Document:

<PAGE>

               NOTE:  THIS TABLE OF CONTENTS IS NOT PART OF THE
               CINERGY CORP. UNION EMPLOYEES' RETIREMENT INCOME PLAN;
               INSTEAD, THIS TABLE OF CONTENTS IS MERELY FOR
               CONVENIENCE OF REFERENCE

                                 TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                 PAGE
<S>                                                                              <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

ARTICLE  1  DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

ARTICLE  2  EFFECTIVE DATE OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE  3  ELIGIBILITY AND PARTICIPATION  . . . . . . . . . . . . . . . . . . . . 29
     3.1    Date of Participation. . . . . . . . . . . . . . . . . . . . . . . . . 29
     3.2    Leased Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
     3.3    Transfers of Employment. . . . . . . . . . . . . . . . . . . . . . . . 29
     3.4    Transfers of Participants and Plan Assets To and From the Cinergy
            Corp. Non-Union Employees' Pension Plan and Cinergy Corp. Union
            Employees' Pension Plan. . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE  4  AMOUNT OF LIFE-ONLY PENSION. . . . . . . . . . . . . . . . . . . . . . 31
     4.1    Normal Retirement Pension Formula. . . . . . . . . . . . . . . . . . . 31
     4.2    Normal Retirement Benefits for Pre-1998 Participants . . . . . . . . . 32
     4.3    General Method of Computing Annual Pension for Retirement at
            Early Retirement Date. . . . . . . . . . . . . . . . . . . . . . . . . 32
     4.4    General Method of Computing Annual Pension for a Terminated
            Vested Participant . . . . . . . . . . . . . . . . . . . . . . . . . . 35
     4.5    Maximum Pension. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

ARTICLE  5  SEVERANCE FROM SERVICE-VESTING . . . . . . . . . . . . . . . . . . . . 40
     5.1    Vesting Requirement. . . . . . . . . . . . . . . . . . . . . . . . . . 40
     5.2    Severance from Service before Vesting. . . . . . . . . . . . . . . . . 40
     5.3    Severance from Service after Vesting . . . . . . . . . . . . . . . . . 41

ARTICLE  6  SPOUSE'S BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
     6.1    Determination of Spouse's Benefit. . . . . . . . . . . . . . . . . . . 41
     6.2    Method of Payment of Spouse's Benefit. . . . . . . . . . . . . . . . . 44

ARTICLE  7  FORMS OF PENSION . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
     7.1    Normal Forms of Pension. . . . . . . . . . . . . . . . . . . . . . . . 45
     7.2    Optional Forms of Retirement Income. . . . . . . . . . . . . . . . . . 47

ARTICLE  8  PAYMENT OF PENSION . . . . . . . . . . . . . . . . . . . . . . . . . . 58
     8.1    Timing of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
     8.2    Method of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 58

<PAGE>

     8.3    Small Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
     8.4    Facility of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . 59
     8.5    Benefits for Late Retirees, Reemployed Retirees and Reemployed
            Terminated Vested Participants . . . . . . . . . . . . . . . . . . . . 59
     8.6    Required Payment of Benefits . . . . . . . . . . . . . . . . . . . . . 61
     8.7    Direct Rollovers of Eligible Distributions . . . . . . . . . . . . . . 66

ARTICLE  9  RETIREE MEDICAL/DENTAL BENEFITS. . . . . . . . . . . . . . . . . . . . 66
     9.1    Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
     9.2    Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
     9.3    Separate Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
     9.4    Impossibility of Diversion Prior To Satisfaction of All
            Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
     9.5    Reversion Upon Satisfaction of All Liabilities . . . . . . . . . . . . 67
     9.6    Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
     9.7    Employer Contributions To The Medical/Dental Benefits Account. . . . . 67
     9.8    Medical/Dental Benefits. . . . . . . . . . . . . . . . . . . . . . . . 68

ARTICLE  10 NONALIENATION OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . . 68

ARTICLE  11 ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
     11.1   Administrator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
     11.2   Removal and Replacement of Committee Members . . . . . . . . . . . . . 69
     11.3   Disqualification and Resignation . . . . . . . . . . . . . . . . . . . 69
     11.4   Chairperson, Services, and Counsel . . . . . . . . . . . . . . . . . . 69
     11.5   Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
     11.6   Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
     11.7   Action Without Meeting . . . . . . . . . . . . . . . . . . . . . . . . 70
     11.8   Notice to Trustee of Changes in Membership . . . . . . . . . . . . . . 70
     11.9   Correction of Defects. . . . . . . . . . . . . . . . . . . . . . . . . 71
     11.10  Reliance Upon Legal Counsel. . . . . . . . . . . . . . . . . . . . . . 71
     11.11  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
     11.12  Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
     11.13  Powers and Duties of Committee . . . . . . . . . . . . . . . . . . . . 72
     11.14  Matters Specifically Excluded from Jurisdiction. . . . . . . . . . . . 73

ARTICLE  12 BENEFIT CLAIMS PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . 73

ARTICLE  13 FUNDING POLICY AND METHOD. . . . . . . . . . . . . . . . . . . . . . . 75

ARTICLE  14 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
     14.1   No Enlargement of Employee Benefits. . . . . . . . . . . . . . . . . . 75
     14.2   Reemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
     14.3   Qualified Military Service . . . . . . . . . . . . . . . . . . . . . . 76
     14.4   Notice of Address. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
     14.5   Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
     14.6   No Individual Liability. . . . . . . . . . . . . . . . . . . . . . . . 77
     14.7   Participant's Statement of Agreement . . . . . . . . . . . . . . . . . 77

                                          ii
<PAGE>

     14.8   No Diversion of Assets . . . . . . . . . . . . . . . . . . . . . . . . 77
     14.9   Governing Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
     14.10  Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
     14.11  Interpretation and Regulation of Plan. . . . . . . . . . . . . . . . . 78
     14.12  Communications by Participants . . . . . . . . . . . . . . . . . . . . 78
     14.13  Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
     14.14  Accrued Benefit Not to be Decreased by Amendment . . . . . . . . . . . 79

ARTICLE  15 TRUSTS AND INSURANCE CONTRACTS . . . . . . . . . . . . . . . . . . . . 79
     15.1   Trusts and Insurance Contracts . . . . . . . . . . . . . . . . . . . . 79
     15.2   Irrevocability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
     15.3   Sufficiency of Pension Fund. . . . . . . . . . . . . . . . . . . . . . 80

ARTICLE  16 CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

ARTICLE  17 APPROVAL UNDER INTERNAL REVENUE CODE . . . . . . . . . . . . . . . . . 81

ARTICLE  18 AMENDMENT AND TERMINATION. . . . . . . . . . . . . . . . . . . . . . . 81
     18.1   Right to Amend or Terminate. . . . . . . . . . . . . . . . . . . . . . 81
     18.2   Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . 82
     18.3   Merger and Consolidation of Plan . . . . . . . . . . . . . . . . . . . 84
     18.4   Post-Change in Control Merger, Consolidation, or Transfer of
            Pension Plan Assets or Liabilities . . . . . . . . . . . . . . . . . . 85
     18.5   General Protection of Benefits in the Event of a Change in
            Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
     18.6   Post-Change in Control Surplus Reversion . . . . . . . . . . . . . . . 86

ARTICLE  19 AUTHORIZED TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . 87

ARTICLE  20 PARTICIPATION BY OTHER EMPLOYERS . . . . . . . . . . . . . . . . . . . 87
     20.1   Adoption of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
     20.2   Withdrawal from Participation. . . . . . . . . . . . . . . . . . . . . 87
     20.3   Cinergy as Agent for Employers . . . . . . . . . . . . . . . . . . . . 88

ARTICLE  21 CONTINUANCE BY A SUCCESSOR . . . . . . . . . . . . . . . . . . . . . . 89

</TABLE>

                                         iii
<PAGE>

                                 ADOPTED PURSUANT TO RESOLUTIONS OF THE CINERGY
                               CORP. BOARD OF DIRECTORS DATED DECEMBER 18, 1997

               CINERGY CORP. UNION EMPLOYEES' RETIREMENT INCOME PLAN

                (As Amended and Restated Effective January 1, 1998)

                                    INTRODUCTION

Effective December 31, 1946, The Cincinnati Gas & Electric Company adopted The
Cincinnati Gas & Electric Company Retirement Income Plan.  The Plan has been
restated on several occasions in order to comply with applicable legal
requirements and to make other changes.  This document is a complete restatement
of the Plan, effective January 1, 1998.  Also, effective January 1, 1998, the
Plan is renamed the Cinergy Corp. Union Employees' Retirement Income Plan.

This Plan is maintained for the exclusive benefit of Eligible Employees.  The
purpose of the Plan is to provide retirement income for Eligible Employees.  The
Plan is designed to satisfy the requirements of Code subsection 401(a) and the
applicable requirements of ERISA.

                                     ARTICLE 1

                                    DEFINITIONS

As used in this document, the following words and phrases, when capitalized,
will have the meanings set forth below, unless a different meaning is plainly
required by the context.

1.1    "Absence from Service" means, with respect to each Employee, his absence
       from service (with or without pay) with his Employer for any reason other
       than a quit, resignation, discharge, retirement, or death, including, but
       without limitation because of enumeration, vacation, holiday, sickness,
       disability, leave of absence (unless otherwise required by applicable
       law), or other layoff.

                                          1
<PAGE>

1.2    "Accrued Vacation Pay" means, with respect to an Employee, the
       compensation received at his Severance from Service for unused accrued
       vacation pursuant to the Employer's applicable policy.

1.3    "Active Participant" means a Participant for whom benefits are being
       accrued under the Plan on the applicable date.

1.4    "Actual Separation Date" means:

       (a)    with respect to a Participant who either (1) retires on or after
              his Normal Retirement Date, or (2) who retires on an Early
              Retirement Date, the first day of the calendar month coincident
              with or following the date of the Participant's Severance from
              Service; or

       (b)    with respect to a Participant who incurs a Severance from Service
              before he reaches age 50 and who is entitled to benefits
              determined under the provisions of Section 5.3 (Severance from
              Service after Vesting), the date of the Participant's Severance
              from Service.

1.5    "Actuarial Equivalent" means a benefit having the same actuarially
       determined value as the benefit that the Actuarial Equivalent replaces.
       The determination of an Actuarial Equivalent will be based on the
       following actuarial assumptions, except as provided in Subsection (c) or
       (d) below:

       (a)    MORTALITY:

              Participants in accordance with the UP-1984 Table, with no rating
              of ages;Spouses and Contingent Annuitants in accordance with the
              UP-1984 Table, with ages rated down three years;

                                          2
<PAGE>

       (b)    INTEREST:

              7-1/2% per annum, compounded annually.

       (c)    With respect to any lump sum payment that may be payable under the
              Plan during a Plan Year, the Actuarial Equivalent will be
              calculated using the mortality table as prescribed from time to
              time by the Secretary of the Treasury (currently the 1983 Group
              Annuity Mortality Table with a 50/50 mix of males and females) and
              an interest rate equal to the annual rate of interest on 30 year
              Treasury securities as specified by the Commissioner of Internal
              Revenue for the second full calendar month preceding the first day
              of the Plan Year.

       (d)    In the case of a Participant who had an accrued benefit under the
              Plan as of December 31, 1997, and who has a Severance from Service
              Date after December 31, 1997, no benefit determination will
              produce an amount that is less than that which would have been
              produced utilizing both the actuarial assumptions specified in the
              Plan as in effect on December 31, 1997, and the annual pension
              accrued as of December 31, 1997, determined under the provisions
              of the Plan, as then in effect.

1.6    "Additional Separation Date" means, with respect to a Participant who has
       an Initial Separation Date and who is later reemployed by an Employer,
       the first day of the calendar month coincident with or following the
       Participant's next Severance from Service Date.  However, if the
       Participant has multiple Severance from Service Dates after his Initial
       Separation Date, then he will have an Additional Separation Date for each
       Severance from Service, which will be the first day of the calendar month
       coincident with or following the Participant's applicable Severance from
       Service Date.

1.7    "Affiliate" means any employer that together with the Employer is under
       common control or a member of an affiliated service group as determined
       under Code subsections 414(b), (c), (m), and (o).  In determining whether
       an employer is a member

                                          3
<PAGE>

       of a controlled group for purposes of Section 4.5 (Maximum Pension), the
       rules of Code subsections 414(b) and (c) will be applied as modified by
       Code subsection 415(h).

1.8    "Annual Addition" means, with respect to a Participant for a Plan Year,
       the following amounts credited to a Participant's account in any
       Qualified Defined Contribution Plan maintained by the Employer or an
       Affiliate for the Plan Year:  employer contributions, employee
       contributions (other than rollover contributions); forfeitures; amounts
       allocated, after March 31, 1984, to an individual medical account, as
       defined in Code paragraph 415(l)(2), that is part of a pension or annuity
       plan maintained by the Employer or an Affiliate; and amounts derived from
       contributions paid or accrued after March 31, 1984, that are attributable
       to post-retirement medical benefits, allocated to the separate account of
       a Key Employee, under a welfare benefit fund, as defined in Code
       subsection 419(e), maintained by the Employer or an Affiliate.

1.9    "Annual Pension" means, with respect to a Participant, the amount of the
       Participant's pension, expressed as an annual benefit for the
       Participant's lifetime.

1.10   "Annual Performance Cash Award" means, with respect to an Employee, the
       cash award received by the Employee under the provisions of an Employer's
       annual bonus or incentive pay plan or program, including, but without
       limitation because of enumeration, the Union Employees' Incentive Plan or
       any successor Plan.

1.11   "Annuity Starting Date" means, with respect to a Participant, the first
       day of the first period for which a Plan benefit is paid as an annuity
       or, in the case of a benefit not payable in the form of an annuity, the
       first day on which all events have occurred that entitle the Participant
       to the benefit.

1.12   "Base Wage" means, with respect to an Employee, the hourly or weekly base
       rate of pay received as remuneration for services performed for the
       relevant period, exclusive of any allowances, premiums, bonuses,
       overtime, or other forms or types of compensation, multiplied by his
       hours worked during the applicable period.

                                          4
<PAGE>

1.13   "Beneficiary" means, with respect to each Participant, the person or
       persons who are to receive benefits under the Plan after the
       Participant's death.

1.14   "Board of Directors" means the duly constituted board of directors of
       Cinergy on the applicable date.

1.15   "Break in Service" means, with respect to an Employee, a Period of
       Severance of at least 12 consecutive months.

1.16   "CG&E" means The Cincinnati Gas & Electric Company, and any related
       company that adopted the Plan on or before December 31, 1997.

1.17   "Change in Control" means any of the following events have occurred:

       (a)    Any "person" or "group" (within the meaning of subsection 13(d)
              and paragraph 14(d)(2) of the Securities Exchange Act) is or
              becomes the "beneficial owner" (as defined in Rule 13d-3 under the
              Securities Exchange Act), directly or indirectly, of securities of
              Cinergy (not including in the securities beneficially owned by
              such person or group any securities acquired directly from Cinergy
              or an Affiliate) representing 50% or more of the combined voting
              power of Cinergy's then outstanding securities, excluding any
              person or group who becomes such a beneficial owner in connection
              with a transaction described in Paragraph (1) of Subsection (b)
              below;

       (b)    There is consummated a merger or consolidation of Cinergy or any
              direct or indirect subsidiary of Cinergy with any other
              corporation, other than (1) a merger or consolidation that would
              result in the voting securities of Cinergy outstanding immediately
              prior to the merger or consolidation continuing to represent
              (either by remaining outstanding or by being converted into voting
              securities of the surviving entity or any parent thereof) at least
              50% of the combined voting power of the securities of Cinergy or
              such surviving entity or any parent thereof

                                          5
<PAGE>

              outstanding immediately after the merger or consolidation, or
              (2) a merger or consolidation effected to implement a
              recapitalization of Cinergy (or similar transaction) in which no
              person is or becomes the beneficial owner, directly or indirectly,
              of securities of Cinergy (not including in the securities
              beneficially owned by such person any securities acquired directly
              from Cinergy or its Affiliates other than in connection with the
              acquisition by Cinergy or its Affiliates of a business)
              representing 25% or more of the combined voting power of Cinergy's
              then outstanding securities;

       (c)    During any period of two consecutive years, individuals who at the
              beginning of that period constitute the Board of Directors and any
              new director (other than a director whose initial assumption of
              office is in connection with an actual or threatened election
              context, including but not limited to a consent solicitation,
              relating to the election of directors of Cinergy) whose
              appointment or election by the Board of Directors or nomination
              for election by Cinergy's shareholders was approved or recommended
              by a vote of at least two-thirds (2/3) of the directors then still
              in office who either were directors at the beginning of that
              period or whose appointment, election or nomination for election
              was previously so approved or recommended cease for any reason to
              constitute a majority of the Board of Directors; or

       (d)    The shareholders of Cinergy approve a plan of complete liquidation
              or dissolution of Cinergy or there is consummated an agreement for
              the sale or disposition by Cinergy of all or substantially all of
              Cinergy's assets, other than a sale or disposition by Cinergy of
              all or substantially all of Cinergy's assets to an entity, at
              least 60% of the combined voting power of the voting securities of
              which are owned by shareholders of Cinergy in substantially the
              same proportions as their ownership of Cinergy immediately prior
              to such sale.

1.18   "Cinergy" means Cinergy Corp., a Delaware corporation, and any
       corporation that succeeds to its business and adopts the Plan.

                                          6
<PAGE>

1.19   "Claimant" means a person submitting a claim for benefits under the Plan.

1.20   "Code" means the Internal Revenue Code of 1986, as amended from time to
       time, and interpretive rulings and regulations.

1.21   "Committee" means the benefits committee established pursuant to
       Article 11 (Administration) to serve as Plan administrator.

1.22   "Contingent Annuitant" means, with respect to any Participant electing a
       contingent pension option under Section 7.2 (Optional Forms of Retirement
       Income), the person designated by the Participant to receive a contingent
       pension after the Participant's death.

1.23   "Covered Compensation" means, with respect to a Participant, the average
       (without indexing) of the annual Social Security taxable wage bases under
       the Social Security Act for each year during the 35 calendar years ending
       with the last day of the calendar year in which the Participant reaches
       his Social Security Retirement Age.

1.24   "DCIP" means The Cincinnati Gas & Electric Company Deferred Compensation
       and Investment Plan.

1.25   "Defined Benefit Plan Fraction" means, with respect to an individual
       participating in one or more Qualified Defined Benefit Plans for any
       calendar year, the fraction, the numerator of which is the individual's
       Projected Annual Benefit under the Qualified Defined Benefit Plans
       (determined as of the end of the calendar year), and the denominator of
       which is the lesser of:  (a) the product of 1.25 multiplied by the dollar
       limitation in effect under Code subparagraph 415(b)(1)(A) for that
       calendar year, or (b) the product of 1.4 multiplied by the amount that
       may be taken into account under Code subparagraph 415(b)(1)(B) with
       respect to the individual under the Qualified Defined Benefit Plans for
       the calendar year.

                                          7
<PAGE>

1.26   "Defined Contribution Plan Fraction" means, with respect to an individual
       participating in one or more Qualified Defined Contribution Plans for any
       calendar year, the fraction, the numerator of which is the sum of the
       Annual Additions with respect to the Participant (determined as of the
       close of the calendar year), and the denominator of which is the lesser
       of the following amounts (determined for that calendar year and for each
       prior calendar year of service with the Employer):  (a) the product
       of 1.25 multiplied by the dollar limitation in effect under Code
       subparagraph 415(c)(1)(A) for the calendar year (determined without
       regard to Code paragraph 415(c)(6)), or (b) the product of 1.4 multiplied
       by the amount that may be taken into account under Code
       subparagraph 415(c)(1)(B) with respect to that individual under all
       Qualified Defined Contribution Plans for the calendar year.

1.27   "Dependent" means any individual who is eligible for coverage under the
       Medical/Dental Plan as the "spouse" or "dependent" of an Eligible
       Retiree.

1.28   "Direct Rollover" means a payment by the Plan to the Eligible Retirement
       Plan specified by the Distributee.

1.29   "Disability Date" means, with respect to a Participant, the date the
       Participant is first determined to be totally disabled under Cinergy's
       Long Term Disability Plan, as amended from time to time.

1.30   "Distributee" means an Employee or former Employee.  In addition, the
       Employee's or former Employee's surviving Spouse, and the Employee's or
       former Employee's Spouse who is the alternate payee under a Qualified
       Domestic Relations Order are Distributees with regard to the interest of
       the Spouse or former Spouse.

1.31   "Early Retirement Date" means, with respect to each Participant who has
       satisfied the Vesting Requirement, and whose Severance from Service
       occurs on or after his 50th birthday but prior to his Normal Retirement
       Date, the first day of the calendar month coincident with or following
       his Severance from Service.

                                          8
<PAGE>

1.32   "Earnings" means, with respect to any Employee for any period of
       reference, the sum of the Employee's:  (a) Base Wage, (b) Overtime Pay,
       (c) Shift Premiums, (d) Holiday Premiums, (e) Accrued Vacation Pay,
       (f) Sabbatical Vacation Pay, (g) Service Watch Payments, and (h) Annual
       Performance Cash Awards.  "Earnings" does not include (a) reimbursements
       or other expense allowances, (b) fringe benefits (cash and noncash) other
       than those named in the preceding sentence, (c) moving and relocation
       expenses, (d) deferred compensation, (e) welfare benefits, (f)
       Long-Term Performance Awards, (g) other forms of compensation or
       remuneration that are not specifically named in the preceding sentence,
       or (h) any payments received by an Employee from any Affiliate that is
       not an Employer.

       If an Eligible Employee takes a leave of absence to act as Business
       Manager and/or Assistant Business Manager of Local Union 1347 of the
       International Brotherhood of Electrical Workers, AFL-CIO, his Earnings
       for the period of his leave of absence will be deemed to be the Earnings
       the Eligible Employee received immediately prior to his leave of absence;
       provided, however, that his Earnings for the period of his leave will be
       adjusted to reflect any cost-of-living increases the Eligible Employee
       would have received during that period under the collective bargaining
       agreement between Local Union 1347 and the Employer.

       Notwithstanding the foregoing provisions of this Section, an Employee's
       Earnings taken into account for any Plan Year will not exceed $150,000,
       as adjusted pursuant to Code paragraph 401(a)(17).

1.33   "Effective Date" means the Plan's original effective date of December 31,
       1946.

1.34   "Eligible Employee" means an Employee other than a Leased Employee whose
       pay is customarily computed on an hourly, weekly, or bi-weekly basis;
       whose employment is subject to FLSA overtime and record keeping
       provisions; and who is assigned to an employment position that is
       governed by a collective bargaining agreement to which the Employer is a
       party and which provides for participation in the Plan.

                                          9
<PAGE>

1.35   "Eligible Individual" means an Eligible Retiree or a Dependent.

1.36   "Eligible Retiree" means an individual who:

       (a)    is a Retired Participant who is also eligible to participate in
              the Medical/Dental Plan, and

       (b)    is not a Key Employee at any time during the current Plan Year and
              has not been a Key Employee at any time during any previous Plan
              Year for which contributions were made for that individual's
              benefit to the Medical/Dental Benefits Account.

1.37   "Eligible Retirement Plan" means an individual retirement account
       described in Code subsection 408(a), an individual retirement annuity
       described in Code subsection 408(b), an annuity plan described in Code
       subsection 403(a), or a qualified trust described in Code
       subsection 401(a), that accepts the Distributee's Eligible Rollover
       Distribution.  However, in the case of an Eligible Rollover Distribution
       to a surviving Spouse, an Eligible Retirement Plan is an individual
       retirement account or individual retirement annuity.

1.38   "Eligible Rollover Distribution" means any distribution of all or a
       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 Beneficiary, or for a specified period
       of ten years or more; any distribution to the extent that the
       distribution is required under Code paragraph 401(a)(9); 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).

                                          10
<PAGE>

1.39   "Employee" means any person who is employed by an Employer, other than as
       an employee classified by his Employer as a summer laborer or summer
       employee, and who receives compensation that the Employer initially
       reports on a federal wage and tax statement (Form W-2).  For purposes of
       crediting Service for vesting and, except as otherwise provided, for
       purposes of the rules set out in Section 4.5 (Maximum Pension), the term
       "Employee" includes a Leased Employee.

1.40   "Employer" means Cinergy and any Affiliate that, with the consent of the
       Board of Directors, elects to participate in the Plan pursuant to
       Section 20.1 (Adoption of Plan) and any successor corporation or other
       organization or entity that adopts the Plan pursuant to Article 21
       (Continuance by a Successor).  If any Affiliate withdraws from
       participation in the Plan pursuant to Section 20.2 (Withdrawal from
       Participation), that Affiliate will cease to be an Employer.

1.41   "Employment Commencement Date" means, with respect to each Employee, the
       date as of which the Employee is first entitled to be credited with an
       Hour of Service.

1.42   "ERISA" means the Employee Retirement Income Security Act of 1974, as
       amended from time to time, and interpretive rulings and regulations.

1.43   "FLSA" means the Fair Labor Standards Act of 1938, as amended from time
       to time, and interpretive rulings and regulations.

1.44   "Highest Average Earnings" means a Participant's highest average annual
       Earnings for any three consecutive calendar years out of his last ten
       years of Participation.  However, if the Participant completes fewer than
       three years of Participation, his Highest Average Earnings will mean his
       average annual Earnings for his total years of Participation.  If a
       Participant is totally disabled and qualifies for benefits under
       Cinergy's Long Term Disability Plan until his Normal Retirement Date,
       Early Retirement Date, or Actual Separation Date, whichever is
       applicable, his Severance from Service Date will be deemed for purposes
       of this Section to be his Disability Date.

                                          11
<PAGE>

       For purposes of this Section, if a Participant's Severance from Service
       Date is other than December 31, the following periods will be treated as
       a period of three consecutive calendar years:

       (a)    His months of Participation in the calendar year that includes his
              Severance from Service Date; plus

       (b)    The two (or fewer) full calendar years of Participation prior to
              his Severance from Service Date; plus

       (c)    From the calendar year immediately preceding the period described
              in Subsection (b), the lesser of (1) the Participant's months of
              Participation in that year, or (2) the number of months equal to
              12 minus the number of months included pursuant to Subsection (a).
              A Participant's Earnings will be deemed to have been earned
              ratably throughout the period described in this Subsection (c).

1.45   "Holiday Premiums" means, with respect to an Employee, the compensation
       received as a premium for services performed for the relevant period for
       working on a holiday recognized by the Employer pursuant to its
       applicable policy.

1.46   "Hour of Service" means, with respect to any Employee, any of the
       following:

       (a)    each hour for which he is paid, or entitled to payment, by an
              Employer for the performance of duties for that Employer;

       (b)    each other hour for which back pay, irrespective of mitigation of
              damages, has been either awarded to him or agreed to be paid to
              him by an Employer;

       (c)    each other hour for which he is absent from his normal period of
              employment with his Employer due to an approved military leave,
              maternity leave, paternity

                                          12
<PAGE>

              leave, adoption leave, worker's compensation leave, personal leave
              of six consecutive months or less, or sick leave of six
              consecutive months or less; and

       (d)    each other hour for which he is paid, or entitled to payment, by
              an Employer for a period of time during which he does not perform
              any duties for that Employer (irrespective of whether or not his
              employment relationship with that Employer has terminated) due to
              vacation, holiday, illness, incapacity (including disability),
              layoff, jury duty, witness duty, military duty, or leave of
              absence.

