38
         Section 14.06.    Controlling Law ................................................................   38
         Section 14.07.    Construction ...................................................................   38
         Section 14.08.    Headings .......................................................................   38
         Section 14.09.    Counterparts ...................................................................   38
         Section 14.10.    Treasury Qualification .........................................................   38
         Section 14.11.    Denial of Guaranty .............................................................   39
SUPPLEMENT A - IRS MODEL DIRECT ROLLOVER REVISIONS ........................................................   40
SUPPLEMENT B - IRS MODEL SECTION 401(a)17 LIMITATION ......................................................   41
SUPPLEMENT C - PERIOD OF LIMITED ACTIVITY .................................................................   42
</TABLE>

<PAGE>   4

                                   CERTIFICATE

         I, ___________________ of Robbins & Myers, Inc. and a member of its
Corporate Benefits Committee, hereby certify that the attached document is a
full, true and complete copy of the Robbins & Myers Employee Savings Plan, as
adopted by the Corporate Benefits Committee of Robbins & Myers, Inc., on
________________, 1995, to be effective as of January 1, 1996.

         Dated this _____ day of _________, 1995.

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

<PAGE>   5

                              ROBBINS & MYERS. INC.

                              EMPLOYEE SAVINGS PLAN

                                   ARTICLE I

                       NAME, PURPOSE AND HISTORY OF PLAN

         Robbins & Myers, Inc., an Ohio corporation (the "Company"), has
previously established the Robbins & Myers, Inc. Employee Savings Plan for
Salaried Employees of Chemineer, Edlon, and Pfaudler and the Robbins & Myers,
Inc. Employee Savings Plan (the "Plans"). The Company now restates those plans
in the form of the Robbins & Myers, Inc. Employee Savings Plan ("Plan"),
effective January 1, 1996 (the "Effective Date"). Its purpose is to stimulate
employee savings for financial security on a tax-advantaged basis.

         The Plan has been amended and restated to bring it into compliance with
the requirements of the Internal Revenue Code of 1986. The Company intends that
this Plan and the related Trust qualify under all applicable provisions of the
Internal Revenue Code of 1986, as amended ("Code"), and the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and each of the terms of this
Plan and the Trust Agreement shall be so interpreted. This Plan is intended to
be a profit sharing plan with a qualified cash or deferred arrangement meeting
the requirement of Code sections 401(a) and 401(k).

         The provisions of the Plan may be modified or supplemented by
Supplements to the Plan. Any such Supplement shall form a part of the Plan as of
its effective date and be attached hereto.

                                   ARTICLE II

                          DEFINITIONS AND CONSTRUCTION

         Section 2.01. Definitions. For purposes of the Plan, unless the
content clearly or necessarily indicates otherwise, the following words and
phrases shall have the meaning set forth in the definitions below:

         (a) "Account" shall mean the separate Account or Accounts to be
maintained under the Plan for each Participant as provided in Section 6.02.

         (b) "Acquired Business" shall mean one or more plants, units or other
facilities acquired by the Company or any other Employer after the Effective
Date as a going concern.

         (c) "Affiliate" shall mean each corporation or unincorporated trade or
business which is a member of either a controlled group of corporations, a group
of trades or businesses under common control, or an affiliated service group
within the meaning of Code sections 414(b), (c) or (m), which includes the
Company, or any other entity required to be aggregated with the Company pursuant
to regulations under Code section 414(o).

         (d) "After-Tax Contributions" shall mean contributions by the
Participant pursuant to the Participant's authorization to make regular payroll
deductions from his Compensation pursuant to

                                       1

<PAGE>   6

Section 4.01(b). The term shall be deemed to include amounts contributed as
"Qualified Deposits" under the terms of the Plan in effect prior to January 1,
1985.

         (e) "Basic Contributions" shall mean contributions made pursuant to
Section 4.01(a) or (b) and shall include both Pre-Tax Contributions and
After-Tax Contributions.

         (f) "Beneficiary" shall mean the person or persons designated on Timely
Notice by a Participant to receive benefits in the event of the Participant's
death, as provided in Section 7.03.

         (g)  "Board" shall mean the Board of Directors of the Company.

         (h) "Committee" shall mean the Corporate Benefits Committee described
in Section 9.01 hereof, which committee shall be the plan administrator for
purposes of ERISA.

         (i) "Compensation" shall mean an Employee's total salary or wages from
an Employer before deductions, including annual base pay bonuses, commissions
and overtime and Pre-Tax Contributions hereunder and any other salary reduction
amount under Code section 401(k), but excluding deferred compensation,
contributions by an Employer to this or any other benefit plan, and any other
form of remuneration which is not "compensation" within the meaning of Code
section 415, all as determined in accordance with such rules, regulations or
standards as may be prescribed by the Committee. The maximum annual compensation
that may be taken into account hereunder for any Participant shall be $150,000
or such greater amount as may be permitted pursuant to Code section 401(a)(17).
In determining the compensation of a Participant for purposes of this
limitation, the rules of Code section 414(q)(6) shall apply, except that, in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the Plan Year.

         (j)  "Effective Date" means January 1, 1996.

         (k) "Employee" shall mean any person who is in the employ of an
Employer during periods in which he meets the following conditions:

               (i)  he is employed by an Employer on its United States payroll;

              (ii) he is not in a unit of employees covered by a collective
         bargaining agreement, unless such collective bargaining agreement
         specifically provides for the application of the Plan to the employees
         in such unit; and

              (iii) his employment is not in a group which has been excluded by
         the Corporate Benefits Committee from participation in the Plan.

The term shall not include persons employed by an Employer at an Acquired
Business unless and until the Corporate Benefits Committee designates the
persons so employed as Employees hereunder.

         In addition, any leased employee (within the meaning of Code section
414(n)(2)) of the Employer performing services shall be treated as an Employee
of the Employer. However, contributions or benefits provided by the leasing
organization for any leased employee which are attributable to services
performed for the Employer shall be treated as provided by the Employer. The
preceding sentences shall not apply to any leased employee of the Employer if
(a) leased employees do

                                       2
<PAGE>   7

not constitute more than 20 percent of the Employer's nonhighly compensated
workforce (as defined by reference to Code section 414(q)) and (b) the leased
employee is covered by a money purchase pension plan maintained by the leasing
organization which provides (i) a nonintegrated employer contribution rate for
each participant of at least 10 percent of compensation (ii) full and immediate
vesting and (iii) immediate participation for all employees of the leasing
organization (except for those individuals whose compensation is less than
$1,000 in each Plan Year during the 4-year period ending with the Plan Year).
Notwithstanding any other provisions of the Plan, for purposes of determining
the number or identity of highly compensated employees (within the meaning of
Code section 414(q)), the employees of the Employer shall include all
individuals defined as Employees in this Section 2.01(m).

         Notwithstanding the preceding paragraph, a leased employee shall be
deemed to be in a class of employees not eligible to participate in this Plan
unless such participation is required as a condition of the Plan's qualification
under Code section 401(a).

         (l) "Employer" shall mean the Company, Chemineer, Inc., Edlon, Inc.,
Pfaudler, Inc. and each other Affiliate which, with the approval of the
Corporate Benefits Committee, adopts this Plan.

         (m) "Employer Contributions" shall mean amounts contributed under the
Plan by Employers as provided in Article IV. The term shall also be deemed to
include forfeitures applied to reduce the amount of an Employer's contributions
otherwise due hereunder.

         (n) "Employment Commencement Date" shall mean the date on which an
Employee first performs an Hour of Service.

         (o) "Highly Compensated Employee" shall mean an individual described in
Code section 414(q) and Section 4.06 of this Plan.

         (p)  "Hour of Service" shall mean:

               (i) Each hour for which the Employee is paid or entitled to
         payment, for the performance of duties for the Company or an Affiliate,
         during the applicable computation period. These hours shall be credited
         to the Employee for the computation period in which the duties were
         performed;

              (ii) each hour for which the Employee is paid or entitled to
         payment by the Company or an Affiliate, either directly or indirectly,
         on account of a period of time during which no duties are performed
         (irrespective of whether the employment relationship has terminated)
         due to vacation, holiday, illness, incapacity (including disability),
         layoff, jury duty, military duty, and leave of absence, but excluding
         payments under a plan maintained solely for the purpose of complying
         with workmen's compensation, unemployment compensation, or disability
         insurance laws and also excluding payments for medical or medically
         related expenses. No more than 501 Hours of Service shall be credited
         under this paragraph (ii) for any single computation period whether or
         not such period occurs in a single computation period); and

              (iii) Each hour for which back pay, irrespective of mitigation of
         damages, is either awarded or agreed to by the Company or an Affiliate:

The same hours of service shall not be credited under clause (i) or clause (ii),
as the case may be, and under clause (iii). Further, no more than 501 Hours of
Service shall be credited for payment of back

                                       3
<PAGE>   8

pay to the extent it is agreed to or awarded for a period of time during which
an Employee did not or would not have performed duties. These Hours shall be
credited to the Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period in which the
award, agreement or payment is made. Hours of Service shall be computed and
credited in accordance with paragraphs (b) and (c) of Section 2530.200b-2 of the
Department of Labor Regulations.

         (q) "Investment Fund" means an unsegregated fund established at the
direction of the Committee pursuant to Section 5.02, and invested in securities,
insurance contracts, mutual fund shares or other property of such type and
characteristics as the Committee shall determine.

         (r) "Normal Retirement Age" shall mean the date on which the
Participant attains age 65.

         (s) "Participant" shall mean an Employee who has satisfied the
requirements of Section 3.01 and has made Basic Contributions under the Plan.
The term shall also include any other person whose interests derived from
participation in a prior plan are transferred or rolled over into the Plan. A
person who has become a Participant hereunder shall continue to be a Participant
until his entire Account has been distributed or forfeited pursuant to the Plan.

         (t) "Part-Time Employee" shall mean an Employee who is regularly
scheduled to perform less than 20 Hours of Service per week or whose work
schedule, because of its seasonal or temporary nature, is expected to result in
completion of fewer than 1,000 Hours of Service per year.

         (u) "Plan" shall mean the Robbins & Myers, Inc. Employee Savings Plan
for Salaried Employees of Chemineer, Edlon and Pfaudler.

         (v) "Plan Year" shall mean the calendar year.

         (w) "Pre-Tax Contributions" shall mean amounts contributed by the
Participant's Employer pursuant to the Participant's authorization and direction
under Section 4.01(a) to make such contribution on the Participant's behalf in
lieu of payment of an equal amount directly to the Participant.

         (x) "After-Tax Contributions" shall mean amounts contributed as such
under the terms of the Plan as it was in effect prior to the Effective Date.

         (y) "Supplemental Contributions" shall mean amounts contributed as
"Special Deposits" under the terms of the plan as it was in effect prior to the
Effective Date.

         (z) "Timely Notice" shall mean a notice in writing on a form prescribed
by the Committee and filed at such places and at such reasonable times as shall
be required by the rules of the Committee.

         (aa) "Trust" shall mean the trust fund established pursuant to the
provisions of this Plan, as it may be amended from time to time.

         (bb)  "Trustee" shall mean the Trustee under the Trust.

         (cc)  "Valuation Date" shall mean each business day.

                                       4
<PAGE>   9

         Section 2.02. Construction.

         (a) Where appearing in this Plan, the masculine shall include the
feminine and the plural shall include the singular, unless the context clearly
indicates otherwise. The words "hereof", "herein", "hereunder", and other
similar compounds of the word "here" shall mean and refer to the entire Plan and
not to any particular section or subsection. Titles of articles and sections are
for reference purposes only.

         (b) The Plan is intended to be a qualified profit sharing plan meeting
the requirements of Code section 401(a) and to contain a "qualified cash or
deferred arrangement" meeting the requirements of Code section 401(k), and shall
be interpreted so as to comply with the applicable requirements thereof, where
such requirements are not clearly contrary to the express terms hereof. In all
other respects, the Plan shall be construed and its validity determined
according to the laws of the State of Ohio to the extent such laws are not
preempted by applicable requirements of federal law. In case any provision of
this Plan shall be held illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining provisions of the Plan, and the Plan
shall be construed and enforced as if said illegal or invalid provisions had
never been included herein.

                                  ARTICLE III

                                 PARTICIPATION

         Section 3.01. Eligibility to Participate.

         (a) Each Participant in the prior Plans on December 31, 1995 shall
continue as a Participant subject to the terms of the Plan on January 1, 1996 if
he is then an Employee. Each Employee who would have become a Participant under
one of the Prior plans on January 1, 1996 shall become a Participant under this
Plan on January 1, 1996 if he is then an Employee. On or after January 1, 1996,
an Employee, other than a Part-Time Employee, shall be eligible to participate
herein as of the first January 1, April 1, July 1 or October 1 which is at least
90 days after his Employment Commencement Date.

