Document:

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                                                                    EXHIBIT 10.8

                             SOUTHWEST AIRLINES CO.

                               PROFIT SHARING PLAN

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                             SOUTHWEST AIRLINES CO.
                              PROFIT SHARING PLAN

                               TABLE OF CONTENTS

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ARTICLE I PURPOSE.............................................................1

ARTICLE II DEFINITIONS AND CONSTRUCTION.......................................2
2.1 Definitions ..............................................................2
2.2 Construction .............................................................8

ARTICLE III ELIGIBILITY AND PARTICIPATION.....................................8
3.1 Eligibility Requirements..................................................8
3.2 Notification of Eligibility...............................................9
3.3 Reentry of Prior Members..................................................9

ARTICLE IV CONTRIBUTIONS.....................................................10
4.1 Company Contributions....................................................10

ARTICLE V ADJUSTMENT OF INDIVIDUAL ACCOUNTS..................................11
5.1 Individual Accounts......................................................11
5.2 Method of Adjustment.....................................................12

ARTICLE VI ALLOCATIONS.......................................................13
6.1 Company Contribution.....................................................13
6.2 Allocation of Forfeitures................................................13
6.3 Notification to Members..................................................14
6.4 Maximum Annual Addition to Account or Benefit............................14

ARTICLE VII RETIREMENT.......................................................16
7.1 Normal or Late Retirement................................................16
7.2 Benefit 16

ARTICLE VIII DEATH...........................................................16
8.1 Designation of Beneficiary...............................................16
8.2 Benefit .................................................................17
8.3 No Beneficiary ..........................................................17

ARTICLE IX DISABILITY........................................................18
9.1 Benefit .................................................................18

ARTICLE X TERMINATION OF EMPLOYMENT AND FORFEITURES..........................18
10.1 Eligibility and Benefits................................................18
10.2 Time of Payment.........................................................19
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10.3 Forfeitures ............................................................19
10.4 Forfeiture for Cause....................................................19

ARTICLE XI WITHDRAWALS.......................................................20
11.1 Withdrawals ............................................................20

ARTICLE XII INVESTMENT OF THE TRUST FUND.....................................21
12.1 [deleted] ..............................................................21
12.2 Member Direction of Investment..........................................21
12.3 Conversion of Investments...............................................22

ARTICLE XIII ADMINISTRATION..................................................23
13.1 Appointment of Committee................................................23
13.2 Committee Powers and Duties.............................................24
13.3 Duties and Powers of the Plan Administrator.............................25
13.4 Rules and Decisions.....................................................26
13.5 Committee Procedures....................................................26
13.6 Authorization of Benefit Payments.......................................26
13.7 Payment of Expenses.....................................................26
13.8 Indemnification of Members of the Committee.............................27

ARTICLE XIV NOTICES..........................................................27
14.1 Notice to Trustee.......................................................27
14.2 Subsequent Notices......................................................27
14.3 Reliance upon Notice....................................................27

ARTICLE XV BENEFIT PAYMENTS..................................................28
15.1 Method of Payment.......................................................28
15.2 Time of Payment.........................................................28
15.3 Cash Out Distribution...................................................32
15.4 Minority or Disability Payments.........................................33
15.5 Distributions Under Domestic Relations Orders...........................33
15.6 Direct Rollover of Eligible Rollover Distributions......................35

ARTICLE XVI TRUSTEE..........................................................36
16.1 Appointment of Trustee..................................................36
16.2 Appointment of Investment Manager.......................................36
16.3 Responsibility of Trustee and Investment Manager........................37
16.4 Bonding of Trustee and Investment Manager...............................37

ARTICLE XVII AMENDMENT AND TERMINATION OF PLAN...............................38
17.1 Amendment of Plan.......................................................38
17.2 Termination of Plan.....................................................39
17.3 Suspension and Discontinuance of Contributions..........................39
17.4 Liquidation of Trust Fund...............................................39
17.5 Consolidation or Merger.................................................40
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ARTICLE XVIII GENERAL PROVISIONS.............................................40
18.1 No Employment Contract..................................................40
18.2 Manner of Payment.......................................................40
18.3 Nonalienation of Benefits...............................................41
18.4 Titles for Convenience Only.............................................41
18.5 Validity of Plan........................................................41
18.6 Plan Binding ...........................................................42
18.7 Return of Contributions.................................................42
18.8 Missing Members or Beneficiaries........................................42
18.9 Voting Rights ..........................................................43
18.10 Acquisition Loans......................................................45
18.11 Preretirement Diversification Rights...................................46
18.12 Qualified Military Service.............................................48

ARTICLE XIX TOP-HEAVY RULES..................................................49
19.1 Definitions ............................................................49
19.2 Determination of Top-Heavy Status.......................................50
19.3 Minimum Company Contribution............................................51
19.4 Minimum Vesting.........................................................52

ARTICLE XX FIDUCIARY PROVISIONS..............................................53
20.1 General Allocation of Duties............................................53
20.2 Fiduciary Duty .........................................................53
20.3 Fiduciary Liability.....................................................54
20.4 Co-Fiduciary Liability..................................................54
20.5 Delegation and Allocation...............................................54
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                             SOUTHWEST AIRLINES CO.
                               PROFIT SHARING PLAN

                                    PREAMBLE

         WHEREAS, SOUTHWEST AIRLINES CO., a corporation formed under the laws of
the State of Texas (the "Company") has previously adopted a plan and trust
designated as the Southwest Airlines Co. Profit Sharing Plan (the "Prior Plan"),
effective January 1, 1973, which was subsequently amended and restated in its
entirety, effective January 1, 1986, and again amended and restated in its
entirety, effective January 1, 1991, as amended from time to time thereafter;

         WHEREAS, the Company now desires to continue the plan by again amending
and restating the Prior Plan for compliance with the Small Business Job
Protection Act of 1996, the Taxpayer Relief Act of 1997, and subsequent
legislation, and to incorporate amendments which have previously been made to
the plan;

         NOW, THEREFORE, in consideration of the premises and to carry out the
purposes and intent as set forth above, the Prior Plan is hereby restated and
amended in its entirety, superseded and replaced by this Plan, effective January
1, 1996, except as otherwise specifically provided herein. There will be no gap
or lapse in time or effect between such plans, and the existence of a qualified
plan and trust shall be continuous and uninterrupted.

         The terms and conditions of this restated Plan are as follows:

                                   ARTICLE I

                                    Purpose

         The purpose of this Plan is to reward Employees of the Company for
their loyal and faithful service, to provide the Employees with a retirement
benefit, and to provide funds for their beneficiaries in the event of death or
disability. The Plan is designed to invest primarily in

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qualifying employer securities, as such term is defined in Section 4975(e)(7) of
the Code, and is thus formally designated as an employee stock ownership plan
and a money purchase defined contribution plan. The benefits provided by this
Plan will be paid from a Trust Fund established by the Company and will be in
addition to the benefits Employees are entitled to receive under any other
programs of the Company and under the Social Security Act.

         This Plan and the separate related Trust forming a part hereof are
established and shall be maintained for the exclusive benefit of the Members
hereunder and their Beneficiaries. No part of the Trust Fund can ever revert to
the Company, except as hereinafter provided, or be used for or diverted to
purposes other than the exclusive benefit of the Members of this Plan and their
Beneficiaries.

                                  ARTICLE II

                         Definitions and Construction

         2.1 Definitions: Where the following words and phrases appear in this
Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary:

                  (a) Affiliate: A member of a controlled group of corporations
         (as defined in Section 414(b) of the Code), a group of trades or
         businesses (whether or not incorporated) which are under common control
         (as defined in Section 414(c) of the Code), or an affiliated service
         group (as defined in Section 414(m) of the Code) of which the Company
         is a member, or any entity otherwise required to be aggregated with the
         Company pursuant to Section 414(o) of the Code and the regulations
         issued thereunder.

                  (b) Allocation Date: The date on which Company Contributions
         and forfeitures are to be allocated, such date to be the last day of
         each Plan Year.

                  (c) Annual Compensation: The total amounts paid by the Company
         or any Eligible Affiliate to an Employee as remuneration for personal
         services rendered during each Plan Year, including expense allowances
         (to the extent includible in the gross income of the Employee) and any
         amounts not includible in the gross income of the Employee pursuant to
         Sections 125 or 402(g)(1) of the Code, but excluding director's fees,
         expense reimbursements and nontaxable expense allowances, prizes and
         awards, items of imputed income contributions made by the Company under
         this Plan or any

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         other employee benefit plan or program it maintains, such as group
         insurance, hospitalization or like benefits, amounts realized or
         recognized from qualified or nonqualified stock options 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 amounts, if any, paid to an Employee in lieu of a
         Company Contribution to this Plan in the event that such Company
         Contribution would constitute an annual addition, as defined in Section
         415(c)(2) of the Code, in excess of the limitations under Section
         415(c) of the Code. Annual Compensation shall include amounts otherwise
         includible, as provided above, which are paid by the Company or an
         Eligible Affiliate to the Employee through another person, pursuant to
         the common paymaster provisions of Sections 3121(s) and 3306(p) of the
         Code.

                  The Annual Compensation of each Member or former Member taken
         into account under the Plan for any Plan Year shall not exceed
         $150,000, as adjusted by the Secretary of the Treasury for increases in
         the cost of living at the time and in the manner set forth in Section
         401(a)(17)(B) of the Code. Furthermore, for purposes of an allocation
         under the Plan based on Annual Compensation, Annual Compensation shall
         only include amounts actually paid to an Employee during the period he
         is a Member of the Plan.

                  (d) Beneficiary: A person designated by a Member or former
         Member to receive benefits hereunder upon the death of such Member or
         former Member.

                  (e) Break in Service: An Employee shall have a Break in
         Service for each Plan Year in which he completes less than 501 Hours of
         Service with the Company or an Eligible Affiliate unless he is on a
         leave of absence authorized by the Company or an Eligible Affiliate in
         accordance with its leave policy.

                  (f) Code: The Internal Revenue Code of 1986, as amended.

                  (g) Committee: The persons who may be appointed to administer
         the Plan in accordance with Article XIII.

                  (h) Common Stock: The common stock of the Company.

                  (i) Company: Southwest Airlines Co., or its successor or
         successors.

                  (j) Company Contributions: Contributions which are made by the
         Company for each Plan Year pursuant to the provisions of Section 4.1
         hereof.

                  (k) Deductible Contributions: A Member's voluntary
         contributions, if any, to the Plan, made prior to January 1, 1987 and
         deductible by such Member for federal income tax purposes in accordance
         with Section 219 of the Internal Revenue Code, as then in effect.

                  (l) Deductible Contribution Account: A separate subaccount to
         which is credited a Member's Deductible Contributions, if any, and any
         earnings attributable thereto, adjusted to reflect any withdrawals,
         distributions or investment losses attributable thereto.

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                  (m) Disability: A physical or mental condition which, in the
         judgment of the Committee, totally and presumably permanently prevents
         the Employee from engaging in any substantial gainful employment with
         the Company or an Eligible Affiliate. A determination of Disability
         shall be based upon competent medical evidence satisfactory to the
         Committee. The Committee shall apply the rules with respect to
         Disability uniformly and consistently to all Employees in similar
         circumstances.

                  (n) Effective Date: January 1, 1996, except as otherwise
         specifically provided herein.

                  (o) Employee: Any person who is receiving remuneration for
         personal services rendered to the Company or any Eligible Affiliate, or
         who would be receiving such remuneration except for an authorized leave
         of absence; provided, however, that any individual whose conditions of
         employment are governed by a collective bargaining agreement between
         the Company and a labor union shall not be considered an Employee
         unless the collective bargaining agreement provides for coverage of
         such individual under the Plan. In no event shall any individual
         employed by TranStar Airlines or any other Affiliate or subsidiary of
         the Company be considered an Employee unless such Affiliate or
         subsidiary has specifically been designated by the Company as an
         Eligible Affiliate. Notwithstanding the foregoing, individuals whose
         conditions of employment are governed by a collective bargaining
         agreement which does not provide for coverage of such individual under
         the Plan shall nonetheless be deemed to be an Employee for purposes of
         crediting service pursuant to the provisions of subsections 2.1(t),
         (gg) and (kk) hereunder.

                  The term "Employee" shall also include any "leased employee,"
         as such term is defined below, deemed to be an employee of an Employer
         or any Affiliate as provided in Sections 414(n) or (o) of the Code. The
         term "leased employee" means any person (other than an employee of the
         recipient) who, pursuant to an agreement between the recipient and any
         other person ("leasing organization"), has performed services for the
         recipient (or for the recipient and related persons determined in
         accordance with Section 414(n)(6) of the Code) on a substantially
         full-time basis for a period of at least one year, and such services
         are performed under primary direction or control by the recipient.
         Contributions or benefits provided by the leasing organization that are
         attributable to services performed for the recipient shall be treated
         as provided by the recipient. Notwithstanding the foregoing, a leased
         employee shall not be considered an employee of the recipient if: (i)
         such employee is covered by a money purchase pension plan that
         provides: (1) a nonintegrated employer contribution rate of at least
         ten percent (10%) of compensation, as defined in Section 415(c)(3) of
         the Code, but including amounts contributed pursuant to a salary
         reduction agreement that are excludable from the employee's gross
         income under Section 125, Section 402(e)(3), Section 402(h)(1)(B), or
         Section 403(b)of the Code, immediate vesting; and (ii) leased employees
         do not constitute more than twenty percent (20%) of the recipient's
         nonhighly compensated work force.

                  (p) Employer Savings Account: A separate subaccount to which
         is credited a Member's Company Contributions and forfeitures, if any,
         and any earnings attributable

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         thereto, adjusted to reflect any withdrawals, distributions or
         investment losses attributable thereto.

                  (q) Entry Date: January 1st of each year.

                  (r) ERISA: The Employee Retirement Income Security Act of
         1974, as amended.

                  (s) Fund or Trust Fund: All assets of whatsoever kind or
         nature held from time to time by the Trustee in the Trust forming a
         part of this Plan, without distinction as to income and principal and
         without regard to source, i.e., allocations, Company contributions,
         earnings, forfeitures or gifts.

                  (t) Hour of Service: An Hour of Service shall include all
         hours for which pay is received or for which an Employee is entitled to
         payment, whether worked or not, plus service credit on the basis of the
         number of his regularly scheduled working hours for any other period of
         absence for which the Employee is paid or entitled to payment and which
         is authorized by the Company in accordance with its uniform leave
         policy for vacation, holiday, sick leave, illness, Disability, layoff,
         military service or civic duty. In no event shall credit for the number
         of Hours of Service attributable to a single continuous period for
         which no duties are performed exceed 501. Service credit shall also be
         given for each other leave of absence authorized by the Company for
         which the Employee is paid or entitled to payment.

                  Hours of Service shall be computed on an equivalency basis,
         whereby for each month during which an Employee would be credited with
         at least one Hour of Service (or, in the case of flight attendants or
         pilots, one trip), such Employee shall be credited with one hundred
         ninety (190) Hours of Service.

                  These hours must be credited to Employees in the computation
         period during which the duties were performed, or, if no duties were
         performed, during which the applicable period of absence occurred, and
         not when paid, if different. Credit must also be given, without
         duplicating any hours described above, for each hour for which back
         pay, irrespective of mitigation of damages, has been awarded or agreed
         to by the Company or any Eligible Affiliate. These hours must be
         credited in the computation period or periods to which the award or
         agreement pertains rather than that in which the payment, award or
         agreement was made.

                  In determining the number of Hours of Service to be credited
         to an Employee in the case of a payment which is made or due to an
         Employee under the provisions of the paragraphs above, the Committee
         shall apply the rules set forth in Department of Labor Regulations
         2530.200b-2(b) and (c), which rules are incorporated into and made a
         part of this Plan by reference.

                  Effective for Plan Years beginning after 1984, for purposes of
         determining whether an Employee has incurred a Break in Service as
         defined in Section 2.1(e), the Committee shall credit an Employee with
         Hours of Service during absence from work for maternity or paternity
         reasons which would otherwise have been credited to such

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         Employee but for such absence. For purposes of this Plan, an Employee
         shall be deemed to be on maternity or paternity leave if the Employee's
         absence from work is (1) by reason of the pregnancy of the Employee,
         (2) by reason of the birth of a child of the Employee, (3) by reason of
         the placement of a child with the Employee in connection with the
         adoption of such child by the Employee, or (4) for purposes of caring
         for such child for a period beginning immediately following such birth
         or placement. The Hours of Service credited under this paragraph shall
         be limited to the lesser of (1) the number necessary to prevent the
         Employee from incurring a Break in Service or (2) 501 Hours of Service.
         Hours of Service credited under this paragraph shall be credited in the
         Plan Year in which the absence begins, but if the Employee does not
         need those Hours of Service to prevent a Break in Service in the Plan
         Year in which the absence began, then they shall be credited in the
         immediately following Plan Year.

                  Hours of Service during the period prior to January 1, 1976
         shall be determined from whatever records may be reasonably accessible
         to the Company and, if such records are insufficient, the Company may
         make whatever calculations are necessary to approximate Hours of
         Service for such period in a manner uniformly applicable to all
         Employees similarly situated. These provisions shall be construed by
         resolving any questions or ambiguities in favor of crediting Employees
         with Hours of Service.