       In computing an Hour of Service, the Plan may use the equivalencies set
       forth in paragraph (e) of 29 C.F.R. Section 2530.200b-3.  However, if
       different equivalencies are used for different classifications of
       Employees, then those classifications must be reasonable and consistently
       applied.  Each Hour of Service will be credited to the Employee for the
       appropriate computation period in accordance with the provisions of
       paragraphs (b) and (c) of 29 C.F.R. Section 2530.200b-2, and each Hour of
       Service, when aggregated for a particular computation period, will
       constitute the Hours of Service credited to the Employee for that
       computation period.  However, no Employee will be credited under
       Subsection (d) either with more than 501 Hours of Service on account of
       any single continuous period during which the Employee performs no duties
       for an Employer irrespective of whether or not that period occurs in a
       single computation period, or with an hour for which the Employee is
       paid, or entitled to payment, by an Employer if that payment is made
       solely for the purposes of either reimbursing the Employee for medical or
       medically related expenses incurred by the Employee or complying with
       applicable worker's compensation, unemployment compensation, or
       disability insurance laws.  However, the crediting of Hours of Service
       for back pay awarded or agreed to with respect to periods described in
       Subsection (d) of this Section will be subject to the same limitations
       set forth in the immediately preceding sentence with respect to
       Subsection (d).

1.47   "Initial Separation Date" means, with respect to a Participant who is
       entitled to benefits under the provisions of Section 5.1 (Vesting
       Requirement), Section 5.2 (Severance from Service before Vesting), or
       Section 5.3 (Severance from Service after Vesting), the first

                                          13
<PAGE>

       day of the calendar month coincident with or following the Participant's
       initial Severance from Service Date.

1.48   "Key Employee" means an Employee or former Employee of an Employer who,
       at any time during the determination period, is:

       (a)    an officer of an Employer having annual Section 415 Compensation
              from his Employer greater than 50 percent of the amount in effect
              under Code subparagraph 415(b)(1)(A) for any Plan Year;

       (b)    one of the ten Employees having annual Section 415 Compensation
              from his Employer of more than the limitation in effect under Code
              subparagraph 415(c)(1)(A) and owning (or considered as owning
              within the meaning of Code section 318) the largest interests in
              the Employer.

       (c)    the owner (or considered as the owner within the meaning of Code
              section 318) either of more than five percent of the outstanding
              stock of Cinergy, or stock possessing more than five percent of
              the total combined voting power of all stock of Cinergy; or

       (d)    the recipient of at least $150,000 in annual Section 415
              Compensation from the Employer and who owns (or is considered as
              owning within the meaning of Code section 318) either more than
              one percent of the outstanding stock of Cinergy or stock
              possessing more than one percent of the total combined voting
              power of all stock of Cinergy.

       However, no more than 50 Employees of an Employer will be deemed to be
       officers for any particular Plan Year.  Also, the term Key Employee
       includes the beneficiaries of a Key Employee.  For purposes of
       Subsection (b) above, if two Employees have the same interest in the
       Employer, the Employee having greater annual Earnings from his

                                          14
<PAGE>

       Employer will be treated as having a larger interest.  The determination
       of who is a Key Employee will be made in accordance with Code
       paragraph 416(i)(1).

1.49   "Leased Employee" means any person who performs services for another
       person, the "recipient," but who is not an employee of the recipient, if
       (a) the services are provided pursuant to an agreement between the
       recipient and any other person, (b) the person has performed the services
       for the recipient (or for the recipient and related persons) on a
       substantially full-time basis for a period of at least one year, and
       (c) the services are performed under the primary direction and control of
       the recipient.  A Leased Employee will not be considered an employee of
       the recipient if:

       (a)    that employee is covered by a money purchase pension plan
              providing:

              (1)    a non-integrated employer contribution rate of at least
                     10 percent of compensation, as defined in Code
                     paragraph 415(c)(3), which includes amounts contributed
                     pursuant to a salary reduction agreement that are
                     excludable from the Employee's gross income under Code
                     section 125, Code paragraph 402(a)(8), or Code
                     subsections 402(h) or 403(b);

              (2)    immediate participation;

              (3)    full and immediate vesting; and

       (b)    leased employees do not constitute more than 20 percent of the
              recipient's non-highly compensated work force.

1.50   "Long-Term Performance Awards" means, with respect to an Employee, the
       cash or stock-based award received by the Employee pursuant to the
       provisions of an Employer's long-term bonus or incentive pay plan or
       program, including, but without limitation because of enumeration, the
       Cinergy 1996 Long-Term Incentive Compensation Plan.

                                          15
<PAGE>

1.51   "Medical/Dental Benefits" means the benefits specified and payable under
       Section 9.8 (Medical/Dental Benefits) from the Medical/Dental Benefits
       Account.

1.52   "Medical/Dental Benefits Account" means the separate account established
       pursuant to Article 9 (Retiree Medical/Dental Benefits) for contributions
       to fund benefits payable under Article 9 (Retiree Medical/Dental
       Benefits).

1.53   "Medical/Dental Plan" means any plan or program that is established by
       the Employer to provide medical or dental insurance coverage or medical
       or dental expense reimbursements to Eligible Individuals.

1.54   "Nonforfeitable" means, with respect to a Participant's claim for
       benefits under the Plan, that the claim is unconditional, legally
       enforceable, and not subject to divestment except in accordance with the
       Plan's specific provisions, including, but without limitation because of
       enumeration, the provisions of Section 15.3 (Sufficiency of Pension
       Fund).

1.55   "Normal Retirement Date" means, with respect to each Participant, the
       first day of the calendar month coincident with or following his
       65th birthday.

1.56   "Option Effective Date" means a Participant's Actual Separation Date,
       unless further extended with respect to a Participant making a timely
       election during the applicable election period, in which case the Option
       Effective Date will be the first day of the calendar month coincident
       with or following the last day of the applicable election period,
       provided he has timely elected the option on or before that date.

1.57   "Overtime Pay" means, with respect to an Employee, the compensation
       received as remuneration consistent with the requirements of the FLSA, or
       for services performed for the relevant period for hours worked beyond
       the Employee's regularly scheduled work hours pursuant to the Employer's
       applicable policy.

                                          16
<PAGE>

1.58   "Participant" means any Eligible Employee who has met the eligibility
       requirements set forth in Article 3 (Eligibility and Participation) and
       for whom benefits are to be provided under the Plan.

1.59   "Participation" means, with respect to an Eligible Employee, the period
       of time during which he is treated as a Participant in the Plan, the
       length of which will be determined as follows:

       (a)    Notwithstanding any other provision of this Plan to the contrary,
              an Eligible Employee who accrued Pre-1998 Years of Accredited
              Service prior to January 1, 1998, under the Plan will be credited
              with years of Participation for the Pre-1998 Years of Accredited
              Service credited to him.

       (b)    An Eligible Employee will be credited with Participation for the
              period of time beginning with the later of (1) January 1, 1998, or
              (2) his Employment Commencement Date and ending on his Severance
              from Service Date.

       (c)    An Eligible Employee will be credited with Participation for any
              Period of Credited Severance during which he is a Participant or
              former Participant.

       (d)    Notwithstanding any other provision of this Plan to the contrary,
              an Eligible Employee who is a Participant and who takes a leave of
              absence to act as Business Manager and/or Assistant Business
              Manager for Local Union 1347 of the International Brotherhood of
              Electrical Workers, AFL-CIO, will be credited with Participation
              for the period of time during which he acts as Business Manager
              and/or Assistant Business Manager.  This Subsection will be
              effective only through the duration of the 1996-2001 collective
              bargaining agreement between Local Union 1347 and the Employer,
              unless it is extended by agreement of the parties or by operation
              of law.

                                          17
<PAGE>

       (e)    In determining an Eligible Employee's total Participation for
              purposes of the Plan, all periods of service that are credited to
              the Employee under Subsections (a) through (d) above will be
              aggregated.  In no event will an Employee be credited more than
              once for the same period of Participation.  For purposes of
              determining an Eligible Employee's total Participation, the
              Eligible Employee will be credited with one month of Participation
              for each calendar month in which he is a Participant in the Plan
              and is credited with at least one Hour of Service.  An Eligible
              Employee will be credited with one year of Participation for each
              12 months of Participation with which he is credited pursuant to
              the preceding sentence.

1.60   "Pension Fund" or "Fund" means the fund established in consequence of and
       for the purposes of the Plan to provide the benefits under the Plan,
       including all funds held in all trusts and group annuity contracts that
       are being used as funding media for the Plan.

1.61   "Period of Credited Severance" means, with respect to each Eligible
       Employee who has incurred a Severance from Service, and who, within
       12 Months of his Severance from Service Date, performs an Hour of
       Service, the Period of Severance commencing on the Eligible Employee's
       Severance from Service Date and ending on the date thereafter upon which
       he first performs an Hour of Service.  In the case of an Eligible
       Employee who has incurred a Severance from Service that occurs during an
       Absence from Service by reason of a maternity or paternity absence as
       defined in Subsection 1.83(b), the period between the first and second
       anniversaries of the first day of absence will not be a Period of
       Credited Severance.

1.62   "Period of Severance" means, with respect to each Eligible Employee, the
       period of time commencing on his Severance from Service Date and ending
       on the date thereafter upon which he first performs an Hour of Service.

                                          18
<PAGE>

1.63   "Plan" means the pension plan known as the "Cinergy Corp. Union
       Employees' Retirement Income Plan," as amended, from time to time.  As
       effective January 1, 1998, this document sets forth the Plan.

1.64   "Plan Year" means the calendar year.

1.65   "Pre-1998 CG&E Service" means, with respect to an Employee, the period of
       time during which the employment relationship exists between the Employee
       and CG&E on or before December 31, 1997, the length of which is
       determined as follows:

       (a)    An Employee will be credited with Pre-1998 CG&E Service for the
              period of time beginning with his Employment Commencement Date and
              ending on December 31, 1997.

       (b)    An Employee will be credited with Pre-1998 CG&E Service for each
              Period of Credited Severance occurring on or before December 31,
              1997.

       (c)    An Employee will be credited with Pre-1998 CG&E Service for any
              period of service on or before December 31, 1997, with a related
              company of CG&E (as determined under Code subsections 414(b), (c),
              and (m)), which will be determined as if he had been employed by
              CG&E during that period.

       (d)    In determining an Employee's total Pre-1998 CG&E Service for
              purposes of the Plan, all periods of Pre-1998 CG&E Service that
              are credited to the Employee under Subsections (a) through (c)
              above will be aggregated.  In no event will an Employee receive
              credit more than once for the same period of Pre-1998 CG&E
              Service.  For purposes of determining an Employee's total Pre-1998
              CG&E Service, the Employee will be credited with one month of
              Pre-1998 CG&E Service for each month during which he is credited
              with at least one Hour of Service.  Those total months of Pre-1998
              CG&E Service will then be rounded up to the next highest number of
              whole calendar years.

                                          19
<PAGE>

1.66   "Pre-1998 Final Average Compensation" means, with respect to a
       Participant who was a Participant in the Plan as of December 31, 1997,
       the average of the four consecutive calendar years of compensation, as
       defined in (a) below, that produce the highest average within the 10
       calendar years ending on December 31, 1997.

       (a)    For purposes of this definition, "compensation" means the annual
              rate of base pay determined on July 1 of each year prior to 1998.
              For these purposes, base pay is the wage or salary assigned to
              each specific job title or position.  Base pay does not include
              overtime, bonuses, severance, or any other special pay.  Base pay,
              however, will include deferred compensation contributions (as that
              term is defined under the DCIP and SIP) and will also include any
              other elective contribution made by CG&E to a plan covered by Code
              section 125, which contribution is not included in the gross
              income of the Participant.  If compensation for any Plan Year
              beginning before January 1, 1994, is taken into account in
              determining a Participant's Pre-1998 Final Average Compensation,
              the compensation for that Plan Year will be subject to the
              limitation of Code paragraph 401(a)(17) that was in effect for
              that year and the Participant's Nonforfeitable Annual Pension will
              not be less than the Participant's accrued benefit under the Plan
              as of December 31, 1993.

       (b)    For purposes of this definition, a Participant's base pay will be
              converted to an annual rate of compensation using the formula
              appropriate to the Participant's base pay, as follows:

              (1)    SEMI-MONTHLY RATE.  The annual compensation for a
                     Participant paid on a semi-monthly basis is 24 times the
                     Participant's July 1 semi-monthly base pay.

              (2)    MONTHLY RATE.  The annual compensation for a Participant
                     paid on a monthly basis is 12 times the Participant's
                     July 1 monthly base pay.

                                          20
<PAGE>

              (3)    HOURLY RATE.  The annual compensation for a Participant
                     paid on an hourly basis is 2,080 times the Participant's
                     July 1 hourly base pay.

              (4)    WEEKLY RATE.  The annual compensation for a participant
                     paid on a weekly basis is 52 times the Participant's weekly
                     base pay.

       (c)    The compensation of a Participant who has no salary or wage rate
              on July 1 of a calendar year because he is on an unpaid leave of
              absence or temporary suspension will be calculated using his
              latest rate of pay prior to July 1 of that year, if the
              Participant returns to active employment before his Severance from
              Service Date.  If the Participant is on unpaid leave or suspension
              on July 1 of a year, and the Participant does not return to active
              employment before his Severance from Service Date, his
              compensation for that calendar year will be zero.

1.67   "Pre-1998 Years of Accredited Service" means the number of years equal to
       the length of the Employee's Pre-1998 CG&E Service, during which the
       Employee is treated as a Participant in the Plan.  The calculation of an
       Employee's Pre-1998 Years of Accredited Service will begin on the first
       day of the month during which the Employee became eligible to participate
       in the Plan.

1.68   "Primary Social Security Benefit" means the primary federal old age
       insurance benefit estimated by the Committee that is, or would be,
       payable to a Plan Participant at age 65 based on the federal Social
       Security Act in effect on December 31, 1997.

       The Primary Social Security Benefit of a Participant who had not attained
       age 65 by December 31, 1997,  will be determined by assuming that he
       continued to receive compensation after December 31, 1997, at the rate of
       compensation in effect immediately prior to that, to age 55, and zero
       compensation from age 55 thereafter until age 65.

                                          21
<PAGE>

       If a Participant was hired after 1950, he will be provided with written
       notice of his right to supply actual pre-employment earnings history, of
       the financial consequences of failing to supply such history, and that
       the Participant can obtain his actual earnings history on a year-by-year
       basis from the Social Security administration.

       If a Participant whose pre-CG&E employment earnings history was estimated
       supplies documentation from the Social Security administration of his
       actual year-by-year earnings history, the Participant's Primary Social
       Security Benefit that previously was estimated will be recalculated using
       actual pre-CG&E employment earnings.  Such documentation must be supplied
       no later than 6 months following the later of:

       (a)    the date of the Participant's Severance from Service, or

       (b)    the date that the Participant is notified of the benefit to which
              he is entitled.

1.69   "Projected Annual Benefit" means, with respect to any Participant
       participating in a Qualified Defined Benefit Plan maintained by an
       Employer or an Affiliate, the annual straight life annuity benefit to
       which the Participant would be entitled under that Qualified Defined
       Benefit Plan based upon the following assumptions:

       (a)    the Participant will continue as an employee of an Employer until
              reaching the Participant's normal retirement age under the plan
              (or the Participant's current age if that is later);

       (b)    the Participant's compensation used to determine benefits under
              the plan for the calendar year under consideration will remain the
              same until the date the Participant attains the age described in
              Paragraph (a); and

       (c)    all other relevant factors used to determine benefits under the
              plan for the calendar year under consideration will remain
              constant for all future calendar years.

                                          22
<PAGE>

1.70   "Qualified Defined Benefit Plan" means any qualified defined benefit plan
       as defined in Code subsections 414(j) and 415(k).

1.71   "Qualified Defined Contribution Plan" means any qualified defined
       contribution plan as defined in Code subsections 414(i) and 415(k).

1.72   "Qualified Domestic Relations Order" means a qualified domestic relations
       order as defined in Code subsection 414(p).

1.73   "Reduced Primary Social Security Benefit" means the reduced amount of
       primary federal old age insurance benefit estimated by the Committee that
       is, or would be, payable or estimated to become payable to a Participant
       at his earliest eligibility date.  The estimate is based on the Social
       Security Act as in effect at the Participant's Option Effective Date.  If
       a Participant supplies documentation from the Social Security
       Administration of his or her actual Reduced Primary Social Security
       Benefit at least 60 days before his or her Option Effective Date, that
       amount will be used in lieu of the estimate referred to above.  A Reduced
       Primary Social Security Benefit calculated using actual documentation
       will not be recalculated.

1.74   "Reemployed Retiree" means a Participant, other than a Terminated Vested
       Participant, who is reemployed by an Employer after his Initial
       Separation Date or an Additional Separation Date.

1.75   "Reemployed Terminated Vested Participant" means a Terminated Vested
       Participant who is reemployed by an Employer after his Initial Separation
       Date or an Additional Separation Date.

1.76   "Reemployment Commencement Date" means, with respect to an Eligible
       Employee who incurs a Severance from Service and is later reemployed by
       an Employer, the date upon which the Eligible Employee first performs an
       Hour of Service after his reemployment.

                                          23
<PAGE>

1.77   "Retired Participant" means a former Participant, other than a Terminated
       Vested Participant, while alive on and after his Actual Separation Date.

1.78   "Sabbatical Vacation Pay" means, with respect to an Employee, the
       compensation received as remuneration for the weeks of accrued vacation
       accumulated pursuant to the Employer's applicable policy for the purpose
       of taking an extended vacation beyond the number of weeks of vacation to
       which the Employee would normally be entitled.

1.79   "Section 415 Compensation" means an Eligible Employee's earned income,
       wages, salaries, and fees for professional services, and other amounts
       received for personal services actually rendered in the course of
       employment with the Employer (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, except
       as provided in the following sentence, excluding the following:
       (a) Employer contributions to a plan of deferred compensation that are
       not included in the Employee's gross income for the taxable year in which
       contributed or any distributions from a plan of deferred compensation;
       (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; and (c) amounts realized from the sale, exchange, or other
       disposition of stock acquired under a qualified stock option.
       Notwithstanding the foregoing, Section 415 Compensation will include any
       elective deferral as defined in Code paragraph 402(g)(3) and amounts
       contributed by an Employer pursuant to a salary reduction agreement that
       are excludable from the Employee's gross income under Code section 125 or
       457.

1.80   "Securities Exchange Act" means the Securities Exchange Act of 1934, as
       amended from time to time, and interpretive rulings and regulations.

1.81   "Service" means, with respect to an Eligible Employee, the period of time
       during which the employment relationship exists between the Eligible
       Employee and the Employer, the length of which is determined as follows:

                                          24
<PAGE>

       (a)    Notwithstanding any other provision of the Plan to the contrary,
              any Eligible Employee who accrued "years of vesting service" (as
              defined in the Plan as of December 31, 1997) under the Plan will
              be credited with Service for the "years of vesting service"
              credited to him under the Plan before January 1, 1998.

       (b)    An Eligible Employee will be credited with Service for the period
              of time beginning with his Employment Commencement Date and ending
              on his Severance from Service Date.

       (c)    An Eligible Employee will be credited with Service for each Period
              of Credited Severance.

       (d)    An Eligible Employee will be credited with Service for any period
              of Service with an Affiliate after he has reached age 18, which
              will be determined as if he had been employed by the Employer
              during that period.

       (e)    Notwithstanding any other provision of the Plan to the contrary,
              an Eligible Employee who takes a leave of absence to act as
              Business Manager and/or Assistant Business Manager for Local
              Union 1347 of the International Brotherhood of Electrical Workers,
              AFL-CIO, will be credited with Service for the period of time
              during which he acts as Business Manager and/or Assistant Business
              Manager.  This Subsection will be effective only through the
              duration of the 1996-2001 collective bargaining agreement between
              Local Union 1347 and the Employer, unless it is extended by
              agreement of the parties or by operation of law.

       (f)    In determining an Eligible Employee's total Service for purposes
              of the Plan, all periods of Service that are credited to the
              Employee under Subsections (a) through (e) above will be
              aggregated.  In no event will an Employee receive credit more than
              once for the same period of Service.  For purposes of determining
              an Eligible Employee's total Service, the Eligible Employee will
              be credited with

                                          25
<PAGE>

              one month of Service for each calendar month in which he is
              credited with at least one Hour of Service.  An Eligible Employee
              will be credited with one year of Service for each 12 months of
              Service with which he is credited pursuant to the preceding
              sentence.

1.82   "Service Watch Payments" mean, with respect to an Eligible Employee, the
       compensation received as a premium for serving on stand-by duty for the
       relevant period pursuant to the Employer's applicable policy.

1.83   "Severance from Service" means, with respect to an Employee:

       (a)    the date of termination of his employment relationship with his
              Employer by reason of a quit, resignation, discharge, retirement,
              death, or layoff of the Employee for an indefinite period of time
              made without any expectation on the part of the Employer at the
              time of layoff to recall the Employee, for employment with the
              Employer as an Employee within 12 months from the date of the
              commencement of the layoff; or

       (b)    the first anniversary of the first date of the Employee's Absence
              from Service, or, if later, the expiration of an Absence from
              Service.  Notwithstanding the preceding sentence, if an Employee
              has an Absence from Service of more than one year by reason of a
              maternity or paternity absence, the Employee's Severance from
              Service occurs on the second anniversary of that absence.  For
              purposes of this Subsection, an Absence from Service for maternity
              or paternity reasons means an absence (1) by reason of the
              pregnancy of the individual, (2) by reason of the birth of a child
              of that individual, (3) by reason of the placement of a child with
              the individual in connection with the adoption of the child by
              that individual, or (4) for purposes of caring for the child for a
              period beginning immediately following its birth or placement.

                                          26
<PAGE>

       For purposes of this Subsection, the term "Employer" includes all
       Affiliates, and an Employee or former Employee will not be treated as
       having incurred a Severance from Service until the employment
       relationship between the Employee and all Employers and Affiliates is
       terminated.

1.84   "Severance from Service Date" means, with respect to each Employee, the
       date of his Severance from Service.

1.85   "Shift Premiums" means, with respect to an Eligible Employee, the
       compensation received as a premium for services performed for the
       relevant period for working a shift other than the Employer's regular day
       shift pursuant to the Employer's applicable policy.

1.86   "SIP" means The Cincinnati Gas & Electric Savings Incentive Plan.

1.87   "Social Security Act" means the federal Social Security Act, 42 U.S.C.
       Section 301, ET SEQ., as amended from time to time, and interpretive
       rulings and regulations.

1.88   "Social Security Retirement Age" means respectively (a) age 65 for a
       Participant born before January 1, 1938; (b) age 66 for a Participant
       born after December 31, 1937, but before January 1, 1955; and (c) age 67
       for a Participant born after December 31, 1954.

1.89   "Spouse" means, with respect to any Participant, the Participant's
       lawfully married spouse, if any, on the applicable date.  The Plan will
       not recognize common law marriages or similar arrangements unless
       required to do so by federal law.  A former Spouse will also be
       considered a Spouse to the extent provided under a Qualified Domestic
       Relations Order.

1.90   "Terminated Vested Participant" means a Participant who is entitled to
       benefits under the provisions of Section 5.3 (Severance from Service
       After Vesting).

1.91   "Trust Fund" means the trust established by the Employer to fund the
       Plan.

                                          27
<PAGE>

1.92   "Trustee" means the person or entity designated by Cinergy to act as
       trustee of any trust forming a part of the Pension Fund.

1.93   "Vesting Requirement" means, with respect to each Participant, the
       requirements for the vesting of his accrued benefits under the Plan.

The uses of singular and masculine words are for practical purposes only and
will be deemed to include the plural and feminine, respectively, unless the
context plainly indicates a distinction.  Certain other definitions, as
required, appear in the following Articles of the Plan.

                                     ARTICLE 2

                               EFFECTIVE DATE OF PLAN

The original effective date of this Plan was December 31, 1946.  The effective
date of this Plan restatement is January 1, 1998, as to Cinergy, and will be
effective with respect to any other Employer as of the date that Employer elects
to participate in the Plan pursuant to Section 20.1 (Adoption of Plan).

This restatement applies only to Eligible Employees who are credited with at
least one Hour of Service on or after January 1, 1998.  This Plan will not
affect the rights of former Eligible Employees (and their Beneficiaries) who
retired, died, or otherwise terminated their employment with an Employer prior
to January 1, 1998.  The rights, if any, of those former Eligible Employees (and
their Beneficiaries), and the amounts of their benefits, if any, will be
governed by the provisions of the Plan as in effect prior to January 1, 1998.

                                          28
<PAGE>

                                     ARTICLE 3

                           ELIGIBILITY AND PARTICIPATION

3.1    DATE OF PARTICIPATION

       Each Employee who is an Eligible Employee on January 1, 1998, and who was
       participating in the Plan as of December 31, 1997, will continue to be a
       Participant as of January 1, 1998.  Each other Eligible Employee will
       automatically become a Participant on the later of his Employment
       Commencement Date or the date he reaches age 18.  An Eligible Employee
       who becomes a Participant, subsequently incurs a Severance from Service,
       and is later reemployed by an Employer will again become a Participant on
       his Reemployment Commencement Date.

3.2    LEASED EMPLOYEES

       A Leased Employee will be excluded from participation in the Plan.
       However, if a Leased Employee is subsequently employed by an Employer as
       an Eligible Employee, his time as a Leased Employee of an Employer will
       be considered for purposes of determining eligibility under this Article
       and vesting under Article 5 (Severance from Service -- Vesting).

3.3    TRANSFERS OF EMPLOYMENT

       If a Participant is transferred from one Employer to another or from an
       Employer to an Affiliate, he will continue to participate in the Plan
       until an event occurs that would have terminated his participation had he
       continued in the service of an Employer, except that payments received by
       a Participant from any Affiliate that is not an Employer will not be
       treated as Earnings for purposes of determining the amount of retirement
       benefits to which the Participant will be entitled.  Any period of
       employment with an Affiliate that is not an Employer will be taken into
       account for purposes of determining when a Participant has satisfied the
       Vesting Requirement.

                                          29
<PAGE>

       If a Participant is transferred from an Employer to an Affiliate that has
       not elected to participate in the Plan pursuant to Section 20.1 (Adoption
       of Plan), the Participant's accrued benefit under the Plan as of the date
       of the transfer will be preserved.  The Participant's service after the
       transfer will not be considered in determining the Participant's years of
       Participation, but will be considered in determining the Participant's
       years of Service.

3.4    TRANSFERS OF PARTICIPANTS AND PLAN ASSETS TO AND FROM THE CINERGY CORP.
       NON-UNION EMPLOYEES' PENSION PLAN AND CINERGY CORP. UNION EMPLOYEES'
       PENSION PLAN.

       (a)    If a Participant in the Plan remains an Employee but becomes
              ineligible to participate in the Plan, he will become a
              participant in the Cinergy Corp. Non-Union Employees' Pension Plan
              or the Cinergy Corp. Union Employees' Pension Plan, if he is an
              "eligible employee" as defined in either of those plans, as of the
              first day of the month during which his change in Employee status
              becomes effective.