         (b) A Part-Time Employee, shall be eligible to participate herein as of
the last day of his "qualifying period". For purposes of this subsection, the
"qualifying period" of a Part-Time Employee shall mean the first
12-consecutive-month period commencing on his Employment Commencement Date or
any anniversary thereof, during which he completes at least 1,000 Hours of
Service.

         (c) A former Participant whose employment has terminated and who is
subsequently reemployed as an Employee shall reenter the Plan as a Participant
on the date of his reemployment. If a reemployed Employee was not formerly a
Participant in the Plan, he shall be considered a new Employee and required to
meet the requirements of Section 3.01 to be eligible to participate in the Plan.

         Section 3.02. Election to Participate. An Employee may elect to
participate in the Plan by filing his election with his Employer on a Timely
Notice to make Basic Contributions on the Participant's behalf, as provided in
Section 4.01. Such election shall be effective with the January 1, April 1, July
1 or October 1 which next follows the later of (i) the filing of the election or
(ii) the date as of which he shall have become eligible to participate herein as
determined under Section 3.01. Such

                                       5
<PAGE>   10

election shall remain in effect so long as the Participant remains an Employee
as defined herein, subject to Sections 4.03 and 8.04 relating to the suspension
of contributions.

                                   ARTICLE IV

                                 CONTRIBUTIONS

         Section 4.01. Amount of Participant's Contributions.

         (a) Basic Contributions. Subject to the limitations described in
Sections 4.02, 4.06 and 4.07, a Participant may elect to make Pre-Tax Basic
Contributions in any whole percentage from 1 to 12 percent of the Participant's
Compensation. Basic Contributions shall be made by the Participant's Employer in
lieu of payment of an equal amount directly to the Participant as current
compensation, pursuant to authorization by the Participant on a form provided by
the Committee. A Participant's Basic Contributions for a Plan Year may not
exceed the limitation of Code section 402(g). No After-Tax Contributions will be
made under the Plan on or after the Effective Date.

         (b) Supplemental Contributions. The Plan does not permit Supplemental
Contributions.

         (c) Change in Rate of Contributions. The designated rates of a
Participant's Basic Contributions may be changed as of the first day of any
month following the Company's receipt of Timely Notice, but shall remain in
effect for successive periods of time unless changed.

         Section 4.02. Limitations on Basic Contributions.

         (a) No Participant shall be permitted to have Basic Contributions made
under the Plan and any other plan maintained by the Employer during any taxable
year in excess of the dollar limitation contained in Code section 402(g) as in
effect at the beginning of such taxable year.

         (b) Excess Elective Deferrals under this Plan, plus any income and
minus any losses allocable thereto, may be distributed to the Participant no
later than March 15 of the following year.

         (c) Definitions.

               (i) "Excess Elective Deferrals" shall mean those Basic
         Contributions that are includable in a Participant's gross income under
         Code section 402(g) to the extent such Participant's Elective Deferrals
         for a taxable year exceed the dollar limitation under such Code
         section. Excess Elective Deferrals shall be treated as Annual Additions
         under the Plan.

               (ii) "Elective Deferrals" with respect to any taxable year, shall
         mean, the sum of all employer contributions (including those of another
         employer who is not an Employer who has adopted this Plan) made on
         behalf of a Participant pursuant to an election to defer under any
         qualified cash or deferred arrangement as described in Code section
         401(k), any simplified employee pension cash or deferred arrangement as
         described in Code section 402(h)(l)(B), any eligible deferred
         compensation plan under Code section 457, any plan as described under
         Section 501(c) (18), and any employer contributions made on the behalf
         of a Participant for the purchase of an annuity contract under Code
         section 403(b) pursuant to a salary reduction agreement.

                                       6
<PAGE>   11

         (d) Determination of income or loss. Excess Elective Deferrals shall be
adjusted for any income or loss up to the date of distribution using the method
described in this subsection or any other method permitted under Treasury
Regulation Section l.402(g)-1(e)(5). The income or loss allocable to Excess
Elective Deferrals is the sum of: (i) income or loss allocable to the
Participant's Basic Contributions for the taxable year multiplied by a fraction,
the numerator of which is such Participant's Excess Elective Deferrals for the
year and the denominator of which is the Participant's Account balance
attributable to Basic Contributions without regard to any income or loss
occurring during such taxable year; and (ii) ten percent (10%) of the amount
determined under (i) multiplied by the number of whole calendar months between
the end of the Participant's taxable year and the date of distribution, counting
the month of distribution if distribution occurs after the 15th of such month.

         Section 4.03. Suspension of Contributions.

         (a) A Participant's Basic Contributions shall be suspended if any of
the following occurs:

               (i) the Participant elects, in the form of a Timely Notice, to
         suspend all of his Basic Contributions being made pursuant to Section
         4.01;

               (ii) the Participant receives a hardship withdrawal under Section
         8.04; or

               (iii) the Participant fails to qualify as an Employee. (A
         Participant on an authorized leave of absence without pay fails to
         qualify as an Employee for purposes of this Section.)

Suspensions shall be effective as soon as practicable following such occurrence.
Participants will not be permitted to make up suspended contributions. A
Participant's Basic Contributions shall be suspended for the period described in
Section 8.04(d) following his receipt of a hardship withdrawal.

         (b) A Participant whose contributions have been suspended for reasons
other than a Hardship Withdrawal pursuant to Section 8.04 of this Plan may
resume making contributions as of the next January 1, April 1, July 1 or October
1 following his provision of Timely Notice provided that he is then an Employee
as defined herein.

         Section 4.04. Payment of Basic Contributions to Trustee . Each Employer
shall periodically (but not less frequently than monthly), remit to the Trustee
(or to the Company, if the Company has remitted to the Trustee) the amounts
withheld from the Compensation of its Employees as Basic Contributions under the
Plan. Such amounts shall be credited to the Accounts of Participants on a
monthly basis.

         Section 4.05. Employer Matching Contributions.

         (a) Each Employer shall make contributions for each of its eligible
Employees in an amount equal to forty percent (40%) of the Employee's Basic
Contributions up to six percent (6%) of his Compensation that he elects to make
as Basic Contributions and each Employer may contribute, from its current or
accumulated profits (as determined in accordance with generally accepted
accounting principles), on behalf of each Participant (excluding any Participant
who resigned or was dismissed during that year and who is not employed by the
Employers on the last day of that year) an amount, if any, equal to such
percentage (which shall be the same for all Participants) of the Participant's
Basic Contributions for that Plan Year as the Employer shall decide and as shall
be approved by the Corporate Benefits Committee. Amounts forfeited from the
Accounts of Employees of the Employer

                                       7
<PAGE>   12

pursuant to Section 7.01 shall be applied to reduce the amount of the Employer's
Matching Contributions otherwise payable hereunder.

         (b) Employer Matching Contributions under this subsection shall be made
in "qualifying employer securities" (as defined in Section 407(d)(4) of ERISA)
issued by the Company ("Company Stock"), on or before the due date of the
Company's tax return for the year.

         (c) Employer Matching Contributions hereunder are conditioned upon
their deductibility under Code section 404. Notwithstanding any provision herein
to the contrary, to the extent a deduction is disallowed, contributions may be
returned to the Employer within one year after such disallowance.

         (d) Employer Matching Contributions shall be forfeited to the extent
they are based on Excess Elective Deferrals under Section 4.02(c), Basic
Contributions that are Excess Contributions or After-Tax Contributions that are
Excess Aggregate Contributions distributed under Section 4.06(h). Any
forfeitures that occur will be used to reduce Employer Matching Contributions
for the next Plan Year.

         Section 4.06. Limitations on Contributions For Nondiscrimination
Testing Purposes.

         (a) Employer Matching Contributions and Basic Contributions allocated
to the Accounts of Highly-Compensated Employees shall not in any Plan Year
exceed the limits specified in this Section 4.06. The Committee may make the
adjustments authorized in this Section 4.06 to ensure that the limits of
Subsections (b) (the "Actual Deferral Percentage test") and (c) (the "Average
Contribution Percentage test") are not exceeded, regardless of whether such
adjustments affect some Participants more than others. This Section shall be
administered and interpreted in accordance with Code sections 401(k) and 401(m).

         (b) The Actual Deferral Percentage of the Highly-Compensated Employees
shall not exceed, in any Plan Year, the greater of:

               (i)  The Actual Deferral Percentage of all other Participants for
such Plan Year multiplied by 1.25; or

               (ii) The lesser of the (A) Actual Deferral Percentage. of all
         other Participants for such Plan Year multiplied by two (2) and (B) the
         Actual Deferral Percentage of all other Participants for such Plan Year
         plus two (2) percentage points, or such lesser amount as the Secretary
         of the Treasury shall prescribe to prevent the multiple use of this
         alternative limitation with respect to any Highly-Compensated Employee.

         (c) The Average Contribution Percentage of the Highly Compensated
Employee shall not exceed, in any Plan Year, the greater of:

               (i)  The Average Contribution Percentage of all other
         Participants for such Plan Year multiplied by 1.25; or

               (ii) The lesser of (A) the Average Contribution Percentage of all
         other Participants for such Plan Year multiplied by two (2) and (B) the
         Average Contribution Percentage of all other Participants for such Plan
         Year plus two (2) percentage points, or such lesser amounts as the

                                       8
<PAGE>   13

         Secretary of the Treasury shall prescribe to prevent the multiple use
         of this alternative limitation with respect to any Highly-Compensated
         Employee.

         (d) The following terms shall have the meanings specified herein for
purposes of this Section 4.06.

               (i) Actual Deferral Percentage. The average, for a specified
         group of Participants for a Plan Year, of the ratios (calculated
         separately for each Participant in such group) of (1) the amount of
         Employer contributions actually paid over to the Trust on behalf of
         such Participant for the Plan Year to (2) the Participant's
         compensation for such Plan Year, as determined under Treasury
         Regulation Section 1.401(k)-1(g)(2). For this purpose, Employer
         contributions on behalf of any Participant shall include Basic
         Contributions, including amounts in excess of the dollar limitation
         contained in Section 4.02(g) of the Code described in Section 4.02, but
         excluding Basic Contributions that are taken into account in the
         Average Contribution Percentage test (provided that the Actual Deferral
         Percentage test is satisfied both with and without exclusion of these
         Basic Contributions). For purposes of computing Actual Deferral
         Percentages, an Employee who would be a Participant but for the failure
         to make Basic Contributions shall be treated as a Participant on whose
         behalf no Basic Contributions are made.

               (ii) Average Contribution Percentage. The average for a
         designated group of Employees of the ratios (calculated separately for
         each Employee in the group) of (1) the sum of (A) the Employer Matching
         Contributions paid and credited to the Account of such Employee for a
         Plan Year, and (B) any Basic Contributions which are to be taken into
         account for purposes of the Average Contribution Percentage Test, to
         (2) such Employee's compensation for such Plan Year, as determined
         under Treasury Regulation Section 1.401(k)-1(g)(2). Participant Basic
         Contributions may be used in the Average Contribution Percentage test
         provided that the Actual Deferral Percentage test is met before the
         Basic Contributions are used in the Average Contribution Percentage
         test and continues to be met following the exclusion of those
         contributions that are used to meet the Average Contribution Percentage
         test.

               (iii) Highly-Compensated Employee.  The term Highly Compensated
         Employee shall mean Highly Compensated Active Employees and Highly
         Compensated Former Employees.

               A Highly Compensated Active Employee includes any Employee who
         performs service for the Employer during the determination year and
         who, during the look-back year: (i) received compensation from the
         Employer in excess of $75,000 (as adjusted pursuant to Code section
         415(d)); (ii) received compensation from the Employer in excess of
         $50,000 (as adjusted pursuant to Code section 415(d)) and was a member
         of the top paid group for such year; or (iii) was an officer of the
         Employer and received compensation during such year that is greater
         than 50 percent of the dollar limitation in effect under Code section
         415(b)(1)(A). The term Highly Compensated Employee also includes: (i)
         Employees who are both described in the preceding sentence if the term
         "determination year" is substituted for the term "look-back year" and
         the Employee is one of the 100 employees who received the most
         compensation from the Employer during the determination year; and (ii)
         employees who are five percent owners at any time during the look-back
         year or determination year.

                                       9
<PAGE>   14

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

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

               A Highly Compensated Former Employee includes any Employee who
         separated from service (or was deemed to have separated) prior to the
         determination year, performs no service for the Employer during the
         determination year, and was a Highly Compensated Active Employee for
         either the separation year or any determination year ending on or after
         the Employee's 55th birthday.