                  (u) Individual Account: The account or record maintained by
         the Committee showing the monetary value of the individual interest in
         the Trust Fund of each Member, former Member and Beneficiary.

                  (v) Investment Managers: The qualified and acting Investment
         Managers, as defined in ERISA, who under this Plan may be appointed by
         the Company to invest and manage Plan assets as fiduciaries.

                  (w) Member: An Employee who has met the eligibility
         requirements for participation in this Plan, as set forth in Article
         III hereof.

                  (x) Named Fiduciary: The Committee shall be the Named
         Fiduciary designated to manage the operation and administration of the
         Plan.

                  (y) Nondeductible Contributions: A Member's voluntary
         contributions, if any, to the Plan, made prior to January 1, 1987,
         which are not deductible by such Member for federal income tax
         purposes.

                  (z) Nondeductible Contribution Account: A separate subaccount
         to which is credited a Member's Nondeductible Contributions, if any,
         and any earnings attributable thereto, adjusted to reflect any
         withdrawals, distributions or investment losses attributable thereto.

                  (aa) Normal Retirement Date: The date on which a Member
         attains the age of fifty-nine and one-half (59 1/2) years.

                  (bb) Plan: Southwest Airlines Co. Profit Sharing Plan, as
         amended from time to time.

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                  (cc) Plan Administrator: Such person or persons as designated
         by the Committee, which shall be the Committee unless and until it
         designates such other person or persons.

                  (dd) Plan Year: The annual period beginning January 1st and
         ending December 31st, both dates inclusive of each year.

                  (ee) Prior Plan: The Southwest Airlines Co. Profit Sharing
         Plan, effective January 1, 1973, as heretofore amended and restated
         from time to time.

                  (ff) Retirement: Termination of employment after a Member has
         reached his Normal Retirement Date. Retirement shall be considered as
         commencing on the day immediately following a Member's last day of
         employment.

                  (gg) Service: A period or periods of employment by an Employee
         used in determining eligibility for Plan participation or in
         determining the amount of benefits. If the Company is a member of a
         controlled group of corporations (as defined in Section 414(b) of the
         Code), is one of a group of trades or businesses (whether or not
         incorporated) which are under common control (as defined in Section
         414(c) of the Code), is a member of an affiliated service group (as
         defined in Section 414(m) of the Code) or is otherwise required to be
         aggregated with any entity pursuant to Section 414(o) of the Code and
         the regulations issued thereunder, then Service shall include any
         employment with any such Affiliate from and after the date such entity
         becomes an Affiliate, including Service prior to the Effective Date.

                  (hh) Trust: Southwest Airlines Co. Profit Sharing Trust, as
         amended from time to time, the Trust established to hold and invest
         contributions made under the Plan and Prior Plan for the exclusive
         benefit of the Members included in the Plan from which the benefits
         will be distributed.

                  (ii) Trustee: The qualified and acting Trustee under the
         Trust, who shall be the fiduciary designated to invest and manage the
         Plan assets, other than those which may be managed exclusively by an
         Investment Manager, and to operate and administer the Trust Fund.

                  (jj) Valuation Date: Each business day on which the financial
         markets are open for trading activity.

                  (kk) Vesting Service: Vesting Service is the period of
         employment used in determining eligibility for benefits. A year of
         Vesting Service shall be granted for each Plan Year in which an
         Employee has completed 1,000 or more Hours of Service with the Company
         or an Affiliate, subject to the following exceptions:

                           (i) Vesting Service prior to January 1, 1973 shall be
                  excluded.

                           (ii) Vesting Service completed after December 31,
                  1972 and prior to January 1, 1976 shall be excluded if such
                  service would have been disregarded under the break in service
                  rules of the Prior Plan, as then in effect. For this

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                  purpose, break in service rules are those rules which result
                  in the loss of prior vesting because of service termination or
                  failure to complete a required period of service within a
                  specified time.

                           (iii) In the case of an Employee who has a Break in
                  Service, his years of Vesting Service before such Break in
                  Service shall not be taken into account until he has completed
                  a year of Vesting Service following his reemployment. Prior to
                  January 1, 1985, in the case of an Employee who has any Break
                  in Service, all years of Vesting Service incurred after such
                  Break shall be disregarded for purposes of measuring years of
                  Vesting Service before such Break. However, effective January
                  1, 1985, and thereafter, in the case of an Employee who has
                  five (5) or more consecutive Breaks in Service, all years of
                  Vesting Service incurred after such Breaks in Service will be
                  disregarded for purposes of measuring years of Vesting Service
                  before such Breaks in Service.

                           (iv) Prior to January 1, 1985, if an Employee who
                  does not have any nonforfeitable right to his Employer Savings
                  Account incurs a period of consecutive Breaks in Service that
                  equals or exceeds the aggregate number of years of Vesting
                  Service incurred before such period, then all of his prior
                  years of Vesting Service before such period shall no longer be
                  credited to him. However, effective January l, 1985, and
                  thereafter, if an Employee who does not have any
                  nonforfeitable right to his Employer Savings Account incurs a
                  period of consecutive Breaks in Service that equals or exceeds
                  the greater of (1) five or (2) the aggregate number of years
                  of Vesting Service incurred before such period, then all of
                  his prior years of Vesting Service before such period shall no
                  longer be credited to him.

                  (ll) Eligible Affiliate: An Affiliate, the employees of which
         the Company has specifically designated as being eligible to
         participate in the Plan.

         2.2 Construction: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. The words "hereof," "herein," "hereunder," and other
similar compounds of the word "here" shall mean and refer to the entire Plan,
not to any particular provision or section. The Plan and Trust shall each form a
part of the other by reference and terms shall be used therein interchangeably.

                                  ARTICLE III

                         Eligibility and Participation

         3.1 Eligibility Requirements: Every Employee on the Effective Date, who
was a Member in the Prior Plan on the day before the Effective Date, shall
continue to be a Member in

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the Plan. Every other Employee shall be eligible to become a Member in the Plan
as of the first Entry Date concurrent with or next following his employment
commencement date or the date on which his employer became an Eligible
Affiliate, whichever is later. The employment commencement date is the first day
for which an Employee is entitled to be credited hereunder with an Hour of
Service. Non-resident aliens who receive no earned income from the Company which
constitutes income from sources within the United States shall not be eligible
to participate in the Plan.

         3.2 Notification of Eligibility: The Committee shall promptly notify in
writing each Employee of his qualification as a Member and shall furnish each
new Member a copy of such explanation of the Plan as the Committee shall provide
for that purpose. Any Employee who is eligible to become a Member may elect to
participate in the Plan upon the date on which he first becomes eligible by
executing and filing with the Committee, prior to or upon such date, an
application form furnished by the Committee. An Employee who does not become a
Member on the date on which he first becomes eligible may become a Member on any
subsequent Entry Date by executing and filing with the Committee, prior to or
upon such date, an application form furnished by the Committee.

         3.3 Reentry of Prior Members: An Employee who terminates employment
after becoming a Member hereunder shall be eligible to participate immediately
upon his completion of one Hour of Service following his reemployment by the
Company or an Eligible Affiliate. An Employee who terminates employment after
satisfying the requirements of Section 3.1 hereof, but prior to the first Entry
Date following the satisfaction of such requirements, shall be eligible to
participate immediately upon his completion of one Hour of Service following his

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reemployment by the Company or an Eligible Affiliate, or, if later, the first
Entry Date following the satisfaction of such requirements.

                                   ARTICLE IV

                                 Contributions

         4.1 Company Contributions: For each Plan Year, the Company shall
contribute to the Trust Fund a contribution for each Member and former Member
who is entitled to have a contribution made on his behalf for such Plan Year, as
set forth in Section 6.1 hereof. The contribution made on behalf of each Member
and former Member so entitled shall be that uniform percentage (but in no event
less than one-tenth of one percent (.1%)) of the Annual Compensation of each
such Member and former Member that is cumulatively equal to 15% of ANP, with
such cumulative amount reduced by the contribution made to the Southwest
Airlines Co. Deferred Compensation Plan for Pilots for such Plan Year pursuant
to section 3.2 thereof.

         For purposes of the foregoing, ANP is the operating profit of the
Company for such Plan Year. As used herein, the term 'operating profit' of the
Company for any Plan Year shall mean its income for such Plan Year before income
taxes, derived in accordance with generally accepted accounting principles, and
as set forth in the Company's audited statement of income included in the annual
report to shareholders, before provision for any contribution to this Plan,
excluding (1) nonoperating and non-recurring gains or losses not arising from
the Company's usual business operations, including gains or losses from the sale
or exchange of capital assets, as set forth in the Company's audited statement
of income, and (2) profits or losses incurred by TranStar or any separately
definable division of the Company; provided, however that notwithstanding the
foregoing, profits and losses incurred by Morris Air Corporation shall be taken
into account for Plan Years beginning after December 31, 1993. In no event shall
the

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Company Contribution for a Plan Year exceed the total amount deductible as a
Plan contribution for such Plan Year under the applicable provisions of the
Code.

         The contribution shall be made either (1) in cash, (2) in Common Stock
having a fair market value equal to the amount of the contribution, or (3) in
cash and Common Stock having an aggregate fair market value equal to the amount
of the contribution. The fair market value of any Common Stock contributed shall
be based on the mean of the reported high and low sales prices of Common Stock
on the New York Stock Exchange-Composite Tape on the day of the contribution to
the Plan; except however, if the Company acquires Common Stock on the open
market and contributes it to the Plan immediately following the settlement date,
then the fair market value of the contribution shall be equal to the cost paid
by the Company for the Common Stock, including commissions and other expenses
which the Trustee would incur in the acquisition of Common Stock if the Trustee
acquired the Common Stock directly. Any portion of the contribution made in
Common Stock may be made in the form of authorized but unissued shares or shares
previously issued and reacquired by the Company.

         Company Contributions shall be added to and become a part of the Trust
Fund, and, as of each Allocation Date, shall be credited to the Individual
Accounts of the Members, as provided in Section 6.1 hereof.

                                   ARTICLE V

                       Adjustment of Individual Accounts

         5.1 Individual Accounts: The Committee shall establish an Individual
Account for each Member showing the monetary value of the individual interest in
the Trust Fund of each Employee, former Employee and Beneficiary. The Individual
Account of each Member shall be composed of an Employer Savings Account, to
which Company Contributions and forfeitures, if

                                       11
<PAGE>   16

any, shall be credited. In addition, if a Member was at any time prior to the
Effective Date a member of the Prior Plan who, prior to January 1, 1987, made
voluntary Deductible Contributions or Nondeductible Contributions, his
Individual Account shall include a Deductible Contribution Account and/or
Nondeductible Contribution Account, as applicable. Such accounts are primarily
for accounting purposes and do not require a segregation of the Trust Fund,
except as otherwise provided herein.

         5.2 Method of Adjustment: As of each Valuation Date, before any
restoration of accounts as required pursuant to Section 15.3 hereof and before
taking into account the contributions of the Company and forfeitures for the
period since the last preceding Valuation Date, the Committee or the Trustee, as
directed by the Committee, shall value the assets of each investment fund and
adjust the Individual Accounts of all Members who have elected to participate in
such investment fund as follows:

                  (a) The Committee shall determine the market value of the
         investment fund, including the effect of expenses of administration and
         other charges against such investment fund since the last Valuation
         Date.

                  (b) The Committee shall determine the total aggregate value of
         all Individual Accounts participating in the investment fund as shown
         in its records as of the prior Valuation Date. The Individual Account
         balances of Employees, former Employees and Beneficiaries shall be
         reduced by any amounts paid to them from the investment fund since the
         last Valuation Date.

                  (c) The Committee shall then adjust the value of each
         Individual Account participating in the investment fund by crediting
         each Individual Account with its proportion of the difference between
         (a) and (b) if (a) is the larger or charging it with its proportion of
         the difference between (a) and (b) if (b) is larger; the proportion to
         be so credited or charged to each Individual Account shall be
         calculated by multiplying the difference between (a) and (b) by a
         fraction, the numerator of which is the then value of said Individual
         Account and the denominator of which is the then aggregate value of all
         Individual Accounts participating in such investment fund.

                                       12
<PAGE>   17

                                   ARTICLE VI

                                  Allocations

         6.1 Company Contribution: As of each Allocation Date, but after any
adjustment of Individual Accounts, as provided in Section 5.2, and other
applicable provisions herein, the Committee shall credit the Company
Contribution, as described in Section 4.1 hereof, for the Plan Year ending with
said Allocation Date to the Individual Accounts of all Members and former
Members, except those Members and former Members who: (a) failed to complete at
least 1,000 Hours of Service during such Plan Year or (b) terminated employment
prior to the Allocation Date and who do not have any nonforfeitable right to a
benefit hereunder.

         6.2 Allocation of Forfeitures: If a Member or former Member forfeits a
portion of his Individual Account as provided in Section 10.3 hereof, then said
forfeited amount shall be used first to restore the Individual Accounts of
rehired Members, as required under Section 15.3 hereof. Any remaining
forfeitures shall be allocated as soon as practicable following the Plan Year in
which said forfeiture occurs among the Individual Accounts of the Members and
former Members who are eligible to have a Company contribution credited on their
behalf for such Plan Year, as set forth in Section 6.1 hereof. The amount of the
forfeiture allocated under this Section 6.2 to the Individual Account of such
Member or former Member shall be in the proportion that his Annual Compensation
for the Plan Year in which the allocation occurs bears to the total Annual
Compensation for such Plan Year of all such Members and former Members.

If a Member or former Member who does not have any nonforfeitable right to his
Individual Account terminates his employment and thereby forfeits his Individual
Account, then in the event such Member or former Member is reemployed before he
has incurred five (5) or more

                                       13
<PAGE>   18

consecutive Breaks in Service, his Individual Account which was forfeited shall
be restored by the Company at the time of his reemployment.

         6.3 Notification to Members: At least annually, the Committee shall
advise each Member, former Member and Beneficiary for whom an Individual Account
is held hereunder of the then balance in such account.

         6.4 Maximum Annual Addition to Account or Benefit:

                  (a) Limitations. If the Employer maintains this Plan and one
         or more other qualified defined contribution plans, the Annual
         Additions (as defined in subsection (b) below) allocated under this
         Plan to any Member's Individual Account shall be limited in accordance
         with the allocation provisions of this subsection 6.4(a).

                  The amount of the Annual Additions which may be allocated
         under this Plan to the Individual Account of any Member as of any
         Allocation Date, together with Annual Additions allocated on behalf of
         any such Member under any other defined contribution plan of the
         Employer for the Limitation Year (as defined in subsection (b) below)
         in which such Allocation Date occurs, shall not exceed the Maximum
         Permissible DC Amount (as defined in subsection (b) below), based upon
         Annual Compensation up to such Allocation Date for such Limitation
         Year.

                  If the Annual Additions allocated on behalf of a Member or
         former Member under this Plan and any other defined contribution plan
         of the Employer are to be reduced as of any Allocation Date as a result
         of exceeding the limitations described in the next preceding two
         paragraphs, such reduction shall be, to the extent required, effected
         by first reducing the Annual Additions to be allocated on behalf of
         such Member or former Member under this Plan as of such Allocation
         Date.

                  If as a result of the first three paragraphs of this
         subsection 6.4(a) the allocation of Annual Additions under this Plan is
         to be reduced, such reduction shall be allocated to a suspense account
         as of such Allocation Date and held therein until the next succeeding
         Allocation Date on which Company Contributions and forfeitures could be
         allocated under the provisions of the Plan, at which time such
         reduction shall be allocated and reallocated to the Individual Accounts
         of Members hereunder (in accordance with the provisions of Section 6.1
         hereof and subject to the limitations of this Section 6.4) before any
         Company Contributions may be made to the Plan for the limitation year
         ending on such Allocation Date. In the event of termination of the
         Plan, the suspense account shall revert to the Company to the extent it
         may not be allocated to any Individual Account. If a suspense account
         is in existence at any time during a Limitation Year pursuant to this
         Section, it will not participate in the allocation of the Trust Fund's
         investment gains and losses.

                                       14
<PAGE>   19

                  (b) Definitions Applicable to Section 6.4. For purposes of
         Section 6.4, the following definitions shall apply:

                           (1) Annual Additions: Annual Additions are the sum of
                  the following amounts allocated on behalf of a Member or
                  former Member for a Limitation Year:

                                    (i) all Employer contributions;

                                    (ii) all forfeitures;

                                    (iii) all Employee contributions; and

                                    (iv) amounts allocated after March 31, 1984,
                           to an individual medical benefit account, as defined
                           in Code Section 415(1)(2) which is part of a pension
                           or annuity plan maintained by the Employer, and
                           amounts derived from contributions paid or accrued
                           after December 31, 1985, in taxable years ending
                           after such date, which are attributable to
                           post-retirement medical benefits allocated to the
                           separate account of a key employee (as defined in
                           Code Section 419(d)(3)) under a welfare benefit plan
                           (as defined in Code Section 419(e) maintained by the
                           Employer.