       (b)    If a participant in the Cinergy Corp. Non-Union Employees' Pension
              Plan or the Cinergy Corp. Union Employees' Pension Plan remains an
              Employee but becomes  ineligible to participate in his current
              plan, he will become a Participant in the Plan, if he is an
              Eligible Employee, as of the first day of the month during which
              his change in Employee status becomes effective.

       (c)    A transfer of assets between the Plan and the Cinergy Corp.
              Non-Union Employees' Pension Plan or the Cinergy Corp. Union
              Employees' Pension Plan will follow the requirements of Code
              subsection 414(1).  The value of the benefits to be transferred
              will be based upon the Plan's actuarial valuation assumptions at
              the time of the transfer.  The actual transfer of assets will
              occur as soon as administratively practicable after the change in
              the Participant's Employee status.

                                          30
<PAGE>

       (d)    A Participant who has earned years and/or partial years of
              "participation" under the Cinergy Corp. Non-Union Employees'
              Pension Plan or the Cinergy Corp. Union Employees' Pension Plan,
              and who then becomes a Participant in this Plan, will be credited
              under this Plan with his total years of "participation" earned
              under the Cinergy Corp. Non-Union Employees' Pension Plan or the
              Cinergy Corp. Union Employees' Pension Plan as if they were earned
              under this Plan.  A Participant will not be credited with more
              years of Participation than he would have earned if the total of
              all his years of Participation under the Plan and all his years of
              "participation" under the Cinergy Corp. Non-Union Employees'
              Pension Plan and the Cinergy Corp. Union Employees' Pension Plan
              had been earned solely as a Participant of this Plan.  The benefit
              paid to a Participant under this Plan will never be less than the
              benefit the Participant earned in the Cinergy Corp. Non-Union
              Employees' Pension Plan and/or the Cinergy Corp. Union Employees'
              Pension Plan prior to his change in Employee status.

                                     ARTICLE 4

                            AMOUNT OF LIFE-ONLY PENSION

4.1    NORMAL RETIREMENT PENSION FORMULA

       Except as otherwise expressly provided in this Article, a Participant who
       retires on or after his Normal Retirement Date will be entitled to a
       Nonforfeitable Annual Pension under this Plan equal to the sum of (a)
       plus (b), where (a) is equal to:

              (1)    1.1 percent of the Participant's Highest Average Earnings
                     plus

              (2)    0.5 percent of the amount by which his Highest Average
                     Earnings exceed his applicable Covered Compensation,
                     multiplied by the number of his years of Participation not
                     in excess of 35;

                                          31
<PAGE>

       and (b) is equal to 1.4 percent of the Participant's Highest Average
       Earnings, multiplied by the number of his years of Participation in
       excess of 35.

4.2    NORMAL RETIREMENT BENEFITS FOR PRE-1998 PARTICIPANTS

       The normal retirement Nonforfeitable Annual Pension of a Participant who
       was a Participant in the Plan as of December 31, 1997, will be the
       greater of (a) or (b), where (a) is the Participant's Annual Pension
       calculated under Section 4.1 (Normal Retirement Pension Formula) and
       (b) is the Participant's annual accrued benefit calculated under the Plan
       as of December 31, 1997.  A Participant's annual accrued benefit computed
       under the Plan's Normal Retirement Formula as of December 31, 1997,
       equals 57 percent of the Participant's Pre-1998 Final Average
       Compensation reduced by one-half of his or her Primary Social Security
       Benefit.  If the Participant has less than 30 Pre-1998 Years of
       Accredited Service, the amount will be further reduced by 1/30 for each
       full year less than 30 years.  If the Participant has more than 30
       Pre-1998 Years of Accredited Service, the amount will be increased by
       $6.00 for each Pre-1998 Year of Accredited Service over 30 years.

4.3    GENERAL METHOD OF COMPUTING ANNUAL PENSION FOR RETIREMENT AT EARLY
       RETIREMENT DATE

       (a)    Subject to the following provisions of this Section, a Participant
              who retires on an Early Retirement Date, will be entitled to a
              Nonforfeitable Annual Pension computed under Section 4.1 (Normal
              Retirement Pension Formula).  The benefits will begin on the
              Employee's Normal Retirement Date, or, if the Employee so elects,
              at an earlier date on or after his Early Retirement Date.  If the
              Employee elects to have the benefit begin before his
              62nd birthday, the amount of the Employee's Nonforfeitable Annual
              Pension will be multiplied by the appropriate early payment factor
              as obtained from the following table:

                                          32
<PAGE>

<TABLE>
<CAPTION>
             EARLY              EARLY               EARLY
            PAYMENT            PAYMENT             PAYMENT
            PERIOD     EARLY    PERIOD     EARLY    PERIOD     EARLY
            ------    PAYMENT   ------    PAYMENT   ------    PAYMENT
           YR.  MO.    FACTOR  YR.  MO.    FACTOR  YR.  MO.    FACTOR
           ---  ---    ------  ---  ---    ------  ---  ---    ------
           <S>  <C>   <C>      <C>  <C>   <C>      <C>  <C>   <C>
            0    0     1.0000   4    0     0.7333   8    0     0.5667
            0    1     0.9944   4    1     0.7278   8    1     0.5639
            0    2     0.9889   4    2     0.7222   8    2     0.5611
            0    3     0.9833   4    3     0.7167   8    3     0.5584
            0    4     0.9778   4    4     0.7111   8    4     0.5556
            0    5     0.9722   4    5     0.7056   8    5     0.5528
            0    6     0.9667   4    6     0.7000   8    6     0.5500
            0    7     0.9611   4    7     0.6944   8    7     0.5473
            0    8     0.9556   4    8     0.6889   8    8     0.5445
            0    9     0.9500   4    9     0.6833   8    9     0.5417
            0    10    0.9444   4    10    0.6778   8    10    0.5389
            0    11    0.9389   4    11    0.6722   8    11    0.5361
            1    0     0.9333   5    0     0.6667   9    0     0.5334
            1    1     0.9278   5    1     0.6639   9    1     0.5300
            1    2     0.9222   5    2     0.6611   9    2     0.5265
            1    3     0.9167   5    3     0.6584   9    3     0.5231
            1    4     0.9111   5    4     0.6556   9    4     0.5196
            1    5     0.9056   5    5     0.6528   9    5     0.5162
            1    6     0.9000   5    6     0.6500   9    6     0.5127
            1    7     0.8944   5    7     0.6473   9    7     0.5093
            1    8     0.8889   5    8     0.6445   9    8     0.5059
            1    9     0.8833   5    9     0.6417   9    9     0.5024
            1    10    0.8778   5    10    0.6389   9    10    0.4990
            1    11    0.8722   5    11    0.6361   9    11    0.4955
            2    0     0.8667   6    0     0.6334   10   0     0.4921
            2    1     0.8611   6    1     0.6306   10   1     0.4889
            2    2     0.8556   6    2     0.6278   10   2     0.4858
            2    3     0.8500   6    3     0.6250   10   3     0.4826
            2    4     0.8444   6    4     0.6223   10   4     0.4795
            2    5     0.8389   6    5     0.6195   10   5     0.4763
            2    6     0.8333   6    6     0.6167   10   6     0.4732
            2    7     0.8278   6    7     0.6139   10   7     0.4700
            2    8     0.8222   6    8     0.6111   10   8     0.4668
            2    9     0.8167   6    9     0.6084   10   9     0.4637
            2    10    0.8111   6    10    0.6056   10   10    0.4605
            2    11    0.8056   6    11    0.6028   10   11    0.4574
            3    0     0.8000   7    0     0.6000   11   0     0.4542
            3    1     0.7944   7    1     0.5973   11   1     0.4513
            3    2     0.7889   7    2     0.5945   11   2     0.4485
            3    3     0.7833   7    3     0.5917   11   3     0.4456
            3    4     0.7778   7    4     0.5889   11   4     0.4427
            3    5     0.7722   7    5     0.5861   11   5     0.4398
            3    6     0.7667   7    6     0.5834   11   6     0.4370
            3    7     0.7611   7    7     0.5806   11   7     0.4341
            3    8     0.7556   7    8     0.5778   11   8     0.4312
            3    9     0.7500   7    9     0.5750   11   9     0.4283
            3    10    0.7444   7    10    0.5723   11   10    0.4255
            3    11    0.7389   7    11    0.5695   11   11    0.4226
                                                    12   0     0.4197
</TABLE>

                                          33
<PAGE>

              In using the above table, the order of required steps is as
              follows:

              (1)    determine the Participant's "early payment period," which
                     is the number of whole calendar months by which the actual
                     commencement of his pension payments precedes the first day
                     of the calendar month coincident with or following his
                     62nd birthday;

              (2)    use the early payment period as determined in Step (1) to
                     identify the applicable early payment factor; and

              (3)    multiply the applicable early payment factor times the
                     amount of the Participant's Annual Pension determined under
                     Section 4.1 (Normal Retirement Pension Formula).

       (b)    Notwithstanding any other provision of this Section except
              Subsection (c), the early retirement Nonforfeitable Annual Pension
              payable to a Participant who was a participant in the Plan as of
              December 31, 1997, will be the greater of the amounts calculated
              under (a) and (b) of Section 4.2 (Normal Retirement Benefits for
              Pre-1998 Participants), after those amounts are reduced as
              follows:

              (1)    The Participant's Nonforfeitable Annual Pension calculated
                     under Section 4.1 (Normal Retirement Pension Formula) will
                     be reduced by multiplying the amount of the Participant's
                     Annual Pension by the early payment factor described in
                     Subsection (a).

              (2)    The Participant's annual accrued benefit calculated under
                     the Plan as of December 31, 1997, will be reduced by
                     multiplying the Participant's annual accrued benefit as of
                     December 31, 1997, by the product of (A) 5/12 of one
                     percent and (B) the number of whole calendar months by
                     which the actual commencement of the Participant's pension
                     payments

                                          34
<PAGE>

                     precedes the first day of the calendar month coincident
                     with or following the Participant's 60th birthday.

       (c)    If, as of his applicable Severance from Service Date, a
              Participant has reached age 55, and the sum of his age (in whole
              years) attained as of that date and the number of his years of
              Service (in whole years) accumulated as of that date equals or
              exceeds 85, he will receive a Nonforfeitable Annual Pension
              computed under the appropriate early retirement Annual Pension
              formula described in this Section, but the amount of the
              Participant's pension will not be multiplied by the early payment
              factor that otherwise would be applicable.

       (d)    A Participant who is eligible to terminate employment voluntarily
              under the Redeployment Status Opportunity provisions of the
              Severance Opportunity Plan for Union Employees of Cinergy Corp.,
              as amended from time to time, is eligible to receive a
              Nonforfeitable Annual Pension computed under the appropriate early
              retirement Annual Pension formula described in this Section, but
              the amount of the Participant's pension will not be multiplied by
              the early payment factor that otherwise would be applicable,
              provided that:  (1) as of his applicable Severance from Service
              Date, the Participant has reached age 50, but not yet reached age
              55, (2) he elects under Article 8 (Payment of Pension) to defer
              receipt of his pension to at least age 55, and (3) the sum of his
              age (in whole years) attained as of the date that the receipt of
              the pension under the Plan begins pursuant to Paragraph (2) and
              his years of Service (in whole years) accumulated as of his
              Severance from Service Date equals or exceeds 85.

4.4    GENERAL METHOD OF COMPUTING ANNUAL PENSION FOR A TERMINATED VESTED
       PARTICIPANT

       (a)    Subject to the following provisions of this Section, the amount of
              Nonforfeitable Annual Pension payable to a former Participant who
              is described in Section 5.3 (Severance from Service After
              Vesting), and whose Actual Separation Date occurred on or before
              his Normal Retirement Date, will be computed under

                                          35
<PAGE>

              Section 4.1 (Normal Retirement Pension Formula).  The benefits
              will begin on the Employee's Normal Retirement Date or, if the
              Employee so elects, at an earlier date on or after his Early
              Retirement Date.  If the Employee elects to have the benefits
              begin before his Normal Retirement Date, the amount of the
              Employee's Nonforfeitable Annual Pension will be reduced by five
              percent for each calendar year (or .4166 percent for each calendar
              month) by which the commencement of his pension payments precedes
              his Normal Retirement Date.

       (b)    Notwithstanding any other provision of this Section, the
              terminated vested Nonforfeitable Annual Pension payable to a
              Participant who was a Participant in the Plan as of December 31,
              1997, will be the greater of the amounts calculated under (a) or
              (b) of Section 4.2 (Normal Retirement Benefits for Pre-1998
              Participants), after each of those amounts is reduced by five
              percent for each calendar year (or .4166 percent for each calendar
              month) by which the commencement of the Participant's pension
              payments precedes his Normal Retirement Date.

4.5    MAXIMUM PENSION

       (a)    Each Participant whose Annual Pension as otherwise determined
              pursuant to the provisions of this Article and as modified by the
              applicable provisions of Section 7.1 (Normal Forms of Pensions)
              exceeds $1,000 multiplied by the Employee's years of Service with
              the Employer (not exceeding ten), or who has ever participated in
              a Qualified Defined Contribution Plan, will in no event be
              entitled to an Annual Pension that exceeds the lesser of:

              (1)    $90,000 (as adjusted for increases in the limitation
                     pursuant to Code subsection 415(d)); or

              (2)    100 percent of his highest average annual Section 415
                     Compensation from his Employer for any three consecutive
                     years of Service; provided, that if

                                          36
<PAGE>

                     he has fewer than three years of Service, then 100 percent
                     of his highest average annual Section 415 Compensation from
                     his Employer for his total years of Service will be
                     construed as the limiting amount.

       However, if a Participant has fewer than ten years of Participation at
       his Normal Retirement Date or Early Retirement Date, whichever is
       applicable, then the dollar limitation of Paragraph (1) will be
       multiplied by a fraction, the numerator of which is the number of the
       Participant's years of Participation (including fractional years of
       Participation) and the denominator of which is ten.  However, the maximum
       benefit will never be reduced to less than 1/10th of the applicable
       limitation.

       (b)    If any benefit under the Plan begins before the Participant's
              Social Security Retirement Age, but on or after the Participant
              reaches age 62, the determination as to whether the $90,000 limit
              set forth in Subsection (a) has been satisfied will be made, in
              accordance with regulations prescribed by the Secretary, by
              reducing the limitation of Subsection (a).  The reduction under
              the preceding sentence will be made in the manner as the Secretary
              may prescribe that is consistent with the reduction for old-age
              insurance benefits commencing before the Social Security
              Retirement Age under the Social Security Act.  If any benefit
              under the Plan begins before the Participant reaches age 62, the
              determination as to whether the $90,000 limit set forth in
              Subsection (a) has been satisfied will be made, in accordance with
              regulations prescribed by the Secretary, by reducing the
              limitation of Subsection (a) so that the limitation (as reduced)
              equals an Annual Pension (beginning when the retirement income
              benefit begins) that is actuarially equivalent to the reduced
              $90,000 Annual Pension beginning at age 62 as determined under
              this Subsection.

       (c)    If any benefit under the Plan begins after the Participant's
              Social Security Retirement Age, the determination as to whether
              the $90,000 limitation set forth in Subsection (a) has been
              satisfied will be made, in accordance with regulations prescribed
              by the Secretary, by increasing, if necessary, the limitation of

                                          37
<PAGE>

              Subsection (a) so that the limitation (as increased) equals an
              Annual Pension (beginning when the retirement income benefit
              begins) that is actuarially equivalent to a $90,000 Annual Pension
              beginning at the Social Security Retirement Age.

       (d)    In general, the maximum annual benefit means a benefit payable
              annually in the form of a single life annuity (without ancillary
              benefits).  If a Participant's pension under the Plan is payable
              in any form other than a single life annuity, the determination as
              to whether the limitations of this Section have been satisfied
              will be made by adjusting the benefit so that it is the actuarial
              equivalent of a single life annuity.  For purposes of this
              Section, any ancillary benefit not directly related to retirement
              income benefits, and that portion of any joint and survivor
              annuity that constitutes a Qualified Joint and Survivor Annuity
              under Subsection 7.1(b) (Normal Forms of Pension), will not be
              taken into account.

       (e)    For benefits commencing in Plan Years beginning on or after
              January 1, 1995, and except as provided in this Plan, the
              adjustments to the limitations under Subsections (b), (c), and (d)
              will be calculated as described in this Subsection.  For purposes
              of adjusting the limit for an Annual Pension commencing prior to
              age 62 under Subsection (b), the $90,000 limitation will be equal
              to the lesser of the equivalent $90,000 limitation that is
              computed using the interest rate and mortality table (or other
              tabular factor) specified in the Plan for equivalence for early
              retirement benefits, and the equivalent $90,000 limitation that is
              computed using a 5 percent interest rate assumption and the
              mortality table prescribed from time to time by the Secretary for
              this purpose.  For purposes of adjusting any form of optional
              benefit to a straight life annuity under Subsection (d), the
              actuarially equivalent life annuity will be equal to the greater
              of the annuity benefit that is computed using the interest rate
              and mortality table (or other tabular factor) specified in the
              Plan for adjusting benefits in the same form, and the annuity
              benefit that is computed using a 5 percent interest rate
              assumption and the mortality table prescribed from time to time by
              the Secretary for this purpose.  For

                                          38
<PAGE>

              purposes of adjusting for any form of benefit subject to Code
              paragraph 417(e)(3), an interest rate assumption equal to the
              annual rate of interest on 30 year Treasury securities for
              November of the preceding Plan Year, as specified by the
              Commissioner of Internal Revenue, will be substituted for the 5
              percent interest rate assumption set forth in the preceding
              sentences.  For purposes of adjusting the limit under Subsection
              (c), the $90,000 limitation for an Annual Pension beginning after
              Social Security Retirement Age will be the lesser of the
              equivalent $90,000 limitation that is computed using the interest
              rate and mortality table (or other tabular factor) specified in
              the Plan for equivalence of delayed retirement benefits, and the
              eqivalent $90,000 limitation that is computed using a 5 percent
              interest rate assumption and the mortality table prescribed from
              time to time by the Secretary for this purpose.  Notwithstanding
              the preceding provisions of this Subsection, this Subsection will
              not apply to the accrued benefit of any Participant under the Plan
              as of December 31, 1997, after applying Code section 415 as in
              effect on December 7, 1994, for each possible Annuity Starting
              Date and each optional form of benefit under the Plan.

       (f)    Notwithstanding the foregoing, the maximum annual benefit payable
              under this Section will not be less than the actuarial equivalent
              of the Participant's single life annuity, accrued under the Plan,
              as of December 31, 1997, determined by using the Plan's actuarial
              assumptions as in effect on December 31, 1997.

       (g)    If for any particular Plan Year, a Participant is also
              participating in one or more Qualified Defined Contribution Plans
              maintained by his Employer, then the sum of the Participant's
              aggregate Defined Benefit Plan Fraction and the Participant's
              aggregate Defined Contribution Plan Fraction will not exceed 1.0.
              If the sum exceeds 1.0, then the Employer will reduce the
              Participant's benefits in this Plan so that the sum equals 1.0.
              The Participant's maximum Annual Pension will be determined under
              the provisions of this Article without regard to the $10,000
              minimum amount referred to in the first paragraph of this Section.
              This

                                          39
<PAGE>

              Subsection will be repealed effective January 1, 2000, for any
              Participant who is credited with at least one Hour of Service on
              or after January 1, 2000.

                                     ARTICLE 5

                           SEVERANCE FROM SERVICE-VESTING

5.1    VESTING REQUIREMENT

       A Participant will satisfy the Vesting Requirement under the Plan upon
       his completion of five years of Service and then will have a
       Nonforfeitable right to his accrued benefit under the Plan.  A
       Participant who is an Employee on his Normal Retirement Date will be
       deemed to satisfy the Vesting Requirement as of that date if he has not
       already satisfied the Vesting Requirement under the Plan.
       Notwithstanding the preceding provisions of this Subsection, the
       Nonforfeitable percentage of each Participant's right to his accrued
       benefit derived from Employer contributions, because of a change to the
       vesting schedule, will be not less than the Participant's vested
       percentage, computed under the Plan as of the date immediately prior to
       the change, without regard to the change.  Moreover, each Participant
       whose Nonforfeitable percentage of his accrued benefit derived from
       Employer contributions is determined under an amended vesting schedule,
       and who has completed at least three years of Service as of the date of
       the amendment may elect, within a reasonable period after the adoption of
       the amended vesting schedule, to have the Nonforfeitable percentage of
       his accrued benefit derived from Employer contributions determined
       without regard to the amendment if his Nonforfeitable percentage under
       the Plan as amended is, at any time, less than the percentage determined
       without regard to the amendment.

5.2    SEVERANCE FROM SERVICE BEFORE VESTING

       If a Participant incurs a Severance from Service before he has satisfied
       the Vesting Requirement and is not reemployed by an Employer, he will
       have no further interest in, or right to, any benefits under the Plan,
       except as otherwise provided in Section 14.2

                                          40
<PAGE>

       (Reemployment).  If upon a Severance from Service, a Participant is zero
       percent vested in his benefits under the Plan, the vested portion of his
       Plan benefits will be deemed distributed to him as of his Severance from
       Service Date.

5.3    SEVERANCE FROM SERVICE AFTER VESTING

       If a Participant incurs a Severance from Service before his
       50th birthday, but after satisfying the Vesting Requirement, he will be
       entitled to receive a pension commencing on his 50th birthday, if he is
       then living, or the Participant may elect to begin receiving his benefit
       at any time on or after his Early Retirement Date.  Subject to the
       provisions of Section 4.5 (Maximum Pension) and Article 7 (Forms of
       Pension), the amount of Nonforfeitable Annual Pension payable will be
       determined pursuant to the provisions of Section 4.4 (General Method of
       Computing Annual Pension for a Terminated Vested Participant).

                                     ARTICLE 6

                                  SPOUSE'S BENEFIT

6.1    DETERMINATION OF SPOUSE'S BENEFIT

       Upon the death of either (a) an Active Participant who has satisfied the
       Vesting Requirement (an "Eligible Active Participant"), or (b) a former
       Participant who has satisfied the Vesting Requirement, whose employment
       with his Employer terminated before the Participant reached age 50, and
       whose pension under the Plan had not yet begun on the date of his death
       (an "Eligible Former Participant"), the Participant's Spouse on the date
       of his death, if living on the date of the first installment payable, as
       set forth below, will be entitled to receive a pension under the Plan as
       a Spouse's Benefit.  The annual amount of the Spouse's Benefit will be
       determined as follows:

       (a)    If, at the date of his death, the Participant was either an
              Eligible Active Participant or an Eligible Former Participant who
              had reached age 50, the Spouse's benefit

                                          41
<PAGE>

              will equal 100 percent of the Annual Pension that the Participant
              would have received, commencing on the first day of the calendar
              month coincident with or following the date of his death, if
              (1) he had retired as of the first day of the calendar month
              coincident with or following his death, thus establishing an Early
              Retirement Date, (2) the amount of Annual Pension commencing on
              the Early Retirement Date had been determined pursuant to the
              applicable provisions of Section 4.3 (General Method of Computing
              Annual Pension for Retirement at Early Retirement Date), and
              (3) his pension had been payable under the single-life option
              applicable to him pursuant to Subsection 7.1(a) (Normal Forms of
              Pension).  However, subject to Subsection (b), if the
              Participant's Spouse is more than eight years younger than the
              Participant, the Spouse will receive the actuarial equivalent of
              the benefit payable to a Spouse exactly eight years younger than
              the Participant, calculated by multiplying the Annual Pension that
              the Participant would have received times the appropriate early
              payment factor under Subsection 4.3(a) (General Method of
              Computing Annual Pension for Retirement at Early Retirement Date)
              and then multiplying the resulting product by the appropriate
              Spouse's benefit factor as obtained from the following table:

                                          42
<PAGE>

<TABLE>
<CAPTION>
         Participant's Age       Participant's Age at Death
    Less Spouse's Age (in years)  50-59             60 or older
    ----------------------------  -----             -----------
    <S>                           <C>               <C>
                    8 or less     1.00                1.00
                    9              .91                 .90
                   10              .82                 .81
                   11              .75                 .72
                   12              .68                 .65
                   13              .62                 .59
                   14              .56                 .54
                   15              .51                 .49
                   16              .47                 .44
                   17              .43                 .40
                   18              .39                 .36
                   19              .36                 .33
                   20              .33                 .30
                   21              .30                 .28
                   22              .28                 .26
                   23              .26                 .24
                   24              .24                 .22
                   25              .22                 .20

</TABLE>

       (b)    Notwithstanding Subsection (a), if a Participant who had reached
              age 50 at the date of his death was a Participant in the Plan as
              of December 31, 1997, the Spouse's benefit attributable to the
              Participant's accrued benefit under the Plan as of December 31,
              1997, will be calculated by multiplying the Participant's annual
              accrued benefit under the Plan as of December 31, 1997, by the
              early payment factor described under Paragraph 4.3(b)(2) (General
              Method of Computing Annual Pension for Retirement at Early
              Retirement Date), and then multiplying the resulting product by
              the Pre-1998 RIP Spousal and Contingent Annuitant benefit factor
              as obtained from the table in Addendum A of the Plan.

       (c)    If, at the date of his death, the Participant was either an
              Eligible Active Participant or an Eligible Former Participant who,
              in either case, had not reached age 50, the Spouse's benefit will
              equal 100 percent of the Annual Pension that the Participant would
              have received commencing on the first day of the calendar month
              coincident with or following his 50th birthday, if (1) his
              Severance from Service

                                          43
<PAGE>

              Date, in the case of an Eligible Active Participant, had been the
              date of his death, (2) the amount of Annual Pension (including the
              appropriate early payment reduction factor) had been determined
              pursuant to the applicable provisions of Section 4.4 (General
              Method of Computing Annual Pension for Terminated Vested
              Participant), (3) he had survived and elected to begin receiving
              pension payments on the first day of the calendar month coincident
              with or following his 50th birthday, and (4) his pension had been
              payable under the 100 percent option applicable to him pursuant to
              Subsection 7.1(b) (Normal Forms of Pension).

       (d)    Notwithstanding Subsection (c), if a Participant who had not
              attained age 50 at the date of his death was a Participant in the
              Plan as of December 31, 1997, the Spouse's benefit attributable to
              the Participant's accrued benefit under the Plan as of
              December 31, 1997, will be calculated by multiplying the
              Participant's annual accrued benefit under the Plan as of
              December 31, 1997, by the early payment factor described under
              Subsection 4.4(b) (General Method of Computing Annual Pension for
              Terminated Vested Participant) and then multiplying the resulting
              product by the Pre-1998 RIP Spousal and Contingent Annuitant
              benefit factor as obtained from the table in Addendum A of the
              Plan.

6.2    METHOD OF PAYMENT OF SPOUSE'S BENEFIT

       A Spouse's benefit will be payable in equal monthly installments, each
       equal to 1/12th of the Annual Pension as determined pursuant to this
       Article.  If at the date of his death the Eligible Active Participant or
       Eligible Former Participant had reached age 50, the first monthly
       installment of the Spouse's benefit will be payable to the Participant's
       Spouse on the first day of the calendar month coincident with or
       following the date of the Participant's death, if his Spouse is then
       living, unless the Spouse elects to defer payment until the date the
       Participant would have reached age 62.  If at the date of his death the
       Participant had not reached age 50, the first monthly installment will be
       payable to the Participant's Spouse on the first day of the calendar
       month coincident with or following the date the Participant would have
       reached age 50, had he survived until that date, if his

                                          44
<PAGE>

       Spouse is then living, unless the Spouse elects to defer payment until
       the date the Participant would have reached age 65.  In either event,
       subsequent monthly installments will be payable on the first day of each
       month and will cease upon the payment of the installment due on the first
       day of the calendar month in which the Spouse dies.