               If an Employee is, during a determination year or look-back year,
         a family member of either a five percent owner who is an active or
         former Employee or a Highly Compensated Employee who is one of the ten
         (10) most Highly Compensated Employees ranked on the basis of
         compensation paid by the Employer during such year, then the family
         member and the five percent owner or top-ten Highly Compensated
         Employee shall be aggregated. In such case, the family member and five
         percent owner or top-ten Highly Compensated Employee shall be treated
         as a single employee receiving compensation and plan contributions or
         benefits equal to the sum of such compensation and contributions or
         benefits of the family member and five percent owner or top-ten Highly
         Compensated Employee. For purposes of this Section, family member
         includes the spouse, lineal ascendants and descendants of the Employee
         or former Employee and the spouses of such lineal ascendants and
         descendants.

               The determination of who is a Highly Compensated Employee,
         including the determinations of the number and identity of Employees in
         the top-paid group, the top ten Employees, the number of Employees
         treated as officers and the compensation that is considered, will be
         made in accordance with Code section 414(q) and the regulations
         thereunder.

         (e) For purposes of determining compliance with the Actual Deferral
Percentage Test and the Average Contribution Percentage test, Basic
Contributions and Employer Matching Contributions must be made before the last
day of the twelve-month period immediately following the Plan Year to which the
contributions relate.

         (f) The Committee shall maintain records sufficient to demonstrate
satisfaction of the Actual Deferral Percentage test and the Average Contribution
Percentage test and the amount of Basic Contributions and Employer Matching
Contributions used in such test.

         (g) For purposes of determining the Actual Deferral Percentage or
Average Contribution Percentage of a Participant who is a five percent owner or
one of the ten most highly paid Highly Compensated Employees, the Basic
Contributions, Employer Matching Contributions, and Compensation of such
Participant shall include the Basic Contributions, Employer Matching
Contributions, and Compensation for the Plan Year of family members (as defined
in Code section 414(q)(6)). Family members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in determining the Actual
Deferral Percentages and Average Contribution Percentages of Participants who
are Highly Compensated Employees and Participants who are not Highly Compensated
Employees.

                                       10
<PAGE>   15

         (h) Treatment of Excess Contributions. If Employer Matching
Contributions or Basic Contributions exceed any of the limits specified in
Subsections 4.06(b) and (c) for a Plan Year, then the Plan Administrator shall
correct such excess in accordance with the provisions of this Subsection (h).

               (i) Notwithstanding any other provision of this Plan, unless
         Employer Matching Contributions are treated as Qualified Matching
         Contributions as provided under Subsection (iv) below, excess
         contributions and excess aggregate contributions (as defined in
         subsections (ii) and (iii) below) attributable to Basic Contributions,
         plus any income and minus any loss allocable thereto, such income or
         loss determined and allocated in accordance with Treasury Regulation
         Section l.401(k)-l(f)(4)(ii), shall be distributed no later than the
         last day of each Plan Year to Participants to whose accounts such
         excess contributions and excess aggregate contributions were allocated
         for the preceding Plan Year. Employer Matching Contributions based on
         such Basic Contributions distributed as excess contributions and excess
         aggregate contributions shall be forfeited as provided under Section
         4.05(d). Excess contributions and excess aggregate contributions shall
         be allocated to Participants who are subject to the family member
         aggregation rules of Code section 414(q) (6) in the manner prescribed
         by the regulations. If such excess contributions and excess aggregate
         contributions are distributed more than 2-1/2 months after the last day
         of the Plan Year in which such excess amounts arose, a ten percent
         (10%) excise tax will be imposed on the Employer maintaining the Plan
         with respect to those amounts. Excess contributions and excess
         aggregate contributions shall be treated as Annual Additions under the
         plan.

               (ii) "Excess contributions" shall mean, with respect to any Plan
         Year, the excess of:

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

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

               (iii) "Excess aggregate contributions" shall mean, with respect
         to any Plan Year, the excess of:

                    (A) The aggregate amount of Employer contributions taken
               into account in computing the numerator of the Average
               Contribution Percentage actually made on behalf of Highly
               Compensated Employees for such Plan year, over

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

               (iv) The Plan Administrator may, in its sole discretion, elect to
         treat any portion of the Employer Matching Contributions as Qualified
         Matching Contributions to be taken into account for the Actual Deferral
         Percentage test to the extent necessary to satisfy the requirements of
         this Section 4.06. To the extent Employer Matching Contributions are
         treated as Qualified

                                       11
<PAGE>   16

         Matching Contributions and taken into account for the Actual Deferral
         Percentage test, they may not be taken into account for the Average
         Contribution Percentage test. To the extent Employer Matching
         Contributions are treated as Qualified Matching Contributions they
         shall be allocated to Participants' Accounts within the Plan Year to
         which they relate and shall be paid to the Trust no later than 12
         months after the end of the Plan Year to which they relate.

         Section 4.07. Maximum Annual Additions.

         (a) The Annual Addition to the Accounts of any Participant for a
Limitation Year, when added to the Annual Additions to his accounts under all
other defined contribution plans (if any) maintained by the Employer, may not
exceed the Maximum Permissible Amount. In addition, in the case of a Participant
who also participates in a defined benefit plan maintained by the Employer, the
Annual Addition for a Limitation Year will, if necessary, be further limited so
that the sum of the Defined Contribution Plan Fraction and the Defined Benefit
Plan Fraction for such Limitation Year does not exceed 1.0.

         (b) Definitions. For purposes of this Article, the following
definitions and rules of interpretation shall apply:

               (i) Annual Additions. The sum of the following amounts credited
to a Participant's Account for the Limitation Year:

                    (A) Employer Contributions;

                    (B) Employee Contributions; and

                    (C) Forfeitures.

                    Annual additions shall also include (i) any amounts
               allocated to an individual medical account, as defined in Code
               section 415(l)(2) which is part of a pension or annuity plan
               maintained by an Employer and (ii) amounts derived from
               contributions for post-retirement medical benefits allocated to
               the separate account of a key employee (as defined in Code
               section 419A(d)) under a welfare benefit plan (as defined in Code
               section 419(e)) maintained by an Employer.

               (ii) Compensation. A Participant's earned income, wages,
         salaries, and fees for professional services and other amounts received
         for personal service actually rendered in the course of employment with
         the Employer maintaining the Plan (including, but not limited to,
         commissions paid salesmen, compensation for services on the basis of a
         percentage of profits, commissions on insurance premiums, tips and
         bonuses), and excluding the following:

                    (A) Employer contributions to a plan of deferred
               compensation which are not includable in the Employee's gross
               income for the taxable year in which contributed, or Employer
               contributions under a simplified employee pension to the extent
               such contributions are deductible by the Employee, or any
               distributions from a plan of deferred compensation;

                                       12
<PAGE>   17

                    (B) Amounts realized from the exercise of a nonqualified
               stock option, or when restricted stock (or property) held by the
               Employee either becomes freely transferable or is no longer
               subject to a substantial risk of forfeiture;

                    (C) Amounts realized from the sale, exchange, or other
               disposition of stock acquired under a qualified stock option; and

                    (D) Other amounts which received special tax benefits, or
               contributions made by the Employer (whether or not under a
               compensation reduction agreement) towards the purchase of an
               annuity described in Code section 403(b) (whether or not the
               amounts are actually excludable from the gross income of the
               Employee).

               For purposes of applying the limitations of this Article,
         Compensation for a Limitation Year is the Compensation actually paid or
         includable in gross income during such year.

               (iii) Defined Benefit Fraction. A fraction, the numerator of
         which is the projected annual benefit of the Participant under all
         defined benefit plans (whether or not terminated) maintained by the
         Employer, and the denominator of which is the lesser of (i) the product
         of 1.25 multiplied by the dollar limitation in effect under Code
         section 415(b)(1)(A) for such Plan Year, or (ii) the product of 1.4
         multiplied by the amount which may be taken into account under Code
         section 415(b)(l)(B)with respect to such Participant under the Plan for
         such Plan Year.

               (iv) Defined Contribution Fraction. A fraction, the numerator of
         which is the sum of the Annual Additions to the Participant's accounts
         under defined contribution plans (whether or not terminated) maintained
         by the Employer for the current and all prior Limitation Years, and the
         denominator of which is the sum of the lesser of the following amounts
         determined for such limitation Year and all prior Limitation Years of
         service with the Employer: (i) the product of 1.25 multiplied by the
         dollar limitation in effect under Code section 415(c)(l)(A) for such
         Plan Year (determined without regard to Code section 415(c)(6)), or
         (ii) the product under Code section 415(c)(1)(B) (or Code section
         415(c) (7), if applicable) with respect to the Participant under the
         Plan for such Plan Year.

               (v) Maximum Permissible Amount. The lesser of thirty thousand
         dollars ($30,000) (or, if larger, one-fourth of the dollar limitation
         in effect under Code section 415(b)(l)(A)) or twenty-five percent (25%)
         of the Participant's Compensation for the Limitation Year.

               (vi) Limitation Year. The Plan Year.

         (c) In the event that rules set forth in Subsections (a) or (b) would
otherwise be violated after making all possible adjustments under the terms of
any defined benefit plans, then such Employee's benefits under this Plan shall
be reduced by forfeiting a pro rata portion of the Employer Matching
Contribution made with respect thereto and, in the event such return is not
sufficient to eliminate the violation, by returning the Participant's Basic
Contributions together with the earnings thereon and by forfeiting a pro rata
portion of Employer Matching Contributions made with respect thereto. Such
forfeited Employer Matching Contributions shall be held in a suspense account
and used to reduce Employer Matching Contributions to all Participants in the
next Limitation Year.

                                       13
<PAGE>   18

                                    ARTICLE V

                        TRUST AGREEMENT; INVESTMENT FUNDS
                      AND PARTICIPANT INVESTMENT ELECTIONS

         Section 5.01. Trust Agreement. The Company shall enter into a trust
agreement with a corporate trustee selected by the Corporate Benefits Committee
to act as Trustee. The Trustee shall receive all Basic Contributions and all
Employer Matching Contributions and shall hold, manage, administer and invest
the same, reinvest any income, and make distributions in accordance with the
provisions of the Plan and the trust agreement. The trust agreement shall be in
such form and contain such provisions as the Board may deem necessary and
appropriate to effectuate the purposes of the Plan and to qualify the Plan and
the Trust under the Code.

         Section 5.02. Investment Funds. The Committee shall establish two or
more Investment Funds and shall advise the Trustee in writing of the types of
investments to be made for each Investment Fund. The Committee may direct that
any such Investment Fund will be invested in one or more insurance contracts or
mutual funds selected by the Committee or may appoint one or more investment
managers to direct the investment of any Investment Fund. The Committee may at
any time add, delete or change the investment medium or investment manager of
any Investment Fund, provided that if such change substantially changes the
characteristics of any Investment Fund, Participants utilizing such Fund shall
be notified and given an opportunity to reallocate their Account balances.
Notwithstanding the foregoing, the Committee shall at all times on and after
September 1, 1995 cause to be maintained an Investment Fund, known as the
Robbins & Myers, Inc. Company Stock Fund," the assets of which shall be invested
in shares of a class of voting common stock issued by the Company, which are
regularly traded on an established securities market and are required to be, and
are, registered under the provisions of Section 12 of the Securities Exchange
Act of 1934, as amended. Notwithstanding the asset character of an Investment
Fund, the Trustee, in its sole discretion, may invest any amount held under the
Fund in cash or cash equivalents pending investment of, or any distribution or
withdrawal from, that fund pursuant to the terms of the Trust Agreement or the
Plan. The Plan shall be administered in compliance with the provisions of
Section 404 (c) of ERISA.

         Section 5.03. Allocation and Reallocation of Contributions Among
Investment Funds.

         (a) Allocation. On Timely Notice a Participant shall elect to allocate
all of his Basic Contributions and Employer Matching Contributions among the
Investment Funds established pursuant to Section 5.02 in whole multiples of 1
percent of such Contributions. An election under this subsection may be changed
as of any business day but shall remain in effect for successive periods of time
unless changed on Timely Notice. In the event that a Participant fails to direct
the investment of contributions subject to his direction or fails to replace any
directions which may have been suspended or revoked, then such contributions
shall be invested in an Investment Fund designated by the Committee which
invests primarily in securities or other property providing a fixed or
guaranteed rate of return.

         (b) Investment Fund Transfers. A Participant may on Timely Notice elect
to transfer his interests in any one or more Investment Funds to other
Investment Funds. Except to the extent that the conditions governing any
Investment Fund (such as a fund investing in guaranteed investment contracts
issued by an insurance company) may limit or prohibit such transfers, such
transfers may be made on any business day. Such election shall be in such form
as the Committee shall determine.

                                       14
<PAGE>   19

         Section 5.04. Fees and Expenses. Brokerage fees and other direct costs
of investment shall be paid by the Trustee out of that fund of the Trust to
which such cost is attributable. All other costs and expenses of the Plan
including without limitation the Trustee's fees and transfer taxes shall be paid
by the Company.