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

                           (2) Employer: Employer shall mean, in addition to the
                  Company (as defined in Section 2.1(i) hereof, all members of a
                  controlled group of corporations (as defined in Section 414(b)
                  of the Code as modified by Section 415(h)), all commonly
                  controlled trades or businesses (as defined in Section 414(c)
                  as modified by Section 415(h)) or affiliated service groups
                  (as defined in Section 414(m)) of which the Company is a part,
                  and any other entity required to be aggregated with the
                  Company pursuant to regulations under Section 414(o) of the
                  Code.

                           (3) Limitation Year: The Limitation Year shall be the
                  twelve (12) consecutive month period ending on the last day of
                  December or any other twelve (12) consecutive month period for
                  all qualified plans of the Company pursuant to a written
                  resolution the Company adopts.

                           (4) Maximum Permissible DC Amount: The Maximum
                  Permissible DC Amount for a given Limitation Year is equal to
                  the lesser of (i) 25% of Annual Compensation (excluding
                  contributions made by the Employer pursuant to a salary
                  reduction agreement under a plan subject to Code Section
                  401(k) or Code Section 125) for such Limitation Year or (ii)
                  $30,000. Effective January 1, 1998, the Maximum Permissible DC
                  Amount for a given Limitation Year is equal to the lesser of
                  (i) 25% of Annual Compensation for such Limitation Year or
                  (ii) $30,000. If a short Limitation Year is created because of
                  an amendment changing

                                       15
<PAGE>   20

                  the Limitation Year to a different twelve (12) consecutive
                  month period, the $30,000 referred to in the previous sentence
                  is multiplied by a fraction, the numerator of which is equal
                  to the number of months in the short Limitation Year and the
                  denominator of which is twelve.

                                  ARTICLE VII

                                   Retirement

         7.1 Normal or Late Retirement: A Member, upon reaching his Normal
Retirement Date for the purposes of this Plan, shall be one hundred percent
(100%) vested in his Individual Account and such amount contained therein shall
be nonforfeitable. If a Member continues in the employment of the Company beyond
his Normal Retirement Date, he shall continue to participate in the Plan.

         7.2 Benefit: Upon Retirement (whether normal or late Retirement in
accordance with Section 7.1), a Member shall be entitled to the entire amount to
the credit of his Individual Account as of the Valuation Date concurrent with or
next following his date of Retirement, including his portion, if any, of Company
Contributions and forfeitures allocated after his date of Retirement, adjusted
for earnings and losses, if any, which accrue to the Valuation Date immediately
preceding the date of distribution, if later. Upon his Retirement under this
Article VII, a Member shall receive the benefits to which he is entitled at the
time and in the manner provided in Article XV hereof.

                                  ARTICLE VIII

                                     Death

         8.1 Designation of Beneficiary: Each Member and former Member may, from
time to time, designate one or more Beneficiaries and alternate Beneficiaries to
receive benefits pursuant to this Article in the event of the death of such
Member or former Member. Such designation shall be made in writing upon a form
provided by the Committee and shall only be

                                       16
<PAGE>   21

effective when filed with the Committee. The last such designation filed with
the Committee shall control.

         If a Member is married, his spouse shall automatically be his
Beneficiary; provided, however, a Beneficiary other than his spouse may be
designated if (1) his spouse consents in writing to such designation, the
consent acknowledges the effect of such designation and the designation is
witnessed by a member of the Committee or a notary public, or (2) it is
established to the satisfaction of the Committee that there is sufficient reason
why the consent may not be obtained.

         8.2 Benefit: Subject to the requirements of Section 18.11 hereof, upon
the death of a Member or former Member, his designated Beneficiary shall be
entitled to the entire amount to the credit of his Individual Account as of the
Valuation Date concurrent with or next following his date of death, including
his portion, if any, of Company Contributions and forfeitures allocated after
the date of his death, adjusted for earnings and losses, if any, which accrue to
the Valuation Date immediately preceding the date of distribution, if later.
Payment shall be made at the time and in the manner provided in Article XV
hereof.

         8.3 No Beneficiary: If a Member or former Member dies without a
designated Beneficiary surviving him, or if all his Beneficiaries die before
receiving the payment to which they are entitled, then any amounts to which such
Member, former Member or Beneficiary is entitled hereunder shall be paid to his
estate.

         For the purpose of this Plan, the production of a certified copy of the
death certificate of any Employee or other person shall be sufficient evidence
of death, and the Committee shall be fully protected in relying thereon. In the
absence of such proof, the Committee may rely upon such other evidence of death
as it deems necessary or advisable.

                                       17
<PAGE>   22

                                   ARTICLE IX

                                   Disability

         9.1 Benefit: In the event of the Disability of a Member or former
Member, he shall be entitled to the entire amount to the credit of his
Individual Account as of the Valuation Date concurrent with or next following
the date on which his termination of employment occurs as a result of his
Disability, including his portion, if any, of Company Contributions and
forfeitures allocated after the date of his termination of employment, adjusted
for earnings and losses, if any, which accrue to the Valuation Date immediately
preceding the date of distribution, if later. Payments shall be made at the time
and in the manner provided in Article XV hereof.

                                   ARTICLE X

                   Termination of Employment and Forfeitures

         10.1 Eligibility and Benefits: If a Member's employment with the
Company and all Eligible Affiliates shall terminate for any reason other than
his Retirement Under Article VII, death under Article VIII, or Disability under
Article IX, such Member shall be entitled to all of his Nondeductible
Contribution Account and Deductible Contribution Account and to a percentage of
the amount in his Employer Savings Account as of the Valuation Date concurrent
with or next following the date on which his termination of employment occurs,
including his portion, if any, of Company Contributions and forfeitures
allocated after the date of his termination of employment, adjusted for earnings
and losses, if any, which accrue to the Valuation Date immediately preceding the
date of distribution, if later. The percentage of a Member's Employer Savings
Account to which he is entitled shall be determined in accordance with the
following schedule:

                                       18
<PAGE>   23

<TABLE>
<CAPTION>
                                               Percentage
          Completed Years of Vesting Service    Payable
          ----------------------------------   ----------

<S>                                            <C>
                   Less than 5 years                0%
                   5 years or more                100%
</TABLE>

         The vesting schedule set forth above shall only apply to Members who
have at least one (1) Hour of Service after December 31, 1988.

         The provisions of this Section shall be subject to the provisions of
Section 17.3 hereof, which shall be given full effect.

         10.2 Time of Payment: The amount to which a Member shall be entitled
under Section 10.1 shall be paid to him at the time and in the manner provided
in Article XV hereof.

         10.3 Forfeitures: A Member to whom Section 10.1 is applicable shall
forfeit that portion of the amount in his Individual Account to which he is not
entitled under Section 10.1 and the amount thus forfeited shall remain in the
Trust Fund and shall be allocated pursuant to the provisions of Section 6.2. A
Member who does not have any nonforfeitable right to his Individual Account
shall be deemed to have received a cashout distribution pursuant to Section 15.3
hereof, and shall forfeit the amount in such Individual Account in the Plan Year
in which his termination of employment occurs.

         10.4 Forfeiture for Cause: In the event a Member who has not completed
at least five (5) years of Vesting Service is discharged due to his dishonest or
criminal act (proven by conclusive evidence to the unanimous satisfaction of the
Committee) or due to embezzlement, fraud, or dishonesty against and damaging to
the Company whereby the reasons for such discharge are confirmed by resolution
of the board of directors or other governing authority of the Company, the
entire amount credited to the benefit of such Member in his Company Matching
Contribution Account shall be forfeited and neither he nor his Beneficiary shall
be

                                       19
<PAGE>   24

entitled to any benefit hereunder with respect to such amounts. Likewise, any
amounts credited, but not distributed, to the Employer Savings Account of a
former Member who has not completed at least five (5) years of Vesting Service
shall be forfeited upon the discovery of any embezzlement, fraud or dishonesty
of such former Member against and damaging to the Company. Notwithstanding the
foregoing, in the event the Plan is top-heavy for any Plan Year pursuant to
Section 19.2 hereof, the provisions of Section 19.4 shall supersede this Section
10.4 and shall be controlling for all purposes hereunder.

                                   ARTICLE XI

                                  Withdrawals

         11.1 Withdrawals:

                  (a) Nondeductible and Deductible Contribution Accounts.
         Effective as of any Valuation Date, a Member may, upon prior written
         notice to the Committee within the time period established by the
         Committee for such elections, elect to withdraw from his Nondeductible
         and Deductible Contribution Accounts any or all of the balance thereof,
         as of such Valuation Date. If a Member timely elects such a withdrawal,
         distribution shall be made as soon as practicable following such
         Valuation Date.

                  (b) Employer Savings Account. Subject to the requirements of
         Section 18.11 hereof, on or after the date on which he attains Normal
         Retirement Age, a Member who remains employed by the Company or any
         Eligible Affiliate shall have the right at any one time prior to the
         close of any Plan Year to elect in writing, within the time period
         established by the Committee for such elections, to withdraw all, but
         not less than all, of his vested interest (determined pursuant to
         Section 10.1 hereof, without regard to Articles VII, VIII or IX hereof,
         as if he had terminated his employment as of the end of such Plan Year
         for a reason other than Disability, Retirement or death) in his
         Employer Savings Account as of the end of such Plan Year. A Member who
         makes an election under this subsection (b) shall be entitled to have
         credited to his Employer Savings Account his allocable share of the
         Company Contributions and forfeitures for the Plan Year in which the
         election is made. An electing Member's vested interest shall be
         distributed to him in one lump sum within ninety (90) days after the
         close of the Plan Year in which such election is made, or, if later,
         the date as of which the value of the Member's Employer Savings Account
         is finally determined. Partial payment may be made, however, prior to
         that date in the sole and absolute discretion of the Committee;
         provided, however, in no event shall any partial payment be made if
         full payment would be made to the Member in more than one taxable year.
         A Member who makes an election under this subsection (b) shall be
         prohibited from participating further in the Plan (and no Company
         Contributions or forfeitures shall be allocated to his Employer Savings
         Account) until the first day of

                                       20
<PAGE>   25

         the first Plan Year beginning one year after the end of the Plan Year
         in which the Member's election under this subsection (b) was made.

                                  ARTICLE XII

                          Investment of the Trust Fund

         12.1 [deleted]:

         12.2 Member Direction of Investment: Each Member shall have the right
to direct the Committee to instruct the Trustee to invest any whole percentage,
up to one hundred percent (100%), of such Member's current Company Contributions
and forfeitures in one or more of such investment media as the Committee may
designate from time to time. The Committee shall be authorized at any time and
from time to time to modify, alter, delete or add to the funds available for
investment at the direction of a Member. In the event a modification occurs, the
Committee shall notify those Members whom the Committee, in its sole and
absolute discretion, determines are affected by the change, and shall give such
persons such additional time as is determined by the Committee to designate the
manner and percentage in which amounts invested in those funds thereby affected
shall be invested.

         The Committee shall not be obligated to substitute funds of similar
investment criteria for existing funds, nor shall it be obligated to continue
the types of investments presently available to the Members. Nothing contained
herein shall constitute any action by the Committee as a direction of investment
of the assets or an attempt to control such direction.

         Any Member, on or before his entry into the Plan, within the time
period established by the Committee, may designate the manner and the percentage
in which the Member desires the Trustee to invest his current Company
Contributions and forfeitures, pursuant to the provisions set forth above, which
designation shall continue in effect until revoked or modified by the Member. If
a Member fails to designate the investment of his current Company Contributions

                                       21
<PAGE>   26

and forfeitures on or before his entry into the Plan, or if a Member wishes to
change such designation, the Member may make such designation or change, within
the time period established by the Committee, to become effective for all such
future contributions and forfeitures, and such designation or change shall
continue in effect until revoked by the Member in accordance with this Plan.

         In the event the nature of any fund shall, in the opinion of the
Committee, change, then the Committee shall notify those Members who the
Committee, in its sole and absolute discretion, determines are affected by the
change, who shall have a reasonable period of time, s determined by the
Committee, to designate the manner and the percentages in which amounts invested
in those funds affected by the change shall be invested.

         Any amounts not directed by a Member for investment shall be invested
in the fund or funds designated by the Committee, in its sole and absolute
discretion. The provisions of this Section 12.2 shall be subject to such
administrative rules as may be established by the Committee. All investment
designations shall be made in the manner prescribed by the Committee.

         The Committee shall maintain separate subaccounts in the name of each
Member within his Individual Account to reflect such Member's accrued benefit
attributable to his directed investment in the above investment media.

         12.3 Conversion of Investments:

                  (a) Member's Individual Account. Effective as of any Valuation
         Date, within the time period prior thereto established by the
         Committee, and subject to any restrictions on transfer imposed under
         particular investment funds, a Member may, pursuant to guidelines
         established by the Committee, direct the Committee to instruct the
         Trustee to convert any whole percentage, up to one hundred percent
         (100%), of the amount in such Member's Individual Account which is
         invested in any of the investment media set forth in Section 12.2
         hereof into one or more other of such investment media. Such direction

                                       22
<PAGE>   27

         shall be effective as soon as practicable following the date of receipt
         by the Committee of such direction to convert.

                  (b) Conversion Directions. A direction to convert by any
         eligible Member shall be irrevocable and shall be made in the manner
         prescribed by the Committee within the time period established by the
         Committee. Any conversion of investments pursuant to this Section 12.3
         shall not affect a Member's direction of investments with respect to
         his future contributions and forfeitures pursuant to Section 12.2.

                  (c) Direction of Spouse. If a Member's spouse who is not a
         Member in this Plan acquires an interest in a Member's Individual
         Account pursuant to a qualified domestic relations order, then the
         Member's spouse may direct the Committee to convert the investment of
         the interest to which such spouse is thus entitled in the same manner
         and at the same time as the Member may direct a conversion of
         investments, as provided above. If such spouse becomes a Member of the
         Plan, the spouse shall be entitled to convert such investments in
         accordance with the rights of Members in the Plan.

                  If such spouse becomes a Member of the Plan, the spouse shall
         be entitled to convert such investments in accordance with the rights
         of Members in the Plan.

                  (d) Miscellaneous. The Committee is authorized to establish
         such other rules and regulations, including adding additional times to
         convert investments, as it determines are necessary to carry out the
         provisions of Sections 12.2 and 12.3, the specific dates of conversion
         to be determined by the Committee, and all earnings on the Member's
         investments after such dates shall be allocated in accordance with the
         Member's Employer Savings Account, as adjusted on such dates. The
         Committee shall be authorized to modify the allocations of earnings,
         provided such change is made on a reasonable and nondiscriminatory
         basis.

                                  ARTICLE XIII

                                 Administration

                  13.1 Appointment of Committee: The Plan shall be administered
         by a Committee consisting of at least three or more persons who shall
         be appointed by and serve at the pleasure of the board of directors of
         the Company. All usual and reasonable expenses of the Committee shall
         be paid by the Trustee out of the principal or income of the Trust and,
         to the extent not so paid, shall be paid by the Company. The members of
         the Committee shall not receive compensation with respect to their
         services for the Committee. The members of the Committee may serve
         without bond or security for the performance of their duties hereunder
         unless

                                       23
<PAGE>   28

         applicable law makes the furnishing of such bond or security mandatory
         or unless required by the Company. Any member of the Committee may
         resign by delivering his written resignation to the Company and to the
         other members of the Committee.

                  13.2 Committee Powers and Duties: The Committee shall have
         such powers as may be necessary to discharge its duties hereunder,
         including, but not by way of limitation, the following powers and
         duties:

                  (a) to construe and interpret the Plan, decide all questions
         of eligibility and determine the amount, manner and time of payment of
         any benefits hereunder;

                  (b) to prescribe procedures to be followed by distributees in
         obtaining benefits;

                  (c) to make a determination as to the right of any person to a
         benefit and to afford any person dissatisfied with such determination
         the right to a hearing thereon;

                  (d) to receive from the Company, Eligible Affiliates, and from
         Members such information as shall be necessary for the proper
         administration of the Plan;

                  (e) to delegate to one or more of the members of the Committee
         the right to act in its behalf in all matters connected with the
         administration of the Plan and Trust;

                  (f) to receive and review reports of the financial condition
         and of the receipts and disbursements of the Trust Fund from the
         Trustee;

                  (g) to appoint or employ for the Plan any agents it deems
         advisable, including, but not limited to, legal counsel; and

                  (h) to take any and all further actions from time to time as
         the Committee, in its sole and absolute discretion, shall deem
         necessary for the proper administration of the Plan.

         The Committee shall have no power to add to, subtract from or modify
any of the terms of the Plan, nor to change or add to any benefits provided by
the Plan, nor to waive or fail to apply any requirements of eligibility for
benefits under the Plan. The Committee shall have full and absolute discretion
in the exercise of each and every aspect of its authority under this Plan,
including without limitation, all of the rights, powers and authorities
specified in this Section 13.2 and, if applicable, in Section 13.3 hereof.