                                     ARTICLE 7

                                  FORMS OF PENSION

7.1    NORMAL FORMS OF PENSION

       (a)    UNMARRIED PARTICIPANTS

              The normal form of pension payable under the Plan to a Participant
              who is not married on his Annuity Starting Date and who does not
              otherwise elect an optional form of pension under Section 7.2
              (Optional Forms of Retirement Income), will be a single-life
              income payable in equal monthly installments throughout the
              Participant's lifetime, ceasing with the installment due on the
              first day of the calendar month in which his death occurs.  Each
              monthly installment will equal 1/12th of the Annual Pension as
              determined pursuant to Article 4 (Amount of Life-Only Pension), or
              Article 5 (Severance from Service-Vesting), whichever is
              applicable to the Participant.

       (b)    MARRIED PARTICIPANTS

              The normal form of pension payable under the Plan to a Participant
              who is married on his Annuity Starting Date and who does not
              otherwise elect an optional form of pension under Section 7.2
              (Optional Forms of Retirement Income) is a "Qualified Joint and
              Survivor Annuity," which will be paid as follows:

                                          45
<PAGE>

              (1)    To the Participant:

                     A reduced pension based on the 100 percent option in equal
                     monthly installments payable on his Annuity Starting Date
                     and on the first day of each calendar month thereafter.
                     The reduced amount payable to the Participant will be the
                     Actuarial Equivalent of the amount that would otherwise be
                     paid to the Participant if he were unmarried.  Payments
                     will cease with the installment due on the first day of the
                     calendar month in which the Participant dies.

                     If a Participant has an annual accrued benefit under the
                     Plan as of December 31, 1997, the reduced pension payable
                     to him will not be less than the Participant's annual
                     accrued benefit under the Plan as of December 31, 1997,
                     multiplied by the applicable Pre-1998 100 percent RIP
                     Spousal and Contingent Annuitant benefit factor from the
                     table in Addendum A to the Plan.

              (2)    To his Spouse:

                     A pension payable in equal monthly installments, each
                     monthly installment being equal to 100 percent of the
                     monthly installment paid to the Participant.  The first
                     installment will be payable on the first day of the
                     calendar month following the Participant's death, if the
                     Spouse is then living; subsequent installments are payable
                     on the first day of each calendar month, ceasing with the
                     installment due on the first day of the calendar month in
                     which the Spouse dies.  If the Participant's Spouse
                     predeceases the Participant after reduced pension payments
                     under this Subsection have begun, payments will be made to
                     the Participant after the Spouse's death in the form of an
                     unreduced single life annuity pursuant to Subsection (a) as
                     of the first day of the month after the Participant
                     notifies the Committee of the Spouse's death.

                                          46
<PAGE>

                     If a Participant who is entitled to benefits under the
                     provisions of Section 4.3 (General Method of Computing
                     Annual Pension for Retirement at Early Retirement Date)
                     dies after his Actual Separation Date, but prior to the
                     commencement of pension payments, and if the Participant's
                     Actual Separation Date is on or after his 50th birthday,
                     under the normal form of pension applicable to him, his
                     Spouse will be entitled to receive, commencing on the first
                     day of the calendar month following the Participant's
                     death, if the Spouse is then living, a monthly pension,
                     with each monthly installment equal to the amount that
                     would have been payable to the Spouse following the
                     Participant's death pursuant to his election, or if no
                     election is made, then pursuant to the provisions of this
                     Paragraph (b)(2), if the Participant had begun receiving
                     pension benefits on the first day of the calendar month in
                     which the Participant died.

7.2    OPTIONAL FORMS OF RETIREMENT INCOME

       Subject to the following conditions, a Participant, by making a request
       to the Committee or its designee within the election period specified in
       this Section, may elect to receive, in lieu of the normal form of pension
       applicable to him under Section 7.1 (Normal Forms of Pension), one of the
       optional forms of pension specified under this Section (the "Contingent
       Pension Option").  Each election must be made by the Participant in a
       manner prescribed by the Committee or its designee.  The election of the
       Contingent Pension Option will take effect at a specified date, referred
       to as the "Option Effective Date."  The amount of pension payable under
       any optional form will be the Actuarial Equivalent of the pension to
       which the Participant would otherwise be entitled under the Plan.

       At least 30 days but no more than 90 days before a Participant's Annuity
       Starting Date, the Committee or its designee will provide the Participant
       whose normal form of pension applicable to him is described in
       Subsection 7.1(a) (Normal Forms of Pension) with a written explanation of
       (a) the terms and conditions of the normal form of pension benefits

                                          47
<PAGE>

       applicable to him under Subsection 7.1(a) (Normal Forms of Pension);
       (b) the Participant's ability to elect to receive, in lieu of the normal
       form of pension applicable to him under Subsection 7.1(a) (Normal Forms
       of Pension), an optional form of pension under this Section; (c) the
       relative financial effect of the election on his pension benefits;
       (d) the availability of additional information describing the particular
       financial effect of the election upon his pension benefit; and (e) the
       procedures the Participants must follow to obtain the additional
       information.

       The Committee or its designee will provide each Participant whose normal
       form of pension is a Qualified Joint and Survivor Annuity, at least
       30 days but no more than 90 days before the Participant's Annuity
       Starting Date, a written explanation of (a) the terms and conditions of
       the Qualified Joint and Survivor Annuity, (b) the Participant's right to
       make and the effect of an election to waive a Qualified Joint and
       Survivor Annuity, (c) the rights of a Participant's Spouse with respect
       to the selection of benefit forms, and (d) the right to make and the
       effect of a revocation of a previous election to waive the Qualified
       Joint and Survivor Annuity.  A Participant may elect to waive any
       requirement that the Applicable Election Period extend at least 30 days
       after the Committee provides the Participant with the written
       explanations described in this Section, if the distribution begins more
       than seven days after the applicable written explanation is provided.  If
       the Participant is married, the Participant's Spouse must consent to the
       waiver in writing before a notary public or a Plan representative.

       To be effective, an election to waive the Qualified Joint and Survivor
       Annuity must be made in writing during the 90 day period ending on the
       Annuity Starting Date and, if the Participant is married, it must be
       consented to by the Participant's Spouse.  The election must designate a
       Beneficiary (or a form of benefits) that may not be changed (except back
       to a Qualified Joint and Survivor Annuity) without the Spouse's consent,
       unless the Spouse's original consent expressly permits designations by
       the Participant without any requirements of further consent by the
       Spouse.  The Spouse's consent must be given in writing during the 90 day
       period ending on the Annuity Starting Date, must acknowledge the effect
       of the election and the consent, and must be witnessed by a Plan

                                          48
<PAGE>

       representative or notary public.  If the Participant establishes to the
       satisfaction of a Plan representative that the Spouse's written consent
       cannot be obtained because there is no Spouse or the Spouse cannot be
       located, the Spouse's consent will be deemed to have been given.  If a
       Participant is legally separated from his Spouse or has been abandoned by
       his Spouse (within the meaning of local law) and the Participant has a
       court order to such effect, the Spouse's consent will not be required
       unless a Qualified Domestic Relations Order provides otherwise.  Any
       Spousal consent will be valid only with respect to the Spouse who signs
       the consent, or in the event of a deemed consent, the designated Spouse.
       If a Participant's Spouse is legally incompetent to give consent, the
       Spouse's legal guardian (even if the guardian is the Participant) may
       give consent.  A Participant may revoke a prior effective election at any
       time prior to the receipt of benefits.

       (a)    SINGLE-LIFE OPTION

              A married Participant whose normal form of pension is a Qualified
              Joint and Survivor Annuity may elect, in lieu of all payments
              otherwise payable, a single-life pension that provides payments to
              the Participant in equal monthly installments throughout his
              lifetime, ceasing with the installment due on the first day of the
              calendar month in which the Participant dies.  Each monthly
              installment will be equal to 1/12th of the Annual Pension as
              determined pursuant to Article 4 (Amount of Life-Only Pension),
              Article 5 (Severance from Service-Vesting), or Article 6 (Spouse's
              Benefit), whichever is applicable.

       (b)    CONTINGENT PENSION OPTION

              A Participant may elect, in lieu of all payments otherwise payable
              on and after the Option Effective Date, the Contingent Pension
              Option providing payments as follows:

                                          49
<PAGE>

              (1)    To the Participant:

                     A reduced pension beginning on the Option Effective Date,
                     with subsequent monthly payments payable on the first day
                     of each subsequent calendar month throughout his remaining
                     lifetime, terminating with the payment due on the first day
                     of the calendar month in which he dies.  The reduced amount
                     payable to the Participant will be determined in accordance
                     with the Participant's choice of the 100 percent, 662/3
                     percent, or 50 percent option and will be the Actuarial
                     Equivalent of the amount that would otherwise be paid to
                     the Participant under the single-life annuity option
                     applicable to him pursuant to Subsection 7.2(a) (Optional
                     Forms of Retirement Income).  An option cannot be elected,
                     modified, or rescinded after the Option Effective Date.

                     If a Participant has an annual accrued benefit under the
                     Plan as of December 31, 1997, the reduced pension payable
                     to him will not be less than the Participant's annual
                     accrued benefit under the Plan as of December 31, 1997,
                     multiplied by (A) for the 100 percent option, the
                     applicable Pre-1998 100 percent RIP Spousal and Contingent
                     Annuitant Benefit factor from the table in Addendum A to
                     the Plan, or (B) for the 50 percent option, the applicable
                     Pre-1998 RIP 50 percent Contingent Annuitant Benefit factor
                     from the table in Addendum B to the Plan.

              (2)    To the Contingent Annuitant designated by the Participant
                     at the time he elects this option:

                     A contingent pension beginning on the first day of the
                     calendar month following the calendar month in which the
                     Participant's death occurs if the Participant dies on or
                     after the Option Effective Date, and if the Contingent
                     Annuitant is then living, with subsequent monthly payments
                     payable on the first day of each subsequent calendar month
                     throughout the

                                          50
<PAGE>

                     Contingent Annuitant's remaining lifetime, terminating with
                     the monthly payment due on the first day of the calendar
                     month in which the Contingent Annuitant dies.  However, if
                     the Participant had elected to defer his pension payments,
                     the Contingent Annuitant may elect, at any time prior to
                     the date contingent pension payments actually begin, to
                     have the payments begin after the Participant's death on
                     the first day of any calendar month coincident with or
                     prior to the date the Participant had elected to start
                     receiving his pension payments.

                     The monthly amount payable to the Contingent Annuitant will
                     be a specified percentage of the reduced pension payable
                     under this option to the Participant, as specified by the
                     Participant.  This percentage will be either 100 percent,
                     662/3 percent, or 50 percent.  Notwithstanding the
                     foregoing, if the Contingent Annuitant is other than the
                     Participant's Spouse, the Contingent Pension Option may be
                     elected only if the requirements of 26 C.F.R. Section
                     1.401(a)(9)-2 are satisfied.

              An option will not become effective, and payments will be made as
              otherwise provided in the Plan as if this option had never been
              elected, if:  (a) the Participant is not living on the Option
              Effective Date, (b) the Participant does not, within 90 days after
              his election, and not later than the Option Effective Date,
              furnish evidence, satisfactory to the Committee, of the age of his
              Contingent Annuitant, or (c) the Participant elects, prior to the
              Option Effective Date, to cancel the option.  If the Participant's
              Contingent Annuitant predeceases the Participant after the
              contingent pension payments have begun, the option will be
              canceled and no longer effective, and payments will be made to the
              Participant in the form of an unreduced single-life annuity
              applicable to him pursuant to Subsection 7.2(a) (Optional Forms of
              Retirement Income) as of the first day of the month after the
              Participant notifies the Committee of the Contingent Annuitant's
              death.

                                          51
<PAGE>

       (c)    LIFE WITH TEN YEAR CERTAIN OPTION

              A Participant may, in lieu of all payments otherwise payable on
              and after the Option Effective Date, elect the Life with Ten Year
              Certain Option providing payments as follows:

              (1)    To the Participant:

                     A reduced pension beginning on the Option Effective Date
                     with subsequent monthly payments payable on the first day
                     of each calendar month thereafter for ten years or
                     throughout his remaining lifetime, whichever is longer,
                     terminating with the payment due on the first day of the
                     calendar month after the end of ten years or in which the
                     Participant dies, whichever is applicable.

                     If the Participant elects the Life with Ten Year Certain
                     Option, the amount of the Participant's Nonforfeitable
                     annual pension will be determined by multiplying his Annual
                     Pension by the appropriate Life with Ten Year Certain
                     Factor as obtained from the following table:

                                          52
<PAGE>

<TABLE>
<CAPTION>
                    LIFE WITH TEN YEAR CERTAIN FACTORS
                    ----------------------------------
                   Age    Factor    Age           Factor
                   ---    ------    ---           ------
                   <S>    <C>       <C>           <C>
                    50    .9869      70            .9065

                    51    .9855      71            .8977

                    52    .9839      72            .8883

                    53    .9823      73            .8780

                    54    .9803      74            .8670

                    55    .9783      75            .8553

                    56    .9760      76            .8429

                    57    .9734      77            .8299

                    58    .9706      78            .8163

                    59    .9674      79            .8021

                    60    .9639      80            .7875

                    61    .9601      81            .7723

                    62    .9558      82            .7569

                    63    .9511      83            .7413

                    64    .9461      84            .7253

                    65    .9407      85            .7090

                    66    .9347      86            .6925

                    67    .9285      87            .6758

                    68    .9217      88            .6591

                    69    .9145      89            .6424

                                     90            .6259

</TABLE>

              (2)    To the Beneficiary designated by the Participant at the
                     time he elects this option:

                     If the Participant dies prior to the end of ten years from
                     the date of his initial pension payment, a contingent
                     pension payable on the first day of the calendar month
                     following the calendar month in which the Participant dies
                     if the Participant's death is on or after the Option
                     Effective Date and if the Beneficiary is then living, with
                     subsequent monthly payments being payable on the first day
                     of each calendar month for the balance of ten years from
                     the date of the Participant's Option Effective Date.

                                          53
<PAGE>

              d)     LIFE ANNUITY LEVEL INCOME OPTION

              A Participant who retires prior to reaching age 62 may elect, in
              lieu of all payments otherwise payable on and after the Option
              Effective Date, the Life Annuity Level Income Option, which
              provides payments to the Participant that are adjusted for the
              months before and after the Participant is eligible to receive
              benefits under the Social Security Act at age 62.

              The Participant will receive a reduced pension on the Option
              Effective Date, with subsequent monthly payments payable on the
              first day of each calendar month thereafter for his remaining
              lifetime, terminating with the payment due on the first day of the
              calendar month in which his death occurs.  The reduced pension the
              Participant receives will be calculated as follows:

              (1)    Subject to Paragraph (5), the Participant's Annual Pension
                     will be determined under Article 4 (Amount of Life-Only
                     Pension), Article 5 (Severance From Service-Vesting), or
                     Article 6 (Spouse's Benefit), whichever is applicable.

              (2)    Subject to Paragraph (5), the Participant's Reduced Primary
                     Social Security Benefit will be multiplied by the
                     appropriate Level Income Option factor from the table in
                     Addendum C to the Plan.

              (3)    The sum of the amounts determined under Paragraphs (1) and
                     (2) will equal the Level Income Option benefit payable to
                     the Participant prior to age 62, which is the first date he
                     is eligible to begin receiving Social Security Act
                     benefits.

              (4)    The Level Income Option benefit payable to the Participant
                     after he reaches age 62 will equal the amount determined in
                     Paragraph (3), minus the Participant's Reduced Primary
                     Social Security Benefit.

                                          54
<PAGE>

              (5)    If a Participant has an annual accrued benefit under the
                     Plan as of December 31, 1997, the Level Income Option
                     benefit payable to that Participant will not be less than
                     the sum of (A) and (B), where (A) equals the Participant's
                     annual accrued benefit under the Plan as of December 31,
                     1997, and (B) equals the Participant's Reduced Primary
                     Social Security Benefit multiplied by the appropriate
                     Pre-1998 RIP Level Income Option factor from the table in
                     Addendum D to the Plan.

              e)     100 PERCENT CONTINGENT ANNUITANT LEVEL INCOME OPTION

              A Participant who retires prior to reaching age 62 may, in lieu of
              all payments otherwise payable on after the Option Effective Date,
              elect the 100 Percent Contingent Annuitant Level Income Option,
              which provides payments as follows:

                     (1)    To the Participant:

                     A reduced pension that is adjusted for the months before
                     and after the Participant is eligible to receive benefits
                     under the Social Security Act at age 62.  The Participant
                     will receive a reduced pension on the Option Effective
                     Date, with subsequent monthly payments payable on the first
                     day of the calendar month thereafter for his remaining
                     lifetime, terminating with the payment due on the first day
                     of the calendar month in which the Participant dies.

                     The reduced pension the Participant receives under this
                     option will be calculated as follows:

                     (A)    Subject to Subparagraph (F), the Participant's
                            Annual Pension will be determined under Article 4
                            (Amount of Life-Only Pension), Article 5 (Severance
                            From Service-Vesting), or Article 6 (Spouse's
                            Benefit), whichever is applicable.

                                          55
<PAGE>

                     (B)    The Participant's Annual Pension will be converted
                            to a reduced pension based on the 100 percent
                            Contingent Pension Option under Subsection 7.2(b)
                            (Optional Forms of Retirement Income).

                     (C)    Subject to Subparagraph (F), the Participant's
                            Reduced Primary Social Security Benefit will be
                            multiplied by the appropriate Level Income Option
                            factor from the table in Addendum C to the Plan.

                     (D)    The sum of the amounts determined under
                            Subparagraphs (B) and (C) will equal the Level
                            Income Option benefit payable to the Participant
                            prior to age 62, which is the first date he is
                            eligible to begin receiving Social Security Act
                            benefits.

                     (E)    The Level Income Option benefit payable to the
                            Participant after he attains age 62 will equal the
                            amount determined in Subparagraph (D), minus the
                            Participant's Reduced Primary Social Security
                            Benefit.

                     (F)    If a Participant has an annual accrued benefit under
                            the Plan as of December 31, 1997, the Level Income
                            Option benefit payable to that Participant will not
                            be less than the sum of (i) and (ii), where
                            (i) equals the Participant's annual accrued benefit
                            under the Plan as of December 31, 1997, converted to
                            a reduced pension based on the 100 percent
                            Contingent Annuitant Pension Option under
                            Subsection 7.2(b) (Optional Forms of Retirement
                            Income), and (ii) equals the Participant's Reduced
                            Primary Social Security Benefit multiplied by the
                            appropriate Pre-1998 RIP Level Income Option factor
                            from the table in Addendum D to the Plan.

                                          56
<PAGE>

              (2)    To the Contingent Annuitant:

                     A contingent pension beginning on the first day of the
                     calendar month following the calendar month in which the
                     Participant dies if the Participant dies on or after the
                     Option Effective Date, and if the Contingent Annuitant is
                     then living; with subsequent monthly payments payable on
                     the first day of each subsequent calendar month throughout
                     the Contingent Annuitant's remaining lifetime, terminating
                     with the monthly payment due on the first day of the
                     calendar month in which the Contingent Annuitant dies.
                     However, if the Participant had elected to defer his
                     pension payments, the Contingent Annuitant may elect at any
                     time prior to the date contingent pension payments actually
                     begin, to have the payments begin after the Participant's
                     death on the first day of any calendar month coincident
                     with or prior to the date the Participant had elected to
                     start receiving payments.

                     The monthly amount payable to the Contingent Annuitant will
                     equal 100 percent of the reduced pension that would have
                     been payable under this option to the Participant.

              An option will not become effective, and payments will be made as
              otherwise provided in the Plan as if this option had never been
              elected, if:  (a) the Participant is not living on the Option
              Effective Date, (b) the Participant does not, within 90 days after
              his election, but not later than the Option Effective Date,
              furnish evidence, satisfactory to the Committee, of the age of his
              Contingent Annuitant, or (c) the Participant elects, prior to the
              Option Effective Date, to cancel the option.  If the Participant's
              Contingent Annuitant predeceases the Participant after the
              contingent pension payments have begun, the option will be
              canceled and no longer effective, and payments will be made to the
              Participant in the form of a reduced single-life annuity level
              income option applicable to him pursuant to Subsection 7.2(d)
              (Optional Forms of Retirement Income) as of the first day of

                                          57
<PAGE>

              the month after the Participant notifies the Committee of the
              Contingent Annuitant's death.  An option cannot be elected,
              modified, or rescinded after the Option Effective Date.

                                     ARTICLE 8

                                 PAYMENT OF PENSION

8.1    TIMING OF PAYMENT

       This Section is subject to the provisions of Section 8.6 (Required
       Payment of Benefits).

       A Participant who ceases to be an Employee as of his Normal Retirement
       Date will begin receiving any pension payable to him under the Plan as of
       his Normal Retirement Date.  A Participant who continues as an Employee
       after his Normal Retirement Date will begin receiving the pension payable
       to him under the Plan as of the first day of the calendar month
       coincident with or following his Severance from Service.

       A Participant who ceases to be an Employee as of an Early Retirement Date
       will begin receiving his pension at his Normal Retirement Date unless he
       elects to begin receiving his pension on either his Early Retirement Date
       or the first day of a calendar month between his Early Retirement Date
       and his Normal Retirement Date (the "Deferred Pension Payment Date");
       provided he has made the required election, in a manner prescribed by the
       Committee, prior to the date he wants his pension to begin.

8.2    METHOD OF PAYMENT

       Unless specified elsewhere in the Plan, all pension payments under the
       Plan will normally be payable in equal monthly installments, with each
       monthly installment equal to 1/12th of the annual amount payable.
       Pension payments will be (a) made by check to the order of the
       Participant, his Spouse, his Beneficiary, or his Contingent Annuitant, as
       applicable, and mailed to that person's address as it appears on the
       Employer's records,

                                          58
<PAGE>

       or (b) deposited directly into an account of the Participant, his Spouse,
       his Beneficiary, or his Contingent Annuitant, as applicable, maintained
       by the recipient at a bank, savings and loan, or other financial
       institution, as directed by the recipient.

8.3    SMALL BENEFITS

       Notwithstanding the provisions of Sections 6.2 (Method of Payment of
       Spouse's Benefit) and 7.2 (Optional Forms of Retirement Income), where
       the Actuarial Equivalent present value of a Participant's Nonforfeitable
       pension or Spouse's benefit under Section 6.1 (Determination of Spouse's
       Benefit) does not exceed $5,000, the Committee or its designee will pay
       the Nonforfeitable pension or Spouse's benefit (if applicable) in a
       single-sum cash payment equal to the Actuarial Equivalent of the pension
       or Spouse's benefit otherwise payable.

8.4.   FACILITY OF PAYMENT

       If any benefit under the Plan is payable to a person whom the Committee
       knows is a minor or otherwise under legal incapacity, the Committee or
       its designee may have the payment made to the legal guardian of that
       person or to the person or organization as a court of competent
       jurisdiction may direct.  To the extent permitted by law, any payment
       under this Section will be a complete discharge of any liability under
       the Plan to that person.

8.5    BENEFITS FOR LATE RETIREES, REEMPLOYED RETIREES AND REEMPLOYED TERMINATED
       VESTED PARTICIPANTS

       (a)    LATE RETIREES

              A Participant may postpone his retirement and continue his
              employment with an Employer after his Normal Retirement Date.  If
              a Participant continues employment after his Normal Retirement
              Date, he will continue to accrue years of

                                          59
<PAGE>

              Service and years of Participation during this time period up to
              the date of his actual retirement.  The Participant's benefit will
              be calculated under Article 4 (Amount of Life-Only Pension),
              Article 5 (Severance From Service-Vesting), or Article 6 (Spouse's
              Benefit), whichever is applicable, as of his Severance from
              Service Date.

       (b)    SUSPENSION OF RETIREMENT BENEFIT NOTICE FOR PARTICIPANT WHO
              CONTINUES EMPLOYMENT AFTER HIS NORMAL RETIREMENT DATE

              When a Participant continues in employment with an Employer beyond
              his Normal Retirement Date, benefits will not begin during that
              continued period of employment unless required under Section 8.6
              (Required Payment of Benefits).  The Participant will be sent a
              notification described in Section  2530.203-3(b)(4) of the
              Department of Labor regulations, provided that the suspension of
              benefits notice is limited to periods of service within the
              context of Section  2530.203-3(c) of the Department of Labor
              regulations.

       (c)    REEMPLOYED RETIREES AND REEMPLOYED VESTED TERMINATED PARTICIPANTS

              A Reemployed Retiree or Reemployed Vested Terminated Participant
              who resumes employment will continue to receive any pension
              benefit payments under the Plan to which he is entitled, and will
              begin to receive any pension benefit payments under the Plan, as
              if he were not reemployed.  When a Reemployed Retiree or
              Reemployed Terminated Vested Participant again incurs a Severance
              from Service, his Annual Pension will, subject to all of the
              provisions of the Plan, be recalculated by aggregating his years
              of Participation and by considering his Earnings during his period
              of reemployment; provided, however, that the Participant's
              benefits as recalculated will not be less than the Actuarial
              Equivalent of his Annual Pension prior to his reemployment.  The
              Participant's recalculated Annual Pension will be reduced by the
              Actuarial Equivalent of the pension benefits already paid to the
              Participant.  Any pension benefit payable to a Spouse

                                          60
<PAGE>

              or Contingent Annuitant will also be based on the Participant's
              pension benefit, as so recalculated and reduced.

       (d)    QUESTIONS CONCERNING EFFECT ON REEMPLOYMENT

              The Plan's benefit claims procedures may be used by an individual
              who has questions concerning the effect of reemployment by his
              Employer upon his pension benefit payments.

       (e)    ADDITIONAL RULES AND PROCEDURES

              The Committee is authorized to develop more fully the provisions
              of this Section by establishing, from time to time, various rules
              and procedures consistent with ERISA, the Code, and the Plan.

8.6    REQUIRED PAYMENT OF BENEFITS

       This Section has been included in the Plan to comply with the limitations
       imposed by Code paragraphs 401(a)(9) and 401(a)(14), and it will not be
       construed as providing for a form of benefit not otherwise provided under
       the Plan.  Notwithstanding any provision of this Plan to the contrary,
       any distribution under the Plan will be made in accordance with
       regulations under Code paragraph 401(a)(9), including proposed federal
       income tax regulation 1.401(a)(9)-2, and will comply with the following
       rules:

       (a)    Unless a Participant elects otherwise, the payment of his benefits
              under the Plan must begin not later than the 60th day after the
              end of the Plan Year in which occurs the latest of:  (1) the
              Participant's 65th birthday; (2) the 10th anniversary of the Plan
              Year in which the Participant began participation in the Plan; or
              (3) termination of the Participant's employment with the Employer.