         Section 5.05. Exclusive Benefit and Funding Policy.

         (a) All contributions hereunder shall be paid to the Trust and all
property and funds of the Trust allocable to the Plan, including income from
investments and from all other sources, shall be managed solely in the interest
of Participants and their Beneficiaries and for the exclusive purpose of:

               (i)  providing benefits to Participants and their Beneficiaries;
         and

               (ii) defraying the reasonable expenses of administering the Plan.

         (b) To the extent not specifically set forth in the Plan or Trust, the
Trustee shall establish the funding policy for the Plan and shall consult with
the Committee with respect thereto.

         Section 5.06. Special Rules Relating to Certain Participants Subject to
Section 16(b). Notwithstanding any other provision of the Plan, the Plan shall
at all times be administered in a manner that will minimize or eliminate a
Participant's liability to the Company under Section 16(b) of the Securities
Exchange Act of 1934, and the rules, regulations and interpretations thereunder.

                                   ARTICLE VI

                              PARTICIPANT ACCOUNTS

         Section 6.01. Establishment of Accounts. A separate Account shall be
established and maintained in the name of each Participant. To the extent
necessary or appropriate to provide for the proper administration of the Plan,
such Account shall include separate balances for interests derived from Pre-tax
and After-Tax Contributions, Supplemental Contributions and Employer Matching
Contributions and such other separate balances as the Committee shall determine.
As soon as practicable following the end of each Plan Year, the Company shall
provide to each Participant a statement of his Account balances, which may, but
need not, be provided more frequently.

         Section 6.02. Adjustment of Participants' Accounts. On, or as soon as
administratively practicable after, each Valuation Date, the Company shall cause
Participants' Accounts to be adjusted, as of that Valuation Date, as follows:

         (a) first, by adjusting the balances of the Participant's interests
invested under each of the Investment Funds as of the last preceding Valuation
Date, upward or downward, pro rata, according to the interests so that the
aggregate interests of Participants invested under that Investment Fund will
equal the then "Adjusted Net Worth" (as defined below) of that Investment Fund;

         (b) next, by executing the Investment Fund transfer elections made by
each Participant pursuant to the provisions of Section 5.03 that are to be
executed as of that date;

                                       15
<PAGE>   20

         (c) next, by charging to the proper Accounts of each Participant the
amount of any distributions made to or on account of that Participant pursuant
to the provisions of Articles VII and VIII since the last preceding Valuation
Date and with any cost directly related to any such distribution or loan that
have not been charged previously;

         (d) finally, by crediting the proper Accounts of each Participant with
the amount of any contributions made on his behalf or by him pursuant to the
provisions of Article IV that are to be credited as of that date.

The "Adjusted Net Worth" of any Investment Fund as of any Accounting Date means
the then fair market value of the assets held in the Investment Fund, as
determined by the Trustee.

                                   ARTICLE VII

                       VESTING; DISTRIBUTION OF ACCOUNTS

         Section 7.01. Vesting. A Participant's right to the balances credited
to his Basic Contributions Account and his Supplemental and After-Tax
Contributions Accounts, if any, shall at all times be fully vested and
nonforfeitable. A Participant's right to the balance of his Employer Matching
Contributions is subject to the following table:

                   Number of Completed
                    Years of Service                  Forfeitable Percentage
                    ----------------                  ----------------------

           Less than 1 year                                  100  percent
           at least 1 year but less than 2 years              80  percent
           at least 2 years but less than 3 years             60  percent
           at least 3 years but less than 4 years             40  percent
           at least 4 years but less than 5 years             20  percent
           5 years or more                                     0  percent;

The portion of a Participant's Employer Matching Contributions Account that is
not distributable to him by reason of the provisions of this subsection shall be
forfeited and shall be applied, commencing with the Plan Year next following the
Plan Year during which the Participant first incurs a One Year Break in Service
(as defined in subsection 7.06) to reduce the amount of any Employer Matching
Contributions that would otherwise be made pursuant to subsection 4.05, until
exhausted. Notwithstanding the foregoing provisions of this Section, the
Forfeitable Percentage of an Employee of an Employer who participated in the
Robbins & Myers, Inc. Savings Plan for Salaried Employees of Chemineer, Edlon
and Pfaudler prior to January 1, 1996 shall be determined under the provisions
of Section 12.02 of the Plan.

         Section 7.02. Distribution Upon Termination of Employment. When a
Participant's employment with the Company and any Affiliates is terminated for
any reason (except an intercompany transfer between the Company or any Affiliate
and another Affiliate), including death, disability or retirement, the entire
vested balance in such Participant's Account shall be paid at the time and in
the manner specified in Section 7.04. If the termination occurs by reason of the
death of the Participant, or if the Participant dies before the distribution is
completed, distribution shall be made to the Participant's

                                       16
<PAGE>   21

Beneficiary. If a Participant terminates employment with the Company and
Affiliates but does not take a distribution under this subsection, his entire
Account shall be invested in the Investment Fund selected by the Committee for
that purpose and shall continue to share in the earnings, gains and losses of
such Investment Fund until distribution has been completed.

         Section 7.03. Designation of Beneficiary. A Participant may designate
any person, trust and/or other entity as Beneficiary. Any such designation shall
be in writing and filed with the Committee on the form and in the manner
prescribed by the Committee, and may be revoked or changed at any time by
the-Participant. Notwithstanding the foregoing, in the event that the
Participant has a spouse at the time of his death, such spouse shall be the
Participant's Beneficiary unless (i) such spouse has consented in writing to the
Participant's designation of a different Beneficiary, (ii) such consent
acknowledges the effect of such election and is witnessed by a plan
representative appointed by the Committee or by a notary public, and (iii) the
Participant is survived by a Beneficiary designated as such as described above.
Any such consent shall be irrevocable, but shall be effective only with respect
to the specific Beneficiary designation unless the consent expressly permits
designations by the Participant without any requirement of further consent. In
the event that the Participant is not married at the time of death and either no
valid designation of Beneficiary is on file with the Committee at the date of
death or no designated Beneficiary survives, the Participant's estate shall be
the Beneficiary.

         Section 7.04. Manner and Timing of Distributions.

         (a) All amounts becoming payable under Section 7.02 shall be paid in
the form of a lump sum cash distribution, provided, however that at the election
of the Participant, distribution of whole shares of Company Stock shall be made
in kind.

         (b) Distributions under this Section shall be made as soon as
practicable after the Valuation Date which is coincident with or next follows
the Participant's election to receive his Account.

         (c) Notwithstanding the foregoing, if the value of the Participant's
interests exceeds $3,500, no distribution shall be made prior to the
Participant's Normal Retirement Age unless the prior written consent of the
Participant and the Participant's spouse, if any (or if either the Participant
or the spouse has died, the survivor) to the distribution has been obtained by
the Plan Administrator within the period beginning no more than 90 days and
ending no less than 30 days before the date payments are to be made or
commenced. The Plan Administrator shall notify the Participant and the
Participant's spouse of the right to defer any distribution until the
Participant's Normal Retirement Age. Such notification shall include a general
description of the material features of, and an explanation of the relative
values of, the optional forms of benefit under the Plan in a manner that would
satisfy the notice requirements of Code section 417(a)(3), and shall be provided
no less than 30 days and no more than 90 days prior to the date that benefit
payments are to be made or commenced. If the Participant or Beneficiary fails to
consent, distribution shall be made as soon as practicable after the Participant
attains Normal Retirement Age; provided that distribution shall in all events be
completed not later than five (5) years after the date of the Participant's
death. In the event that distribution is deferred, the Participant's entire
Account shall be invested in the Investment Funds selected by the Participant
under Section 5.03.

         (d) Notwithstanding any election to the contrary, payment of benefits
to a Participant shall commence no later than the April 1 next following the
close of the calendar year in which he attains age 70-1/2, whether or not the
Participant has retired.

                                       17
<PAGE>   22

         (e) All distributions required under this Section 7.04 shall be
determined and made in accordance with the provisions of Code section 401(a)(9)
and the regulations issued thereunder, including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the Treasury
Regulations.

         (f) Pre-Tax Contributions, Employer Matching Contributions, and income
allocable to each, shall not be distributed to Participants or Beneficiaries
earlier than upon separation from service, death, or disability, or upon the
occurrence of one of the following events:

               (i) The termination of the Plan without establishment of a
         successor defined contribution plan as such term is defined in Section
         1.401(k)-l(d)(3) of the Treasury regulations.

               (ii) The disposition by the Company of substantially all of the
         assets (within the meaning of Section 401(k)-l(d) (4)(iv)(A) of the
         Treasury regulations) used in the trade or business of the Company if
         the Company continues to maintain this Plan after the disposition, but
         only with respect to Employees who continue employment with the
         corporation acquiring such assets.

               (iii) The disposition by the Company to an unrelated entity of
         the Company's interest in a subsidiary (within the meaning of Section
         409(d)(3) of the Code) if the Company continues to maintain this Plan,
         but only with respect to Employees who continue employment with such
         subsidiary.

               (iv) The attainment of age 59-1/2 or, in the case of Pre-Tax
         Contributions only, the hardship of the Participant, as described in
         Section 8.04.

         (g) Notwithstanding the foregoing provisions of this subsection, a
Participant in the Robbins & Myers, Inc. Employee Savings Plan on December 31,
1995 shall have the right to receive a distribution of his account balance as of
December 31, 1995 under subsection 7.02 in 5 substantially equal annual or more
frequent installments if his Distribution Eligibility Date occurs on account of
his retirement on:

               (i)  a normal retirement date elected by him which must occur on
         or after the date on which he attains age 65 years;

               (ii) an early retirement date elected by him which must occur on
         or after the later of the date on which he both attains age 55 years
         and completes at least 10 Years of Service (as defined in subsection
         7.06) or the date on which he is first eligible to retire on an early
         retirement date under the terms of any defined benefit plan (as defined
         in section 414(j) of the Code) that is maintained by an Employer and in
         which he is a participant, but prior to the date on which he attains
         age 65 years.

         Section 7.05. Years of Service. The term "Years of Service" means,
with respect to any employee of Participant, the number of years, including
fractional portions thereof, elapsed since the first date for which he was paid,
or entitled to payment, for the performance of duties for the Employers or
Affiliates, subject to the following:

         (a) an employee's or Participant's number of Years of Service for the
period ended on December 31, 1995, shall be equal to his number of "Years of
Service", if any, determined in accordance with the provisions of the Plan as in
effect on that date;

                                       18
<PAGE>   23

         (b) for purposes of determining the nonforfeitable portion of the
balance of a Participant's Employer Matching Contributions Account accrued prior
to the date he incurs a One Year Break in Service, his number of Years of
Service accrued after 5 consecutive One Year Breaks in Service shall be
disregarded.

         (c) if a Participant's employment with the Employers and Affiliates is
terminated and he incurs a One Year Break in Service, he shall not be credited
with service for the period elapsed between the date his employment is
terminated and the date, if any, of his reemployment by the Employers or
Affiliates;

         (d) if an employee or Participant does not have a nonforfeitable right
under the Plan to any portion of an Employer Matching Contributions Account
balance, and the number of his consecutive One Year Breaks in Service equals or
exceeds 5, then, his number of Years of Service, if any, accrued prior to such
break shall be disregarded and he shall be considered as a new employee.

         Section 7.06. One Year Break in Service . The term "One Year Break in
Service" means, with respect to any employee or Participant, the
12-consecutive-month period commencing on his Distribution Eligibility Date if
he is not paid or entitled to payment for the performance of duties for the
Employers, or the Company Affiliates during that period.

                                  ARTICLE VIII

                             WITHDRAWALS AND LOANS

         Section 8.01. Withdrawal of Supplemental Contributions. Participant
may elect to withdraw, as of any Valuation Date, all or part of any balances
credited to such Participant's Account attributable to Supplemental
Contributions, provided that, in no event shall any Participant have a right
under this Section to withdraw amounts in excess of the amounts actually
contributed as Supplemental Contributions. The minimum withdrawal under this
Section (together with any contemporaneous withdrawal under Section 8.02) shall
be $500.00.

         Section 8.02. Withdrawal of After-Tax Contributions. A Participant may
elect to withdraw, as of any Valuation Date, all or part of any balances
credited to such Participant's Account, attributable to After-Tax Contributions;
provided that Supplemental Contributions, if any, have been previously withdrawn
or are withdrawn at the same time; and provided further that in no event shall
any Participant have a right to withdraw amounts in excess of the amounts
actually contributed as After-Tax Contributions. The minimum withdrawal under
this Section (together with any contemporaneous withdrawal under Section 8.01)
shall be $500.00.

         Section 8.03. Withdrawals After Age 59-1/2. A Participant who has
attained age 59-1/2 may elect to withdraw, as of any Valuation Date, all or part
of the balances credited to such Participant's Account.