                                       24
<PAGE>   29

         A majority of the members of the Committee shall constitute a quorum
for the transaction of business. No action of the Committee shall be taken
except upon a majority vote of the Committee members, other than as described in
subparagraph (e) above. An individual shall not vote or decide upon any matter
relating solely to himself or vote in any case in which his individual right or
claim to any benefit under the Plan is particularly involved. If, in any case in
which a Committee member is so disqualified to act, and the remaining members
cannot agree, the board of directors of the Company will appoint a temporary
substitute member to exercise all the powers of the disqualified member
concerning the matter in which he is disqualified.

         13.3 Duties and Powers of the Plan Administrator: The Plan
Administrator shall have such powers as may be necessary to discharge his duties
hereunder, including, but not by way of limitation, the following powers and
duties:

                  (a) to file with the Secretary of Labor the annual report,
         plan description, summary plan description, and other pertinent
         documents which may be requested by the Secretary;

                  (b) to file with the Secretary of Labor such terminal and
         supplementary reports as may be necessary in the event of the
         termination of the Plan;

                  (c) to furnish each Member, former Member and each Beneficiary
         receiving benefits hereunder a summary plan description explaining the
         Plan;

                  (d) to furnish any Member, former Member or Beneficiary, who
         requests in writing, statements indicating such Member's, former
         Member's or Beneficiary's total accrued benefits and nonforfeitable
         benefits, if any;

                  (e) to furnish to a Member a statement containing information
         contained in a registration statement required by Section 6057(a)(2) of
         the Code;

                  (f) to maintain all records necessary for verification of
         information required to be filed with the Secretary of Labor;

                  (g) to allocate the assets of the Plan available to provide
         benefits to Members in the event the Plan should terminate; and

                  (h) to report to the Trustee all available information
         regarding the amount of benefits payable to each Member, the
         computations with respect to the allocation of

                                       25
<PAGE>   30

         assets, and any other information which the Trustee may require in
         order to terminate the Plan.

         13.4 Rules and Decisions: The Committee may adopt such rules as it
deems necessary or desirable. All rules and decisions of the Committee shall be
uniformly and consistently applied to all Employees in similar circumstances.
The Committee is required to provide a notice in writing to any person whose
claim for benefits under the Plan has been denied, setting forth the specific
reasons for such denial. The Committee shall adopt rules or procedures to carry
out the intent of this Section and to provide a basis for a full and fair review
by the Committee of the decision denying the claim and provide such person with
an opportunity to supply any evidence he has to sustain the claim.

         13.5 Committee Procedures: The Committee may adopt such bylaws as it
deems desirable. The Committee shall elect one of its members as chairman. The
Committee shall advise the Trustee of such election in writing. The Committee
shall keep a record of all meetings and forward all necessary communications to
the Trustee.

         13.6 Authorization of Benefit Payments: The Committee shall issue
directions to the Trustee concerning all benefits which are to be paid from the
Trust Fund pursuant to the provisions of the Plan. The Committee shall keep on
file, in such manner as it may deem convenient or proper, all reports from the
Trustee.

         13.7 Payment of Expenses: All expenses incident to the administration,
termination or protection of the Plan and Trust, including but not limited to,
actuarial, legal, accounting, and Trustee's fees, shall be paid by the Trustee
from the Trust Fund and, until paid, shall constitute a first and prior claim
and lien against the Trust Fund. To the extent such expenses are not paid by the
Trustee from the Trust Fund, they shall be paid by the Company.

                                       26
<PAGE>   31

         13.8 Indemnification of Members of the Committee: The Company shall, to
the maximum extent permitted under the Company's bylaws, indemnify the members
of the Committee against liability or loss sustained by them by an act or
failure to act in their capacity as members of the Committee.

                                  ARTICLE XIV

                                    Notices

         14.1 Notice to Trustee: As soon as practicable after a Member ceases to
be in the employ of the Company for any of the reasons set forth in Articles VII
through X, inclusive, the Committee shall give written notice to the Trustee,
which notice shall include such of the following information and directions as
are necessary or advisable under the circumstances:

                  (a) name and address of the Member;

                  (b) name and address of the Beneficiary or Beneficiaries in
         case of a Member's death;

                  (c) amount to which Member is entitled in case of termination
         of employment pursuant to Article X; and

                  (d) manner and amount of payments to be made pursuant to
         Article XV.

         If a former Member dies, the Committee shall give a like notice to the
Trustee, but only if the Committee learns of his death.

         14.2 Subsequent Notices: At any time and from time to time after giving
the notice as provided for in Section 14.1, the Committee may modify such
original notice or any subsequent notice by means of a further written notice or
notices to the Trustee; but, any action theretofore taken or payments
theretofore made by the Trustee pursuant to a prior notice shall not be affected
by a subsequent notice.

         14.3 Reliance upon Notice: Upon receipt of any notice as provided in
this Article, the Trustee shall promptly take whatever action and make whatever
payments are called for therein,

                                       27
<PAGE>   32

it being intended that the Trustee may rely upon the information and directions
in such notice absolutely and without question. However, the Trustee may call to
the attention of the Committee any error or oversight which the Trustee believes
to exist in any notice.

                                   ARTICLE XV

                                Benefit Payments

         15.1 Method of Payment: As soon as practicable after a Member, former
Member or Beneficiary is entitled to receive benefits hereunder, as provided in
Articles VII, VIII, IX or X and this Article XV, the Committee shall give
written notice to the Trustee. Such benefits shall be paid to the Member, former
Member or his Beneficiary in a lump sum. Any benefit payable hereunder will be
paid in cash or in whole shares of Common Stock, as elected by the Member,
former Member or Beneficiary; provided, however, that such benefit shall in any
event be paid in whole shares of Common Stock to the extent that such Member's,
former Member's or Beneficiary's Individual Account is invested in Common Stock,
pursuant to Article XII hereof. Any fractional shares of Common Stock shall be
converted to, and paid, in cash.

         15.2 Time of Payment: Distribution of a Member's benefits shall
commence as soon as administratively practicable, but in no event later than one
(1) year, after the Valuation Date coincident with or immediately following the
date on which a Member, former Member or Beneficiary shall become entitled to
receive a benefit hereunder. Notwithstanding the foregoing, if the
nonforfeitable portion of a Member's or former Member's Individual Account
exceeds (or at the time of any prior distribution exceeded) Three Thousand Five
Hundred and No/100 Dollars ($3,500.00) in Plan Years beginning prior to January
1, 1998, or Five Thousand and No/100 Dollars ($5,000.00) for Plan Years
beginning on or after January 1, 1998, no distributions may commence without the
consent of the Member or former Member until he

                                       28
<PAGE>   33

attains age sixty-two (62). The Committee shall notify the Member or former
Member of the right to defer any distribution until the date on which he attains
age sixty-two (62). Such notification shall be provided no less than thirty (30)
days and no more than ninety (90) days prior to the annuity starting date. The
annuity starting date is the first day of the first period for which a benefit
is paid hereunder. Notwithstanding the foregoing, the consent of the Member or
former Member shall not be required to the extent that a distribution is
required to satisfy Section 415 of the Code. In addition, upon termination of
this Plan, if the Plan does not then offer an annuity option, the Member's or
former Member's Individual Account may, without his consent, be distributed to
the Member or former Member or transferred to another defined contribution plan
maintained by an Affiliate.

         Distributions shall be made no later than the required beginning date,
which, effective January 1, 1997, is April 1st of the calendar year following
the later of: (a) the calendar year in which a Member attains age 70 1/2, or (b)
the calendar year in which a Member retires; provided that if a Member is a Five
Percent (5%) Owner (as such term is defined in Section 19.1 hereof), then the
required beginning date is April 1st of the calendar year following the calendar
year in which such Member attains age 70 1/2. Subject to the provisions of
Section 18.11 hereof, distribution of the entire Individual Account of a Member
who attains age 70 1/2 on or after September 15, 2000 shall be made in a single
lump sum on or before such Member's required beginning date.

         In the case of a Member who is a Five Percent (5%) Owner, subject to
the requirements of Section 18.11 hereof, the minimum installment distribution
required for the calendar year immediately preceding such Member's required
beginning date must be made on or before his required beginning date, and the
minimum installment distribution for other calendar years,

                                       29
<PAGE>   34

including the minimum installment distribution for the calendar year in which
the Member's required beginning date occurs, must be made on or before December
31 of such calendar year. All minimum distributions required under this Article
XV shall be determined and made in accordance with the applicable Treasury
Regulations under Section 401(a)(9) of the Code, including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)2 of the
Treasury Regulations. Neither the life expectancy of the Member nor that of his
spouse may be recalculated for purposes of determining minimum distributions. If
minimum distributions have commenced to a Five Percent (5%) Owner, such that
payments are being made over the life expectancy of the Member, and he dies
before his entire interest has been distributed, then the remaining portion of
such interest shall be distributed at least as rapidly as under the method of
distribution being used as of the date of his death, but in no event later than
one (1) year after the Valuation Date coincident with or immediately following
his death. On the other hand, if such Member dies before the distribution of any
of his benefits has begun, then his entire interest will be distributed no later
than one (1) year after the Valuation Date coincident with or immediately
following his death. If the designated Beneficiary is such Member's surviving
spouse and such surviving spouse dies after the Member, but before payments to
such surviving spouse begin, then the provisions of the preceding sentence shall
be applied as if the surviving spouse were the Member. Furthermore, if the
designated Beneficiary is the surviving spouse of the Member, then distributions
to such surviving spouse will not be required to begin earlier than the later
of: (a) December 31 of the calendar year immediately following the calendar year
of the Member's death and (b) December 31 of the calendar year in which the
Member would have attained age 70 1/2. Distribution of benefits is considered to
have begun, for purposes of this paragraph, on the required beginning date;
provided that if such Member's designated Beneficiary is his surviving

                                       30
<PAGE>   35

spouse, and such surviving spouse dies after the Member but before payments to
such surviving spouse have begun, then distribution of benefits is considered to
have begun on the date distribution to the surviving spouse is required to begin
pursuant to the provisions of this paragraph. Any amount paid to the child of
such Member will be treated as if it had been paid to the surviving spouse if
the amount becomes payable when the child reaches the age of majority.

         In the case of a Member who attains age 70 1/2 prior to September 15,
2000, subject to the requirements of Section 18.11 hereof, such Member shall
continue to be eligible to receive any benefits commencing after such Member has
attained age 70 1/2 and prior to April 1 of the calendar year following the
calendar year in which such Member attains age 70 1/2 in the form of minimum
installment distributions under the rules of the preceding paragraph.

         Notwithstanding any provision herein to the contrary, any Member who
attains age 70 1/2 in a calendar year after 1995 and prior to September 15,
2000, may irrevocably elect, in the manner established by the Committee, by
April 1 of the calendar year following the year in which the Member attains age
70 1/2 (or by December 31, 1997 in the case of a Member who attains age 70 1/2
in 1996) to defer distributions until April 1 of the calendar year following the
calendar year in which the Member retires. If no such election is made, the
Member will begin receiving distributions by April 1 of the calendar year
following the year in which the Member attains age 70 1/2 (or by December 31,
1997 in the case of a Member who attains age 70 1/2 in 1996). Furthermore, any
Member who attains age 70 1/2 in a calendar year prior to 1996 may irrevocably
elect, in the manner established by the Committee, to stop distributions and
recommence distributions as of April 1 of the calendar year following the
calendar year in which such Member retires. In such event, there shall be no new
annuity starting date upon such recommencement.

                                       31
<PAGE>   36

         Unless a Member or former Member elects otherwise, in writing, no
distribution hereunder shall start later than 60 days after the close of the
Plan Year in which the last to occur of the following occurs:

                  (a) the Member or former Member attains Normal Retirement Age,

                  (b) the 10th anniversary of the year in which the Member or
         former Member commenced participation in the Plan, or

                  (c) the Member or former Member terminates service with the
         Company.

         15.3 Cash Out Distribution: If a Member or former Member who has
received a distribution of his benefits hereunder on or before the last day of
the second Plan Year following the year in which his termination of employment
occurs has forfeited a portion of his Individual Account, then in the event such
Member or former Member is subsequently rehired by the Company or an Eligible
Affiliate prior to the date on which he incurs five (5) consecutive Breaks in
Service, he shall be entitled to repay, at any time prior to the earlier of: (i)
the date which is five (5) years after the first date on which he is
subsequently reemployed by the Company or Eligible Affiliate and (ii) the date
on which he incurs five (5) consecutive Breaks in Service, the amount of the
distribution to him from his Individual Account. Upon such repayment, the
rehired Member's or former Member's Individual Account shall be credited with
the exact amount which was nonvested at the time of termination. In the event a
rehired Member or former Member who has received a distribution hereunder does
not timely repay such distribution from his Individual Account, as provided
above, then the amount he forfeited at the time of his termination of employment
pursuant to the terms of Section 10.3 hereof shall remain forfeited. His prior
years of Vesting Service shall be taken into account, however, for purposes of
determining his vested interest in contributions following reemployment. If a
Member or former Member who does not have any nonforfeitable right to his
Individual Account and thus is

                                       32
<PAGE>   37

deemed to have received a cashout distribution, pursuant to the provisions of
Section 10.3 hereof, is subsequently reemployed by the Company or an Eligible
Affiliate and five (5) consecutive Breaks in Service have not occurred, then
upon such reemployment, the rehired Member's or former Member's Individual
Account shall be credited with the exact amount which was nonvested at the time
of termination.

         15.4 Minority or Disability Payments: During the minority or Disability
of any person entitled to receive benefits hereunder, the Committee may direct
the Trustee to make payments due such person directly to him or to his spouse or
a relative or to any individual or institution having custody of such person.
Neither the Committee nor the Trustee shall be required to see to the
application of payments so made, and the receipt of the payee (including the
endorsement of a check or checks) shall be conclusive as to all interested
parties.

         15.5 Distributions Under Domestic Relations Orders: Nothing contained
in this Plan shall prevent the Trustee, in accordance with the direction of the
Committee, from complying with the provisions of a qualified domestic relations
order (as defined in Section 414(p) of the Code). Effective July 20, 2000, the
Plan specifically permits distribution to an alternate payee under a qualified
domestic relations order at any time, irrespective of whether the Member or
former Member has attained his earliest retirement age under the Plan, as
defined in Section 414(p) of the Code; provided, however, that a distribution to
an alternate payee prior to the Member or former Member's attainment of earliest
retirement age is available only if: (1) the order specifies distribution at
that time or permits an agreement between the Plan and the alternate payee to
authorize an earlier distribution; (2) the order specifies such distribution to
be in the form of a single, lump-sum payment; and (3) if the amount to which the
alternate payee is entitled under the Plan exceeds $5,000, and the order so
requires, the alternate payee consents to

                                       33
<PAGE>   38

any distribution occurring prior to the Member or former Member's attainment of
earliest retirement age. Nothing in this Section 15.5 gives a Member or former
Member a right to receive distribution at a time otherwise not permitted under
the Plan nor does it permit the alternate payee to receive a form of payment not
otherwise permitted under the Plan.

         The Plan Administrator shall establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Plan Administrator shall promptly notify the
Member or former Member and any alternate payee named in the order, in writing,
of the receipt of the order and the Plan's procedures for determining the
qualified status of the order. Within a reasonable period of time after
receiving the domestic relations order, the Plan Administrator shall determine
the qualified status of the order and shall notify the Member or former Member
and each alternate payee, in writing, of its determination. The Plan
Administrator shall provide notice under this paragraph by mailing to the
individual's address specified in the domestic relations order, or in a manner
consistent with Department of Labor regulations. The Plan Administrator may
treat as qualified any domestic relations order entered prior to January 1,
1985, irrespective of whether it satisfies all the requirements described in
Section 414(p) of the Code.

         If any portion of an Individual Account is payable during the period
the Plan Administrator is making its determination of the qualified status of
the domestic relations order, the Committee shall direct the Trustee to
segregate the amounts that are payable into a separate account and to invest the
segregated account solely in fixed income investments. If the Plan Administrator
determines the order is a qualified domestic relations order within eighteen
(18) months of receiving the order, the Committee shall direct the Trustee to
distribute the segregated account in accordance with the order. If the Plan
Administrator does not make its determination

                                       34
<PAGE>   39

of the qualified status of the order within eighteen (18) months after receiving
the order, the Committee shall direct the Trustee to distribute the segregated
account in the manner in which the Plan would otherwise distribute if the order
did not exist and shall apply the order prospectively if the Plan Administrator
later determines the order is a qualified domestic relations order.

         To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Committee may direct the Trustee to
invest any amount that is subject to being paid to an alternate payee pursuant
to said order into a segregated subaccount or separate account and to invest the
account in federally insured, interest-bearing savings account(s) or time
deposit(s) (or a combination of both), or in other fixed income investments. A
segregated subaccount shall remain a part of the Trust, but it alone shall share
in any income it earns, and it alone shall bear any expense or loss it incurs.

         The Trustee shall make any payments or distributions required under
this Section 15.5 by separate benefit checks or other separate distribution to
the alternate payee(s).