                                          61
<PAGE>

       (b)    For purposes of this Article, "required beginning date" means
              (1) with respect to a Participant who is not a 5 percent owner as
              described in Code section 416 and who did not reach age 70 1/2
              before January 1, 1997, April 1 of the calendar year following the
              later of (A) the calendar year in which the Participant reaches
              age 70 1/2, or (B) the calendar year in which the Participant
              retires; or (2) with respect to a Participant who is a 5 percent
              owner as described in Code section 416, or any Participant who
              reached age 70 1/2 before January 1, 1997, April 1 of the calendar
              year following the calendar year in which the Participant reaches
              age 70 1/2.  The Plan will provide an actuarial increase to a
              Participant's interest in the Plan for the period beginning on the
              April 1 of the calendar year following the calendar year in which
              the Participant reaches age 70 1/2 and ending on the date on which
              benefits begin after the Participant's retirement in an amount
              sufficient to satisfy Code paragraph 401(a)(9).  The benefits
              payable to the Participant at the end of the period described in
              the preceding sentence will be no less than the Actuarial
              Equivalent of the benefit that would have been payable to the
              Participant as of the April 1 of the calendar year following the
              calendar year in which the Participant reached 70 1/2.

       (c)    Notwithstanding any other provision of this Plan, the entire
              interest of each Participant will be distributed either:  (1) in a
              lump sum payment not later than the required beginning date, or
              (2) in a series of payments beginning not later than the required
              beginning date over the life of the Participant or over the lives
              of the Participant and the designated Beneficiary (or over a
              period not extending beyond the life expectancy of the Participant
              or the life expectancy of the Participant and a designated
              Beneficiary).  If the Participant's interest is to be paid in the
              form of annuity distributions under the Plan, payments under the
              annuity will satisfy the following requirements:

              (1)    The annuity distributions must be paid in periodic payments
                     made at intervals not longer than one year.

                                          62
<PAGE>

              (2)    For purposes of computing the distribution period, life
                     expectancies or joint and last survivor expectancies will
                     not be recalculated.

              (3)    Once payments have begun, the distribution period may not
                     be lengthened even if that period would be shorter than the
                     permitted maximum period.

              (4)    Payments must either be non-increasing or increase only as
                     follows:

                     (A)    with any percentage increase in a specified and
                            generally recognized cost-of-living index;

                     (B)    to the extent of the reduction to the amount of the
                            Participant's payments to provide for a survivor
                            benefit upon death, but only if the Beneficiary or
                            Contingent Annuitant whose life was being used to
                            determine the distribution period dies and the
                            payments continue otherwise over the life of the
                            Participant;

                     (C)    to provide cash refunds of employee contributions
                            upon the Participant's death; or

                     (D)    because of an increase in benefits under the Plan.

              (5)    If the annuity is a life annuity (or a life annuity with a
                     period certain not exceeding 20 years), the amount that
                     must be distributed on or before the Participant's required
                     beginning date (or, in the case of distributions after the
                     death of the Participant, the date distributions are
                     required to begin after the Participant's death) will be
                     the payment that is required for one payment interval.  The
                     second payment need not be made until the end of the next
                     payment interval even if that payment interval ends in the
                     next calendar year.  Payment intervals are the periods for
                     which payments are received, e.g., bi-monthly, monthly,
                     semi-annually or annually.  If the

                                          63
<PAGE>

                     annuity is a period certain annuity without a life
                     contingency (or is a life annuity with a period exceeding
                     20 years), periodic payments for each distribution calendar
                     year will be combined and treated as an annual amount.  The
                     amount that must be distributed by the Participant's
                     required beginning date (or, in the case of distributions
                     after the death of the Participant, the date distributions
                     are required to begin after the Participant's death) is the
                     annual amount for the first distribution calendar year.
                     The annual amount for other distribution calendar years,
                     including the annual amount for the calendar year in which
                     the Participant's required beginning date (or the date
                     distributions are required to begin after the Participant's
                     death) occurs, must be distributed on or before December 31
                     of the calendar year for which the distribution is
                     required.

       (d)    If (1) the distribution of a Participant's interest has begun in
              accordance with Subsection (c), and (2) the Participant dies
              before his entire interest has been distributed to him, the
              remaining portion of his interest will be distributed at least as
              rapidly as under the method of distribution being used under
              Subsection (c) as of the date of his death.

       (e)    Except as provided in Subsection (f), if a Participant dies before
              the distribution of his interest has begun in accordance with
              Subsection (c), the Participant's entire interest will be
              distributed within five years after his death.

       (f)    For purposes of Subsection (c), any portion of a distribution that
              is payable to (or for the benefit of) a designated Beneficiary
              will be treated as completely distributed on the date on which
              distribution began if:

              (1)    that portion is to be distributed (in accordance with
                     regulations prescribed by the Secretary) over the life of
                     the designated Beneficiary (or over a period not extending
                     beyond the life expectancy of the Beneficiary), and

                                          64
<PAGE>

              (2)    distributions begin by the latest of (A) one year after the
                     date of the Participant's death, (B) any later date that
                     the Secretary may establish by regulations, or (C) if the
                     Beneficiary is the Participant's surviving Spouse, the date
                     on which the Participant would have attained age 70-1/2.

       (g)    If the designated Beneficiary is the Participant's surviving
              Spouse, and if the surviving Spouse dies before the distributions
              to the Spouse begin, Subsections (c), (e), and (f) will be applied
              as if the surviving Spouse were the Participant.

       (h)    For purposes of Subsection (f), payment will be calculated by use
              of the expected return multiples specified in Tables V and VI of
              26 C.F.R. Section 1.72-9.  The life expectancy of a designated
              Beneficiary will be calculated at the time payment first commences
              without further recalculation.

       (i)    For purposes of Subsections (c), (d), (e), and (f), if any amounts
              payable to a child of the Participant becomes payable to the
              Participant's surviving Spouse and the child reaches the age of
              majority, that amount will be treated as if it had been paid to
              the surviving Spouse.

       (j)    Unless paid to the surviving Spouse under a Qualified Joint and
              Survivor Annuity, the method of distribution selected must assure
              that at least 50 percent of the present value of the amount
              available for distribution is paid within the Participant's life
              expectancy.

       (k)    If a Participant reaches age 70 1/2 on or after January 1, 1997,
              but before January 1, 1999, the Plan will deem the Participant's
              "required beginning date" to be April 1 of the calendar year
              following the calendar year in which the Participant reaches age
              70 1/2 unless the Participant elects, with his Spouse's consent,
              to defer commencement of his Plan benefits until a date no later
              than April 1 of the calendar year following the calendar year in
              which the Participant retires.

                                          65
<PAGE>

8.7    DIRECT ROLLOVERS OF ELIGIBLE DISTRIBUTIONS

       Notwithstanding any provision of the Plan to the contrary that would
       otherwise limit a Distributee's election under this Section, a
       Distributee may elect, at the time and in the manner prescribed by the
       Committee, to have any portion of an Eligible Rollover Distribution paid
       directly to an Eligible Retirement Plan specified by the Distributee in a
       Direct Rollover.

                                     ARTICLE 9

                          RETIREE MEDICAL/DENTAL BENEFITS

9.1    PURPOSE

       This Article provides for the payment of certain Medical/Dental Benefits
       to Eligible Retirees and to their Dependents under the Plan.  The
       Medical/Dental Benefits described in this Article are intended to meet
       the requirements of Code subsection 401(h) and its interpretive
       regulations.

9.2    ELIGIBILITY

       Only Eligible Individuals will be eligible to receive Medical/Dental
       Benefits (or to have Medical/Dental Benefits paid on their behalf) under
       this Article.

9.3    SEPARATE ACCOUNT

       A Medical/Dental Benefits Account will be established and maintained with
       respect to contributions made to fund the benefits payable under this
       Article, which will be kept separate (for record keeping purposes only)
       from the amounts contributed to the Plan to fund all other benefits.  The
       funds in the Medical/Dental Benefits Account may be invested with funds
       contributed to the Plan to fund other benefits without identification of
       which assets of the Plan are allocable to the Medical/Dental Benefits
       Account and which

                                          66
<PAGE>

       are allocable to fund other benefits.  Where the assets are not so
       allocated, however, the earnings on the assets will be allocated in a
       reasonable manner between the Medical/Dental Benefits Account and the
       amounts funding other benefits under the Plan.

9.4    IMPOSSIBILITY OF DIVERSION PRIOR TO SATISFACTION OF ALL LIABILITIES

       Prior to the satisfaction of all liabilities under this Article to
       provide for the payment of Medical/Dental Benefits, no part of the corpus
       or income of the Medical/Dental Benefits Account may be (within the
       taxable year or thereafter) used for, or diverted to, any purpose other
       than providing Medical/Dental Benefits or paying any reasonable expenses
       attributable to the administration of the Medical/Dental Benefits
       Account.

9.5    REVERSION UPON SATISFACTION OF ALL LIABILITIES

       Notwithstanding the provisions of Section 14.8 (No Diversion of Assets),
       any amounts that are contributed to fund Medical/Dental Benefits and that
       remain in the Medical/Dental Benefits Account upon the satisfaction of
       all liabilities arising out of the operation of this Article are to be
       returned to Eligible Retirees, in proportion to their respective total
       contributions to the Medical/Dental Benefits Account.

9.6    FORFEITURES

       In the event an Eligible Individual's interest in the Medical/Dental
       Benefits Account is forfeited prior to termination of the Plan, an amount
       equal to the amount of the forfeiture will be applied as soon as possible
       to reduce Employer contributions to the Plan to fund the Medical/Dental
       Benefits under this Article.

9.7    EMPLOYER CONTRIBUTIONS TO THE MEDICAL/DENTAL BENEFITS ACCOUNT

       For each Plan Year, the Employer will contribute to the Medical/Dental
       Benefits Account the amount necessary to fund Medical/Dental Benefits, as
       determined by the Plan's

                                          67
<PAGE>

       actuaries, provided that the contributions mandated by this sentence will
       be reasonable, and will be reduced (but not below zero) as required so
       that the aggregate actual contributions made to the Medical/Dental
       Benefits Account will not exceed 25% of the total aggregate actual
       contributions (other than any contributions to fund past service credits)
       made to the Plan.  All contributions to the Medical/Dental Benefits
       Account will be paid to the Trustee, who will hold them in Trust for the
       payment of Medical/Dental Benefits under this Article.  At the time an
       Employer makes a contribution to the Plan, it will designate the portion
       allocable to the Medical/Dental Benefits Account.

9.8    MEDICAL/DENTAL BENEFITS

       The Medical/Dental Benefits under the Plan will be those benefits payable
       to or on behalf of Eligible Individuals in accordance with the terms of a
       Medical/Dental Plan.

                                     ARTICLE 10

                             NONALIENATION OF BENEFITS

The Pension Fund will not in any manner be liable for, or subject to, the debts
or liabilities of any Participant, Beneficiary, Contingent Annuitant, or Spouse,
or any other person entitled to any benefit.  No payee may assign any payment
due him under the Plan.  No pension or other benefits at any time payable from
the Pension Fund will be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, attachment, garnishment, levy, execution, or
other legal or equitable process or encumbrance of any kind.  Any attempt to
alienate, sell, transfer, assign, or otherwise encumber any such benefit,
whether presently or thereafter payable, will be void.  However, the payment of
benefits under the Plan will be made in accordance with the applicable
requirements of any Qualified Domestic Relations Order entered by a court of
competent jurisdiction or a state administrative agency.  The Committee will
establish procedures to determine whether the domestic relations orders are
Qualified Domestic Relations Orders and to administer distributions under
Qualified Domestic Relations Orders.

                                          68
<PAGE>

                                     ARTICLE 11

                                   ADMINISTRATION

11.1   ADMINISTRATOR

       The Committee will be the administrator of the Plan.  The Committee will
       consist of the number of members, not fewer than three, that is specified
       from time to time by the Board of Directors.  All members of the
       Committee will be Employees or officers of an Employer.  All members of
       the Committee will serve without compensation.

11.2   REMOVAL AND REPLACEMENT OF COMMITTEE MEMBERS

       The members of the Committee will serve at the pleasure of the Board of
       Directors and may be removed by the Board of Directors with or without
       cause.  Any vacancy among the members will be filled by the Board of
       Directors.

11.3   DISQUALIFICATION AND RESIGNATION

       On the date when a Committee member is neither an Employee nor an officer
       of an Employer, he will be disqualified from membership on the Committee.
       A member of the Committee may resign by delivering his written
       resignation to any other member of the Committee.  A resignation will
       become effective on the date specified in the instrument of resignation.

11.4   CHAIRPERSON, SERVICES, AND COUNSEL

       The members of the Committee will elect one of their members as
       Chairperson and will elect a Secretary, who may be, but need not be, one
       of the members of the Committee.  Cinergy will provide the Committee, at
       Cinergy's expense, with such clerical, accounting, actuarial, and other
       services as may be reasonably required by the Committee

                                          69
<PAGE>

       in carrying out its responsibilities.  The Committee may employ counsel,
       who may be, but need not be, counsel to Cinergy.

11.5   MEETINGS

       The Committee will hold meetings upon such notice, at the places, and at
       the times as the Committee may from time to time determine, but no less
       often than quarterly.

11.6   QUORUM

       A majority of the members of the Committee at the time holding office
       will constitute a quorum for the transaction of business.  All
       resolutions and other action taken by the Committee at any meeting will
       be by the vote of the majority of the members of the Committee present at
       the meeting.

11.7   ACTION WITHOUT MEETING

       Any decision, order, direction, or other action, including orders and
       directions to the Trustee or Insurance Company, made in writing signed by
       a majority of the members of the Committee at the time holding office
       will constitute valid and effective action of the Committee, whether or
       not the matter to which that decision, order, direction, or other action
       pertains had already been acted upon at a duly called and held meeting of
       the Committee.

11.8   NOTICE TO TRUSTEE OF CHANGES IN MEMBERSHIP

       The Trustee will not be charged with notice of any change in the
       membership of the Committee unless and until it has received a certified
       copy of the resolution or vote of the Board of Directors effecting the
       change.

                                          70
<PAGE>

11.9   CORRECTION OF DEFECTS

       The Committee may correct any defect or supply any omission or reconcile
       any error or inconsistency in its previous proceedings, decisions,
       orders, directions, or other actions in a manner and to such extent as it
       will deem advisable to carry out the purposes of the Plan.

11.10  RELIANCE UPON LEGAL COUNSEL

       The members of the Committee, and Cinergy, and Cinergy's officers and
       directors, will be entitled to rely upon all opinions given by legal
       counsel selected by the Committee.

11.11  EXPENSES

       In the performance of its duties, the Committee is authorized to incur
       reasonable expenses, including counsel fees.  All operating expenses of
       the Plan, including insurance premiums payable to the Pension Benefit
       Guaranty Corporation, fees for professional services, and technical or
       clerical assistance, will be paid from the Pension Fund, to the extent
       not paid by the Employer.  Investment expenses and any federal, state, or
       local taxes that may be levied against the Pension Fund will also be paid
       from the Pension Fund.

11.12  INDEMNIFICATION

       Cinergy agrees to indemnify and hold harmless each member of the
       Committee against any cost, expense, or liability (including any sum paid
       in settlement of any claim with the approval of the Board of Directors)
       arising out of any act or omission to act as a member of the Committee,
       except only acts and omissions representing willful misconduct, fraud, or
       lack of good faith.

                                          71
<PAGE>

11.13  POWERS AND DUTIES OF COMMITTEE

       Subject to the specific limitations stated in this document, the
       Committee will have the following powers, duties, and responsibilities:

       (a)    to carry out the Plan's general administration;

       (b)    to cause to be prepared all forms necessary or appropriate for the
              Plan's administration;

       (c)    to keep appropriate books and records, including minutes of the
              Committee's meetings;

       (d)    to determine, consistent with the provisions of this document, the
              manner in which the Pension Fund will be allocated and disbursed;

       (e)    to give directions to the Trustee as to the amounts to be
              disbursed to Participants and others under the Plan's provisions;

       (f)    to determine, with discretionary authority and consistent with the
              provisions of this document, all questions of the eligibility,
              rights, and status of Participants and others under the Plan;

       (g)    to exercise all other powers and duties specifically conferred
              upon the Committee elsewhere in this document and the Trust
              Agreement;

       (h)    to exercise all duties and responsibilities imposed by ERISA upon
              the Committee as the Plan's administrator;

                                          72
<PAGE>

       (i)    to interpret, with discretionary authority, the provisions of the
              Plan and to resolve, with discretionary authority, all disputed
              questions of Plan interpretation and benefit eligibility;

       (j)    to employ agents to assist it in performing its administrative
              duties; and

       (k)    to allocate and delegate its fiduciary responsibilities in
              accordance with ERISA section 405.

       The Committee will at all times make similar decisions on similar
       questions involving similar circumstances.  Subject to the provisions of
       ERISA and to the provisions of Article 12 (Benefit Claims Procedures)
       relating to claims, all decisions of the Committee made in good faith on
       all matters within the scope of its authority under the provisions of
       this document will be final and binding upon all persons.

11.14  MATTERS SPECIFICALLY EXCLUDED FROM JURISDICTION

       Notwithstanding any other provision of this document, the Committee will
       have no power, duty, or authority with respect to determination of the
       amounts to be contributed by the Employer to the Pension Fund or Trust
       Fund.

                                     ARTICLE 12

                             BENEFIT CLAIMS PROCEDURES

Claims for benefits under the Plan will be made in writing to the Committee or
its designee.  If a claim for benefits is wholly or partially denied, the
Committee or its designee will notify the Claimant of the claim's denial within
a reasonable period of time not to exceed 90 days after the claim's receipt,
unless special circumstances require an extension of time for processing, in
which case notification will be rendered as soon as possible, but not later than
180 days after the claim's receipt.  If an extension of time for processing is
required, written notice of the extension will be furnished to the Claimant
prior to the termination of the initial 90 day period.  The

                                          73
<PAGE>

extension notice will indicate the special circumstances requiring an extension
of time and the date by which the Plan expects to render final notification.
The notice of denial will be written in a manner calculated to be understood by
the Claimant and will set forth (a) the specific reason or reasons for the
denial, (b) a specific reference to the pertinent Plan provisions on which the
denial is based, (c) a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation of why that
material or information is necessary, and (d) appropriate information as to the
steps to be taken if the Claimant wishes to submit the claim for review.  The
Committee or its designee is authorized to develop more fully the Plan's benefit
claims procedures by establishing from time to time, various rules and
procedures consistent with ERISA.

Within 60 days after the Claimant's receipt of written notice of the claim's
denial, the Claimant, or his duly authorized representative, may file a written
request with the Committee requesting a full and fair review of the denial of
the Claimant's claim for benefits.  In connection with the Claimant's appeal of
the denial of his claim for benefits, the Claimant may review pertinent
documents in the Committee's possession and may submit issues and comments in
writing.  The Committee will make a decision on review promptly, but not later
than the date of the Committee meeting that immediately follows the receipt of
the Claimant's request for review, unless the request for review is filed within
30 days before the date of that meeting.  In that case, a decision will be made
as soon as possible, but not later than the date of the second Committee meeting
following receipt of the request for review.  If special circumstances require a
further extension of time for processing, a decision will be rendered not later
than the third Committee meeting following receipt of the Claimant's request for
review.  If an extension of time for review is required because of special
circumstances, written notice of the extension will be sent to the Claimant
before the extension begins.  The extension notice will indicate the special
circumstances requiring an extension of time and the date by which the Committee
expects to render the final decision.  The decision on review will be in writing
and written in a manner calculated to be understood by the Claimant, will set
forth the specific reason or reasons for the decision, and will contain a
specific reference to the pertinent Plan provisions on which the decision is
based.  If the decision on review is not furnished to the Claimant within
60 days of

                                          74
<PAGE>

receipt of the request for review, or within 120 days after its receipt if
special circumstances required an extension of time, the claim will be deemed
denied on review.

                                     ARTICLE 13

                             FUNDING POLICY AND METHOD

Cinergy will establish and carry out a funding policy and method for the Plan
consistent with (a) the Plan's past experience, (b) the Plan's anticipated
experience, (c) the Plan's objectives, (d) the requirements of ERISA, and
(e) the requirements of the Code.  Cinergy will (a) communicate the funding
policy and method to the Committee, (b) periodically review the funding policy
and method, and (c) document all action taken with respect to the funding policy
and method.

                                     ARTICLE 14

                                   MISCELLANEOUS

14.1   NO ENLARGEMENT OF EMPLOYEE BENEFITS

       This Plan is strictly a voluntary undertaking on the part of each
       Employer and will not be deemed to constitute a contract between an
       Employer and any Employee or to be consideration for, or an inducement
       to, or a condition of, the employment of any Employee.  Nothing contained
       in the Plan will be deemed to give any Employee the right to be retained
       in the service of an Employer or to interfere with the right of the
       Employer to discharge any Employee at any time.  No Employee, prior to
       his retirement under conditions of eligibility for pension benefits or
       prior to his satisfying the Vesting Requirement will have any right to,
       or interest in, any portion of any fund arising from his Employer's
       contributions under this Plan or, in any event, other than as
       specifically provided in the Plan.  No person will have any right to
       pension benefits except to the extent provided in the Plan.

                                          75
<PAGE>

14.2   REEMPLOYMENT

       If an Eligible Employee incurs a Severance from Service and is later
       reemployed by an Employer, his two (or more) periods of employment will,
       subject to all of the provisions of the Plan, be aggregated for the
       purpose of determining his years of Participation, and his years of
       Service.

14.3   QUALIFIED MILITARY SERVICE

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

14.4   NOTICE OF ADDRESS

       Each Participant, Retired Participant, Terminated Vested Participant,
       Beneficiary, Contingent Annuitant, and Spouse entitled to benefits under
       the Plan must submit to the Committee or its designee his post office
       address and each change of post office address.  Any communication,
       statement, or notice addressed to a person at his latest post office
       address filed with the Committee or its designee will, upon deposit in
       the United States mail with postage prepaid, be binding upon that person
       for all purposes of the Plan, and neither the Insurance Company, the
       Committee, nor the Trustee will be obliged to search for, or to ascertain
       the whereabouts of, any person.

14.5   DATA

       Participants, Retired Participants, Terminated Vested Participants,
       Beneficiaries, Contingent Annuitants, and Spouses must furnish to the
       Committee and the Trustee any documents, evidence, or information that
       the Committee or the Trustee considers necessary or desirable for the
       purpose of administering the Plan, or to protect the Committee or
       Trustee; and it will be a condition of the Plan that each person must
       furnish

                                          76
<PAGE>

       this information promptly and sign required documents before any benefits
       become payable under the Plan.

14.6   NO INDIVIDUAL LIABILITY

       It is the express purpose and intention of the Plan that, except as
       otherwise required by law, no individual liability whatever will attach
       to, or be incurred by, the shareholders, officers, or members of the
       board of directors of any Employer, or the Committee, or its members, or
       any fiduciary designated pursuant to Section 11.13 (Powers and Duties of
       Committee), or any representatives appointed by Cinergy under the Plan,
       under or by reason of any of the terms or conditions of the Plan.

14.7   PARTICIPANT'S STATEMENT OF AGREEMENT

       Cinergy will have the right, at any time, to require any Participant to
       agree in writing to be bound by the Plan's provisions.  However, the
       absence of an agreement will not relieve any Participant from being
       legally bound by the provisions of the Plan.

14.8   NO DIVERSION OF ASSETS

       None of the assets of the Pension Fund may be used for, or diverted to,
       purposes other than the exclusive benefit of the Participants and their
       Beneficiaries.  However, nothing in this Section will prohibit the return
       to the Employers, in accordance with the provisions of ERISA
       subsection 403(c), of a contribution (or a portion of a contribution) by
       the Employers to the Pension Fund if the contribution is (a) made by
       reason of mistake of fact, (b) conditioned on the initial qualification
       of the Plan under Code subsection 401(a), or (c) conditioned upon its
       deductibility under Code section 404 and the deduction is not fully
       allowed.

                                          77
<PAGE>

14.9   GOVERNING LAWS

       The Plan will be construed and administered according to the internal
       laws of the State of Ohio to the extent that those laws are not preempted
       by federal law.

14.10  SEVERABILITY

       If any part of the Plan is adjudged by a court of competent jurisdiction
       to be contrary to the laws governing the Plan, then the Plan will, in all
       other respects, be and remain legally effective and binding to the full
       extent permissible under the law.

14.11  INTERPRETATION AND REGULATION OF PLAN

       Cinergy, by action of the Committee, reserves the right to interpret and
       regulate the Plan, by exercise of discretionary authority, and its
       interpretation and regulation will be legally effective and binding on
       all parties concerned.

14.12  COMMUNICATIONS BY PARTICIPANTS

       All communications by Participants and other concerned parties concerning
       the Plan will be in writing and directed to the Committee or its
       designee.

14.13  HEADINGS

       The headings of Articles, Sections, Subsections, Paragraphs or other
       parts of the Plan are for convenience of reference only and do not
       define, limit, construe, or otherwise affect the contents of this
       document.

                                          78
<PAGE>

14.14  ACCRUED BENEFIT NOT TO BE DECREASED BY AMENDMENT

       Notwithstanding any other provisions of the Plan to the contrary, no
       accrued benefit of a Participant under the Plan will be decreased by an
       amendment to the Plan, other than an amendment described in Code
       paragraph 412(c)(8) or ERISA section 4281.  For purposes of this
       Subsection, an amendment to the Plan that has the effect of:

       (a)    eliminating or reducing an early retirement benefit or a
              retirement-type subsidy (as defined in the regulations under Code
              paragraph 411(d)(6)), or

       (b)    eliminating an optional form of benefit, with respect to benefits
              attributable to service before the amendment,

       will be treated as reducing the accrued benefit of a Participant.  In the
       case of any retirement-type subsidy, the preceding sentence will apply
       only with respect to a Participant who satisfies (either before or after
       the amendment) the preamendment conditions for the subsidy.

                                     ARTICLE 15

                           TRUSTS AND INSURANCE CONTRACTS

15.1   TRUSTS AND INSURANCE CONTRACTS

       As part of the Plan, the Employers have established a Pension Fund.  The
       Pension Fund may consist of a trust, or a fund under a group annuity
       contract issued by an insurance company, or a combination of each.
       Benefits may, however, be provided through other trusts or insurance
       contracts as Cinergy, in its sole discretion, may establish or cause to
       be established or entered into for the purposes of carrying out the Plan.
       Cinergy will determine the form and terms of any trust and will also
       determine the terms and provisions of any group annuity contract.
       Cinergy may also, in its sole discretion, cause any funds held by any
       insurance company, or any Trust Fund held by any Trustee, for the

                                          79
<PAGE>

       purpose of providing benefits under the Plan, to be transferred to any
       other insurance company, or qualified Trustee, to be held for the same
       purpose.

15.2   IRREVOCABILITY

       The Employers will have no right, title, or interest in the Pension Fund
       or to the contributions made under the Plan, and no part of the Pension
       Fund will revert to the Employers, except that upon termination of the
       Plan and after satisfaction or provision for the satisfaction of all
       fixed and contingent liabilities or obligations to persons entitled to
       benefits upon the termination, any balance remaining in the Pension Fund
       will be distributed to the Employers.  However, nothing in this
       Section will prohibit the return, in accordance with the provisions of
       ERISA subsection 403(c), to the Employers of a contribution (or a portion
       of a contribution) by the Employers to the Pension Fund if the
       contribution is (a) made by reason of mistake of fact, (b) conditioned on
       the initial qualification of the Plan under Code subsection 401(a), or
       (c) conditioned upon its deductibility under Code section 404 and the
       deduction is not fully allowed.