         Section 8.04. Hardship Withdrawals.

         (a) Prior to the termination of the Participant's employment, upon a
demonstration by the Participant of an immediate and heavy financial need that
cannot be met from other resources that are reasonably available to the
Participant, a Participant shall be permitted, on Timely Notice, to make a

                                       19
<PAGE>   24

withdrawal of an amount not exceeding the lesser of (i) the amount needed to
satisfy such need, or (ii) 100% of all balances in the Participant's Account
which are derived from the Participant's Pre-Tax Contributions. Notwithstanding
the foregoing, (i) amounts derived from Employer Matching Contributions may not
be withdrawn pursuant to this Section, and (ii) distributions made pursuant to
this Section may not include any earnings credited on or after January 1, 1989
to the balance in the Participant's Account derived from Pre-Tax Contributions.

         (b) or purposes of this Section, "an immediate and heavy financial
need" shall be deemed to exist if the distribution is on account of:

               (i) Unreimbursed medical expenses described in Code section
         213(d) incurred by the Participant, the Participant's spouse, or any
         dependent of the Participant (as defined in Code section 152);

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

               (iii) Payment of tuition and related fees for the next semester
         or quarter of post-secondary education for the Participant, his or her
         spouse, children or dependents;

               (iv) The need to prevent the eviction of the Participant from his
         principal residence or foreclosure on the mortgage on the Participant's
         principal residence; or

               (v) Other events provided for in rulings, notices or other
         documents published by the Commissioner of Internal Revenue. The amount
         of an immediate and heavy financial need may include amounts necessary
         to pay any federal, state, or local income taxes or penalties
         reasonably anticipated to result from the distribution.

         (c) In order to demonstrate that a need cannot be met from other
resources, the Participant shall be required to provide such documents or
information as the Committee may require and to certify that the need cannot be
relieved (i) through reimbursement from insurance, (ii) by reasonable
liquidation of assets, (iii) by cessation of Pre-Tax or After-Tax Contributions
under the Plan, or (iv) by other withdrawals under or loans from this or any
other plan or a loan from a commercial lender, on reasonable terms.

         (d) Withdrawals under this Section shall be permitted only if the
Participant has first withdrawn all amounts available to him under this or any
other Employer plan and borrowed all amounts available to him under any other
Employer plan. All of the Participant's Contributions to this Plan and
contributions to all other plans maintained by the Employer (except
contributions to welfare benefit plans and mandatory employee contributions to
defined benefit plans) shall be suspended for a period of 12 months following
such withdrawal, and the amount which the Participant may contribute as Pre-Tax
Contributions for the Plan Year following such withdrawal shall not exceed the
amount described in Code section 402(g), reduced by the amount of the
Participant's actual Pre-Tax Contributions for the Plan Year in which the
withdrawal occurred.

         (e) Distributions pursuant to this Section shall be made as soon as
administratively feasible after the withdrawal is approved. The minimum
withdrawal under this subsection is $500.00.

                                       20
<PAGE>   25

         Section 8.05. Source of Funds for Withdrawals. A Participant may
specify which of his Accounts should be charged for any withdrawal under this
Article. Distribution will be made out of the Participant's interests in each of
the Investment Funds in accordance with the proportion of the Participant's
Account then invested in such Fund. Notwithstanding the foregoing provisions of
this Article, any withdrawal by a Participant of an amount held under any group
investment contract held by the Trustee shall be subject to any restrictions on
withdrawals contained in that contract.

         Section 8.06. Loans to Participants.  On written application of a
Participant, the Corporate Benefits Committee may, if it determines that the
Participant is creditworthy, direct the Trustee to make a loan to him from the
Trust Fund for any purpose set forth in the written loan policies of the
Corporate Benefits Committee. The amount of any loan shall not exceed an amount
equal to the lesser of:

         (a)   $50,000, reduced by the excess, if any, of:

               (i) the highest outstanding balance of loans from the Plan during
         the 1-year period ending on the day before the date the loan is made,
         over

               (ii) the outstanding balance of loans from the Plan on the date
         on which the loan is made; or

         (b) 50 percent of the amount of the Participant's nonforfeitable
Account balances determined as of the last preceding Accounting Date.

Each such loan shall be evidenced by a written note containing such terms as may
be determined by the Corporate Benefits Committee in a uniform and
nondiscriminatory manner in accordance with written loan procedures adopted by
it. Such terms shall provide that:

               (i) interest will be paid on the amount of the loan at a
         commercial lender's then prevailing rate for loans of a similar type;

               (ii) except in the case of a loan used to acquire a dwelling unit
         which, within a reasonable time (determined as of the date the loan is
         made) will be utilized as a principal residence of the Participant, the
         loan will be repaid within 5 years;

               (iii) repayment of the loan will be made in substantially equal
         quarterly or more frequent installments over the period of the loan.

The Corporate Benefits Committee shall establish a Loan Account in the name of
each Participant to whom a loan is granted, which Loan Account shall be
periodically adjusted as provided in Article VI. If, on a Participant's
distribution (under Section 7.02), any loan or portion of a loan made to him,
together with the accrued interest thereon, remains unpaid, an amount equal to
such loan or portion thereof, together with the accrued interest thereon, shall
be charged to the Participant's Accounts after all other adjustments required
under the Plan have been made, but before any payment or distribution is made to
any person pursuant to the provisions of Article VII.

                                       21
<PAGE>   26

                                   ARTICLE IX

                                 ADMINISTRATION

         Section 9.01. Designation of Fiduciaries. The persons designated in
Sections 9.02, 9.03, and 9.05, and the persons they designate to carry out or
help to carry out their duties or responsibilities are fiduciaries under the
Plan and Trust. Each fiduciary has only those duties or responsibilities
specifically assigned to him under the Plan or Trust or delegated to him by
another fiduciary. Each fiduciary may assume that any direction, information or
action of another fiduciary is proper and need not inquire into the propriety of
any such action, direction or information. Except as provided by law, no
fiduciary will be responsible for the malfeasance, misfeasance or nonfeasance of
any other fiduciary. Any fiduciary may participate in the Plan, provided he
otherwise is eligible to do so. Except as permitted by law, no Employee or
director shall receive any compensation from the Plan or Trust for his services
as a fiduciary.

         Section 9.02. Board. The Board will appoint the members of the
Corporate Benefits Committee, act on any matter referred by the Corporate
Benefits Committee under subsection 9.03(c) and receive and review reports
submitted periodically by the Corporate Benefits Committee concerning
administration of the Plan and Trust.

         Section 9.03. Corporate Benefits Committee.

         (a) Designation. The Board will name the members of the Corporate
Benefits Committee and will fix the number of its members.

         (b) Purpose. The Corporate Benefits Committee will control and
administer the Plan.

         (c) Powers. The Corporate Benefits Committee has all powers necessary
to carry out its purposes, including the following:

               (i) administer the Plan in accordance with its terms and
         conditions;

              (ii) establish the rules, regulations and procedures it finds
         necessary or appropriate to discharge its duties;

             (iii) adopt or amend the Plan and any trusts or insurance contracts
         used to fund the Plan;

              (iv) interpret the Plan, including supplying any omissions in
         accordance with the intent of the Plan;

               (v) decide all questions concerning eligibility of any Employee
         to become a Participant;

              (vi) compute the amount of benefits and determine to whom such
         benefits will be paid;

             (vii) authorize or deny the payment of Plan benefits;

            (viii) delegate its powers and duties to others as it sees fit,
         including:

                    (A) the preparation and filing of all reports with
               governmental agencies;

                                       22
<PAGE>   27

                    (B) the preparation and distribution of booklets,
               announcements, reports and descriptions of the Plan to Employees,
               as required by law;

                    (C) the maintenance of all records relating the Plan and
               Trust;

                    (D) the establishment and administration of a uniform claims
               procedure; and

                    (E) the performance of all other duties necessary to
               administer the Plan;

               (ix) employ those accountants, actuaries, agents, consultants,
         physicians and attorneys (who may be counsel to the Company) it finds
         necessary, and to receive and evaluate their reports;

               (x) review bonding and insurance requirements;

              (xi) designate an agent for service of legal process upon the
         Plan;

             (xii) review and implement long-term planning in developing
         modifications of the Plan;

            (xiii) establish and enforce the rules, regulations, procedures,
         investment policies and investment programs it considers desirable;

             (xiv) receive and evaluate monthly, quarterly and annual reports of
         Trustees, investment managers and investment advisers;

              (xv) review the performance of the Trustees, investment managers
         and/or investment advisers at least quarterly;

             (xvi) allocate the amount of assets to be managed by each Trustee,
         investment manager and investment adviser;

            (xvii) accept or reject rollover amounts;

           (xviii) establish any accounts called for by the Plan or Trust;

             (xix) report at least annually to the Company on the investment
         performance of the Trust Fund;

              (xx) appoint, remove or replace other fiduciaries including the
         Trustee (or insurance company which holds Plan assets), investment
         managers or investment advisers;

             (xxi) approve the amount of Employer Contributions to be made to
         the Plan or approve discontinuance of Employer Contributions to the
         Trust Fund;

            (xxii) discontinue or terminate the Plan and any trusts or insurance
         contracts used to fund the Plan; and

           (xxiii) perform any other act or acts necessary to the performance of
         its powers and duties;

                                       23
<PAGE>   28

         (d) Resignation, Removal and Designation of Successor. The Company may
remove any member of the Corporate Benefits Committee at any time. Any member of
the Corporate Benefits Committee may resign at any time by delivering his
written resignation to the Company and the Corporate Benefits Committee. New
members will be named by the Company. Any new member will have the same rights,
powers, privileges, immunities and duties as the other members of the Corporate
Benefits Committee. The Corporate Benefits Committee must promptly notify the
Trustee of any change in its membership.

         Section 9.04. Action of Committee. Any act authorized, permitted or
required to be taken by the Corporate Benefits Committee may be taken by a
majority of its members, either by vote at a meeting or in writing without a
meeting. All members must be notified of the proposed action and must have an
opportunity to vote. A majority of the members of the Corporate Benefits
Committee constitutes a quorum. All notices, advices, directions,
certifications, approvals and instructions required or authorized to be given by
the Corporate Benefits Committee must be in writing and signed (a) by a majority
of the members of the Corporate Benefits Committee, (b) by the member or members
of the Corporate Benefits Committee designated as having authority to execute
documents on its behalf or (c) by a person authorized to act for the Corporate
Benefits Committee under subsection 9.03(c)(ix).

         Section 9.05. Trustee.

         (a) Designation. The Corporate Benefits Committee will appoint the
Trustee.

         (b) Powers and Duties. The Trustee has the duties and powers set forth
in the agreement executed by the Company and the Trustee.

         Section 9.06. Employer Records. The Corporate Benefits Committee may
inspect the Employer's books and records to determine any fact in connection
with acts to be performed by it under the Plan, or it may rely on the Employer's
statement. If the Corporate Benefits Committee wants any statement, certified,
it may rely on a certification of the Company, Employer or Affiliate, as
appropriate.

         Section 9.07. Indemnification. All fiduciaries designated in Section
9.01 other than a bank or trust company or any insurance company acting as a
Trustee and anyone else delegated any power, authority or responsibility under
this Article, have all rights of indemnification provided by law or agreement or
under the Company's Articles of Incorporation, regulations or by-laws. In
addition, the Employer will satisfy any liability actually and reasonably
incurred by all fiduciaries, other than a bank or trust company or an insurance
company acting as Trustee, including expenses, attorneys' fees, judgments, fines
and amounts paid in settlement, in connection with any threatened, pending, or
completed action, suit or proceeding related to their exercise or failure to
exercise any of the powers, authority, responsibilities or discretion provided
under the Plan and the Trust, or reasonably believed by them to be provided
thereunder, any action taken by them in connection with those matters if they
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interest of the Plan, and with respect to any criminal action or
proceeding, if they had no reasonable cause to believe that their conduct was
unlawful.

         Section 9.08. Discrimination Prohibited. In exercising any
discretionary or absolute authority under the Plan, the Corporate Benefits
Committee will act in a consistent and nondiscriminatory manner, treating all
persons in similar circumstances in a similar manner. The Corporate Benefits
Committee may take no action which would discriminate in favor of Members,
Beneficiaries or

                                       24
<PAGE>   29

Employees who are officers, shareholders or highly-compensated employees, or
which would result in benefiting one employee or group of employees at the
expense of others similarly situated.

         Section 9.09. Representation in Proceedings. In any court proceeding
arising under the Plan, the Corporate Benefits Committee will be the
representative of the Members, Beneficiaries and all other claiming any interest
under the Plan.