         15.6 Direct Rollover of Eligible Rollover Distributions: An individual
who is entitled to a benefit hereunder, the distribution of which would qualify
as an eligible rollover distribution (as defined in Section 401(a)(31)(C) of the
Code) may, in lieu of receiving any payment or payments from the Plan, direct
the Trustee to transfer all or any of such payment or payments or any portion
directly to the trustee of one or more eligible retirement plans (as defined in
Section 401(a)(31)(D) of the Code). Such election must be made on a form
provided by the Committee for that purpose and received by the Committee no
later than the date established by the Committee preceding the date on which the
distribution is to occur. Any election made pursuant to this Section 15.6 may be
revoked at any time prior to the date established by the Committee

                                       35
<PAGE>   40

preceding the date on which the distribution is to occur. If an individual who
is so entitled has not elected a direct rollover within the time and in the
manner set forth above, such distributee shall be deemed to have affirmatively
waived a direct rollover. A distributee who wishes to elect a direct rollover
shall provide to the Committee, within the time and in the manner prescribed by
the Committee, such information as the Committee shall reasonably request
regarding the eligible retirement plan or plans to which the payment or payments
are to be transferred. The Committee shall be entitled to rely on the
information so provided, and shall not be required to independently verify such
information. The Committee shall be entitled to delay the transfer of any
payment or payments pursuant to this Section 15.6 until it has received all of
the information which it has requested in accordance with this Section 15.6.

                                  ARTICLE XVI

                                    Trustee

         16.1 Appointment of Trustee: A Trustee (or Trustees) shall be appointed
by the Committee to administer the Trust Fund. The Trustee shall serve at the
pleasure of the Committee and shall have such rights, powers and duties as are
provided to a Trustee under ERISA for the investment of assets and for the
administration of the Trust Fund.

     16.2 Appointment of Investment Manager: An Investment Manager (or
Investment Managers) may be appointed by the Committee to manage (including the
power to acquire and dispose of) any part or all of the assets of the Trust
Fund. The Investment Manager shall serve at the pleasure of the Committee, and
shall have the rights, powers and duties provided to a named fiduciary under
ERISA for the investment of the assets assigned to it. (The Investment Manager
may be referred to from time to time hereafter as "he," "they," or "it," or may
be referred to in

                                       36
<PAGE>   41

the singular or plural, but all such references shall be to the then acting
Investment Manager or Investment Managers serving hereunder.)

         16.3 Responsibility of Trustee and Investment Manager: All
contributions under this Plan shall be paid to and held by the Trustee. The
Trustee shall have responsibility for the investment and reinvestment of the
Trust Fund except with respect to the management of those assets specifically
delegated to the Investment Manager and those funds invested pursuant to the
provisions of Section 15.5. The Investment Manager shall have exclusive
management and control of the investment and/or reinvestment of the assets of
the Trust Fund assigned to it in writing by the Trustee. All property and funds
of the Trust Fund, including income from investments and from all other sources,
shall be retained for the exclusive benefit of Members or former Members, as
provided herein, and shall be used to pay benefits to Members or former Members
or their Beneficiaries, or to pay expenses of administration of the Plan and
Trust Fund to the extent not paid by the Company.

         This Plan and the related Trust are intended to allocate to each
fiduciary the individual responsibilities of the prudent execution of the
functions assigned to each. None of the allocated responsibilities or any other
responsibility shall be shared by the fiduciaries or the Trustee unless such
sharing shall be provided for by a specific provision in this Plan or related
Trust.

         16.4 Bonding of Trustee and Investment Manager: Neither the Trustee nor
the Investment Manager shall be required to furnish any bond or security for the
performance of their powers and duties hereunder unless the applicable law makes
the furnishing of such bond or security mandatory.

                                       37
<PAGE>   42

                                  ARTICLE XVII

                       Amendment and Termination of Plan

         17.1 Amendment of Plan: The Company may, without the assent of any
other party, make from time to time any amendment or amendments to this Plan
which do not cause any part of the Trust Fund to be used for, or diverted to,
any purpose other than the exclusive benefit of Members or former Members of the
Plan. Any such amendment shall be by a written instrument executed by the
Company, and shall become effective as of the date specified in such instrument.
Notwithstanding the foregoing, no amendment to the Plan shall be effective to
the extent that it has the effect of decreasing a Member's or former Member's
accrued benefit, except as provided in Section 412(c)(8) of the Code. For
purposes of the preceding sentence, an amendment which has the effect of
decreasing a Member's or former Member's Individual Account or eliminating an
optional form of benefit, with respect to benefits attributable to service prior
to such amendment shall be treated as reducing an accrued benefit. If any
amendment changes the vesting schedules set forth in Sections 10.1 or 19.4, then
a Member's or former Member's nonforfeitable percentage in his Individual
Account because of a change to the vesting schedule shall not be less than his
nonforfeitable percentage computed under the vesting schedule in effect prior to
the amendment. Furthermore, if any amendment changes the vesting schedules set
forth in Sections 10.1 or 19.4, then each Member or former Member having at
least three (3) Years of Vesting Service may elect to be governed under the
vesting schedules set forth in the Plan without regard to the amendment. The
Member or former Member must file his written election with the Committee within
sixty (60) days after receipt of a copy of the amendment. The Committee shall
furnish the Member or former Member with a copy of the amendment and with notice
of the time within which his election must be returned to the Committee.

                                       38
<PAGE>   43

         17.2 Termination of Plan: The Company may at any time, effective as
specified, terminate the Plan by resolution of its board of directors. A
certified copy of such resolution shall be delivered to the Trustee.

         17.3 Complete Discontinuance of Contributions: In the event the Company
decides it is impossible or inadvisable for it to continue to make its
contributions as provided in Article IV, it shall have the power by appropriate
resolution to either:

                  (a) discontinue its contributions to the Plan; or

                  (b) terminate the Plan.

A complete discontinuance of contributions by the Company shall not constitute a
formal termination of the Plan and shall not preclude later contributions, but
all Individual Accounts of Members or former Members not theretofore fully
vested shall be and become 100% vested and nonforfeitable in the respective
Members or former Members, irrespective of the provisions of Sections 10.1 or
19.4. In such event, Employees who become eligible to enter the Plan subsequent
to the discontinuance shall receive no benefit, and no additional benefits shall
accrue to any of such Employees unless such contributions are resumed. After the
date of a complete discontinuance of contributions, the Trust shall remain in
existence as provided in this Section 17.3, and the provisions of the Plan and
Trust shall remain in force as may be necessary in the sole and absolute
discretion of the Committee.

         17.4 Liquidation of Trust Fund: Upon termination or partial termination
of the Plan, the Individual Accounts of all Members, former Members and
Beneficiaries shall thereupon be and become fully vested and nonforfeitable.
Thereupon, the Trustee shall convert the Trust Fund to cash after deducting all
charges and expenses. The Committee shall then adjust the balances of all
Individual Accounts, as provided in Section 5.2. Thereafter, the Trustee shall
distribute the

                                       39
<PAGE>   44

amount to the credit of each affected Member, former Member and Beneficiary, in
accordance with the provisions of Article XV hereof.

         17.5 Consolidation or Merger: This Plan shall not be merged or
consolidated with, nor shall any assets or liabilities be transferred to, any
other plan, unless the benefits payable on behalf of each Member or former
Member if the Plan were terminated immediately after such action would be equal
to or greater than the benefits to which such Member or former Member would have
been entitled if this Plan had been terminated immediately before such action.
The Trustee shall not accept a direct transfer of assets from a plan subject to
the requirements of Section 417 of the Code.

                                 ARTICLE XVIII

                               General Provisions

         18.1 No Employment Contract: Nothing contained in this Plan shall be
construed as giving any person whomsoever any legal or equitable right against
the Committee, the Company, its stockholders, officers or directors or against
the Trustee, except as the same shall be specifically provided for in this Plan.
Nor shall anything in this Plan give any Member, former Member or other Employee
the right to be retained in the service of the Company or an Eligible Affiliate
and the employment of all persons by the Company or an Eligible Affiliate shall
remain subject to termination by the Company or such Eligible Affiliate to the
same extent as if this Plan had never been executed.

         18.2 Manner of Payment: Wherever and whenever it is herein provided for
payments or distributions to be made, whether in money or otherwise, said
payments or distributions shall be made directly into the hands of the Member or
former Member, his Beneficiary, his administrator, executor or guardian, or an
alternate payee pursuant to Section 15.5 herein, as the

                                       40
<PAGE>   45

case may be. A deposit to the credit of a person entitled to payment in any bank
or trust company selected by such person shall be deemed payment into his hands,
and provided further that in the event any person otherwise entitled to receive
any payment or distribution shall be a minor or an incompetent, such payment or
distribution may be made to his guardian or other person as may be determined by
the Committee.

         18.3 Nonalienation of Benefits: Subject to Code Section 414(p) and
Section 15.5 herein relating to qualified domestic relations orders, the
interest of any Member, former Member or Beneficiary hereunder shall not be
subject in any manner to any indebtedness, judgment, process, creditors' bills,
attachments, garnishment, levy, execution, seizure or receivership, nor shall
such interest be in any manner reduced or affected by any transfer, assignment,
conveyance, sale, encumbrance, act, omission, or mishap, voluntary or
incidental, anticipatory or otherwise, of or to said Member, former Member or
Beneficiary, and they and any of them shall have no right or power to transfer,
convey, assign, sell or encumber said benefits and their interest therein, legal
or equitable, during the existence of this Plan. Notwithstanding the foregoing,
no provision of this Plan shall preclude the enforcement of a Federal tax levy
made pursuant to Section 6331 of the Code or collection by the United States on
a judgment resulting from an unpaid tax assessment.

         18.4 Titles for Convenience Only: Titles of the Articles and Sections
hereof are for convenience only and shall not be considered in construing this
Plan. Also words used in the singular or the plural may be construed as though
in the plural or singular where they would so apply.

         18.5 Validity of Plan: This Plan and each of its provisions shall be
construed and their validity determined by the laws of the State of Texas, and
all provisions hereof shall be

                                       41
<PAGE>   46

administered in accordance with the laws of said State, provided that in case of
conflict, the provisions of ERISA shall control.

         18.6 Plan Binding: This Plan shall be binding upon the successors and
assigns of the Company and the Trustee and upon the heirs and personal
representatives of those individuals who become Members hereunder.

         18.7 Return of Contributions: This Plan and the related Trust are
designed to qualify under Sections 401(a) and 501(a) of the Code. Anything
contained herein to the contrary notwithstanding, if the initial determination
letter is issued by the District Director of Internal Revenue to the effect that
this Plan and related Trust hereby created, or as amended prior to the receipt
of such letter, do not meet the requirements of Section 401(a) and 501(a) of the
Code, the Company shall be entitled at its option to withdraw all contributions
theretofore made, in which event the Plan and Trust shall then terminate.

         Each contribution to the Plan is specifically conditioned on the
deductibility of such contribution under the Code. The Trustee, upon written
request from the Company, shall return to the Company the amount of the
Company's contribution made as a result of a mistake of fact or the amount of
the Company's contribution disallowed as a deduction under Section 404 of the
Code. Such return of contribution must be made within one (1) year after (a) the
Company made the contribution by mistake of fact or (b) the disallowance of the
contribution as a deduction. The amount of contribution subject to being
returned hereunder shall not be increased by any earnings attributable to the
contribution, but such amount subject to being returned shall be decreased by
any losses attributable to it.

         18.8 Missing Members or Beneficiaries: Each Member shall file with the
Committee from time to time in writing a mailing address and any change of
mailing address for himself and

                                       42
<PAGE>   47

his designated Beneficiary. Any communication, statement or notice addressed to
a Member or Beneficiary at the last mailing address filed with the Committee, or
if no such address is filed with the Committee, then at his last mailing address
as shown on the Company's records, shall be binding on the Member or his
Beneficiary for all purposes of the Plan. The Committee shall not be required to
search for or locate a Member or Beneficiary. If the Committee notifies any
Member or Beneficiary that he is entitled to a distribution and also notifies
him of the provisions of this Section 18.8 (or makes reasonable effort to so
notify such Member or Beneficiary by certified letter, return receipt requested,
to the last known address, or such other further diligent effort, including
consultation with the Internal Revenue Service or the Social Security
Administration, to ascertain the whereabouts of such Member or Beneficiary as
the Committee deems appropriate) and the Member or Beneficiary fails to claim
his distributive share or make his whereabouts known to the Committee within
three years thereafter, the distributive share of such Member or Beneficiary
will be forfeited and reallocated according to Section 6.2. However, if the
Member or his Beneficiary should, thereafter, make a proper claim for such
share, it shall be distributed to him.

         18.9 Voting Rights:

                  (a) Each Member shall be entitled to direct the Trustee as to
         the manner in which any Common Stock allocated to said Member's
         Accounts shall be voted. The Committee shall furnish to each Member a
         proxy adequate for such purpose. The Trustee shall vote specifically in
         accordance with each Member's instructions to the extent of such
         Member's whole shares and shall, to the extent possible, vote the
         combined fractional shares of such Members in such manner as to reflect
         the Members' expressed desires. To the extent permitted under ERISA,
         the Trustee shall vote shares of Common Stock with respect to which it
         does not receive instructions and shares of Common Stock which have not
         been allocated to Members' Accounts under the Plan in the same
         proportion as are voted the shares of Common Stock held under the Plan
         with respect to which instructions were received by the Trustee from
         Members.

                  (b) Notwithstanding anything to the contrary contained in the
         Plan, if a cash tender offer or exchange offer for shares of Common
         Stock is made, Common Stock allocated to each Member's accounts under
         the Plan shall be tendered or exchanged by

                                       43
<PAGE>   48

         the Trustee pursuant to such cash tender offer or exchange offer only
         in accordance with the written instructions and directions of such
         Member to the Trustee to so tender or exchange. If a cash tender offer
         or exchange offer for shares of Common Stock is made, the Trustee shall
         use its best efforts to take those steps reasonably necessary to
         furnish information to, and allow decision by, each Member with respect
         to such cash tender offer or exchange offer and the shares of Common
         Stock allocated to such Member's accounts under the Plan in
         substantially the same manner as would be available to holders of
         Common Stock generally, and, in that connection, the Trustee shall:

                           (1) Inform each Member as to the existence of such
                  cash tender offer or exchange offer;

                           (2) Transmit to each Member as soon as practicable
                  such written information, explanation and other materials
                  relative to such cash tender offer or exchange offer as are
                  made available by the Company or by the persons or entities
                  making such cash tender offer or exchange offer to the holders
                  of shares of Common Stock generally;

                           (3) Request detailed written instructions and
                  directions from each Member as to whether to tender or
                  exchange the shares of Common Stock allocated to such Member's
                  accounts under the Plan and as to the time and manner of such
                  tender or exchange, if so instructed and directed; and

                           (4) Use its best efforts to effect on a
                  nondiscriminatory basis the tender or exchange of Common Stock
                  held under the Plan with respect to such cash tender offer or
                  exchange offer solely in accordance with written instructions
                  and directions received from Members. If written instructions
                  or directions are not timely received from a Member, the
                  shares of Common Stock allocated to his accounts under the
                  Plan shall not be tendered or exchanged pursuant to such cash
                  tender offer or exchange offer.

                  For purposes of this subparagraph (b), the term cash tender
         offer shall include a tender offer for, or request or invitation for
         tenders of, shares of Common Stock in exchange for cash, as made to the
         Plan or to holders of shares of Common Stock generally; the term
         exchange offer shall include a tender offer for, or request or
         invitation for tenders of, any shares of Common Stock in exchange for
         any consideration other than for all cash, as made to the Plan or to
         holders of shares of Common Stock generally.

                  (c) If any shares of Common Stock held under the Plan are
         tendered or exchanged pursuant to a cash tender offer or exchange offer
         in accordance with subparagraph (b) above, any cash proceeds obtained
         by the Trustee in connection therewith shall be temporarily invested in
         such short term investments as the Trustee may determine, until such
         time as such temporarily invested cash proceeds are reinvested in
         Common Stock. Any other property obtained by the Trustee pursuant to an
         exchange offer shall be temporarily held in kind by the Trustee, until
         such time as such temporarily held property is sold and the proceeds
         therefrom are reinvested in Common Stock.

                                       44
<PAGE>   49

         18.10 Acquisition Loans. An Acquisition Loan is an installment
obligation incurred by the Trustee in connection with the purchase of Common
Stock. The Trustee may incur Acquisition Loans from time to time to finance (i)
the acquisition of Common Stock by the Trust, or (ii) the repayment of a prior
Acquisition Loan. Each Acquisition Loan shall be for a specific term, shall bear
a reasonable rate of interest, and shall not be payable on demand except in the
event of default. If the lender with respect to an Acquisition Loan is a
disqualified person, as defined in section 4975(e)(2) of the Code, the
Acquisition Loan must provide that Trust assets will be transferred upon default
only upon and to the extent of the failure of the Trust to meet the repayment
schedule of the Acquisition Loan.

                  (a) Financed Shares. Shares of Common Stock acquired by the
         Trustee with the proceeds of an Acquisition Loan shall be described as
         "Financed Shares." Except as provided in section 409(1) of the Code,
         Treas. Reg. Section 54.4975-7(b) (9) and (10), or as otherwise provided
         by applicable law, no shares acquired by the Trustee with the proceeds
         of an Acquisition Loan may be subject to a put, call or other option or
         buy-sell or similar arrangement while held by and when distributed from
         the Plan.