15.3   SUFFICIENCY OF PENSION FUND

       The Employer intends the Plan to be a permanent, as distinguished from a
       temporary, program.  Except as otherwise provided by the Code or ERISA,
       however, the Employer will not be under any liability to make
       contributions to the Pension Fund.  Benefits under the Plan are to be
       paid only from the Pension Fund and only to the extent that the Pension
       Fund is sufficient for that purpose.  Neither Cinergy, nor any of the
       officers, employees, members of the Board of Directors, the Committee, or
       representatives of Cinergy guarantees in any manner nor, unless otherwise
       required by law, will be liable for the payment of benefits under the
       Plan.  Except as otherwise provided by ERISA, any person having any claim
       under, or in connection with, the Plan must look solely to the Pension
       Fund for satisfaction.

                                          80
<PAGE>

                                     ARTICLE 16

                                   CONTRIBUTIONS

No contributions to the Plan by Participants will be required or permitted under
the Plan.

During the continuance of the Plan and for the purpose of providing the benefits
contemplated under the Plan, the Employer intends to deposit, from time to time,
with the Trustee or with the Insurance Company, sums of money, to be held in the
Pension Fund, which, together with the earnings of the Pension Fund, will be
deemed sufficient to provide the benefits of the Plan and to satisfy the minimum
funding standards set forth in ERISA.  All contributions by the Employer to the
Pension Fund are expressly conditioned upon deductibility under Code
section 404.

                                     ARTICLE 17

                        APPROVAL UNDER INTERNAL REVENUE CODE

The Plan as set forth in this document is intended to comply with the
requirements of Code subsection 401(a), so that the income of the Pension Fund
may be exempt from federal income taxes and so that contributions of the
Employers under the Plan may be deductible for federal income tax purposes under
Code section 404.  Any modification or amendment of the Plan may be made,
retroactive or otherwise, as necessary or appropriate to establish and maintain
its qualified status under the Code, or to otherwise comply with ERISA.

                                     ARTICLE 18

                             AMENDMENT AND TERMINATION

18.1   RIGHT TO AMEND OR TERMINATE

       Cinergy reserves the right to modify, alter, amend, revoke or terminate
       the Plan and/or any Trust Fund or group annuity contract that may be
       established or entered into to effectuate and implement the Plan at any
       time.  The Board of Directors will generally have the authority to adopt
       amendments; however, the Committee or the compensation

                                          81
<PAGE>

       committee of the Board of Directors may adopt any amendment to ensure the
       continued qualification of the Plan and Pension Fund under Code
       subsections 401(a) and 501(a), to comply with the provisions of any
       federal statute or regulation impacting pension plans, to enhance the
       delivery of benefits to Participants and Beneficiaries, to ease Plan
       administration, or to respond to the withdrawal of any Employer from the
       Plan.  Notwithstanding the preceding sentence, no amendment by the
       Committee or the compensation committee of the Board of Directors will
       substantially increase the cost of the Plan without the Board of
       Directors' consent.

       The Board of Directors, or any person or persons duly authorized by the
       Board of Directors, will also have the right, authority, and power to
       terminate the Plan and to discontinue or suspend the payment of
       contributions to provide benefits under the Plan (except for the
       provision of any agreement which has been entered into between an
       Employer and a labor union representing Eligible Employees).  However, no
       action taken pursuant to this Section will operate to enlarge the right
       of Cinergy under Section 15.2 (Irrevocability).

18.2   EFFECT OF TERMINATION

       If a partial or complete termination of the Plan occurs, all Participants
       with respect to whom the Plan is being so terminated will have a
       Nonforfeitable right to their benefits accrued under the Plan up to the
       date of termination of the Plan to the extent then funded.

       Except as otherwise required by ERISA section 4044, Cinergy will direct
       the Trustee to segregate the Pension Fund, as determined by Cinergy to be
       attributable to the group that is terminating its participation in the
       Plan, and to make separate allocations of the segregated assets among the
       respective persons having interests in them.  The separate allocations
       will be made as follows:

                                          82
<PAGE>

       (a)    First, either:

              (1)    in the case of the pension of a Retired Participant, a
                     Terminated Vested Participant, a Spouse, or a Contingent
                     Annuitant that began at least three years prior to the
                     termination date of the Plan, that portion of the pension
                     that is based on the provisions of the Plan as in effect at
                     any time during the five-year period ending on the
                     termination date, which would result in the least amount,
                     or

              (2)    in the case of the pension of an Active Participant, a
                     Participant who has incurred a Severance from Service, or
                     either a Retired Participant or a Terminated Vested
                     Participant not included in Paragraph (1) of this
                     Subsection (a) that three years prior to the termination
                     date of the Plan would have begun had the Participant then
                     become a Retired Participant, a Terminated Vested
                     Participant, or the Participant's Spouse or Contingent
                     Annuitant, that portion of the pension that is based on the
                     provisions of the Plan that were in effect at any time
                     during the five-year period ending on the termination date,
                     which would result in the least amount;

       (b)    Second, all other pensions under the Plan that are guaranteed by
              the Pension Benefit Guaranty Corporation;

       (c)    Third, all other pensions with respect to both (1) Retired
              Participants, Terminated Vested Participants, Spouses, and
              Contingent Annuitants and (2) Active Participants and Participants
              who have incurred a Severance from Service who, as of the date of
              termination of the Plan, have completed the Vesting Requirement of
              the Plan; and

       (d)    All other pensions under the Plan.

                                          83
<PAGE>

              If the balance of the Pension Fund allocable to the terminating
              group that is remaining after allocations have been made with
              respect to all pensions in a preceding class or group is
              insufficient to allocate the full Actuarial Equivalent of pensions
              to all persons in the class or group for which it is then being
              applied, the balance will be allocated to each person in the class
              or group in the proportion to which the Actuarial Equivalent of
              the pension allocable to him pursuant to the class or group bears
              to the total Actuarial Equivalent of the pensions so allocable to
              all persons in the class or group.  However, if the balance is
              sufficient to allocate a portion only of the full Actuarial
              Equivalent of the pensions set forth in Subsection (c), then the
              amounts of pension otherwise provided will be redetermined based
              on the provisions of the Plan as in effect five years prior to the
              termination date, or, if applicable, as of the later date as will
              provide for the allocation of the full Actuarial Equivalent
              thereof.

              The amounts so allocated will be purchased under a group annuity
              contract.

              Any balance remaining in the Pension Fund that is allocable to the
              terminating group, and after all allocations have been made
              pursuant to the foregoing provisions of this Subsection, will be
              allocated to the Employers.

18.3   MERGER AND CONSOLIDATION OF PLAN

       In the case of any merger or consolidation with, or transfer of assets
       and liabilities to, any other plan, provisions will be made so that each
       Participant in the Plan on the date thereof (if the Plan had then
       terminated) would receive a benefit immediately after the merger,
       consolidation or transfer that is equal to, or greater than, the benefit
       he would have been entitled to receive immediately prior to the merger,
       consolidation, or transfer if the Plan had then terminated.

                                          84
<PAGE>

18.4   POST-CHANGE IN CONTROL MERGER, CONSOLIDATION, OR TRANSFER OF PENSION PLAN
       ASSETS OR LIABILITIES

       Notwithstanding the preceding provisions of this Article or any other
       provision of this Plan, in the event of any merger or consolidation of
       this Plan with another employee benefit plan or any transfer of assets or
       liabilities of this Plan to another plan that is effected within three
       years following a Change in Control, (a) the accrued benefit of each
       Participant who is actively employed by an Employer as of the effective
       date of the merger, consolidation, or transfer of assets or liabilities
       and with respect to whom liability for the payment of benefits under the
       Plan is being merged or consolidated with or transferred to another plan
       will become fully vested; (b) the vested accrued benefit of each
       Participant, former Participant, and Beneficiary with respect to whom any
       liability for the payment of benefits under the Plan is being merged or
       consolidated with or transferred to another plan will be increased in
       accordance with Section 18.6 (Post-Change in Control Surplus Reversion)
       as if the Plan had terminated immediately prior to any merger,
       consolidation, or transfer (and for purposes of calculating the increase,
       the accrued benefits of all other Participants, former Participants and
       their Beneficiaries will be deemed to have increased in accordance with
       Section 18.6 (Post-Change in Control Surplus Reversion)); and (c) prior
       to consummation of any merger, consolidation, or transfer, the accrued
       benefit (as increased, if applicable) of each Participant, former
       Participant, and Beneficiary with respect to whom liability for the
       payment of benefits under the Plan is being merged or consolidated with
       or transferred to another plan will be satisfied by the purchase of a
       guaranteed annuity contract from a financially sound insurance company
       that represents an irrevocable commitment to satisfy the accrued benefit
       (as increased, if applicable) of the person.  Notwithstanding the
       provisions of Section 18.1 (Right to Amend or Terminate), the provisions
       of this Section may not be amended by an amendment to the Plan effective
       within three years following a Change in Control.

                                          85
<PAGE>

18.5   GENERAL PROTECTION OF BENEFITS IN THE EVENT OF A CHANGE IN CONTROL

       Notwithstanding any other provisions of this Plan, for a period of three
       years following a Change in Control, the provisions of this Plan may not
       be amended in any manner that would adversely affect in any way the
       computation or amount of or the entitlement to retirement benefits under
       the Plan, including, but not limited to, any adverse change in or to
       (a) the rate at which benefits accrue or vest, (b) the compensation
       recognized under the Plan, or (c) the optional forms of payment available
       to a Participant or Beneficiary under the Plan, including the time of
       commencement of benefits and any actuarial factors utilized.
       Notwithstanding the provisions of Section 18.1 (Right to Amend or
       Terminate), the provisions of this Section may not be amended by an
       amendment effective within three years following a Change in Control.

18.6   POST-CHANGE IN CONTROL SURPLUS REVERSION

       Notwithstanding the preceding provisions of this Article or any other
       provision of the Plan, in the event this Plan is terminated within three
       years following a Change in Control, the assets of the Plan will be
       applied in accordance with the preceding provisions of this Article to
       satisfy all liabilities to Participants, former Participants, and their
       Beneficiaries.  If, after satisfaction of the liabilities, there are
       assets remaining in the Plan, the balance will be applied on a pro rata
       basis based upon final vested benefit to increase the benefits of the
       Participants, former Participants, and their Beneficiaries, subject
       however, to the applicable legal limitations on benefits payable from tax
       qualified plans.  Notwithstanding the provisions of Section 18.1 (Right
       to Amend or Terminate), the provisions of this Section may not be amended
       by an amendment to the Plan effected within three years following a
       Change in Control.

                                          86
<PAGE>

                                     ARTICLE 19

                               AUTHORIZED TRANSACTION

Cinergy will have the right, authority, and power to transfer some or all of the
assets of the Plan, including contributions and earnings, to a pooled investment
fund of an insurance company qualified to do business in one or more states of
the United States, even though that insurance company might otherwise be a
"party in interest," as that term is defined in ERISA; provided, the insurance
company receives not more than reasonable compensation with respect to the
transaction.

                                     ARTICLE 20

                          PARTICIPATION BY OTHER EMPLOYERS

20.1   ADOPTION OF PLAN

       With Cinergy's consent, any Affiliate may become a participating Employer
       under the Plan by (a) taking appropriate action to adopt the Plan,
       (b) filing with Cinergy a duly certified copy of the Plan as adopted by
       the Affiliate, (c) becoming a party to the trust agreement establishing
       the Trust Fund, and (d) executing and delivering documents and taking any
       other action as may be necessary or desirable to put the Plan into effect
       with respect to it.

20.2   WITHDRAWAL FROM PARTICIPATION

       Any Employer may, with Cinergy's consent, withdraw from participation in
       the Plan at any time by filing with Cinergy a duly certified copy of a
       resolution of its board of directors to that effect and giving notice of
       its intended withdrawal to Cinergy, the Trustee, and Insurance Company
       prior to the effective date of withdrawal.  If an Employer withdraws from
       the Plan, Cinergy will determine the portion of the Pension Fund held by
       the Trustee or Insurance Company that is applicable to the Participants
       and former Participants of the withdrawing Employer and direct the
       Trustee to segregate its

                                          87
<PAGE>

       portion in a separate trust.  The separate trust will be held and
       administered as a part of the separate plan of the withdrawn Employer.
       The portion of the Pension Fund applicable to the Participants and former
       Participants of a particular Employer will be the sum of:

       (a)    the total amount of the accrued benefits applicable to the
              Participants and former Participants of the withdrawing Employer,
              and

       (b)    an amount that bears the same ratio to the excess, if any, of:

              (1)    the total of the Pension Fund over

              (2)    the total amount of the accrued benefits applicable to the
                     Participants and former Participants of the withdrawing
                     Employer bears to the total amount of the accrued benefits
                     applicable to all Participants and former Participants.

Notwithstanding the preceding sentence, if the total amount of the present value
of the accrued benefits applicable to the Participants and former Participants
of the withdrawing Employer (when combined with the value of any other assets
segregated during that Plan Year) is less than three percent of the total of the
Pension Fund as of at least one day in the Plan Year during which the withdrawal
occurs, the portion of the Pension Fund applicable to the Participants and
former Participants of the withdrawing Employer will be equal to the present
value of those Participants' accrued benefits.

20.3   CINERGY AS AGENT FOR EMPLOYERS

       Each Affiliate that becomes a participating Employer pursuant to
       Section 20.1 (Adoption of Plan) or Article 21 (Continuance by a
       Successor) by so doing will be deemed to have appointed Cinergy its agent
       to exercise on its behalf all of the powers and authorities conferred
       upon Cinergy by the terms of the Plan, including, but not limited to the
       power

                                          88
<PAGE>

       to amend and terminate the Plan.  Cinergy's authority to act as agent
       will continue unless and until the portion of the Pension Fund held for
       the benefit of Employees of the particular Employer and their
       Beneficiaries is set aside in a separate trust as provided in
       Section 20.2 (Withdrawal from Participation).  Each Employer will, from
       time to time, upon Cinergy's request, furnish to Cinergy any data and
       information as Cinergy requires in the performance of its duties.

                                     ARTICLE 21

                             CONTINUANCE BY A SUCCESSOR

If Cinergy or any other Employer is reorganized by way of merger, consolidation,
transfer of assets, or otherwise, so that a corporation, partnership, or person
other than an Employer succeeds to all or substantially all of the Employer's
business, the successor may be substituted for the Employer under the Plan by
adopting the Plan and becoming a party to the trust agreement.  Contributions by
the Employer will be automatically suspended from the effective date of any
reorganization until the date upon which the substitution of the successor
corporation for the Employer under the Plan becomes effective.  If, within
90 days following the effective date of any reorganization, the successor does
not elect to become a party to the Plan, or if the Employer adopts a plan of
complete liquidation other than in connection with a reorganization, the Plan
will be automatically terminated with respect to employees of the Employer as of
the close of business on the 90th day following the effective date of
reorganization or as of the close of business on the date of adoption of a plan
of complete liquidation, as the case may be, and Cinergy will direct the Trustee
to distribute the portion of the Trust Fund applicable to that Employer in the
manner provided in Section 20.2 (Withdrawal from Participation).

                                          89
<PAGE>

              Cinergy Corp. has caused this document to be executed by its duly
authorized officers, effective January 1, 1998.

                                          By:    _____________________________
                                                 Madeleine W. Ludlow
                                                 Vice President and Chief
                                                 Financial Officer

                                          Dated: _______________________________

APPROVED:

_______________________________
Jerome A. Vennemann
Acting General Counsel
and Assistant Corporate Secretary

Dated: _________________________

                                          90
<PAGE>

                                     ADDENDUM A

             Pre-1998 RIP 100% Spousal and Contingent Annuitant Benefit

<TABLE>
<CAPTION>

  NUMBER OF FULL YEARS                       NUMBER OF FULL YEARS
      THE SPOUSE OR                             THE SPOUSE OR
  CONTINGENT ANNUITANT                       CONTINGENT ANNUITANT
        WAS BORN                                   WAS BORN
  AFTER THE PARTICIPANT      FACTOR         AFTER THE PARTICIPANT       FACTOR
  ---------------------      ------         ---------------------       ------
  <S>                        <C>            <C>                         <C>
            0                 .911                    20                 .861
            1                 .908                    21                 .859
            2                 .905                    22                 .858
            3                 .902                    23                 .856
            4                 .899                    24                 .855
            5                 .896                    25                 .853
            6                 .893                    26                 .852
            7                 .890                    27                 .851
            8                 .887                    28                 .850
            9                 .885                    29                 .849
           10                 .882                    30                 .848
           11                 .880                    31                 .847
           12                 .877                    32                 .846
           13                 .875                    33                 .845
           14                 .872                    34                 .844
           15                 .870                    35                 .844
           16                 .868                    36                 .843
           17                 .866                    37                 .842
           18                 .864                    28                 .842
           19                  863                    39                 .841
                                                      40                 .841
</TABLE>

                                          1
<PAGE>

<TABLE>
<CAPTION>

  NUMBER OF FULL YEARS                       NUMBER OF FULL YEARS
      The Spouse Or                             THE SPOUSE OR
  CONTINGENT ANNUITANT                       CONTINGENT ANNUITANT
     WAS BORN BEFORE                           WAS BORN BEFORE
  THE PRIMARY ANNUITANT      FACTOR         THE PRIMARY ANNUITANT       FACTOR
  ---------------------      ------         ---------------------       ------
  <S>                        <C>            <C>                         <C>
            0                 .911                    20                 .973
            1                 .915                    21                 .975
            2                 .918                    22                 .977
            3                 .922                    23                 .979
            4                 .925                    24                 .981
            5                 .928                    25                 .982
            6                 .932                    26                 .984
            7                 .935                    27                 .985
            8                 .939                    28                 .986
            9                 .942                    29                 .987
           10                 .945                    30                 .988
           11                 .949
           12                 .952
           13                 .955
           14                 .958
           15                 .961
           16                 .963
           17                 .966
           18                 .968
           19                 .971
</TABLE>

Morality:     1971 TPF&C Forecast Mortality Table (Employee rate based on 85%
              male; Contingent Annuitant rate based on 85% female)
Interest:     7.5%
Subsidy:      Factors include a 50% subsidy provided by the Company
Effective:    January 1, 1984

                                          2
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    25    26     27    28     29     30    31     32    33     34     35    36     37     38    39    40    RETIREMENT
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      20       .985  .984   .982  .981   .979   .978  .976   .974  .972   .970   .967  .965   .962   .959  .956  .952       20

      21       .985  .984   .983  .981   .980   .978  .976   .974  .972   .970   .968  .965   .962   .959  .956  .952       21

      22       .985  .984   .983  .982   .980   .979  .977   .975  .973   .971   .968  .966   .963   .960  .957  .953       22

      23       .986  .985   .983  .982   .981   .979  .977   .975  .973   .971   .969  .966   .964   .961  .958  .954       23

      24       .986  .985   .984  .982   .981   .979  .978   .976  .974   .972   .969  .967   .964   .961  .958  .954       24

      25       .987  .985   .984  .983   .981   .980  .978   .976  .974   .972   .970  .968   .965   .962  .959  .955       25

      26       .987  .986   .985  .983   .982   .980  .979   .977  .975   .973   .971  .968   .966   .963  .960  .955       26

      27       .987  .986   .985  .984   .982   .981  .979   .977  .976   .974   .971  .969   .966   .963  .960  .956       27

      28       .988  .987   .985  .984   .983   .981  .980   .978  .976   .974   .972  .970   .967   .964  .961  .957       28

      29       .988  .987   .986  .985   .983   .982  .980   .979  .977   .975   .973  .970   .968   .965  .962  .957       29

      30       .988  .987   .986  .985   .984   .982  .981   .979  .977   .975   .973  .971   .968   .966  .963  .958       30

      31       .989  .988   .987  .986   .984   .983  .981   .980  .978   .976   .974  .972   .969   .967  .964  .959       31

      32       .989  .988   .987  .986   .985   .983  .982   .980  .979   .977   .975  .972   .970   .967  .965  .960       32

      33       .989  .989   .988  .986   .985   .984  .983   .981  .979   .977   .975  .973   .971   .968  .965  .960       33

      34       .990  .989   .988  .987   .986   .984  .983   .982  .980   .978   .976  .974   .972   .969  .966  .961       34

      35       .990  .989   .988  .987   .986   .985  .984   .982  .981   .979   .977  .975   .972   .970  .967  .962       35

      36       .991  .990   .989  .988   .987   .985  .984   .983  .981   .979   .978  .976   .973   .971  .968  .963       36

      37       .991  .990   .989  .988   .987   .986  .985   .983  .982   .980   .978  .976   .974   .972  .969  .964       37

      38       .991  .990   .990  .989   .988   .987  .985   .984  .982   .981   .979  .977   .975   .973  .970  .965       38

      39       .992  .991   .990  .989   .988   .987  .986   .985  .983   .982   .980  .978   .976   .974  .971  .966       39

</TABLE>

                                          1
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    25    26     27    28     29     30    31     32    33     34     35    36     37     38    39    40    RETIREMENT
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      40       .992  .991   .990  .990   .989   .988  .986   .985  .984   .982   .981  .979   .977   .974  .972  .967       40

      41       .992  .992   .991  .990   .989   .988  .987   .986  .984   .983   .981  .979   .978   .975  .973  .968       41

      42       .993  .992   .991  .990   .990   .989  .987   .986  .985   .984   .982  .980   .978   .976  .974  .968       42

      43       .993  .992   .992  .991   .990   .989  .988   .987  .986   .984   .983  .981   .979   .977  .975  .969       43

      44       .993  .993   .992  .991   .990   .990  .989   .987  .986   .985   .983  .982   .980   .978  .976  .970       44

      45       .994  .993   .992  .992   .991   .990  .989   .988  .987   .986   .984  .983   .981   .979  .977  .971       45

      46       .994  .993   .993  .992   .991   .990  .990   .989  .987   .986   .985  .983   .982   .980  .978  .972       46

      47       .994  .994   .993  .992   .992   .991  .990   .989  .988   .987   .986  .984   .983   .981  .979  .973       47

      48       .994  .994   .993  .993   .992   .991  .991   .990  .989   .987   .986  .985   .983   .982  .980  .974       48

      49       .995  .994   .994  .993   .992   .992  .991   .990  .989   .988   .987  .986   .984   .983  .981  .975       49

      50       .995  .994   .994  .993   .993   .992  .991   .991  .990   .989   .988  .986   .985   .983  .982  .976       50

      51       .995  .995   .994  .994   .993   .993  .992   .991  .990   .989   .988  .987   .986   .984  .983  .977       51

      52       .995  .995   .995  .994   .994   .993  .992   .992  .991   .990   .989  .988   .986   .985  .983  .978       52

      53       .996  .995   .995  .994   .994   .993  .993   .992  .991   .990   .989  .988   .987   .986  .984  .979       53

      54       .996  .996   .995  .995   .994   .994  .993   .992  .992   .991   .990  .989   .988   .986  .985  .980       54

------------------------------------------------------------------------------------------------------------------------------------
                25    26     27    28     29     30    31     32    33     34     35    36     37     38    39    40

</TABLE>

                          PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:           1971 TPF&C Forecast Mortality Table (Pensioner rate based
                     on 85% male; Beneficiary rate based on 85% female)
Interest Rate:       7.5%
Effective:           January 1, 1984
Prepared by:         Towers Perrin

                                          2
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    25    26     27    28     29     30    31     32    33     34     35    36     37     38    39    40    RETIREMENT
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      55       .996  .996   .995  .995   .995   .994  .994   .993  .992   .991   .991  .990   .988   .987  .986  .981       55

      56       .996  .996   .996  .995   .995   .994  .994   .993  .993   .992   .991  .990   .989   .988  .987  .982       56

      57       .997  .996   .996  .996   .995   .995  .994   .994  .993   .992   .992  .991   .990   .989  .987  .983       57

      58       .997  .996   .996  .996   .995   .995  .995   .994  .994   .993   .992  .991   .990   .989  .988  .984       58

      59       .997  .997   .996  .996   .996   .995  .995   .994  .994   .993   .993  .992   .991   .990  .989  .985       59

      60       .997  .997   .997  .996   .996   .996  .995   .995  .994   .994   .993  .992   .992   .991  .990  .985       60

      61       .997  .997   .997  .997   .996   .996  .996   .995  .995   .994   .994  .993   .992   .991  .990  .986       61

      62       .997  .997   .997  .997   .997   .996  .996   .995  .995   .995   .994  .993   .993   .992  .991  .987       62

      63       .998  .997   .997  .997   .997   .997  .996   .996  .995   .995   .994  .994   .993   .992  .992  .988       63

      64       .998  .998   .997  .997   .997   .997  .996   .996  .996   .995   .995  .994   .994   .993  .992   989       64

      65       .998  .998   .998  .997   .997   .997  .997   .996  .996   .996   .995  .995   .994   .993  .993  .989       65

      66       .998  .998   .998  .998   .997   .997  .997   .997  .996   .996   .996  .995   .995   .994  .993  .990       66

      67       .998  .998   .998  .998   .998   .997  .997   .997  .997   .996   .996  .995   .995   .994  .994  .991       67

      68       .998  .998   .998  .998   .998   .998  .997   .997  .997   .997   .996  .996   .995   .995  .994  .991       68

      69       .998  .998   .998  .998   .998   .998  .998   .997  .997   .997   .997  .996   .996   .995  .995  .992       69

      70       .999  .998   .998  .998   .998   .998  .998   .998  .997   .997   .997  .996   .996   .996  .995  .992       70

      71       .999  .999   .999  .998   .998   .998  .998   .998  .998   .997   .997  .997   .996   .996  .996  .993       71

      72       .999  .999   .999  .999   .998   .998  .998   .998  .998   .998   .997  .997   .997   .996  .996  .994       72

      73       .999  .999   .999  .999   .999   .998  .998   .998  .998   .998   .998  .997   .997   .997  .996  .994       73

      74       .999  .999   .999  .999   .999   .999  .998   .998  .998   .998   .998  .997   .997   .997  .997  .995       74

</TABLE>

                                          3
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    25    26     27    28     29     30    31     32    33     34     35    36     37     38    39    40    RETIREMENT
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      75       .999  .999   .999  .999   .999   .999  .999   .998  .998   .998   .998  .998   .997   .997  .997  .995       75

      76       .999  .999   .999  .999   .999   .999  .999   .999  .998   .998   .998  .998   .998   .997  .997  .995       76

      77       .999  .999   .999  .999   .999   .999  .999   .999  .999   .998   .998  .998   .998   .998  .997  .996       77

      78       .999  .999   .999  .999   .999   .999  .999   .999  .999   .999   .998  .998   .998   .998  .998  .996       78

      79       .999  .999   .999  .999   .999   .999  .999   .999  .999   .999   .999  .998   .998   .998  .998  .996       79

      80       .999  .999   .999  .999   .999   .999  .999   .999  .999   .999   .999  .999   .998   .998  .998  .997       80

      81       .999  .999   .999  .999   .999   .999  .999   .999  .999   .999   .999  .999   .999   .998  .998  .997       81