         Section 9.10. Time of Delivery. Any information, forms of election,
rejection or other materials required to be filed or delivered by a Member or
Beneficiary to the Company, the Employer or any fiduciary will be deemed filed
or delivered when received. Any consents, approvals, information, requests for
information or other materials required to be filed or delivered to a Member or
Beneficiary by the Company, the Employer for any fiduciary will be deemed filed
or delivered on the earlier of the date of personal delivery or the date
deposited in first class mail. Any information or other materials required to be
filed or delivered to the Company, the Employer or any fiduciary by the Company,
the Employer or any fiduciary will be deemed filed or delivered when actually
received.

                                   ARTICLE X

                                 MISCELLANEOUS

         Section 10.01. Rights to Trust Assets.

         (a) No Participant or any other person shall have any right to, or
interest in, any part of the Trust assets upon termination of employment or
otherwise, except as provided from time to time under this Plan, and then only
to the extent of the amounts due and payable to such person out of the assets of
the Trust. All payments as provided for in this Plan shall be made solely out of
the assets of the Trust and neither the Employers, the Trustee, nor any member
of the Committee shall be liable therefor in any manner.

         (b) The effectiveness of this Plan is expressly subject to the
condition that the Company shall initially receive a favorable determination
letter from the Internal Revenue Service that the Plan meets the requirements
for qualification under Section 401(a) of the Code and all Employer
contributions hereunder are conditioned on the continued qualification of the
Plan under such Code section and the deductibility of such contributions under
Code section 404. In the event that the Internal Revenue Service initially fails
to issue a favorable determination letter, the Company may, at its option,
terminate the Plan, in which case all amounts in the Trust attributable to
Employer contributions shall be refunded to the Employers and all amounts
attributable to Participant contributions shall be distributed to Participants.
In the event that the Committee determines that a contribution has been made as
the result of a good faith mistake of fact, then the Committee may direct that
any non-deductible Employer contribution or any other contribution made as the
result of a mistake of fact shall be refunded to the Employer or Participant in
accordance with applicable provisions of ERISA.

         (c) Except as provided in subsection (b) of this Section, the Employers
shall have no beneficial interest of any nature whatsoever in any Employer
Matching Contributions after the same have been received by the Trustee, or in
the assets, income or profits of the Trust or any part thereof.

         Section 10.02. Non-Recommendation of Investment. The decision as to
the choice of Investment Funds hereunder must be made solely by each
Participant, and no officer or employee of

                                       25
<PAGE>   30

any Employer or the Trustee is authorized to make any recommendation to any
Participant concerning the allocation or reallocation of Contributions among the
Investment Funds.

         Section 10.03. Non-Alienation. Except as otherwise provided herein, no
right or interest of any Participant or Beneficiary in the Plan and the Trust
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, attachment, garnishment, execution,
levy, bankruptcy, or any other disposition of any kind, either voluntary or
involuntary, prior to actual receipt of payment by the person entitled to such
right or interest under the provisions hereof, and such disposition or attempted
disposition shall be void. Notwithstanding the foregoing, a qualified domestic
relations order relating to child support, alimony payments or marital property
rights shall be recognized and given effect if such order contains sufficient
information to permit the Committee to determine that it meets the requirements
of Code section 414(p). If a qualified domestic relations order so directs,
distribution of benefits to the alternate payee may be made at a time not
permitted for distributions to the Participant.

         Section 10.04. Facility of Payment. If the Committee shall determine
that a Participant or Beneficiary entitled to a distribution hereunder is
incapable of caring for his own affairs, because of illness or otherwise, it may
direct that any distribution from such Participant's Account may be made, in
such shares as it shall determine, to the spouse, child, parent or other blood
relative of such Participant or his Beneficiary, or any of them, or to such
other persons or persons as the Committee may determine. The Committee shall be
under no obligation to see to the proper application of the distributions so
made to such person or persons and any such distribution shall be a complete
discharge of any liability under the Plan to such Participant or Beneficiary, to
the extent of such distribution.

         Section 10.05. Unclaimed Benefits. In the event that the Committee is
unable to locate any person who is entitled to benefits hereunder despite
reasonable and diligent efforts to do so, then such person's benefits shall be
automatically forfeited as of the last day of the Plan Year next following the
year in which such benefits became payable; provided, however, in the event that
such person subsequently makes a claim for such forfeited benefits prior to the
termination of the Plan, such benefits shall be reinstated by means of a special
Employer contribution equal to the amount of the forfeiture or by direct payment
by the Company to such person as determined by the Committee.

                                   ARTICLE XI

                           TOP-HEAVY PLAN PROVISIONS

         Section 11.01. Effect of Top-Heavy Status. The Plan shall be a
"Top-Heavy Plan" for any Plan Year if either of the following conditions
applies:

         (a) The Top-Heavy Ratio for the Plan exceeds sixty percent (60%) and
the Plan is not part of any Required Aggregation Group or Permissive Aggregation
Group having a Top-Heavy Ratio of sixty percent (60%) or less.

         (b) The Plan is part of a Required Aggregation Group Having a Top-Heavy
Ratio which exceeds sixty percent (60%) and is not part of a Permissive
Aggregation Group having a Top-Heavy Ratio of sixty percent (60%) or less.

                                       26
<PAGE>   31

If the Plan is a Top-Heavy Plan in any Plan Year, the provisions of Article
11.03 through 11.05 shall supersede any conflicting provisions of the Plan.

         Section 11.02. Additional Definitions. Solely for purposes of this
Article, the following terms shall have the meanings set forth below:

         (a) "Key Employee" means any employee or former employee (and the
beneficiary of such employee) whose status as an officer or owner of the
Employer makes him a "key employee" as determined in accordance with Code
section 416(i)(1) and the regulations thereunder.

         (b) "Determination Date" means the last day of the preceding Plan Year.

         (c) "Top-Heavy Ratio" means a fraction, the numerator of which is the
sum of account balances under any defined contribution plans maintained by the
Employer for all Key Employees and the present value of accrued benefits under
any defined benefit plans maintained by the Employer for all Key Employees, and
the denominator of which is the sum of the account balances under such defined
contribution plans for all employees and the present value of accrued benefits
under such defined benefit plans for all employees disregarding in either case
accrued benefits attributable to employees who have not been employed within the
five year period preceding the Determination Date. Both the numerator and
denominator of the Top-Heavy Ratio shall be adjusted for any distribution of an
account balance on an accrued benefit made in the five (5) year period ending on
the Determination Date and any contribution due but unpaid as of the
Determination Date. For purposes of calculating the Top-Heavy Ratio, (i) the
value of account balances and the present value of accrued benefits shall be
determined as of the most recent Valuation Date that falls within or ends with
the twelve (12) month period ending on the Determination Date, and (ii) the
account balances and present values of accrued benefits of any employees who are
not Key Employees but who were Key Employees in a prior year shall be
disregarded. The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Code section 416 and the regulations thereunder. When
aggregating plans, the value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall within the same
calendar year. The present value of accrued benefits shall be determined
pursuant to Code section 416(g) using a five (5) percent interest assumption and
the 11P-1984 Mortality Table. Solely for the purpose of determining if the Plan,
or any other plan included in an aggregation group of which this Plan is a part,
is top-heavy, the accrued benefit of an Employee other than a Key Employee shall
be determined under (i) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Affiliates, or (ii) if there is no
such method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual rate of Code section
411(b)(1)(C).

         (d) "Permissive Aggregation Group" means the Required Aggregation Group
of plans plus any other plan or plans of the Employer which, when considered as
a group with the Required Aggregation Group, would continue to satisfy the
requirements of Code section 401(a)(4) and 410.

         (e) "Required Aggregation Group" means (i) each qualified plan of the
Employer in which at least one Key Employee participates, and (ii) any other
qualified plan of the Employer which enables a plan described in (i) to meet the
requirements of Code sections 401(a)(4) and 410.

         (f) "Valuation Date" means (i) in the case of a defined contribution
plan, the Determination Date, and (ii) in the case of a defined benefit plan,
the date as of which funding calculations are generally made within the twelve
(12) month period ending on the Determination Date.

                                       27
<PAGE>   32

         (g) "Employer" means the employer or employers whose employees are
covered by this Plan and any other employer which must be aggregated with any
such employer under Code sections 414(b), (c), (m) or (o).

         Section 11.03. Minimum Benefits. For any year in which the Plan is a
Top-Heavy Plan, the employer contributions on behalf of each Employee who is not
Key Employee shall at least be equal to three percent (3%) of such Employee's
compensation (as defined in Code section 415) for such Plan Year or the
percentage of compensation allocated on behalf of the Key Employee for which
such allocation was highest, whichever is less, reduced however by the amounts
allocated to such Employee under any other defined contribution plans. If such
Employee is also covered under a defined benefit plan of the Affiliates, such
Employee will only be entitled to the defined benefit minimum.

         Section 11.04. Maximum Benefit Limits. If the Employer maintains a
defined benefit plan and a defined contribution plan which both cover one or
more of the same Key Employees, and if such Plans are Top-Heavy, then the
limitation stated in a separate provision of this Plan with respect to the Code
section 415(e) maximum benefit limitations shall be deemed to refer to a 1.0
adjustment on the dollar limitation rather than a 1.25 adjustment. This
provision shall not apply if the Top-Heavy Ratio is less than ninety percent
(90%) and if the minimum benefit requirements of Section 11.03 are met when
three percent (3%) is changed to four percent (4%).

                                  ARTICLE XII

                                   AMENDMENT

         Section 12.01. General Amendment. The Corporate Benefits Committee may
amend the Plan at any time, by action of a majority of its members at a meeting
or by unanimous written consent in lieu of meeting. The Employer, the Corporate
Benefits Committee and all Members, Beneficiaries and other persons will be
bound by those amendments. However, no amendment may increase the duties or
liabilities of the Trustee, the Company or the Employer without its written
consent, and no amendment may authorize or permit any part of the Trust Fund to
be used for or diverted to any purpose other than the exclusive benefit of
Members or their Beneficiaries, and for defraying the reasonable expenses of
administering the Plan and Trust. The Corporate Benefits Committee specifically
reserves the right to make any amendment designed to comply, or to eliminate any
uncertainty of compliance, with the Code, ERISA, any other laws relating to
qualified employees' trusts or any regulations or rulings issued under those
laws, even though accrued benefits are eliminated or reduced retroactively.

         Section 12.02. Amendment of Vesting Schedule. If the Plan is amended
to provide a different vesting schedule, each person adversely affected:

         (a) who is a Participant during the election period below; and

         (b) who has completed a Period of Service of at least three years
before that period ends;

may elect to have the amendment disregarded in determining his vested amount.
The election must be in writing and delivered to the Corporate Benefits
Committee within the election period. Upon delivery, the election will be
irrevocable. The election period begins on the date the amendment is adopted and
ends 60 days after the latest of the date:

                                       28
<PAGE>   33

         (c) the amendment is adopted;

         (d) the amendment becomes effective; or

         (e) the Corporate Benefits Committee delivers a written notice of the
amendment to the Participant.

No amendment to the Plan's vesting schedule may decrease the vested amount which
any Member has earned as of the date of the amendment.

                                  ARTICLE XIII

                   SUSPENSION, DISCONTINUANCE OR TERMINATION

         Section 13.01. Termination or Partial Termination of the Plan. The
Corporate Benefits Committee may terminate or partially terminate the Plan at
any time by action of a majority of its members at a meeting or by unanimous
written consent in lieu of meeting. If the Plan is terminated or partially
terminated without termination of the Trust, the Trust will be continued until
terminated by the Corporate Benefits Committee or until all Trust assets have
been distributed.

         Section 13.02. Termination of the Trust. If the Plan is terminated or
partially terminated, the Trust may be terminated by the Corporate Benefits
Committee in the manner described above. The Trust Fund and each account under
the Trust Fund will be valued as provided in the Trust document. The Corporate
Benefits Committee will determine the methods and means of distribution and will
certify that information to the Trustee. After receiving that certification and
after making necessary adjustments to reflect additional earnings, losses and
liquidation expenses, the Trustee will distribute the Trust assets promptly. If
one but not all Employers terminates or partially terminates the Plan, that
Employer will determine whether or not the Trust will continue for its Members.
If those interests are terminated, the Corporate Benefits Committee will direct
their liquidation under this Section.

         Section 13.03. Discontinuance of Employer Contributions. The Employer
expects to continue the Plan and to make Employer Contributions indefinitely.
However, the Employer does not assume a contractual obligation to continue the
Plan and reserves the right to reduce, suspend or discontinue Employer
Contributions. Any suspension or discontinuance of Employer Contributions will
not constitute a discontinuance of the Plan. If Employer Contributions are
discontinued or suspended the Trust will be continued until terminated by the
Company or until all trust Assets have been distributed.