                  (b) Collateral. An Acquisition Loan may be secured by a
         collateral pledge of the Financed Shares so acquired and any other
         Trust assets which are a permissible security within the provisions of
         Treas. Reg. Section 54.4975-7(b). No other assets of the Trust may be
         pledged as collateral for an Acquisition Loan, and no lender shall have
         recourse against any other Trust assets.

                  (c) Loan Payment. Repayment of principal and interest on any
         Acquisition Loan shall be made by the Trustee from annual Company
         Contributions made pursuant to subsection 4.1 and, to the extent
         permitted by applicable law, may also be made from the following
         sources:

                           (i) cash dividends on Financed Shares held in the
                  Loan Suspense Account (as defined below) and earnings, if any,
                  thereon; and

                           (ii) in the event of the sale of Financed Shares, the
                  proceeds of such sale.

                  (d) Release of Financed Shares. Financed Shares shall
         initially be credited to a "Loan Suspense Account" and shall be
         transferred for allocation to the Individual Accounts of Members as
         payments are made on the Acquisition Loan by the Trustee, and any
         pledge of Financed Shares must, and shall be deemed to, provide for the
         release of shares so pledged on a consistent basis.

                                       45
<PAGE>   50

                  The number of Financed Shares to be released from the Loan
         Suspense Account for allocation to Members' Individual Accounts as of
         each Allocation Date, shall equal the number of Financed Shares held in
         the Loan Suspense Account immediately prior to such Allocation Date
         multiplied by a fraction, the numerator of which is equal to the
         payments of principal and interest (or principal only, if the
         requirements of the Treasury Regulations under Code Section 4975 are
         met and the Plan Administrator so elects) on the Acquisition Loan for
         the period ending on such date, and the denominator of which is equal
         to the sum of the numerator plus the total projected payments of
         principal and interest (or principal only, if the requirements of the
         Treasury Regulations under Code Section 4975 are met and the Plan
         Administrator so elects) on the Acquisition Loan over the future years
         of the Acquisition Loan.

                  (e) Allocation of Financed Shares. The released Financed
         Shares shall be allocated to the Individual Accounts of eligible
         Members in accordance with the provisions of Section 6.1 hereof.

         18.11 Preretirement Diversification Rights. If a Member attains age
fifty-five (55) and has ten (10) years of participation in the Plan (hereinafter
referred to as a "Qualified Member"), notwithstanding the provisions of Section
15.1 hereof, the following rules shall apply to any distribution made under the
Plan to or on behalf of such Qualified Member.

                  (a) Annuity Distributions to Qualified Members. The Committee
         shall direct the Trustee to distribute such Member's benefits held in a
         Qualified Member's Individual Account in the form of a qualified joint
         and survivor annuity, unless the Qualified Member has a valid waiver
         election (described in Section 18.11(b) hereof) in effect. A qualified
         joint and survivor annuity is an immediate annuity (a) which is payable
         for the life of the Qualified Member, with, if the Qualified Member is
         married on the annuity starting date, as defined below, a survivor
         annuity for the life of the Qualified Member's surviving spouse which
         is not less than fifty percent (50%) of the amount of the annuity
         payable during the joint lives of the Qualified Member and his spouse,
         and (b) which is the actuarial equivalent of a single annuity for the
         life of the Qualified Member. On or before the annuity starting date
         (the first day of the first period for which the Qualified Member would
         receive an amount as an annuity or in any other form), the Committee
         shall direct the Trustee to pay the Qualified Member's benefits in a
         lump sum, in lieu of a qualified joint and survivor annuity, if the
         Qualified Member's vested Individual Account is not greater than $3,500
         for Plan Years beginning prior to January 1, 1998, or $5,000 for Plan
         Years beginning on or after January 1, 1998.

                  If a Qualified Member who is married dies prior to
         commencement of payment of his benefits, the Committee shall direct the
         Trustee to distribute the Qualified Member's Individual Account, as
         calculated under Article VIII, to the Qualified Member's surviving
         spouse in the form of a preretirement survivor annuity, unless the
         Qualified Member has a valid waiver election (as described in Section
         18.11(c) hereof) in effect. A preretirement survivor annuity is an
         annuity which is payable for the life of the Qualified

                                       46
<PAGE>   51

         Member's surviving spouse. The surviving spouse may elect to have the
         preretirement survivor annuity distributed within a reasonable period
         after the Qualified Member's death. The Committee shall direct the
         Trustee to pay the Qualified Member's Individual Account in a lump sum,
         in lieu of a preretirement survivor annuity, if the Qualified Member's
         Individual Account is not greater than $3,500 for Plan Years beginning
         prior to January 1, 1998, or $5,000 for Plan Years beginning on or
         after January 1, 1998.

                  The Committee is not required to distribute any survivor
         annuity described herein to the spouse of a Qualified Member unless the
         Qualified Member and his spouse were married throughout the one-year
         period ending on the earlier of the Qualified Member's annuity starting
         date or the Qualified Member's death; provided, however, this exception
         shall not apply if the Qualified Member marries within one year before
         the annuity starting date and has been married for at least a one-year
         period ending on or before the date of the Qualified Member's death.

                  If the Qualified Member has in effect a valid waiver election
         regarding the qualified joint and survivor annuity or the preretirement
         survivor annuity, the Committee shall direct the Trustee to distribute
         the Participant's Individual Account in accordance with Section 15.1.
         Furthermore, the Qualified Member's surviving spouse may elect the form
         of payment described in Section 15.1 in lieu of the preretirement
         survivor annuity. For purposes of applying this Section 18.11, the
         Committee shall treat a former spouse as the Qualified Member's spouse
         or surviving spouse to the extent required under a qualified domestic
         relations order.

                  (b) Waiver Election - Qualified Joint and Survivor Annuity.
         Within a reasonable period of time (no less than thirty (30) days and
         no more than ninety (90) days) before the Qualified Member's annuity
         starting date, the Committee shall provide the Qualified Member a
         written explanation of the terms and conditions of the qualified joint
         and survivor annuity, the Qualified Member's right to make, and the
         effect of, an election to waive the joint and survivor form of benefit,
         the rights of a married Qualified Member's spouse regarding the waiver
         election and the Qualified Member's right to make, and the effect of, a
         revocation of a waiver election.

                  A Qualified Member's waiver election is not valid unless:

                           (1) the Qualified Member makes the waiver election
                  within the ninety (90) day period ending on his annuity
                  starting date;

                           (2) the Qualified Member's spouse (to whom the
                  survivor annuity is payable under the qualified joint and
                  survivor annuity) has consented in writing to the waiver
                  election, the spouse's consent acknowledges the effect of the
                  election, and a notary public or a Committee member (or its
                  representative) witnesses the spouse's consent; and

                           (3) unless the spouse is the Qualified Member's sole
                  primary Beneficiary, the spouse consents to the Qualified
                  Member's Beneficiary designation or to any change in the
                  Qualified Member's Beneficiary Designation.

                                       47
<PAGE>   52

                           Additionally, a Qualified Member's waiver of the
                  qualified joint and survivor annuity shall not be effective
                  unless the election designates a form of benefit payment which
                  may not be changed without spousal consent (or the spouse
                  expressly permits designations by the Qualified Member without
                  any further spousal consent).

                  The Committee may accept as valid a waiver election which does
         not satisfy the spousal consent requirements described in paragraphs
         (2) and (3) above if the Committee establishes that the Qualified
         Member does not have a spouse, the Committee is not able to locate the
         Qualified Member's spouse, or other circumstances prescribed by
         Treasury Department regulations.

                  Any consent by a spouse obtained under this Section (or the
         establishment that the consent of a spouse may not be obtained) shall
         be effective only with respect to such spouse. A consent that permits
         designations by the Qualified Member without any requirement of further
         consent by such spouse must acknowledge that the spouse has the right
         to limit consent to a specific Beneficiary, and a specific form of
         benefit where applicable, and that the spouse voluntarily elects to
         relinquish either or both of such rights. A revocation of a prior
         waiver may be made by a Qualified Member without the consent of the
         spouse at any time before the commencement of benefits. The number of
         revocations shall not be limited. No consent obtained under this
         Section shall be valid unless the Qualified Member has received an
         explanation of the terms and conditions of the qualified joint and
         survivor annuity, as provided herein.

                  (c) Waiver Election - Preretirement Survivor Annuity. The
         Committee shall provide each Qualified Member, within a reasonable
         period after the Member becomes a Qualified Member, a written
         explanation of the terms and conditions of the preretirement survivor
         annuity, the Qualified Member's right to make, and the effect of, an
         election to waive the preretirement survivor annuity, the rights of the
         Qualified Member's spouse regarding the waiver election and the
         Qualified Member's right to make, and the effect of, a revocation of a
         waiver election.

                  For purposes of applying this subsection, a reasonable period
         is the end of the two-year period beginning one year prior to the date
         on which the Member becomes a Qualified Member, and ending one year
         after that date.

                  A Qualified Member's waiver election of the preretirement
         survivor annuity is not valid unless the election satisfies the spousal
         consent requirements described in Section 18.11(b).

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

                                       48
<PAGE>   53

                                  ARTICLE XIX

                                Top-Heavy Rules

         19.1 Definitions: For purposes of applying the provisions of this
Article XIX:

                  (a) "Key Employee" shall mean, as of any Determination Date
         (as defined below), any Employee or former Employee who, at any time
         during the Plan Year (which includes the Determination Date) or during
         the preceding four Plan Years, is (i) an officer having Annual
         Compensation greater than fifty percent (50%) of the amount in effect
         under Section 415(b)(1)(A) of the Code for any such Plan Year, (ii) one
         of the ten Employees having Annual Compensation of more than the
         limitation in effect under Section 415(c)(1)(A) of the Code and owning
         the largest interests in the Company, (iii) a Five Percent (5%) Owner
         of the Company, or (iv) a One Percent (1%) Owner of the Company who has
         Annual Compensation of more than $150,000. The constructive ownership
         rules of Section 318 of the Code will apply to determine ownership in
         the Company. The Committee will make the determination of who is a Key
         Employee in accordance with Section 416(i)(1) of the Code and the
         regulations under that Code Section. The Beneficiary of a Key Employee
         shall be treated as a Key Employee for purposes of determining whether
         this Plan is top-heavy.

                  (b) "Non-Key Employee" is an Employee who does not meet the
         definition of Key Employee.

                  (c) "Required Aggregation Group" means:

                           (1) Each qualified plan of the Company or an
                  Affiliated Entity (as defined below) in which at least one (1)
                  Key Employee participates or participated at any time during
                  the Plan Year which includes the Determination Date, or during
                  the preceding four Plan Years (regardless of whether the plan
                  has terminated); and

                           (2) Any other qualified plan of the Company which
                  enables a plan described in (1) to meet the requirements of
                  Section 401(a)(4) or Section 410 of the Code.

                  (d) "Permissive Aggregation Group" is the Required Aggregation
         Group plus any other qualified plans maintained by the Company, but
         only if such group would satisfy in the aggregate the requirements of
         Section 401(a)(4) and Section 410 of the Code. The Committee shall
         determine which plans to take into account in determining the
         Permissive Aggregation Group.

                  (e) "Determination Date" for any Plan Year is the Allocation
         Date of the preceding Plan Year or, in the case of the first Plan Year
         of the Plan, the Allocation Date of that Plan Year.

                                       49
<PAGE>   54

                  (f) "Five Percent (5%) Owner" is any person who owns more than
         five percent (5%) of the outstanding stock of the Company or stock
         possessing more than five percent (5%) of the total combined voting
         power of all stock of the Company.

                  (g) "One Percent (1%) Owner" is any person who owns more than
         one percent (1%) of the outstanding stock of the Company or stock
         possessing more than one percent (1%) of the total combined voting
         power of all stock of the Company.

                  (h) "Affiliated Entity" shall mean all the members of (i) a
         controlled group of corporations as defined in Section 414(b) of the
         Code; (ii) a commonly controlled group of trades or businesses (whether
         or not incorporated) as defined in Section 414(c) of the Code; (iii) an
         affiliated service group as defined in Section 414(m) of the Code of
         which the Company is a part; or (iv) a group of entities required to be
         aggregated pursuant to Section 414(o) of the Code and the regulations
         issued thereunder.

         19.2 Determination of Top-Heavy Status: The Plan is top-heavy for a
Plan Year if the top-heavy ratio as of the Determination Date (as defined in
Section 19.1 above) exceeds sixty percent (60%). The top-heavy ratio is a
fraction, the numerator of which is the sum of the present value of the
Individual Accounts of all Key Employees (as defined in Section 19.1 above) as
of the Determination Date, the contributions for all Key Employees that are due
as of the Determination Date, and distributions made to all Key Employees within
the five (5) year period immediately preceding the Determination Date, and the
denominator of which is a similar sum determined for all Employees in the Plan.
If an Employee has not performed any services for the Company or an Eligible
Affiliate at any time during the five (5) year period ending on the
Determination Date, any amount in the Individual Account of such Employee shall
not be taken into account. The Committee shall calculate the top-heavy ratio
without regard to any Non-Key Employee (as defined in Section 19.1 above) who
was formerly a Key Employee. The Committee shall calculate the top-heavy ratio,
including the extent to which it must take into account distributions, rollovers
and transfers, in accordance with Section 416 of the Code and the regulations
under that Code Section.

                                       50
<PAGE>   55

         If the Company maintains other qualified plans (including a simplified
employee pension plan) this Plan is top-heavy only if it is part of the Required
Aggregation Group (as defined in Section 19.1 above), and the top-heavy ratio
for both the Required Aggregation Group and the Permissive Aggregation Group (as
defined in Section 19.1 above) exceeds sixty percent (60%). The Committee will
calculate the top-heavy ratio in the same manner as required by the first
paragraph of this Section 19.2, taking into account all plans within the
aggregation group. The Committee shall calculate the present value of accrued
benefits and the other amounts the Committee must take into account, under
defined benefit plans or simplified employee pension plans included within the
group in accordance with the terms of those plans, Section 416 of the Code and
the regulations under that Code Section. The Committee shall calculate the
top-heavy ratio with reference to the Determination Dates that fall within the
same calendar year.

         19.3 Minimum Company Contribution: Notwithstanding anything contained
herein to the contrary, for any Plan Year in which this Plan is determined to be
top-heavy pursuant to Section 19.2 hereof, each Non-Key Employee who is an
eligible Member shall be entitled to a supplemental contribution equal to three
percent (3%) of such Non-Key Employee's Annual Compensation, reduced by the
amount of Qualified Nonelective Contributions, if any, allocated to a Member's
Salary Reduction Contribution Account under the Southwest Airlines Co. 401(k)
Plan for the applicable Plan Year. For purposes of this Section 19.3, an
eligible Member is a Non-Key Employee who is employed by the Company on the last
day of the applicable Plan Year.

         The percentage referred to in the preceding paragraph shall not exceed
the percentage of Annual Compensation at which Company contributions are made or
allocated under this Plan and all other qualified defined contribution plans
maintained by the Company, including Salary

                                       51
<PAGE>   56

Reduction Contributions under the Southwest Airlines Co. 401(k) Plan, to the Key
Employee for whom such percentage is the largest; provided, however, this
sentence shall not apply if the Plan is required to be included in an
Aggregation Group and enables a defined benefit plan required to be included in
such group to meet the requirements of Code Sections 401(a)(4) or 410. If the
minimum allocation is made for a Non-Key Employee pursuant to another qualified
plan maintained by the Company, then the minimum allocation requirement will be
considered satisfied for purposes of this Plan.

         19.4 Minimum Vesting: For any Plan Year for which the Plan is top-heavy
beginning after December 31, 1983, the Committee shall calculate the percentage
of the amount in a Member's Employer Savings Account which is vested and
nonforfeitable according to a schedule which is no less rapid than the
following:

<TABLE>
<CAPTION>
                                                                    Percentage
 Completed Years of Service                                           Payable
 --------------------------                                         ----------

<S>                                                                 <C>
Less than 2 years                                                        0%
2 years but less than 3 years                                           20%
3 years but less than 4 years                                           40%
4 years but less than 5 years                                           60%
5 years but less than 6 years                                           80%
6 years or more                                                        100%
</TABLE>

If the above schedule is less rapid than the vesting schedule which is
applicable under Section 10.1 at the time when the Plan becomes top-heavy, then
the schedule under Section 10.1 shall apply. The Committee shall apply the
vesting schedule set forth above to a Member who earns at least one (1) Hour of
Service after such schedule becomes effective. If the top-heavy status of the
Plan changes so that there is a shift between the vesting schedules set forth
above and set forth in Section 10.1, then a Plan amendment will be deemed to
have occurred so that the provisions of Section 17.1 of the Plan become
applicable.