      82       .999  .999   .999  .999   .999   .999  .999   .999  .999   .999   .999  .999   .999   .999  .998  .997       82

      83       .999  .999   .999  .999   .999   .999  .999   .999  .999   .999   .999  .999   .999   .999  .999  .998       83

      84       .999  .999   .999  .999   .999   .999  .999   .999  .999   .999   .999  .999   .999   .999  .999  .998       84

      85       .999  .999   .999  .999   .999   .999  .999   .999  .999   .999   .999  .999   .999   .999  .999  .998       85

      86       .999  .999   .999  .999   .999   .999  .999   .999  .999   .999   .999  .999   .999   .999  .999  .998       86

      87       1.000 .999   .999  .999   .999   .999  .999   .999  .999   .999   .999  .999   .999   .999  .999  .998       87

      88       1.000 1.000  .999  .999   .999   .999  .999   .999  .999   .999   .999  .999   .999   .999  .999  .998       88

      89       1.000 1.000  1.000 1.000  .999   .999  .999   .999  .999   .999   .999  .999   .999   .999  .999  .999       89
------------------------------------------------------------------------------------------------------------------------------------
                25    26     27    28     29     30    31     32    33     34     35    36     37     38    39    40
</TABLE>

                          PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:           1971 TPF&C Forecast Mortality Table (Pensioner rate based
                     on 85% male; Beneficiary rate based on 85% female)
Interest Rate:       7.5%
Effective:           January 1, 1984
Prepared by:         Towers Perrin

                                          4
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    40    41     42    43     44     45    46     46    48     49     50    51     52     53    54    55    RETIREMENT
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>

      20       .952  .948   .945  .941   .936   .932  .927   .922  .917   .911   .905  .899   .893   .886  .879  .872       20

      21       .952  .949   .945  .941   .937   .932  .928   .923  .917   .912   .906  .900   .894   .887  .880  .873       21

      22       .953  .949   .946  .942   .937   .933  .928   .923  .918   .912   .907  .901   .894   .888  .881  .873       22

      23       .954  .950   .946  .942   .938   .933  .929   .924  .919   .913   .907  .901   .895   .888  .881  .874       23

      24       .954  .951   .947  .943   .939   .934  .929   .924  .919   .914   .908  .902   .896   .889  .882  .875       24

      25       .955  .951   .947  .943   .939   .935  .930   .925  .920   .914   .909  .903   .896   .890  .883  .876       25

      26       .955  .952   .948  .944   .940   .936  .931   .926  .921   .915   .910  .904   .897   .891  .884  .877       26

      27       .956  .953   .949  .945   .941   .936  .932   .927  .922   .916   .910  .904   .898   .892  .885  .878       27

      28       .957  .953   .950  .946   .941   .937  .932   .928  .922   .917   .911  .905   .899   .893  .886  .878       28

      29       .957  .954   .950  .946   .942   .938  .933   .928  .923   .918   .912  .906   .900   .894  .887  .879       29

      30       .958  .955   .951  .947   .943   .939  .934   .929  .924   .919   .913  .907   .901   .895  .888  .881       30

      31       .959  .955   .952  .948   .944   .940  .935   .930  .925   .920   .914  .908   .902   .896  .889  .882       31

      32       .960  .956   .953  .949   .945   .941  .936   .931  .926   .921   .915  .909   .903   .897  .890  .883       32

      33       .960  .957   .954  .950   .946   .942  .937   .932  .927   .922   .916  .911   .904   .898  .891  .884       33

      34       .961  .958   .954  .951   .947   .943  .938   .933  .928   .923   .918  .912   .906   .899  .893  .885       34

      35       .962  .959   .955  .952   .948   .944  .939   .934  .929   .924   .919  .913   .907   .901  .894  .887       35

      36       .963  .960   .956  .953   .949   .945  .940   .936  .931   .926   .920  .914   .908   .902  .895  .888       36

      37       .964  .961   .957  .954   .950   .946  .941   .937  .932   .927   .921  .916   .910   .903  .897  .890       37

      38       .965  .962   .958  .955   .951   .947  .943   .938  .933   .928   .923  .917   .911   .905  .898  .891       38

      39       .966  .963   .959  .956   .952   .948  .944   .939  .935   .929   .924  .919   .913   .906  .900  .893       39
</TABLE>

                                          5
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    40    41     42    43     44     45    46     47    48     49     50    51     52     53    54    55    RETIREMENT
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>

      40       .967  .964   .960  .957   .953   .949  .945   .941  .936   .931   .926  .920   .914   .908  .902  .895       40

      41       .968  .965   .961  .958   .954   .950  .946   .942  .937   .932   .927  .922   .916   .910  .903  .897       41

      42       .968  .966   .963  .959   .956   .952  .948   .943  .939   .934   .929  .923   .918   .912  .905  .898       42

      43       .969  .967   .964  .960   .957   .953  .949   .945  .940   .935   .930  .925   .919   .913  .907  .900       43

      44       .970  .968   .965  .961   .958   .954  .950   .946  .942   .937   .932  .927   .921   .915  .909  .902       44

      45       .971  .969   .966  .963   .959   .956  .952   .948  .943   .939   .934  .929   .923   .917  .911  .904       45

      46       .972  .970   .967  .964   .961   .957  .953   .949  .945   .940   .935  .930   .925   .919  .913  .907       46

      47       .973  .971   .968  .965   .962   .958  .955   .951  .946   .942   .937  .932   .927   .921  .915  .909       47

      48       .974  .972   .969  .966   .963   .960  .956   .952  .948   .944   .939  .934   .929   .923  .917  .911       48

      49       .975  .973   .970  .968   .964   .961  .958   .954  .950   .945   .941  .936   .931   .925  .920  .913       49

      50       .976  .974   .972  .969   .966   .963  .959   .955  .951   .947   .943  .938   .933   .928  .922  .916       50

      51       .977  .975   .973  .970   .967   .964  .961   .957  .953   .949   .945  .940   .935   .930  .924  .918       51

      52       .978  .976   .974  .971   .968   .965  .962   .959  .955   .951   .947  .942   .937   .932  .926  .921       52

      53       .979  .977   .975  .972   .970   .967  .964   .960  .957   .953   .948  .944   .939   .934  .929  .923       53

      54       .980  .978   .976  .974   .971   .968  .965   .962  .958   .954   .950  .946   .941   .937  .931  .926       54

------------------------------------------------------------------------------------------------------------------------------------
                40    41     42    43     44     45    46     47    48     49     50    51     52     53    54    55
</TABLE>

                          PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:           1971 TPF&C Forecast Mortality Table (Pensioner rate based
                     on 85% male; Beneficiary rate based on 85% female)
Interest Rate:       7.5%
Effective:           January 1, 1984
Prepared by:         Towers Perrin

                                          6
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    40    41     42    43     44     45    46     47    48     49     50    51     52     53    54    55    RETIREMENT
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      55       .981  .979   .977  .975   .972   .969  .966   .963  .960   .956   .952  .948   .944   .939  .934  .928       55

      56       .982  .980   .978  .976   .973   .971  .968   .965  .962   .958   .954  .950   .946   .941  .936  .931       56

      57       .983  .981   .979  .977   .975   .972  .969   .966  .963   .960   .956  .952   .948   .943  .939  .933       57

      58       .984  .982   .980  .978   .976   .973  .971   .968  .965   .962   .958  .954   .950   .946  .941  .936       58

      59       .985  .983   .981  .979   .977   .975  .972   .969  .966   .963   .960  .956   .952   .948  .943  .939       59

      60       .985  .984   .982  .980   .978   .976  .974   .971  .968   .965   .962  .958   .954   .950  .946  .941       60

      61       .986  .985   .983  .981   .979   .977  .975   .972  .970   .967   .964  .960   .957   .953  .948  .944       61

      62       .987  .986   .984  .982   .981   .978  .976   .974  .971   .968   .965  .962   .959   .955  .951  .946       62

      63       .988  .987   .985  .983   .982   .980  .978   .975  .973   .970   .967  .964   .961   .957  .953  .949       63

      64       .989  .987   .986  .984   .983   .981  .979   .977  .974   .972   .969  .966   .963   .959  .956  .952       64

      65       .989  .988   .987  .985   .984   .982  .980   .978  .976   .973   .971  .968   .965   .961  .958  .954       65

      66       .990  .989   .988  .986   .985   .983  .981   .979  .977   .975   .972  .970   .967   .964  .960  .957       66

      67       .991  .990   .988  .987   .986   .984  .982   .981  .979   .976   .974  .971   .969   .966  .962  .959       67

      68       .991  .990   .989  .988   .987   .985  .984   .982  .980   .978   .976  .973   .971   .968  .965  .961       68

      69       .992  .991   .990  .989   .988   .986  .985   .983  .981   .979   .977  .975   .972   .970  .967  .964       69

      70       .992  .992   .991  .990   .988   .987  .986   .984  .982   .981   .979  .976   .974   .972  .969  .966       70

      71       .993  .992   .991  .990   .989   .988  .987   .985  .984   .982   .980  .978   .976   .974  .971  .968       71

      72       .994  .993   .992  .991   .990   .989  .988   .986  .985   .983   .981  .980   .978   .975  .973  .970       72

      73       .994  .993   .993  .992   .991   .990  .988   .987  .986   .984   .983  .981   .979   .977  .975  .972       73

      74       .995  .994   .993  .992   .991   .990  .989   .988  .987   .985   .984  .982   .981   .979  .977  .974       74

</TABLE>

                                          7
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    40    41     42    43     44     45    46     47    48     49     50    51     52     53    54    55    RETIREMENT
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      75       .995  .994   .994  .993   .992   .991  .990   .989  .988   .987   .985  .984   .982   .980  .978  .976       75

      76       .995  .995   .994  .993   .993   .992  .991   .990  .989   .988   .986  .985   .983   .982  .980  .978       76

      77       .996  .995   .995  .994   .993   .992  .992   .991  .990   .988   .987  .986   .985   .983  .981  .979       77

      78       .996  .996   .995  .994   .994   .993  .992   .991  .990   .989   .988  .987   .986   .984  .983  .981       78

      79       .996  .996   .995  .995   .994   .994  .993   .992  .991   .990   .989  .988   .987   .985  .984  .982       79

      80       .997  .996   .996  .995   .995   .994  .993   .993  .992   .991   .990  .989   .988   .987  .985  .984       80

      81       .997  .997   .996  .996   .995   .995  .994   .993  .993   .992   .991  .990   .989   .988  .986  .985       81

      82       .997  .997   .997  .996   .996   .995  .995   .994  .993   .992   .992  .991   .990   .989  .988  .986       82

      83       .998  .997   .997  .996   .996   .996  .995   .994  .994   .993   .992  .992   .991   .990  .989  .987       83

      84       .998  .997   .997  .997   .996   .996  .995   .995  .994   .994   .993  .992   .991   .991  .990  .989       84

      85       .998  .998   .997  .997   .997   .996  .996   .995  .995   .994   .994  .993   .992   .991  .990  .990       85

      86       .998  .998   .998  .997   .997   .997  .996   .996  .995   .995   .994  .994   .993   .992  .991  .990       86

      87       .998  .998   .998  .998   .997   .997  .997   .996  .996   .995   .995  .994   .993   .993  .992  .991       87

      88       .998  .998   .998  .998   .998   .997  .997   .997  .996   .996   .995  .995   .994   .993  .993  .992       88

      89       .999  .998   .998  .998   .998   .997  .997   .997  .996   .996   .996  .995   .995   .994  .993  .993       89
------------------------------------------------------------------------------------------------------------------------------------
                40    41     42    43     44     45    46     47    48     49     50    51     52     53    54    55
</TABLE>

                          PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:           1971 TPF&C Forecast Mortality Table (Pensioner rate based
                     on 85% male; Beneficiary rate based on 85% female)
Interest Rate:       7.5%
Effective:           January 1, 1984
Prepared by:         Towers Perrin

                                          8
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    55    56     57    58     59     60    61     62    63     64     65    66     67     68    69    70    RETIREMENT
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>

      20       .872  .864   .856  .848   .839   .829  .819   .809  .798   .786   .774  .762   .749   .735  .722  .708       20

      21       .873  .865   .857  .849   .839   .830  .820   .810  .799   .787   .775  .762   .749   .736  .722  .708       21

      22       .873  .866   .858  .849   .840   .831  .821   .810  .799   .788   .776  .763   .750   .737  .723  .709       22

      23       .874  .867   .858  .850   .841   .831  .821   .811  .800   .788   .776  .764   .751   .737  .724  .710       23

      24       .875  .867   .859  .851   .842   .832  .822   .812  .801   .789   .777  .765   .752   .738  .725  .711       24

      25       .876  .868   .860  .852   .843   .833  .823   .813  .802   .790   .778  .765   .752   .739  .725  .712       25

      26       .877  .869   .861  .852   .843   .834  .824   .814  .803   .791   .779  .766   .753   .740  .726  .712       26

      27       .878  .870   .862  .853   .844   .835  .825   .815  .804   .792   .780  .767   .754   .741  .727  .713       27

      28       .878  .871   .863  .854   .845   .836  .826   .816  .805   .793   .781  .768   .755   .742  .728  .715       28

      29       .879  .872   .864  .855   .847   .837  .827   .817  .806   .794   .782  .770   .757   .743  .730  .716       29

      30       .881  .873   .865  .857   .848   .838  .828   .818  .807   .795   .783  .771   .758   .744  .731  .717       30

      31       .882  .874   .866  .858   .849   .839  .830   .819  .808   .797   .785  .772   .759   .746  .732  .718       31

      32       .883  .875   .867  .859   .850   .841  .831   .820  .810   .798   .786  .773   .760   .747  .733  .719       32

      33       .884  .877   .869  .860   .851   .842  .832   .822  .811   .799   .787  .775   .762   .748  .735  .721       33

      34       .885  .878   .870  .862   .853   .844  .834   .823  .812   .801   .789  .776   .763   .750  .736  .722       34

      35       .887  .879   .872  .863   .854   .845  .835   .825  .814   .802   .790  .778   .765   .752  .738  .724       35

      36       .888  .881   .873  .865   .856   .847  .837   .826  .816   .804   .792  .780   .767   .753  .740  .726       36

      37       .890  .882   .875  .866   .858   .848  .839   .828  .817   .806   .794  .781   .768   .755  .742  .728       37

      38       .891  .884   .876  .868   .859   .850  .840   .830  .819   .808   .796  .783   .770   .757  .743  .730       38

      39       .893  .886   .878  .870   .861   .852  .842   .832  .821   .810   .798  .785   .772   .759  .746  .732       39
</TABLE>

                                          9
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    55    56     57    58     59     60    61     62    63     64     65    66     67     68    69    70    RETIREMENT
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      40       .895  .888   .880  .872   .863   .854  .844   .834  .823   .812   .800  .787   .775   .761  .748  .734       40

      41       .897  .889   .882  .874   .865   .856  .846   .836  .825   .814   .802  .790   .777   .764  .750  .736       41

      42       .898  .891   .884  .876   .867   .858  .848   .838  .828   .816   .804  .792   .779   .766  .752  .739       42

      43       .900  .893   .886  .878   .869   .860  .851   .841  .830   .819   .807  .794   .782   .769  .755  .741       43

      44       .902  .895   .888  .880   .872   .863  .853   .843  .832   .821   .809  .797   .784   .771  .758  .744       44

      45       .904  .897   .890  .882   .874   .865  .856   .846  .835   .824   .812  .800   .787   .774  .761  .747       45

      46       .907  .900   .892  .885   .876   .867  .858   .848  .838   .827   .815  .803   .790   .777  .763  .750       46

      47       .909  .902   .895  .887   .879   .870  .861   .851  .841   .829   .818  .806   .793   .780  .767  .753       47

      48       .911  .904   .897  .890   .881   .873  .864   .854  .843   .832   .821  .809   .796   .783  .770  .756       48

      49       .913  .907   .900  .892   .884   .876  .866   .857  .847   .836   .824  .812   .800   .787  .773  .760       49

      50       .916  .909   .902  .895   .887   .878  .869   .860  .850   .839   .827  .815   .803   .790  .777  .763       50

      51       .918  .912   .905  .898   .890   .881  .872   .863  .853   .842   .831  .819   .807   .794  .781  .767       51

      52       .921  .914   .908  .900   .893   .884  .876   .866  .856   .846   .834  .823   .810   .798  .784  .771       52

      53       .923  .917   .910  .903   .896   .888  .879   .870  .860   .849   .838  .826   .814   .801  .788  .775       53

      54       .926  .920   .913  .906   .899   .891  .882   .873  .863   .853   .842  .830   .818   .806  .793  .779       54

------------------------------------------------------------------------------------------------------------------------------------
                55    56     57    58     59     60    61     62    63    64      65    66     67     68    69    70
</TABLE>

                          PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:           1971 TPF&C Forecast Mortality Table (Pensioner rate based
                     on 85% male; Beneficiary rate based on 85% female)
Interest Rate:       7.5%
Effective:           January 1, 1984
Prepared by:         Towers Perrin

                                          10
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    55    56     57    58     59     60    61     62    63     64     65    66     67     68    69    70    RETIREMENT
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      55       .928  .922   .916  .909   .902   .894  .885   .876  .867   .857   .846  .834   .822   .810  .797  .784       55

      56       .931  .925   .919  .912   .905   .897  .889   .880  .871   .860   .850  .838   .826   .814  .801  .788       56

      57       .933  .928   .922  .915   .908   .901  .892   .884  .874   .864   .854  .842   .831   .819  .806  .793       57

      58       .936  .931   .925  .918   .911   .904  .896   .887  .878   .868   .858  .847   .835   .823  .811  .798       58

      59       .939  .933   .928  .921   .915   .907  .900   .891  .882   .873   .862  .851   .840   .828  .816  .803       59

      60       .941  .936   .931  .924   .918   .911  .903   .895  .886   .877   .867  .856   .845   .833  .821  .808       60

      61       .944  .939   .933  .928   .921   .914  .907   .899  .890   .881   .871  .860   .849   .838  .826  .813       61

      62       .946  .942   .936  .931   .925   .918  .911   .903  .894   .885   .876  .865   .854   .843  .831  .819       62

      63       .949  .944   .939  .934   .928   .921  .914   .907  .899   .890   .880  .870   .859   .848  .836  .824       63

      64       .952  .947   .942  .937   .931   .925  .918   .911  .903   .894   .885  .875   .864   .854  .842  .830       64

      65       .954  .950   .945  .940   .935   .929  .922   .915  .907   .899   .890  .880   .870   .859  .848  .836       65

      66       .957  .953   .948  .943   .938   .932  .926   .919  .911   .903   .894  .885   .875   .865  .854  .842       66

      67       .959  .955   .951  .946   .941   .936  .930   .923  .916   .908   .899  .890   .880   .870  .859  .848       67

      68       .961  .958   .954  .949   .944   .939  .933   .927  .920   .912   .904  .895   .886   .876  .865  .854       68

      69       .964  .960   .956  .952   .948   .943  .937   .931  .924   .917   .909  .900   .891   .881  .871  .861       69

      70       .966  .963   .959  .955   .951   .946  .941   .935  .928   .921   .914  .905   .896   .887  .877  .867       70

      71       .968  .965   .962  .958   .954   .949  .944   .939  .932   .926   .918  .910   .902   .893  .883  .873       71

      72       .970  .967   .964  .961   .957   .952  .948   .942  .936   .930   .923  .915   .907   .898  .889  .879       72

      73       .972  .970   .967  .963   .959   .955  .951   .946  .940   .934   .927  .920   .912   .904  .895  .886       73

      74       .974  .972   .969  .966   .962   .958  .954   .949  .944   .938   .932  .925   .917   .909  .901  .892       74
</TABLE>

                                          11
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    55    56     57    58     59     60    61     62    63     64     65    66     67     68    69    70    RETIREMENT
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      75       .976  .974   .971  .968   .965   .961  .957   .953  .948   .942   .936  .929   .922   .915  .906  .898       75

      76       .978  .976   .973  .970   .967   .964  .960   .956  .951   .946   .940  .934   .927   .920  .912  .904       76

      77       .979  .977   .975  .973   .970   .966  .963   .959  .954   .950   .944  .938   .932   .925  .917  .909       77

      78       .981  .979   .977  .975   .972   .969  .966   .962  .958   .953   .948  .942   .936   .929  .922  .915       78

      79       .982  .981   .979  .976   .974   .971  .968   .965  .961   .956   .951  .946   .940   .934  .927  .920       79

      80       .984  .982   .980  .978   .976   .973  .971   .967  .964   .960   .955  .950   .944   .938  .932  .925       80

      81       .985  .984   .982  .980   .978   .975  .973   .970  .966   .963   .958  .954   .948   .943  .937  .930       81

      82       .986  .985   .983  .982   .980   .977  .975   .972  .969   .965   .961  .957   .952   .947  .941  .935       82

      83       .987  .986   .985  .983   .981   .979  .977   .974  .972   .968   .965  .960   .956   .951  .946  .940       83

      84       .989  .987   .986  .985   .983   .981  .979   .977  .974   .971   .967  .963   .959   .955  .950  .944       84

      85       .990  .988   .987  .986   .984   .983  .981   .979  .976   .973   .970  .966   .962   .958  .954  .949       85

      86       .990  .989   .988  .987   .986   .984  .982   .980  .978   .975   .972  .969   .965   .961  .957  .952       86

      87       .991  .990   .989  .988   .987   .986  .984   .982  .980   .977   .975  .972   .968   .965  .960  .956       87

      88       .992  .991   .990  .989   .988   .987  .985   .984  .982   .979   .977  .974   .971   .967  .964  .960       88

      89       .993  .992   .991  .990   .989   .988  .987   .985  .983   .981   .979  .976   .973   .970  .967  .963       89

------------------------------------------------------------------------------------------------------------------------------------
                55    56     57    58     59     60    61     62    63     64     65    66     67     68    69    70

</TABLE>

                          PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:           1971 TPF&C Forecast Mortality Table (Pensioner rate based
                     on 85% male; Beneficiary rate based on 85% female)
Interest Rate:       7.5%
Effective:           January 1, 1984
Prepared by:         Towers Perrin

                                          12
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    70    71     72    73     74     75    76     77    78     79     80    81     82     83    84    85    RETIREMENT
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      20       .708  .694   .679  .665   .650   .634  .619   .602  .586   .569   .553  .537   .521   .505  .490  .475       20

      21       .708  .694   .680  .666   .651   .635  .619   .603  .586   .570   .554  .537   .522   .506  .490  .475       21

      22       .709  .695   .681  .666   .651   .636  .620   .603  .587   .571   .554  .538   .522   .506  .491  .476       22

      23       .710  .696   .681  .667   .652   .637  .621   .604  .588   .571   .555  .539   .523   .507  .492  .477       23

      24       .711  .697   .682  .668   .653   .637  .621   .605  .588   .572   .556  .540   .524   .508  .492  .477       24

      25       .712  .697   .683  .669   .654   .638  .622   .606  .589   .573   .556  .540   .524   .509  .493  .478       25

      26       .712  .698   .684  .670   .655   .639  .623   .607  .590   .574   .557  .541   .525   .509  .494  .479       26

      27       .713  .699   .685  .671   .656   .640  .624   .608  .591   .575   .558  .542   .526   .510  .495  .480       27

      28       .715  .700   .686  .672   .657   .641  .625   .609  .592   .576   .559  .543   .527   .511  .496  .480       28

      29       .716  .702   .687  .673   .658   .642  .626   .610  .593   .577   .560  .544   .528   .512  .497  .481       29

      30       .717  .703   .688  .674   .659   .643  .627   .611  .594   .578   .561  .545   .529   .513  .498  .482       30

      31       .718  .704   .690  .675   .660   .645  .628   .612  .595   .579   .562  .546   .530   .514  .499  .483       31

      32       .719  .705   .691  .676   .661   .646  .630   .613  .597   .580   .564  .547   .531   .515  .500  .485       32

      33       .721  .707   .692  .678   .663   .647  .631   .615  .598   .582   .565  .549   .533   .517  .501  .486       33

      34       .722  .708   .694  .679   .664   .649  .633   .616  .600   .583   .566  .550   .534   .518  .502  .487       34

      35       .724  .710   .696  .681   .666   .650  .634   .618  .601   .585   .568  .552   .535   .520  .504  .488       35

      36       .726  .712   .697  .683   .668   .652  .636   .619  .603   .586   .570  .553   .537   .521  .505  .490       36

      37       .728  .713   .699  .685   .669   .654  .638   .621  .605   .588   .571  .555   .539   .523  .507  .492       37

      38       .730  .715   .701  .686   .671   .656  .640   .623  .606   .590   .573  .557   .541   .525  .509  .493       38

      39       .732  .717   .703  .689   .673   .658  .642   .625  .608   .592   .575  .559   .542   .526  .511  .495       39
</TABLE>

                                          13
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    70    71     72    73     74     75    76     77    78     79     80    81     82     83    84    85    RETIREMENT
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      40       .734  .720   .705  .691   .676   .660  .644   .627  .611   .594   .577  .561   .544   .528  .513  .497       40

      41       .736  .722   .708  .693   .678   .662  .646   .630  .613   .596   .579  .563   .547   .531  .515  .499       41

      42       .739  .724   .710  .696   .680   .665  .649   .632  .615   .599   .582  .565   .549   .533  .517  .501       42

      43       .741  .727   .713  .698   .683   .667  .651   .635  .618   .601   .584  .568   .551   .535  .519  .504       43

      44       .744  .730   .715  .701   .686   .670  .654   .637  .621   .604   .587  .570   .554   .538  .522  .506       44

      45       .747  .733   .718  .704   .689   .673  .657   .640  .623   .607   .590  .573   .557   .541  .525  .509       45

      46       .750  .736   .721  .707   .692   .676  .660   .643  .626   .610   .593  .576   .560   .543  .527  .512       46

      47       .753  .739   .725  .710   .695   .679  .663   .647  .630   .613   .596  .579   .563   .547  .530  .515       47

      48       .756  .742   .728  .713   .698   .683  .667   .650  .633   .616   .599  .583   .566   .550  .534  .518       48

      49       .760  .746   .732  .717   .702   .686  .670   .654  .637   .620   .603  .586   .570   .553  .537  .521       49

      50       .763  .749   .735  .721   .706   .690  .674   .657  .640   .624   .607  .590   .573   .557  .541  .525       50

      51       .767  .753   .739  .725   .710   .694  .678   .661  .644   .628   .611  .594   .577   .561  .544  .528       51

      52       .771  .757   .743  .729   .714   .698  .682   .665  .649   .632   .615  .598   .581   .565  .548  .532       52

      53       .775  .761   .747  .733   .718   .703  .686   .670  .653   .636   .619  .602   .585   .569  .553  .537       53

      54       .779  .766   .752  .737   .722   .707  .691   .674  .657   .640   .623  .607   .590   .573  .557  .541       54

------------------------------------------------------------------------------------------------------------------------------------
                70    71     72    73     74     75    76     77    78     79     80    81     82     83    84    85
</TABLE>

                          PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:           1971 TPF&C Forecast Mortality Table (Pensioner rate based
                     on 85% male; Beneficiary rate based on 85% female)
Interest Rate:       7.5%
Effective:           January 1, 1984
Prepared by:         Towers Perrin