                                   ARTICLE XIV

                                     GENERAL

         Section 14.01. Severability. Each provision of the Plan is independent
of each other provision. If any provision of the Plan proves to be, or is
finally held by any court or tribunal, board or authority of competent
jurisdiction to be illegal, unenforceable or in conflict with the Code, ERISA or
any other law relating to qualified employees' trusts, that provision will be
disregarded and will be void. Such invalidation will not impair the Plan or any
of its other provisions.

                                       29
<PAGE>   34

         Section 14.02. Merger of Plans. No merger or consolidation of the Plan
with, or transfer in whole or in part of the assets and liabilities of the Trust
Fund to, any other plan of deferred compensation or trust fund maintained or
established for the benefit of all or some Members may occur unless:

         (a) each Member would receive (if the other plan then terminated) a
benefit immediately after the merger, consolidation or transfer which is equal
to or great than the benefit he would have been entitled to receive immediately
before the merger, consolidation or transfer (if the Plan had then terminated);

         (b) resolutions adopted by the Company, the Corporate Benefits
Committee, and the Employer, and by any new or successor employer of the
affected Members, authorize the transfer of assets and, in the case of the new
or successor employer of the affected Members, its resolutions specifically
assume liabilities for those Members' benefits; and

         (c) the other plan and trust are qualified under Code sections 401(a)
and 501(a).

         Section 14.03. Plan Not a Contract of Employment. Neither the creation
of the Plan nor any amendment to it nor the creation of the Trust Fund nor the
payment of benefits gives any legal or equitable right to any person against the
Company, the Employer or any Affiliate, their officers or employees, or against
the Trustee except as provided in the Plan. All liabilities under the Plan will
be satisfied, if at all, only out of the Trust Fund. Participation in the Plan
does not give any Member any right to continued employment.

         Section 14.04. Successors; Reorganizations. In the case of the merger,
consolidation, sale of assets, liquidation or other reorganization of the
Employer under circumstances in which a successor person, firm or company (a)
continues all or a substantial part of the Employer's business and (b) employs a
substantial number of the Employer's employees, the successor will be
substituted for the Employer under the Plan if it files a written election with
the Trustee and the Corporate Benefits Committee to carry on the provisions of
the Plan.

         Section 14.05. Expenses. The Employer will pay all the expenses of
administering the Plan, including the Trustee's compensation and expenses, any
broker's fees incurred by the Trust, the expenses of the Corporate Benefits
Committee, and any other expenses incurred at the direction of the Corporate
Benefits Committee. Any of those expenses not paid by the Employer will be paid
out of the Trust Fund. The Company will allocate the expenses among Employers.

         Section 14.06. Controlling Law. The Plan will be construed and
enforced according to the laws of the State of Ohio and the United States.

         Section 14.07. Construction. If the Plan contains contradictory
clauses or if there appears to be a conflict between its provisions, the
following rules of construction will apply:

         (a) The interpretation that favors the Plan as a tax-free retirement
plan and the deduction of Employer Contributions for federal income tax purposes
will prevail over any interpretation that might render the Plan taxable or
prevent that deduction.

         (b) Subject to subsection (a), the rules established by the Supreme
Court of the State of Ohio for the construction of like instruments will apply.

                                       30
<PAGE>   35

         Section 14.08. Headings. The headings and subheadings in the Plan are
inserted for convenience of reference only and are not to be considered in the
construction of its provisions.

         Section 14.09. Counterparts. The Plan may be executed in any number of
counterparts, each of which is an original. All counterparts constitute one and
the same instrument, sufficiently evidenced by any one counterpart.

         Section 14.10. Treasury Qualification. The Plan is designed to comply
with Code section 401(a) and will terminate automatically if (a) the Internal
Revenue Service issues a written determination that the Plan as initially
adopted is not qualified and the Corporate Benefits Committee elects not to
amend or further amend the Plan, or (b) the Internal Revenue Service fails to
issue, within one year following a request that the Internal Revenue Service
issue, a written determination of qualification. Upon termination of the Plan
under this Section, the Trust will terminate and all amounts contributed by the
Employer and Participants (adjusted for net earnings and losses) will be
returned to them.

         Section 14.11. Denial of Guaranty. There is no guarantee that the
Trust Fund will not incur losses or depreciate in value. Also, there is no
guarantee that any benefit or amount which may become due to any Member,
Participant or Beneficiary, or to any creditor of the Trust will be paid, nor
does the Employer or the Corporate Benefits Committee guarantee or assume any
obligation to enforce payment by any insurance company of any benefit or amount
which may become due under any insurance contract. Each Member or Beneficiary
and any creditor of the Trust may look only to the Trust Fund for payment. After
a Member's Distributable Credit has been fully distributed to him or to his
Beneficiary, or to the persons designated in Section 5.05, his interest in the
Trust Fund is extinguished. Neither the Company nor the Employer is liable in
any manner to any Member, Beneficiary or other person for any act or omission of
the Corporate Benefits Committee or Trustee.

                                       31
<PAGE>   36

                                  SUPPLEMENT A

                      IRS MODEL DIRECT ROLLOVER REVISIONS
                           (Effective January 1, 1996)

A.1  Rollover Requirements

Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Supplement, a distributee may elect,
at the time and in the manner prescribed by the plan administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.

A.2  Definitions

(a)  Eligible rollover distribution: An eligible rollover distribution is any
     cash distribution of all or any portion of the balance to the credit of the
     distributee, except that an eligible rollover distribution does not
     include: any distribution that is one of a series of substantially equal
     periodic payments (not less frequently than annually) made for the life (or
     life expectancy) of the distributee or the joint lives (or joint life
     expectancies) of the distributee and the distributee's designated
     beneficiary, or for a specified period of ten years or more; any
     distribution to the extent such distribution is required under Section
     401(a)(9) of the Code; and the portion of any distribution that is not
     includable in gross income (determined without regard to the exclusion for
     net unrealized appreciation with respect to Employer securities).

(b)  Eligible retirement plan: An eligible retirement plan is an individual
     retirement account described in Section 408(a) of the Code, an individual
     retirement annuity described in Section 408(b) of the Code, an annuity plan
     described in Section 403(a) of the Code, or a qualified trust described in
     Section 401(a) of the Code, that accepts the distributee's eligible
     rollover distribution. However, in the case of an eligible rollover
     distribution to the surviving spouse, an eligible retirement plan is an
     individual retirement account or individual retirement annuity.

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

(d)  Direct rollover: A direct rollover is a payment by the Plan to the eligible
     retirement plan specified by the distributee.

                                       32
<PAGE>   37

                                  SUPPLEMENT B

                     IRS MODEL SECTION 401(a)17 LIMITATION
                          (Effective January 1, 1996)

In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, the annual
compensation of each employee taken into account under the plan shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit
is $150,000, as adjusted by the Commissioner for increases in the cost of living
in accordance with section 401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.

For plan years beginning on or after January 1, 1994, any reference in this plan
to the limitation under section 401(a)(17) of the Code shall mean the OBRA '93
annual compensation limit set forth in this provision.

If compensation for any prior determination period is taken into account in
determining an employee's benefit accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.

                                       33
<PAGE>   38

                                  SUPPLEMENT C

                           PERIOD OF LIMITED ACTIVITY
                           (Effective January 1, 1996)

         This Supplement applies to Participants who were Participants in the
Robbins & Myers, Inc. Employee Savings Plan on December 31, 1995. During the
period beginning January 1, 1996 and ending as soon as practicable following the
transition to Vanguard administration, such Participants shall not be permitted
to take loans or any in-service withdrawals under the Plan.

                                       34
<PAGE>   39

                               FIRST AMENDMENT TO
                              ROBBINS & MYERS, INC.
                              EMPLOYEE SAVINGS PLAN

         WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc.

Employee Savings Plan (the "Plan"); and

         WHEREAS, amendment of the Plan is now deemed desirable;

         NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it by Section 12.01 of the Plan, hereby amends the Plan
effective January 1, 1996 in the following particulars:

         1. By adding the following paragraph (i) to Section 4.06, to follow
immediately after paragraph (h) thereof:

              (i) Multiple Use Test. The provisions of IRC Regs. Section
         1.401(m)-2(b) are incorporated herein by reference. In applying the
         multiple use test, the actual deferral percentage shall be reduced
         with respect to all Highly Compensated Employees.

         2. By adding the following new sentence to the end of Section 4.07 of
the Plan:

         If, as the result of the allocation of forfeitures, a reasonable error
         in estimating a Participant's Compensation, a reasonable error in
         determining the amount of pre-tax Basic Contributions that a
         Participant may make under the limits created by section 415 of the
         Code, or other facts and circumstances which the Commissioner
         determines justify this treatment, any excess annual additions on
         behalf of a Participant shall be reduced by returning pre-tax Basic
         Contributions to the Participant (including gains attributable to those
         contributions) to the extent necessary to eliminate any excess annual
         additions.

         3. By substituting subsection 7.06 for the reference to subsection 7.07
in subsection 7.01 of the Plan.

         4. By adding the following new sentence to the end of Section 7.02 of
the Plan:

         A Participant is 100 percent vested in his Account Balances upon
         attainment of Normal Retirement Age, if he is then employed, upon plan
         termination and upon partial plan termination.

         5. By adding the following sentence to the end of subsection 7.06 of
the Plan:

         Notwithstanding the foregoing provision of this subsection, in the case
         of a person on maternity or paternity leave of absence, a One Year
         Break in Service will not occur until the end of the

<PAGE>   40

         24-consecutive month period commencing on his Distribution Eligibility
         Date if he is not paid or entitled to payment for the performance of
         duties for the Employers, or the Company Affiliates during that
         period.

         6. By inserting "or at the time of any prior distribution exceeded
$3,500" immediately following the reference to $3,500 in Section 7.04(c).

         7. By adding a new Section 7.07 to follow immediately after Section
7.06 of the Plan:

              Section 7.07. Payment of Benefits. Unless the Participant
         otherwise elects, payment of his Account Balances shall begin not later
         than 60 days after the last day of the Plan Year during which the last
         of the following occurs:

              (a) the Participant attains age 65;

              (b) the tenth anniversary of the Participant's participation in
         the Plan; or

              (c) the Participant terminates employment with Robbins & Myers,
         Inc. and its Affiliates.

         8. By substituting the following for Section 11.02(e) of the Plan:

              (e) "Required Aggregation Group" means (i) each qualified plan of
         the Employer in which at least one Key Employee participates during the
         current Plan Year or any of the four immediately preceding Plan Years,
         and (ii) any other qualified plan of the Employer which enables a plan
         described in (i) to meet the requirements of Code sections 401(a)(4) or
         410.

         IN WITNESS WHEREOF, the undersigned, a duly appointed member of the
Corporate Benefits Committee, has caused this First Amendment to be executed on
its behalf, this ___ day of __________________, 1996.

                                --------------------------------------------
                                A Member of the Corporate Benefits Committee

                                      -2-
<PAGE>   41

                               SECOND AMENDMENT TO
                              ROBBINS & MYERS, INC.
                              EMPLOYEE SAVINGS PLAN

         WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Employee Savings Plan (the "Plan"); and

         WHEREAS, amendment of the Plan is now deemed desirable;

         NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it by Section 12.01 of the Plan, hereby amends the
Plan, effective November 1, 1996, by substituting the following for Section
2.01(i) of the Plan:

            (i) "Compensation" means an Employee's total salary or wages from
         the Employing Unit before deductions, including base pay, commissions,
         overtime, incentive pay provided under an incentive pay plan maintained
         by his Employer and any before-tax contributions made under any 401(k)
         plan or any amount deferred under Code section 125, and excluding any
         severance pay, moving allowance, car allowance, awards or prizes,
         bonuses, stock option or SAR payments, nonqualified deferred
         compensation, expatriate allowances or imputed income under Code
         section 79 or 132, or such other similar payments under the Code and
         regulations thereunder. Notwithstanding the foregoing, Compensation in
         a Plan Year in excess of $150,000, subject to adjustment as provided in
         Code section 401(a)(17), shall be disregarded for all purposes under
         the Plan. In determining compensation of an employee, the rules of
         section 414(q)(6) of the Code shall apply, except that in applying such
         rules, the term "family" shall include only the spouse of the employee
         and lineal descendants of the employee who have not attained age 19
         years before the close of year. If, as a result of the application of
         such rules, the adjusted dollar limitation of section 401(a)(17) of the
         Code applicable to family members is exceeded, then such limitation
         shall be prorated among the affected individuals in proportion to each
         such individual's Compensation as determined under this subsection
         prior to the application of the limitation.

         IN WITNESS WHEREOF, the undersigned, a duly appointed member of the
Corporate Benefits Committee, has caused this Second Amendment to be executed on
its behalf, this ___ day of October, 1996.