                                       52
<PAGE>   57

                                   ARTICLE XX

                              Fiduciary Provisions

         20.1 General Allocation of Duties: Each fiduciary with respect to the
Plan shall have only those specific powers, duties, responsibilities and
obligations as are specifically given him under the Plan. The board of directors
of the Company shall have the sole responsibility for authorizing its
contributions under the Plan. The Company shall have the sole authority to
appoint and remove the members of the Committee and to amend or terminate this
Plan, in whole or in part. The Committee shall have the sole authority to
appoint and remove the Trustee and Investment Managers. However, neither the
board nor the Committee shall be liable for any acts or omissions of the Trustee
or Investment Manager or be under any obligation to invest or otherwise manage
any assets of the Trust Fund which are subject to the management of the Trustee
or Investment Manager. Except as otherwise specifically provided, the Committee
shall have the sole responsibility for the administration of the Plan, which
responsibility is specifically described herein. Except as otherwise
specifically provided, the Trustee shall have the sole responsibility for the
administration, investment and management of the assets held under the Plan. It
is intended under the Plan that each fiduciary shall be responsible for the
proper exercise of its own powers, duties, responsibilities and obligations
hereunder and shall not be responsible for any act or failure to act of another
fiduciary, except to the extent provided by law or as specifically provided
herein.

         20.2 Fiduciary Duty: Each fiduciary under the Plan shall discharge its
duties and responsibilities with respect to the Plan:

                  (a) solely in the interest of the Members of the Plan, for the
         exclusive purpose of providing benefits to such Members and their
         Beneficiaries, and defraying reasonable expenses of administering the
         Plan;

                                       53
<PAGE>   58

                  (b) with the care, skill, prudence and diligence under the
         circumstances then prevailing that a prudent man acting in a like
         capacity and familiar with such matters would use in the conduct of an
         enterprise of a like character and with like aims;

                  (c) by diversifying the investments of the Plan so as to
         minimize the risk of large losses, unless under the circumstances it is
         prudent not to do so; and

                  (d) in accordance with the documents and instruments governing
         the Plan insofar as such documents and instruments are consistent with
         applicable law.

         20.3 Fiduciary Liability: A fiduciary shall not be liable in any way
for any acts or omissions constituting a breach of fiduciary responsibility
occurring prior to the date it becomes a fiduciary or after the date it ceases
to be a fiduciary.

         20.4 Co-Fiduciary Liability: A fiduciary shall not be liable for any
breach of fiduciary responsibility by another fiduciary unless:

                  (a) it participates knowingly in, or knowingly undertakes to
         conceal, an act or omission of such other fiduciary, knowing such act
         or omission is a breach;

                  (b) by its failure to comply with Section 404(a)(1) of ERISA
         in the administration of its specific responsibilities which give rise
         to its status as a fiduciary, it has enabled such other fiduciary to
         commit a breach; or

                  (c) having knowledge of a breach by such other fiduciary, it
         fails to make reasonable efforts under the circumstances to remedy the
         breach.

         20.5 Delegation and Allocation: The Committee may appoint
subcommittees, individuals or any other agents as it deems advisable and may
delegate to any of such appointees any or all of the powers and duties of the
Committee. Such appointment and delegations must clearly specify the powers and
duties delegated. Upon such appointment and delegation, the delegating Committee
members shall have no liability for the acts or omissions of any such delegate,
as long as the delegating Committee members do not violate their fiduciary
responsibility in making or continuing such delegation.

                                       54
<PAGE>   59

         IN WITNESS WHEREOF, Southwest Airlines Co. has caused its corporate
seal to be affixed hereto and these presents to be duly executed in its name and
behalf by its proper officers thereunto duly authorized this 14th day of
September, 2000.

                                             SOUTHWEST AIRLINES CO.
ATTEST:

     /s/ Colleen C. Barrett                  By: /s/ Herbert D. Kelleher
--------------------------------                ------------------------------
           Secretary                            Herbert D. Kelleher, President

<PAGE>   60

STATE OF TEXAS        (
                      (
COUNTY OF DALLAS      (

         BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this 14th day of September, 2000, personally appeared Herbert D.
Kelleher, to me known to be the individual person who subscribed the name of
SOUTHWEST AIRLINES CO., as its President, to the foregoing instrument and
acknowledged to me that he executed the same as his free and voluntary act and
deed and the free and voluntary act and deed of such corporation, for the uses
and purposes therein set forth.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE, the day and year last above
written.

                                      /s/  Linda S. Simmons
                                     -------------------------------------------
                                     Notary Public in and for the State of Texas

My Commission Expires:

       12/11/00
----------------------<PAGE>   1
                                                                    EXHIBIT 10.2

================================================================================

                             SIGNALSOFT CORPORATION

                         NON-QUALIFIED STOCK OPTION PLAN

                          (EFFECTIVE NOVEMBER 22, 2000)

================================================================================

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----

<S>                                                                        <C>
ARTICLE I -    INTRODUCTION...................................................1
      1.1      ESTABLISHMENT..................................................1
      1.2      PURPOSES.......................................................1
      1.3      EFFECTIVE DATE.................................................1

ARTICLE II -   DEFINITIONS....................................................1
      2.1      DEFINITIONS....................................................1
      2.2      GENDER AND NUMBER..............................................3

ARTICLE III -  PLAN ADMINISTRATION............................................3
      3.1      GENERAL........................................................3
      3.2      DELEGATION BY COMMITTEE........................................3

ARTICLE IV -   STOCK SUBJECT TO THE PLAN......................................4
      4.1      NUMBER OF SHARES...............................................4
      4.2      OTHER SHARES OF STOCK..........................................4
      4.3      ADJUSTMENTS FOR STOCK SPLIT, STOCK DIVIDEND, ETC...............4
      4.4      OTHER DISTRIBUTIONS AND CHANGES IN THE STOCK...................4
      4.5      GENERAL ADJUSTMENT RULES.......................................5
      4.6      DETERMINATION BY THE COMMITTEE, ETC............................5

ARTICLE V -    CORPORATE REORGANIZATION; CHANGE IN CONTROL....................5
      5.1      ADJUSTMENT OF AWARDS...........................................5
      5.2      ASSUMPTION OR SUBSTITUTION OF OPTIONS..........................5
      5.3      CORPORATE TRANSACTION..........................................5

ARTICLE VI -   PARTICIPATION..................................................6

ARTICLE VII -  NON-QUALIFIED OPTIONS..........................................7
      7.1      GRANT OF OPTIONS...............................................7
      7.2      STOCK OPTION CERTIFICATES......................................7
      7.3      TRANSFERABILITY................................................9
      7.4      SHAREHOLDER PRIVILEGES........................................10

ARTICLE VIII - RIGHTS OF PARTICIPANTS........................................10
      8.1      SERVICE.......................................................10
      8.2      NO PLAN FUNDING...............................................10

ARTICLE IX -   GENERAL RESTRICTIONS..........................................10
      9.1      INVESTMENT REPRESENTATIONS....................................10
      9.2      COMPLIANCE WITH SECURITIES LAWS...............................10
      9.3      CHANGES IN ACCOUNTING RULES...................................11

ARTICLE X -    OTHER EMPLOYEE BENEFITS.......................................11
</TABLE>

                                        i
<PAGE>   3

<TABLE>
<S>                                                                        <C>
ARTICLE XI -   PLAN AMENDMENT, MODIFICATION AND TERMINATION..................11

ARTICLE XII -  WITHHOLDING...................................................11
      12.1     WITHHOLDING REQUIREMENT.......................................11
      12.2     WITHHOLDING WITH STOCK........................................11

ARTICLE XIII - REQUIREMENTS OF LAW...........................................12
      13.1     REQUIREMENTS OF LAW...........................................12
      13.2     GOVERNING LAW.................................................12

ARTICLE XIV -  DURATION OF THE PLAN..........................................12
</TABLE>

                                        i

<PAGE>   4

                             SIGNALSOFT CORPORATION

                         NON-QUALIFIED STOCK OPTION PLAN

                                    ARTICLE I

                                  INTRODUCTION

         1.1 ESTABLISHMENT. SignalSoft Corporation, a Delaware corporation,
effective November 22, 2000, hereby establishes the SignalSoft Corporation
Non-Qualified Stock Option Plan (the "Plan") for certain eligible employees of
the Company (as defined in subsection 2.1(e)) and certain consultants to the
Company. The Plan permits the grant of Non-Qualified Options to certain
employees of the Company and to certain consultants to the Company.

         1.2 PURPOSES. The purposes of the Plan are to provide those who are
selected for participation in the Plan with added incentives to continue in the
long-term service of the Company and to create in such persons a more direct
interest in the future success of the operations of the Company by relating
incentive compensation to increases in shareholder value, so that the income of
those participating in the Plan is more closely aligned with the income of the
Company's shareholders. The Plan is also designed to provide a financial
incentive that will help the Company attract, retain and motivate the most
qualified employees and consultants.

         1.3 EFFECTIVE DATE. The effective date of the Plan is November 22,
2000.

                                   ARTICLE II

                                   DEFINITIONS

         2.1 DEFINITIONS. The following terms shall have the meanings set forth
below:

                  (a) "AFFILIATED CORPORATION" means any corporation or other
entity that is affiliated with SignalSoft Corporation through stock ownership or
otherwise and is designated as an "Affiliated Corporation" by the Board.

                  (b) "BOARD" means the Board of Directors of SignalSoft
Corporation.

                  (c) "CODE" means the Internal Revenue Code of 1986, as it may
be amended from time to time.

                  (d) "COMMITTEE" means a committee consisting of members of the
Board who are empowered hereunder to take actions in the administration of the
Plan. If applicable, the Committee shall be so constituted at all times as to
permit the Plan to comply with Rule 16b-3 or any successor rule promulgated
under the Securities Exchange Act of 1934 (the "1934 Act"). Except as provided
in Section 3.2, the Committee shall select Participants from Eligible Employees
and Eligible Consultants of the Company and shall determine the awards to be
made pursuant to the Plan and the terms and conditions thereof.

                                                                               1
<PAGE>   5

                  (e) "COMPANY" means SignalSoft Corporation and the Affiliated
Corporations.

                  (f) "DISABLED" or "DISABILITY" shall have the meaning given to
such terms in Section 22(e)(3) of the Code.

                  (g) "EFFECTIVE DATE" means the effective date of the Plan,
November 22, 2000.

                  (h) "ELIGIBLE EMPLOYEES" means those employees of the Company
or any subsidiary or division thereof, upon whose judgment, initiative and
efforts the Company is, or will become, largely dependent for the successful
conduct of its business, provided, however, that Company officers and other
employees who are subject to the provisions of Section 16 of the 1934 Act shall
not be eligible to receive Options under this Plan. For purposes of the Plan, an
employee is any individual who provides services to the Company or any
subsidiary or division thereof as a common law employee and whose remuneration
is subject to the withholding of federal income tax pursuant to section 3401 of
the Code. Employee shall not include any individual (A) who provides services to
the Company or any subsidiary or division thereof under an agreement, contract,
or any other arrangement pursuant to which the individual is initially
classified as an independent contractor or (B) whose remuneration for services
has not been treated initially as subject to the withholding of federal income
tax pursuant to section 3401 of the Code even if the individual is subsequently
reclassified as a common law employee as a result of a final decree of a court
of competent jurisdiction or the settlement of an administrative or judicial
proceeding. Leased employees shall not be treated as employees under this Plan.

                  (i) "ELIGIBLE CONSULTANTS" means those consultants to the
Company who are determined, by the Committee, to be individuals whose services
are important to the Company and who are eligible to receive Non-Qualified
Options under the Plan, provided, however, that consultants who are subject to
the provisions of Section 16 of the 1934 Act shall not be eligible to receive
Options under this Plan.

                  (j) "FAIR MARKET VALUE" means the average of the mean between
the bid and the asked prices of the Stock or the closing price, as applicable,
on the principal stock exchange or other market on which the Stock is traded,
over the five consecutive trading days ending on a particular date or the value
determined by such other method as the Committee, or the individual or
individuals to whom the Committee has delegated authority to grant Awards, may
specify at the time an Award is granted. If the price of the Stock is not
reported on any securities exchange or national market system, the Fair Market
Value of the Stock on a particular date shall be as determined by the Committee.
If, upon exercise of an Option, the exercise price is paid by a broker's
transaction as provided in subsection 7.2(g)(ii)(D), Fair Market Value, for
purposes of the exercise, shall be the price at which the Stock is sold by the
broker.

                  (k) "NON-QUALIFIED OPTION" means an Option that is not an
"Incentive Stock Option" within the meaning of Section 422 of the Code.

                  (l) "OPTION" means a right to purchase Stock at a stated or
formula price for a specified period of time. Options granted under the Plan
shall be Non-Qualified Options.

                  (m) "OPTION CERTIFICATE" shall have the meaning given to such
term in Section 7.2 hereof.

                                                                               2
<PAGE>   6

                  (n) "OPTION HOLDER" means a Participant who has been granted
one or more Options under the Plan.

                  (o) "OPTION PRICE" means the price at which each share of
Stock subject to an Option may be purchased, determined in accordance with
subsection 7.2(b).

                  (p) "PARTICIPANT" means an Eligible Employee or Eligible
Consultant designated by the Committee from time to time during the term of the
Plan to receive one or more Options under the Plan.

                  (q) "SHARE" means a share of Stock.

                  (r) "STOCK" means the $0.001 par value common stock of
SignalSoft Corporation.

         2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
the masculine gender shall also include the feminine gender, and the definition
of any term herein in the singular shall also include the plural.

                                   ARTICLE III

                               PLAN ADMINISTRATION

         3.1 GENERAL. The Plan shall be administered by the Committee. In
accordance with the provisions of the Plan, the Committee shall, in its sole
discretion, select the Participants from among the Eligible Employees and
Eligible Consultants, determine the Option grants to be made pursuant to the
Plan, and the time at which such Option grants are to be made, fix the Option
Price, period and manner in which an Option becomes exercisable, and establish
such other terms and requirements of the Options under the Plan as the Committee
may deem necessary or desirable and consistent with the terms of the Plan. The
Committee shall determine the form or forms of the agreements with Participants
that shall evidence the particular provisions, terms, conditions, rights and
duties of the Company and the Participants with respect to Options granted
pursuant to the Plan, which provisions need not be identical except as may be
provided herein. The Committee may from time to time adopt such rules and
regulations for carrying out the purposes of the Plan as it may deem proper and
in the best interests of the Company. The Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or in any
agreement entered into hereunder in the manner and to the extent it shall deem
expedient and it shall be the sole and final judge of such expediency. No member
of the Committee shall be liable for any action or determination made in good
faith. The determinations, interpretations and other actions of the Committee
pursuant to the provisions of the Plan shall be binding and conclusive for all
purposes and on all persons.

         3.2 DELEGATION BY COMMITTEE. The Committee may, from time to time,
delegate, to specified officers of the Company, the power and authority to grant
Options under the Plan to specified groups of employees and consultants, subject
to such restrictions and conditions as the Committee, in its sole discretion,
may impose. The delegation shall be as broad or as narrow as the Committee shall
determine. To the extent that the Committee has delegated the authority to
determine certain terms and conditions of an Option, all references in the Plan
to the Committee's exercise of authority in determining such terms and
conditions shall be construed to include the officer or officers to whom the
Committee has delegated the power and authority to make such determination.

                                                                               3
<PAGE>   7

                                   ARTICLE IV

                            STOCK SUBJECT TO THE PLAN

         4.1 NUMBER OF SHARES. The maximum aggregate number of Shares that may
be issued under the Plan pursuant to Options is 1,000,000 Shares. The Shares may
be either authorized and unissued Shares or previously issued Shares acquired by
the Company. Such maximum number may be increased from time to time by approval
of the Board and by the stockholders of the Company if, in the opinion of
counsel for the Company, stockholder approval is required. The Company shall at
all times during the term of the Plan and while any Options are outstanding
retain as authorized and unissued Stock at least the number of Shares from time
to time required under the provisions of the Plan, or otherwise assure itself of
its ability to perform its obligations hereunder.

         4.2 OTHER SHARES OF STOCK. Any shares of Stock that are subject to an
Option that expires or for any reason is terminated unexercised, and any shares
of Stock withheld for the payment of taxes or received by the Company as payment
of the exercise price of an Option shall automatically become available for use
under the Plan.

         4.3 ADJUSTMENTS FOR STOCK SPLIT, STOCK DIVIDEND, ETC. If the Company
shall at any time increase or decrease the number of its outstanding Shares or
change in any way the rights and privileges of such Shares by means of the
payment of a stock dividend or any other distribution upon such shares payable
in Stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in relation to
the Stock that is affected by one or more of the above events, the numbers,
rights and privileges of the following shall be increased, decreased or changed
in like manner as if they had been issued and outstanding, fully paid and
nonassessable at the time of such occurrence: (i) the Shares as to which Options
may be granted under the Plan, (ii) the Shares then included in each outstanding
Option granted hereunder, and (iii) the number of Shares subject to a delegation
of authority under Section 3.2 of this Plan.

         4.4 OTHER DISTRIBUTIONS AND CHANGES IN THE STOCK. If

                  (a) The Company shall at any time distribute with respect to
the Stock assets or securities of persons other than the Company (excluding cash
or distributions referred to in Section 4.3), or

                  (b) The Company shall at any time grant to the holders of its
Stock rights to subscribe pro rata for additional shares thereof or for any
other securities of the Company, or

                  (c) there shall be any other change (except as described in
Section 4.3) in the number or kind of outstanding Shares or of any stock or
other securities into which the Stock shall be changed or for which it shall
have been exchanged,

and if the Committee shall in its discretion determine that the event described
in subsection (a), (b), or (c) above equitably requires an adjustment in the
number or kind of Shares subject to an Option, an adjustment in the Option Price
or the taking of any other action by the Committee, including without
limitation, the setting aside of any property for delivery to the Participant
upon the exercise of an Option, then such adjustments shall be made, or other
action shall be taken, by the Committee and shall be effective for all purposes
of the Plan and on each outstanding Option that involves the particular type of
stock for which a change was effected.