                                          14
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    70    71     72    73     74     75    76     77    78     79     80    81     82     83    84    85    RETIREMENT
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      55       .784  .770   .756  .742   .727   .712  .696   .679  .662   .645   .628  .611   .595   .578  .562  .545       55

      56       .788  .775   .761  .747   .732   .717  .700   .684  .667   .650   .633  .616   .599   .583  .566  .550       56

      57       .793  .779   .766  .752   .737   .722  .706   .689  .672   .655   .638  .621   .605   .588  .571  .555       57

      58       .798  .784   .771  .757   .742   .727  .711   .694  .678   .661   .644  .627   .610   .593  .577  .560       58

      59       .803  .789   .776  .762   .748   .732  .716   .700  .683   .666   .649  .632   .616   .599  .582  .566       59

      60       .808  .795   .781  .768   .753   .738  .722   .706  .689   .672   .655  .638   .621   .605  .588  .572       60

      61       .813  .800   .787  .773   .759   .744  .728   .712  .695   .678   .661  .644   .628   .611  .594  .578       61

      62       .819  .806   .793  .779   .765   .750  .734   .718  .702   .685   .668  .651   .634   .617  .601  .584       62

      63       .824  .812   .799  .785   .771   .756  .741   .725  .708   .691   .675  .658   .641   .624  .607  .591       63

      64       .830  .818   .805  .792   .778   .763  .748   .732  .715   .699   .682  .665   .648   .631  .615  .598       64

      65       .836  .824   .811  .798   .784   .770  .755   .739  .722   .706   .689  .672   .656   .639  .622  .606       65

      66       .842  .830   .818  .805   .791   .777  .762   .746  .730   .713   .697  .680   .663   .647  .630  .614       66

      67       .848  .836   .824  .812   .798   .784  .769   .754  .738   .721   .705  .688   .672   .655  .638  .622       67

      68       .854  .843   .831  .819   .806   .792  .777   .762  .746   .730   .713  .697   .680   .663  .647  .630       68

      69       .861  .849   .838  .826   .813   .799  .785   .770  .754   .738   .722  .705   .689   .672  .656  .639       69

      70       .867  .856   .845  .833   .820   .807  .793   .778  .762   .747   .730  .714   .698   .682  .665  .649       70

      71       .873  .863   .852  .840   .828   .815  .801   .786  .771   .755   .739  .723   .707   .691  .675  .658       71

      72       .879  .869   .859  .847   .835   .823  .809   .795  .780   .764   .749  .733   .717   .701  .684  .668       72

      73       .886  .876   .865  .855   .843   .831  .817   .803  .788   .773   .758  .742   .727   .711  .694  .678       73

      74       .892  .882   .872  .862   .850   .838  .825   .812  .797   .782   .767  .752   .736   .721  .705  .689       74
</TABLE>
                                          15
<PAGE>

                                     Addendum B
                   Pre-1998 RIP 50% Contingent Annuitant Factors

                         PENSIONER WHOSE RETIREMENT AGE IS:

<TABLE>
<CAPTION>
 BENEFICIARY'S                                                                                                         BENEFICIARY'S
    AGE AT                                                                                                                AGE AT
  PENSIONER'S                                                                                                           PENSIONER'S
  RETIREMENT    70    71     72    73     74     75    76     77    78     79     80    81     82     83    84    85    RETIREMENT
<S>            <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>   <C>    <C>    <C>   <C>    <C>    <C>   <C>   <C>   <C>
      75       .898  .889   .879  .869   .858   .846  .834   .820  .806   .792   .777  .762   .746   .731  .715  .699       75

      76       .904  .895   .886  .876   .865   .854  .842   .829  .815   .801   .786  .771   .756   .741  .725  .710       76

      77       .909  .901   .892  .883   .872   .862  .850   .837  .824   .810   .796  .781   .766   .751  .736  .721       77

      78       .915  .907   .898  .889   .880   .869  .858   .845  .832   .819   .805  .791   .776   .762  .747  .731       78

      79       .920  .912   .904  .896   .886   .876  .865   .853  .841   .828   .814  .801   .786   .772  .757  .742       79

      80       .925  .918   .910  .902   .893   .884  .873   .861  .849   .837   .824  .810   .796   .782  .768  .753       80

      81       .930  .923   .916  .908   .900   .891  .880   .869  .858   .846   .833  .820   .807   .793  .779  .764       81

      82       .935  .929   .922  .914   .906   .898  .888   .877  .866   .854   .842  .830   .817   .803  .790  .776       82

      83       .940  .934   .927  .920   .913   .904  .895   .885  .874   .863   .851  .839   .827   .814  .800  .787       83

      84       .944  .939   .932  .926   .919   .911  .902   .892  .882   .871   .860  .849   .836   .824  .811  .798       84

      85       .949  .943   .937  .931   .924   .917  .909   .900  .890   .880   .869  .858   .846   .834  .821  .809       85

      86       .952  .947   .942  .936   .930   .923  .915   .906  .897   .887   .877  .866   .855   .843  .831  .819       86

      87       .956  .951   .946  .941   .935   .928  .921   .913  .904   .895   .885  .875   .864   .853  .841  .829       87

      88       .960  .955   .950  .945   .940   .934  .927   .919  .910   .902   .892  .882   .872   .862  .850  .839       88

      89       .963  .959   .954  .949   .944   .938  .932   .925  .917   .908   .899  .890   .880   .870  .859  .848       89

------------------------------------------------------------------------------------------------------------------------------------
                70    71     72    73     74     75    76     77    78     79     80    81     82     83    84    85
</TABLE>

                          PENSIONER WHOSE RETIREMENT AGE IS:

Mortality:           1971 TPF&C Forecast Mortality Table (Pensioner rate based
                     on 85% male; Beneficiary rate based on 85% female)
Interest Rate:       7.5%
Effective:           January 1, 1984
Prepared by:         Towers Perrin

                                          16
<PAGE>

                                      ADDENDUM C

        LEVEL INCOME OPTION -- FACTORS USING UP84 MORTALITY AND 7.5% INTEREST

<TABLE>
<CAPTION>

    AGE      0/12      1/12      2/12      3/12       4/12      5/12      6/12      7/12      8/12      9/12      10/12      11/12
    ---      ----      ----      ----      ----       ----      ----      ----      ----      ----      ----      -----      -----
    <S>    <C>       <C>       <C>       <C>        <C>       <C>       <C>       <C>       <C>       <C>       <C>        <C>
    50     0.30410   0.30651   0.30892   0.31133    0.31374   0.31615   0.31856   0.32097   0.32338   0.32579   0.32820    0.33061

    51     0.33302   0.33570   0.33837   0.34105    0.34373   0.34641   0.34908   0.35176   0.35444   0.35712   0.35979    0.36247

    52     0.36515   0.36813   0.37111   0.37408    0.37706   0.38004   0.38302   0.38600   0.38898   0.39195   0.39493    0.39791

    53     0.40089   0.40421   0.40753   0.41085    0.41417   0.41749   0.42080   0.42412   0.42744   0.43076   0.43408    0.43740

    54     0.44072   0.44443   0.44814   0.45185    0.45556   0.45927   0.46297   0.46668   0.47039   0.47410   0.47781    0.48152

    55     0.48523   0.48938   0.49353   0.49768    0.50184   0.50599   0.51014   0.51429   0.51844   0.52259   0.52675    0.53090

    56     0.53505   0.53971   0.54437   0.54903    0.55369   0.55835   0.56301   0.56767   0.57233   0.57699   0.58165    0.58631

    57     0.59097   0.59621   0.60146   0.60670    0.61194   0.61719   0.62243   0.62767   0.63292   0.63816   0.64340    0.64865

    58     0.65389   0.65980   0.66572   0.67163    0.67755   0.68346   0.68938   0.69529   0.70121   0.70712   0.71304    0.71895

    59     0.72487   0.73156   0.73825   0.74494    0.75164   0.75833   0.76502   0.77171   0.77840   0.78509   0.79179    0.79848

    60     0.80517   0.81276   0.82035   0.82795    0.83554   0.84313   0.85072   0.85832   0.86591   0.87350   0.88109    0.88869

    61     0.89628   0.90492   0.91357   0.92221    0.93085   0.93950   0.94814   0.95678   0.96543   0.97407   0.98271    0.99136

    62     1.00000

</TABLE>

                                          1
<PAGE>

                                      ADDENDUM D

                       PRE-1998 RIP LEVEL INCOME OPTION FACTORS

<TABLE>
<CAPTION>

    AGE      0/12      1/12      2/12      3/12       4/12      5/12      6/12      7/12      8/12      9/12      10/12      11/12
    ---      ----      ----      ----      ----       ----      ----      ----      ----      ----      ----      -----      -----
    <S>    <C>       <C>       <C>       <C>        <C>       <C>       <C>       <C>       <C>       <C>       <C>        <C>
    50     0.30906   0.31148   0.31390   0.31632    0.31875   0.32117   0.32359   0.32601   0.32843   0.33085   0.33328    0.33570

    51     0.33812   0.34080   0.34349   0.34617    0.34886   0.35154   0.35423   0.35691   0.35960   0.36228   0.36497    0.36765

    52     0.37034   0.37332   0.37630   0.37929    0.38227   0.38525   0.38823   0.39122   0.39420   0.39718   0.40016    0.40315

    53     0.40613   0.40945   0.41277   0.41608    0.41940   0.42272   0.42604   0.42936   0.43268   0.43599   0.43931    0.44263

    54     0.44595   0.44965   0.45335   0.45705    0.46075   0.46445   0.46815   0.47186   0.47556   0.47926   0.48296    0.48666

    55     0.49036   0.49450   0.49863   0.50277    0.50690   0.51104   0.51517   0.51931   0.52345   0.52758   0.53172    0.53585

    56     0.53999   0.54462   0.54926   0.55389    0.55852   0.56316   0.56779   0.57242   0.57706   0.58169   0.58632    0.59096

    57     0.59559   0.60079   0.60599   0.61120    0.61640   0.62160   0.62680   0.63201   0.63721   0.64241   0.64761    0.65282

    58     0.65802   0.66388   0.66974   0.67560    0.68146   0.68732   0.69317   0.69903   0.70489   0.71075   0.71661    0.72247

    59     0.72833   0.73495   0.74157   0.74818    0.75480   0.76142   0.76804   0.77466   0.78128   0.78789   0.79451    0.80113

    60     0.80775   0.81525   0.82274   0.83024    0.83774   0.84524   0.85273   0.86023   0.86773   0.87523   0.88272    0.89022

    61     0.89772   0.90624   0.91477   0.92329    0.93181   0.94034   0.94886   0.95738   0.96591   0.97443   0.98295    0.99148

    62     1.00000

</TABLE>
Mortality:    1971 TPF&C Forecast Mortality Table (85% male rate, 15% female
              rate)
Interest:     7.5%

                                          1<PAGE>
                                                                  EXHIBIT 10.33

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

       This Amended and Restated Employment Agreement (the "Agreement"),
effective as of January 1, 2000, is by and between LTC PROPERTIES, INC., a
corporation organized under the laws of the State of Maryland ("LTC" or the
"Company"), and JULIA L. KOPTA ("EXECUTIVE").

       NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

       1.     APPOINTMENT, TITLE AND DUTIES. LTC hereby employs Executive to
serve as its Senior Vice President, General Counsel and Corporate Secretary. In
such capacity, Executive shall report to the Chief Executive Officer of the
Company, and shall have such duties, powers and responsibilities as are
customarily assigned to a Senior Vice President, General Counsel and Corporate
Secretary of a publicly held corporation, but shall also be responsible to the
Board of Directors and to any committee thereof. In addition, Executive shall
have such other duties and responsibilities as the Chief Executive Officer may
assign her, with her consent, including serving with the consent or at the
request of the Chief Executive Officer as an officer or on the board of
directors of affiliated corporations. In addition, at the request of the Chief
Executive Officer, Executive shall serve as the General Counsel and Corporate
Secretary of LTC Healthcare, Inc., a Nevada corporation.

       2.     TERM OF AGREEMENT. The term of this Agreement shall commence as of
the date hereof and shall extend such that at each and every moment of time
hereafter the remaining term shall be one year.

       3.     ACCEPTANCE OF POSITION. Executive accepts the position of Senior
Vice President, General Counsel and Corporate Secretary of LTC, and agrees that
during the term of this Agreement she will faithfully perform her duties and,
except as expressly approved by the Board of Directors of LTC, will devote
substantially all of her business time to the business and affairs of LTC (and,
to the extent requested by the Chief Executive Officer, LTC Healthcare, Inc.),
and will not engage, for her own account or for the account of any other person
or entity, in a business which competes with LTC. It is acknowledged and agreed
that Executive may serve as an officer and/or director of companies in which LTC
owns voting or non-voting stock. In addition, it is acknowledged and agreed that
Executive may, from time to time, serve as a member of the board of directors of
other companies, in which event the Board of Directors of LTC must expressly
approve such service pursuant to a Board resolution maintained in the Company's
minute books. Any compensation or remuneration which Executive receives in
consideration of her service on the board of directors of other companies shall
be the sole and exclusive property of Executive, and LTC shall have no right or
entitlement at any time to any such compensation or remuneration.

                                       1
<PAGE>

       4.     SALARY AND BENEFITS. During the term of this Agreement:

              (1)    LTC shall pay to Executive a base salary at an annual rate
of not less than Two Hundred Twenty-Five Thousand Dollars ($225,000) per annum
("Base Salary"), paid in approximately equal installments at intervals based on
any reasonable Company policy. LTC agrees from time to time to consider
increases in such base salary in the discretion of the Board of Directors. Any
increase, once granted, shall automatically amend this Agreement to provide that
thereafter Executive's base salary shall not be less than the annual amount to
which such base salary has been increased.

              (2)    Executive shall participate in all health, retirement,
Company-paid insurance, sick leave, disability, expense reimbursement and other
benefit programs which LTC makes available to any of its senior executives, and
shall be eligible for bonuses in the discretion of the Board of Directors.

              (3)    Executive shall be entitled to reasonable vacation time,
not less than four (4) weeks per year, PROVIDED that not more than two (2) weeks
of such vacation time may be taken consecutively without prior notice to and
non-objection by the Compensation Committee of the Board of Directors or, if
there is no Compensation Committee, the Board of Directors.

              (4)    LTC shall grant Executive 20,000 shares of restricted stock
pursuant to LTC's Amended and Restated 1992 Stock Option Plan, which
restrictions shall lapse in five consecutive installments beginning January 1,
2001.

              (5)    LTC shall reimburse Executive for $23,600 for her estimated
expenses incurred in connection with her relocation from Pennsylvania to
California and the LTC will have no further liability for said relocation
expenses.

              (6)    Concurrently with the execution hereof, the Company will be
ready to loan Executive $150,000. Such loan shall be unsecured and shall bear
interest at a rate equal to the lowest rate under which the Company may borrow
money under it credit arrangements. Such loan shall be due upon the sale of
Executive's residence in Pennsylvania.

       5.     CERTAIN TERMS DEFINED. For purposes of this Agreement:

              (1)    Executive shall be deemed to be "disabled" if a physical or
mental condition shall occur and persist which, in the written opinion of a
licensed physician selected by the Board of Directors in good faith, has
rendered Executive unable to perform the duties set forth in Section 1 hereof
for a period of sixty (60) days or more and, in the written opinion of such
physician, the condition will continue for an indefinite period of time,
rendering Executive unable to return to her duties;

                                       2
<PAGE>

              (2)    A termination of Executive's employment by LTC shall be
deemed for "Cause" if, and only if, it is based upon (i) conviction of a
felony; (ii) material disloyalty to the Company such as embezzlement,
misappropriation of corporate assets or, except as permitted pursuant to
Section 3 of this Agreement, breach of Executive's agreement not to engage in
business for another enterprise of the type engaged in by the Company; or
(iii) the engaging in unethical or illegal behavior which is of a public
nature, brings LTC into disrepute, and result in material damage to the
Company. The Company shall have the right to suspend Executive with pay, for
a reasonable period to investigate allegations of conduct which, if proven,
would establish a right to terminate this Agreement for Cause, or to permit a
felony charge to be tried. Immediately upon the conclusion of such temporary
period, unless Cause to terminate this Agreement has been established,
Executive shall be restored to all duties and responsibilities as if such
suspension had never occurred;

              (3)    A resignation by Executive shall not be deemed to be
voluntary and shall be deemed to be a resignation with "Good Reason" if it is
based upon (i) a diminution in Executive's title, duties, or salary; (ii) a
reduction in benefits which is not part of an across-the-board reduction in
benefits of all senior executive personnel; (iii) a direction by the Board of
Directors that Executive report to any person or group other than the Chief
Executive Officer or the Board of Directors, or (iv) a geographic relocation
of Executive's place of work a distance for more than seventy-five (75) miles
from LTC's offices located at 300 Esplanade Drive, Suite 1860, Oxnard,
California;

              (4)    "Affiliate" means with respect to any Person, a Person
who, directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control, with the Person specified;

              (5)    "Base Salary" means, as of any date of termination of
employment, the highest base salary of Executive in the then current fiscal
year or in any of the last four fiscal years immediately preceding such date
of termination of employment;

              (6)    "Beneficial Owner" shall have the meaning given to such
term in Rule 13d-3 under the Exchange Act;

              (7)    A "Change in Control" occurs if:

                     (1)    Any Person or related group of Persons (other
than Executive and her Related Persons, the Company or a Person that directly
or indirectly controls, is controlled by, or is under common control with,
the Company) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 30% or more of the combined voting
power of the Company's then outstanding securities; or

                     (2)    The stockholders of the Company approve a merger
or consolidation of the Company with any other corporation (or other entity),
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities

                                       3
<PAGE>

of the surviving entity) more than 66-2/3% of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; PROVIDED, HOWEVER, that a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires more than 30% of
the combined voting power of the Company's then outstanding securities shall
not constitute a Change in Control; or

                     (3)    The Stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets; or

                     (4)    A majority of the members of the Board of
Directors of the Company cease to be Continuing Directors;

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

              (9)    "Continuing Director" means, as of any date of
determination, any member of the Board of Directors who (i) was a member of
such Board of Directors on the date of the Agreement or (ii) was nominated
for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.

              (10)   "Exchange Act" means the Exchange Act of 1934, as
amended.

              (11)   "Person" means any individual, corporation, partnership,
limited liability company, trust, association or other entity.

              (12)   "Related Person" means any immediate family member
(spouse, partner, parent, sibling or child whether by birth or adoption) of
the Executive and any trust, estate or foundation, the beneficiary of which
is the Executive and/or an immediate family member of the Executive.

       6.     CERTAIN BENEFITS UPON TERMINATION. Executive's employment shall
be terminated upon the earlier of (i) the voluntary resignation of Executive
with or without Good Reason; (ii) Executive's death or permanent disability;
or (iii) upon the termination of Executive's employment by LTC for any reason
at any time. In the event of such termination, the below provisions of this
Section 6 shall apply.

              (1)    If Executive's employment by LTC terminates for any reason
other than as a result of (i) a termination for Cause, or (ii) a voluntary
resignation by Executive without a Good Reason, or (iii) a Change in Control of
the Company, then LTC shall pay Executive a lump sum severance payment equal to
her Base Salary; PROVIDED that if employment terminates by reason of Executive's
death or disability, then such salary shall be paid only to the extent the
Company has

                                       4
<PAGE>

available "key man" life, disability or similar insurance relating to the death
or disability of Executive;

              (2)    Upon a Change in Control of the Company whether or not
Executive's employment is terminated thereby, in lieu of the severance payment
described in Section 6(a) above, LTC shall pay Executive a lump sum severance
payment in cash equal to two times her Base Salary;

              (3)    If Executive's employment by LTC terminates for any reason,
except for LTC's termination of Executive's employment for Cause or a voluntary
resignation by Executive without a Good Reason, LTC shall offer to Executive the
opportunity to participate in all Company-provided medical and dental plans to
the extent Executive elects and remains eligible for coverage under COBRA and
for a maximum period of eighteen (18) months at Company expense; PROVIDED,
HOWEVER, in the event Executive's employment by LTC terminated upon a Change in
Control of the Company, then Executive shall not be given the opportunity to
participate in any of such medical and dental plans, except to the extent
required by law;

              (4)    In the event that Executive's employment terminates by
reason of her death, all benefits provided in this Section 6 shall be paid to
her estate or as her executor shall direct, but payment may be deferred until
Executive's executor or personal representatives has been appointed and
qualified pursuant to the laws in effect in Executive's jurisdiction of
residence at the time of her death;

              (5)    LTC shall make all payments pursuant to the foregoing
subsections (a) through (d) within seven (7) days following the date of
termination of Executive's employment or consummation of a Change in Control of
the Company, as applicable;

              (6)    Notwithstanding the foregoing, LTC shall have no liability
under this Section if Executive's employment pursuant to this Agreement is
terminated by LTC for Cause or by Executive without a Good Reason; provided,
however, that if Executive's employment pursuant to this Agreement is terminated
by LTC for Cause or by Executive without a Good Reason at any time after a
Change of Control which did not result in Executive's employment being
terminated, such post-Change of Control termination by LTC for Cause or by
Executive without a Good Reason shall not affect in any way Executive's
entitlement to the lump sum severance payment described in Section 6(b) above or
any other rights, benefits or entitlements to which Executive may be entitled as
a result of such Change of Control;

              (7)    Gross-Up.

                     (1)    If it shall be determined that any payment,
distribution or benefit received or to be received by Executive from the Company
(whether payable pursuant to the terms of this Agreement or any other plan,
arrangements or agreement with the Company or a Affiliate (as defined above)
("Payments")) would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then Executive shall be entitled to receive an
additional payment (the

                                       5
<PAGE>

"Excise Tax Gross-Up Payment") in an amount such that the net amount retained by
Executive, after the calculation and deduction of any Excise Tax on the Payments
and any federal, state and local income taxes and excise tax on the Excise Tax
Gross-Up Payment provided for in this Section 6(g), shall be equal to the
Payments. In determining this amount, the amount of the Excise Tax Gross-Up
Payment attributable to federal income taxes shall be reduced by the maximum
reduction in federal income taxes that could be obtained by the deduction of the
portion of the Excise Tax Gross-Up Payment attributable to state and local
income taxes. Finally, the Excise Tax Gross-Up Payment shall be reduced by
income or excise tax withholding payment made by the Company or any affiliate of
either to any federal, state or local taxing authority with respect to the
Excise Tax Gross-Up Payment that was not deducted from compensation payable to
Executive.

                     (2)    All determinations required to be made under this
Section 6(g), including whether and when an Excise Tax Gross-Up Payment is
required and the amount of such Excise Tax Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, except as specified in Section
6(g)(i) above, shall be made by the Company's independent auditors (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and Executive. Such determination of tax liability made by the
Accounting Firm shall be subject to review by Executive's tax advisor and, if
Executive's tax advisor does not agree with such determination reached by the
Accounting Firm, then the Accounting Firm and Executive's tax advisor shall
jointly designate a nationally recognized public accounting firm, which shall
make such determination. All reasonable fees and expenses of the accountants and
tax advisors retained by either Executive or the Company shall be borne by the
Company. Any Excise Tax Gross-Up Payment, as determined pursuant to this Section
6(g), shall be paid by the Company to Executive within five days after the
receipt of such determination. Any determination by a jointly designated public
accounting firm shall be binding upon the Company and Executive.

                     (3)    As a result of the uncertainty in the application of
Subsection 4999 of the Code at the time of the initial determination thereunder,
it is possible that Excise Tax Gross-Up Payments will not have been made by the
Company that should have been made consistent with the calculations required to
be made hereunder ("Underpayment"). In the event that Executive thereafter is
required to make a payment of any Excise Tax, any such Underpayment calculated
in accordance with and in the same manner as the Excise Tax Gross-Up Payment in
Section 6(g)(i) above shall be promptly paid by the Company to or for the
benefit of Executive. In the event that the Excise Tax Gross-Up Payment exceeds
the amount subsequently determined to be due, such excess shall constitute a
loan from the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).

       7.     TAX LIABILITY LOAN. Upon a Change in Control of the Company,
whether or not Executive's employment is terminated as a result thereof, the
Company shall offer Executive an unsecured loan in the amount necessary to fund
Executive's tax liability arising from the accelerated vesting of restricted
shares held by Executive, if any. Such loan shall be due, in full, in ten (10)
years from the date made and shall bear interest at the then-current Applicable
Federal Rate (the minimum rat necessary to avoid "unstated interest" under
Section 7872 of the Code) with interest payments to

                                       6
<PAGE>

be paid to the Company annually. Such loan shall be evidenced by a promissory
note signed by, and with full recourse to, Executive.

       8.     INDEMNIFICATION. LTC shall indemnify Executive and hold her
harmless from and against all claims, actions, losses, damages, expense or
liabilities (including expenses of defense and settlement) ("Claim") based upon
or in any way arising from or connected with her employment by LTC, to the
maximum extent permitted by law. To the extent permitted by law, LTC shall
advance to Executive any expenses necessary in connection with the defense of
any Claim which is brought if indemnification cannot be determined to be
available prior to the conclusion of, or the investigation of, such Claim. The
parties hereto agree that each understands and has understood that
notwithstanding the above-stated provisions, nothing herein shall require LTC to
hold harmless or indemnify Executive with respect to any Claim which is brought
or asserted against Executive by LTC. LTC shall investigate in good faith the
availability and cost of directors' and officers' insurance and shall include
Executive as an insured in any directors and officers insurance policy of such
insurance it maintains.

       9.     ATTORNEY FEES. In the event that any action or proceeding is
brought to enforce the terms and provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorney fees.

       10.    NOTICES. All notices and other communications provided to either
party hereto under this Agreement shall be in writing and delivered by certified
or registered mail to such party at its/her address set forth below its/her
signature hereto, or at such other address as may be designated with postage
prepaid, shall be deemed given when received.

       11.    CONSTRUCTION. In constructing this Agreement, if any portion of
this Agreement shall be found to be invalid or unenforceable, the remaining
terms and provisions of this Agreement shall be given effect to the maximum
extent permitted without considering the void, invalid or unenforceable
provisions. In construing this Agreement, the singular shall include the plural,
the masculine shall include the feminine and neuter genders as appropriate, and
no meaning in effect shall be given to the captions of the sections in this
Agreement, which are inserted for convenience of reference only.

       12.    HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.

       13.    GOVERNING LAW. The provisions of this Agreement shall be construed
and interpreted in accordance with the internal laws of the State of California
as at the time in effect.

       14.    ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and supersedes all other prior agreements (including the Employment Agreement
dated as of the date hereof) and undertakings, both written and oral, among
Executive and the Company, with respect to the subject matter hereof.

                                       7
<PAGE>

         IN WITNESS WHEREOF, this Agreement shall be effective as of the date
specified in the first paragraph of this Agreement.

                                   LTC, PROPERTIES, INC., a Maryland corporation

Address: 300 Esplanade St., #1860  By:    /s/ Andre Dimitriadis
         Oxnard, CA 90303             -----------------------------------------
                                        Chairman and Chief Executive Officer

                                   By:    /s/ Wendy Simpson
                                      -----------------------------------------
                                         Chairman of Compensation Committee

Address:                                  /s/ Julia Kopta
        ---------------------------  -----------------------------------------
                                             Executive
        ---------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}]]