                               --------------------------------------------
                               A Member of the Corporate Benefits Committee

<PAGE>   42

                               THIRD AMENDMENT TO
                              ROBBINS & MYERS, INC.
                              EMPLOYEE SAVINGS PLAN

         WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Employee Savings Plan (the "Plan"); and

         WHEREAS, amendment of the Plan is now deemed desirable;

         NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it by Section 12.01 of the Plan, hereby amends the
Plan, effective January 1, 1997, by substituting the following for Section
3.01(a) of the Plan:

            (a) On or after January 1, 1997, an Employee, other than a Part-Time
         Employee, shall be eligible to participate herein as of the first day
         of the calendar month coincident with or next following his Employment
         Commencement Date.

              IN WITNESS WHEREOF, the undersigned, a duly appointed member of
the Corporate Benefits Committee, has caused this Third Amendment to be executed
on its behalf, this ___ day of _______________, 1996.

                                 --------------------------------------------
                                 A Member of the Corporate Benefits Committee

<PAGE>   43

                               FOURTH AMENDMENT TO
                              ROBBINS & MYERS, INC.
                              EMPLOYEE SAVINGS PLAN

         WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Employee Savings Plan (the "Plan"); and

         WHEREAS, amendment of the Plan is now deemed desirable;

         NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it by Section 12.01 of the Plan, hereby amends the
Plan, effective April 1, 1997, by substituting the following for Section 3.01(a)
of the Plan:

                (a) On or after January 1, 1997, an Employee, other than a
         Part-Time Employee, shall be eligible to participate herein as of the
         first day of the calendar month coincident with or next following his
         Employment Commencement Date. Notwithstanding the foregoing provisions
         of this paragraph, individuals performing services for Process Supply,
         Inc. through a leasing agency shall become eligible to participate in
         the Plan on April 1, 1997.

         IN WITNESS WHEREOF, the undersigned, a duly appointed member of the
Corporate Benefits Committee, has caused this Fourth Amendment to be executed on
its behalf, this ___ day of _______________, 1997.

                                --------------------------------------------
                                A Member of the Corporate Benefits Committee

<PAGE>   44

                             FIFTH AMENDMENT TO THE
                              ROBBINS & MYERS, INC.
                              EMPLOYEE SAVINGS PLAN

         Amendment to the Robbins & Myers, Inc. Employee Savings Plan.

         WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
         Myers, Inc. Savings Plan (the "Plan"), as amended; and

         WHEREAS, the Company intends to amend the Plan to allow for the Plan to
         accept direct rollovers from participants in a qualified plan;

         NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
         the authority granted to it under Section 9.03 of the Plan, hereby
         amends the Plan effective as of January 1, 1997, as follows:

         1. ARTICLE II DEFINITIONS AND CONSTRUCTION

            Add new paragraph (dd):

               (dd) "Rollover Contribution" means any rollover contribution to
            the Plan made by a participant as permitted under ARTICLE IV.

         2. ARTICLE IV  CONTRIBUTIONS

            The following section is added to this ARTICLE IV:

                Section 4.08. Rollover Contributions.

               (a) An Employee who was a participant in a plan qualified under
            Section 401(a) of the Code and who receives a cash distribution from
            such plan that he elects either (i) to roll over immediately to a
            qualified retirement plan or (ii) to roll over into a conduit IRA
            from which he receives a later cash distribution, may elect to make
            a Rollover Contribution to the Plan if he is entitled under Section
            402(c) or Section 408(d)(3)(A) of the Code to roll over such
            distribution to a plan qualified under Section 401(a) of the Code.
            The Administrator may require an Employee to provide it with such
            information as it deems necessary or desirable to show that he is
            entitled to roll over such distribution to another qualified
            retirement plan. An Employee shall make a Rollover Contribution to
            the Plan by delivering, or causing to be delivered, to the Trustee
            the cash that constitutes the Rollover Contribution amount within
            the time period required in the Code in the manner prescribed by the
            Administrator. If the Employee does not already have an investment
            election on file with the Administrator, the employee

<PAGE>   45

            shall also deliver to the Administrator his election as to the
            investment of his contributions in accordance with Article X.

               (b) A Participant's vested interest in his Rollover Contributions
            Sub-Account shall be at all times 100 percent.

         3. ARTICLE VI PARTICIPANT'S ACCOUNTS

            Section 6.01 is amended as follows:

               Section 6.01. Establishment of Accounts. A separate Account shall
            be established and maintained in the name of each Participant. To
            the extent necessary or appropriate to provide for the proper
            administration of the Plan, such Account shall include separate
            balances for interests derived from Pre-Tax and After-Tax
            Contributions, Supplemental Contributions, Employer Matching
            Contributions, Rollover Contributions and such other separate
            balances as the Committee shall determine. As soon as practicable
            following the end of each Plan Year, the Company shall provide to
            each Participant a statement of his Account balances, which may, but
            need not, be provided more frequently.

         The effective date of this Amendment is January 1, 1997.

         In all respects not amended, the Plan is hereby ratified and confirmed.

                                 * * * * * * * *

         IN WITNESS WHEREOF, Robbins & Myers, Inc. has caused this amendment to
be executed this ____ day of ______________, 1997.

                                          ROBBINS & MYERS, INC.

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

                                       -2-
<PAGE>   46

                             SIXTH AMENDMENT TO THE
                              ROBBINS & MYERS, INC.
                              EMPLOYEE SAVINGS PLAN

         Amendment to the Robbins & Myers, Inc. Employee Savings Plan. Robbins &
Myers, Inc. (the "Company") maintains the Robbins & Myers, Inc. Savings Plan
(the "Plan"), as amended. The Company now deems it desirable to amend the Plan;

         NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
         the authority granted to it under Section 12.01 of the Plan, hereby
         amends the Plan, effective as of January 1, 1998, in the following
         manner:

         1. Section 8.3, When and How Distributions Are Made, is amended in its
         entirety to read as follows:

         8.3. When and How Distributions Are Made. Subject to the following
         provisions of this Section, a Participant's nonforfeitable Account
         balances, determined as of the Accounting Date coincident with or next
         preceding his Plan Payment Date, will be distributed to him in cash or,
         in the case of Company Stock held for his benefit, in kind, by either
         of the following methods:

                   (a) in a single lump sum payment; or

                   (b) in the case of a Participant whose Distribution
              Eligibility Date occurs on account of retirement under
              subparagraph 8.1(a)(i) or (ii) and who so elects by writing filed
              with the Corporate Benefits Committee, in 5 substantially equal
              annual or more frequent installments.

              Notwithstanding the foregoing:

                         (i) in the case of a Participant whose aggregate
                    nonforfeitable Account balances as of his Distribution
                    Eligibility Date equal an amount that is less than $5,000, a
                    distribution will be made as soon as practicable after that
                    date in a single lump sum payment; and

                         (ii) in case of a Participant whose interest in the
                    Company Stock Fund has a value on his Distribution
                    Eligibility Date which is less than the fair market value of
                    100 shares of Company Stock on such date, distributions of
                    his interest in the Company Stock Fund shall be made in cash
                    rather than in Company Stock.

<PAGE>   47

         A Participant's "Plan Payment Date" is any date occurring after his
         Distribution Eligibility Date that is elected by him. A Participant's
         election pursuant to the foregoing sentence must be made not less than
         30 and not more than 90 days prior to the date that is to be his Plan
         Payment Date. In the case of a Participant (not a 5% owner) who attains
         age 70 1/2 after December 31, 1998, and is then still employed by the
         Company, distributions will commence on the April 1 following the year
         in which the Participant retires. If a Participant dies prior to
         receipt of his entire aggregate nonforfeitable Account balances, any
         remaining amount shall be distributed to his Designated Beneficiary or,
         if for any reason the Participant is not survived by a Designated
         Beneficiary, to his Beneficiary or Beneficiaries, as the case may be,
         in a lump sum or lump. sums, as soon as practicable, but not later than
         the 5th anniversary of the Participant's death.

         2. A new Supplement D, as attached hereto, shall be added to the Plan.

         The effective date of this Amendment is January 1, 1998.

         In all respects not amended, the Plan is hereby ratified and confirmed.

                                 * * * * * * * *

         IN WITNESS WHEREOF, the undersigned, a duly appointed member of the
Corporate Benefits Committee, has caused this Sixth Amendment to be executed
this ____ day of ______________, 1998.

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

                                       -2-
<PAGE>   48

                                  SUPPLEMENT D

                          MODEL IRS UNIFORMED SERVICES
                           EMPLOYMENT AND REEMPLOYMENT
                               RIGHTS ACT OF 1994

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

<PAGE>   49

                            SEVENTH AMENDMENT TO THE
                              ROBBINS & MYERS, INC.
                              EMPLOYEE SAVINGS PLAN

         WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Savings Plan (the "Plan"), as amended; and

         WHEREAS, amendment of the Plan is now deemed desirable;

         NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it under Section 12.01 of the Plan, hereby amends the
Plan effective July 1, 1998, in the following manner:

         Replace subsection 8.02 in its entirety and substitute a new subsection
         8.02 which reads as follows:

            Section 8.02. Withdrawal of Rollover and After-Tax Contributions. A
         Participant may elect to withdraw, as of any Valuation Date, all or
         part of any balances credited to such Participant's Account
         attributable to his Rollover Contributions plus earnings thereon, and
         After-Tax Contributions; provided that Supplemental Contributions, if
         any, have been previously withdrawn or are withdrawn at the same time.
         The minimum withdrawal under this Section (together with any
         contemporaneous withdrawal under Section 8.01) shall be $500.00.

         The effective date of this Amendment is July 1, 1998.

         In all respects not amended, the Plan is hereby ratified and confirmed.

                                  * * * * * * * *

                    IN WITNESS WHEREOF, the undersigned, a duly appointed member
of the Corporate Benefits Committee has caused this Seventh Amendment to be
executed on its behalf this ____ day of July, 1998.

                                --------------------------------------------
                                A Member of the Corporate Benefits Committee

<PAGE>   50

                             EIGHTH AMENDMENT TO THE
                              ROBBINS & MYERS, INC.
                              EMPLOYEE SAVINGS PLAN

         WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Employee Savings Plan (the "Savings Plan"), as amended; and

         WHEREAS, the Company also maintains the Flow Control Equipment, Inc.
401(k) Retirement Savings Plan (the "FCE Plan"); and

         WHEREAS, effective January 1, 2000, the Company merged the FCE Plan
into the Savings Plan; and

         WHEREAS, assets of the FCE Plan are to be transferred to the Savings
Plan as soon as practicable after January 1, 2000; and

         WHEREAS, the Company now intends to amend the Savings Plan to reflect
the plan merger;

         NOW, THEREFORE, the Savings Plan is amended as follows:

         1. By adding the following language after the last sentence of Article
            III, Section 3.01(a), Eligibility to Participate:

               (a) Each participant in the Flow Control Equipment, Inc. 401(k)
            Retirement Savings Plan (the "FCE Plan") on December 31, 1999 shall
            automatically become a Participant in the Plan effective January 1,
            2000.

         2. By adding the following language to the last sentence of Section
            6.01, Establishment of Accounts:

            Effective January 1, 2000, a separate Account shall be established
            and maintained in the name of each former participant in the FCE
            Plan who now participates in the Plan ("Former FCE Participant").
            Such Accounts shall include, in addition to the separate Account
            balances set out above, a balance for interest derived from Employer
            Non-elective Matching Contributions.

         3. By adding the following new section to Article VI, Participant
            Accounts:

            Section 6.03. Merger of Accounts. All assets held under the FCE Plan
            shall be transferred to, and merged with, assets of the Plan as soon
            as practicable after January 1, 2000. All benefits payable from the
            FCE Plan after the date assets are transferred shall be payable from
            the Plan. Participant Account balances under the FCE Plan shall be
            transferred to the separate accounts established and maintained for
            each Former FCE Participant under Section 6.01 above.
<PAGE>   51

         4. By adding the following sentence to Section 7.05. Years of Service:

            The number of completed Years of Service for determining vesting
            under Section 7.01 of the Plan shall include Years of Service
            credited to a Former FCE Participant under the FCE Plan.

         5. By adding the following subsection (h) to Section 7.04. Manner and
            Timing of Distributions:

               (h) Notwithstanding the foregoing provisions of this subsection,
            a Former FCE Participant shall have the right to an in-service
            withdrawal of any portion of his Account attributable to Employer
            Non-elective Contributions, if the Former FCE Participant has
            attained age 59 1/2.

         6. The effective date of this Eighth Amendment is January 1, 2000.

         IN ALL RESPECTS NOT AMENDED, THE PLAN IS HEREBY RATIFIED AND CONFIRMED.

                                 * * * * * * * *

              IN WITNESS WHEREOF, the undersigned, a duly appointed member of
the Corporate Benefits Committee, has caused this Eighth Amendment to be
executed on its behalf this ____ day of February, 2000.

                                 --------------------------------------------
                                 Hugh E. Becker
                                 A Member of the Corporate Benefits Committee

                                       -2-

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