                                                                               4
<PAGE>   8

         4.5 GENERAL ADJUSTMENT RULES. No adjustment or substitution provided
for in this Article IV shall require the Company to sell a fractional share of
Stock under any Option, or otherwise issue a fractional share of Stock, and the
total substitution or adjustment with respect to each Option shall be limited by
deleting any fractional share. In the case of any such substitution or
adjustment, the aggregate Option Price for the total number of shares of Stock
then subject to an Option shall remain unchanged but the Option Price per share
under each such Option shall be equitably adjusted by the Committee to reflect
the greater or lesser number of shares of Stock or other securities into which
the Stock subject to the Option may have been changed.

         4.6 DETERMINATION BY THE COMMITTEE, ETC. Adjustments under this Article
IV shall be made by the Committee, whose determinations with regard thereto
shall be final and binding upon all parties thereto.

                                    ARTICLE V

                   CORPORATE REORGANIZATION; CHANGE IN CONTROL

         5.1 ADJUSTMENT OF AWARDS. Upon the occurrence of a Corporate
Transaction (as defined in Section 5.3), the Committee may take any one or more
of the following actions with respect to outstanding Options:

                  (a) Provide that any or all Options shall become fully
exercisable regardless of whether all conditions of exercise relating to length
of service, attainment of financial performance goals or otherwise have been
satisfied;

                  (b) Provide for the assumption or substitution of any or all
Options as described in Section 5.2;

                  (c) Make any other provision for outstanding Options as the
Committee deems appropriate.

The Committee may provide that any Options that are outstanding at the time the
Corporate Transaction is closed shall expire at the time of the closing. The
Committee need not take the same action with respect to all outstanding Options.

         5.2 ASSUMPTION OR SUBSTITUTION OF OPTIONS. The Company, or the
successor or purchaser, as the case may be, may make adequate provision for the
assumption of the outstanding Options or the substitution of new options for the
outstanding Options on terms comparable to the outstanding Options.

         5.3 CORPORATE TRANSACTION. A Corporate Transaction shall include the
following:

                  (a) MERGER; REORGANIZATION: the merger or consolidation of the
Company with or into another corporation or other reorganization (other than a
reorganization under the United States Bankruptcy Code) of the Company (other
than a consolidation, merger, or reorganization in which the Company is the
continuing corporation and which does not result in any reclassification or
change of outstanding shares of Stock); or

                  (b) SALE: the sale or conveyance of the property of the
Company as an entirety or substantially as an entirety (other than a sale or
conveyance in which the Company continues as a holding

                                                                               5

<PAGE>   9

company of an entity or entities that conduct the business or businesses
formerly conducted by the Company);

                  (c) LIQUIDATION: the dissolution or liquidation of the
Company;

                  (d) CHANGE IN CONTROL: A "Change in Control" shall be deemed
to have occurred if either (i) any individual, entity, or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), other than a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company, acquires beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 50 percent (50%) or more of either (A) the
then-outstanding shares of Stock ("Outstanding Shares") or (B) the combined
voting power of the then-outstanding voting securities of the Company entitled
to vote generally in the election of directors ("Voting Power") or (ii) at any
time during any period of three consecutive years (not including any period
prior to the Effective Date), individuals who at the beginning of such period
constitute the Board (and any new director whose election by the Board or whose
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority thereof; or

                  (e) OTHER TRANSACTIONS: any other transaction that the Board
determines by resolution to be a Corporate Transaction.

                                   ARTICLE VI

                                  PARTICIPATION

         Participants in the Plan shall be those Eligible Employees who, in the
judgment of the Committee, are performing, or during the term of their incentive
arrangement will perform, vital services in the management, operation and
development of the Company, and significantly contribute, or are expected to
significantly contribute, to the achievement of long-term corporate economic
objectives. Eligible Consultants shall be selected from those non-employee
consultants to the Company who are performing services important to the
operation and growth of the Company. Participants may be granted from time to
time one or more Options; provided, however, that the grant of each such Option
shall be separately approved by the Committee and receipt of one such Option
shall not result in automatic receipt of any other Option. Upon determination by
the Committee that an Option is to be granted to a Participant, written notice
shall be given to such person, specifying the terms, conditions, rights and
duties related thereto. Each Participant shall, if required by the Committee,
enter into an agreement with the Company, in such form as the Committee shall
determine and which is consistent with the provisions of the Plan, specifying
such terms, conditions, rights and duties. Options shall be deemed to be granted
as of the date specified in the grant resolution of the Committee, which date
shall be the date of any related agreement with the Participant. In the event of
any inconsistency between the provisions of the Plan and any such agreement
entered into hereunder, the provisions of the Plan shall govern.

                                                                               6
<PAGE>   10

                                   ARTICLE VII

                              NON-QUALIFIED OPTIONS

         7.1 GRANT OF OPTIONS. Coincident with or following designation for
participation in the Plan, a Participant may be granted one or more Options. An
Option shall be considered as having been granted on the date specified in the
grant resolution of the Committee.

         7.2 STOCK OPTION CERTIFICATES. Each Option granted under the Plan shall
be evidenced by a written stock option certificate or agreement (an "Option
Certificate"). An Option Certificate shall be issued by the Company in the name
of the Participant to whom the Option is granted (the "Option Holder") and in
such form as may be approved by the Committee. The Option Certificate shall
incorporate and conform to the conditions set forth in this Section 7.2 as well
as such other terms and conditions that are not inconsistent as the Committee
may consider appropriate in each case.

                  (a) NUMBER OF SHARES. Each Option Certificate shall state that
it covers a specified number of shares of Stock, as determined by the Committee.

                  (b) PRICE. The price at which each share of Stock covered by
an Option may be purchased shall be determined in each case by the Committee and
set forth in the Option Certificate.

                  (c) DURATION OF OPTIONS; RESTRICTIONS ON EXERCISE. Each Option
Certificate shall state the period of time, determined by the Committee, within
which the Option may be exercised by the Option Holder (the "Option Period").
The Option Certificate shall also set forth any installment or other
restrictions on exercise of the Option during such period, if any, as may be
determined by the Committee. Each Option shall become exercisable (vest) over
such period of time, if any, or upon such events, as determined by the
Committee.

                  (d) TERMINATION OF SERVICES, DEATH, DISABILITY, ETC. The
Committee may specify the period, if any, during which an Option may be
exercised following termination of the Option Holder's services. The effect of
this subsection 7.2(d) shall be limited to determining the consequences of a
termination and nothing in this subsection 7.2(d) shall restrict or otherwise
interfere with the Company's discretion with respect to the termination of any
individual's services. If the Committee does not otherwise specify, the
following shall apply:

                           (i) If the services of the Option Holder are
terminated within the Option Period for "cause", as determined by the Company,
the Option shall thereafter be void for all purposes. As used in this subsection
7.2(d), "cause" shall mean willful misconduct, a willful failure to perform the
Option Holder's duties, insubordination, theft, dishonesty, conviction of a
felony or any other willful conduct that is materially detrimental to the
Company or such other cause as the Board in good faith reasonably determines
provides cause for the discharge of an Option Holder.

                           (ii) If the Option Holder becomes Disabled, the
Option may be exercised by the Option Holder within one year following the
Option Holder's termination of services on account of Disability (provided that
such exercise must occur within the Option Period), but not thereafter. In any
such case, the Option may be exercised only as to the shares as to which the
Option had become exercisable on or before the date of the Option Holder's
termination of services because of Disability.

                                                                               7
<PAGE>   11

                           (iii) If the Option Holder dies during the Option
Period while still performing services for the Company or within the one year
period referred to in (ii) above or the three-month period referred to in (iv)
below, the Option may be exercised by those entitled to do so under the Option
Holder's will or by the laws of descent and distribution within one year
following the Option Holder's death, (provided that such exercise must occur
within the Option Period), but not thereafter. In any such case, the Option may
be exercised only as to the shares as to which the Option had become exercisable
on or before the date of the Option Holder's death.

                           (iv) If the services of the Option Holder are
terminated (which for this purpose means that the Option Holder is no longer
employed by the Company or performing services for the Company) by the Company
within the Option Period for any reason other than cause, Disability, or death,
the Option may be exercised by the Option Holder within three months following
the date of such termination (provided that such exercise must occur within the
Option Period), but not thereafter. In any such case, the Option may be
exercised only as to the shares as to which the Option had become exercisable on
or before the date of termination of services.

                  (e) CONSIDERATION FOR GRANT OF OPTION. Each Option Holder
agrees to remain in the employment of the Company or to continue providing
consulting services to the Company, as the case may be, at the pleasure of the
Company, for a continuous period of at least one year after the date the Option
is granted, at the rate of compensation in effect on the date of such agreement
or at such changed rate as may be fixed, from time to time, by the Company.
Nothing in this paragraph shall limit or impair the Company's right to terminate
the employment of any employee or to terminate the consulting services of any
consultant.

                  (f) EXERCISE, PAYMENTS, ETC.

                           (i) MANNER OF EXERCISE. The method for exercising
each Option granted hereunder shall be by delivery to the Company of written
notice specifying the number of Shares with respect to which such Option is
exercised. The purchase of such Shares shall take place at the principal offices
of the Company within thirty days following delivery of such notice, at which
time the Option Price of the Shares shall be paid in full by any of the methods
set forth below or a combination thereof. Except as set forth in the next
sentence, the Option shall be exercised when the Option Price for the number of
shares as to which the Option is exercised is paid to the Company in full. If
the Option Price is paid by means of a broker's loan transaction described in
subsection 7.2(f)(ii)(D), in whole or in part, the closing of the purchase of
the Stock under the Option shall take place (and the Option shall be treated as
exercised) on the date on which, and only if, the sale of Stock upon which the
broker's loan was based has been closed and settled, unless the Option Holder
makes an irrevocable written election, at the time of exercise of the Option, to
have the exercise treated as fully effective for all purposes upon receipt of
the Option Price by the Company regardless of whether or not the sale of the
Stock by the broker is closed and settled. A properly executed certificate or
certificates representing the Shares shall be delivered to or at the direction
of the Option Holder upon payment therefor. If Options on less than all shares
evidenced by an Option Certificate are exercised, the Company shall deliver a
new Option Certificate evidencing the Option on the remaining shares upon
delivery of the Option Certificate for the Option being exercised.

                           (ii) The exercise price shall be paid by any of the
following methods or any combination of the following methods at the election of
the Option Holder, or by any other method approved by the Committee upon the
request of the Option Holder:

                                    (A) in cash;

                                                                               8

<PAGE>   12

                                    (B) by certified check, cashier's check or
other check acceptable to the Company, payable to the order of the Company;

                                    (C) by delivery to the Company of
certificates representing the number of shares then owned by the Option Holder,
the Fair Market Value of which equals the purchase price of the Stock purchased
pursuant to the Option, properly endorsed for transfer to the Company; provided
however, that no Option may be exercised by delivery to the Company of
certificates representing Stock, unless such Stock has been held by the Option
Holder for more than six months; for purposes of this Plan, the Fair Market
Value of any shares of Stock delivered in payment of the purchase price upon
exercise of the Option shall be the Fair Market Value as of the exercise date;
the exercise date shall be the day of delivery of the certificates for the Stock
used as payment of the Option Price; or

                                    (D) by delivery to the Company of a properly
executed notice of exercise together with irrevocable instructions to a broker
to deliver to the Company promptly the amount of the proceeds of the sale of all
or a portion of the Stock or of a loan from the broker to the Option Holder
required to pay the Option Price.

                  (g) DATE OF GRANT. An Option shall be considered as having
been granted on the date specified in the grant resolution of the Committee.

                  (h) WITHHOLDING. Upon exercise of an Option, the Option Holder
shall make appropriate arrangements with the Company to provide for the amount
of additional withholding required by Sections 3102 and 3402 of the Code and
applicable state and local income tax laws, including payment of such taxes
through delivery of shares of Stock or by withholding Stock to be issued under
the Option, as provided in Article XII.

         7.3 TRANSFERABILITY.

                  (a) GENERAL RULE: NO LIFETIME TRANSFERS. An Option shall not
be transferable by the Option Holder except by will or pursuant to the laws of
descent and distribution. An Option shall be exercisable during the Option
Holder's lifetime only by him or her, or in the event of Disability or
incapacity, by his or her guardian or legal representative. The Option Holder's
guardian or legal representative shall have all of the rights of the Option
Holder under this Plan.

                  (b) INTERVIVOS TRANSFER TO CERTAIN FAMILY MEMBERS. The
Committee may, however, provide at the time of grant or thereafter that the
Option Holder may transfer an Option to a member of the Option Holder's
immediate family, a trust of which members of the Option Holder's immediate
family are the only beneficiaries, or a partnership of which members of the
Option Holder's immediate family or trusts for the sole benefit of the Option
Holder's immediate family are the only partners (the "InterVivos Transferee").
Immediate family means the Option Holder's spouse, issue (by birth or adoption),
parents, grandparents, siblings (including half brothers and sisters and adopted
siblings) and nieces and nephews. No transfer shall be effective unless the
Option Holder shall have notified the Company of the transfer in writing and has
furnished a copy of the documents that effect the transfer to the Company. The
InterVivos Transferee shall be subject to all of the terms of this Plan and the
Option, including, but not limited to, the vesting schedule, termination
provisions, and the manner in which the Option may be exercised. The Committee
may require the Option Holder and the InterVivos Transferee to enter into an
appropriate agreement with the Company providing for, among other things, the
satisfaction of required tax withholding with respect to the exercise of the
transferred Option and the satisfaction of any Stock retention requirements
applicable to the Option Holder, together with such other terms and conditions
as may be specified by the

                                                                               9

<PAGE>   13

Committee. Except to the extent provided otherwise in such agreement, the
InterVivos Transferee shall have all of the rights and obligations of the Option
Holder under this Plan; provided that the InterVivos Transferee shall not have
any Stock withheld to pay withholding taxes pursuant to Section 12.2 unless the
agreement referred to in the preceding sentence specifically provides otherwise.

                  (c) NO ASSIGNMENT. No right or interest of any Option Holder
in an Option granted pursuant to the Plan shall be assignable or transferable
during the lifetime of the Option Holder, either voluntarily or involuntarily,
or be subjected to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy, except as set forth above.

         7.4 SHAREHOLDER PRIVILEGES. No Option Holder shall have any rights as a
shareholder with respect to any shares of Stock covered by an Option until the
Option Holder becomes the holder of record of such Stock, and no adjustments
shall be made for dividends or other distributions or other rights as to which
there is a record date preceding the date such Option Holder becomes the holder
of record of such Stock, except as provided in Article IV.

                                  ARTICLE VIII

                             RIGHTS OF PARTICIPANTS

         8.1 SERVICE. Nothing contained in the Plan or in any Option granted
under the Plan shall confer upon any Participant any right with respect to the
continuation of his employment by, or consulting relationship with, the Company,
or interfere in any way with the right of the Company, subject to the terms of
any separate employment agreement or other contract to the contrary, at any time
to terminate such services or to increase or decrease the compensation of the
Participant from the rate in existence at the time of the grant of an Option.
Whether an authorized leave of absence, or absence in military or government
service, shall constitute a termination of service shall be determined by the
Committee at the time.

         8.2 NO PLAN FUNDING. Obligations to Participants under the Plan will
not be funded, trusteed, insured or secured in any manner. The Participants
under the Plan shall have no security interest in any assets of the Company, and
shall be only general creditors of the Company.

                                   ARTICLE IX

                              GENERAL RESTRICTIONS

         9.1 INVESTMENT REPRESENTATIONS. The Company may require any person to
whom an Option is granted, as a condition of exercising such Option, to give
written assurances in substance and form satisfactory to the Company and its
counsel to the effect that such person is acquiring the Stock for his own
account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with Federal and applicable state
securities laws. Legends evidencing such restrictions may be placed on the Stock
certificates.

         9.2 COMPLIANCE WITH SECURITIES LAWS. Each Option grant shall be subject
to the requirement that, if at any time counsel to the Company shall determine
that the listing, registration or qualification of

                                                                              10

<PAGE>   14

the shares subject to such Option grant upon any securities exchange or under
any state or federal law, or the consent or approval of any governmental or
regulatory body, is necessary as a condition of, or in connection with, the
issuance or purchase of shares thereunder, such grant may not be accepted or
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained on conditions
acceptable to the Committee. Nothing herein shall be deemed to require the
Company to apply for or to obtain such listing, registration or qualification.

         9.3 CHANGES IN ACCOUNTING RULES. Except as provided otherwise at the
time an Option is granted, notwithstanding any other provision of the Plan to
the contrary, if, during the term of the Plan, any changes in the financial or
tax accounting rules applicable to Options shall occur which, in the sole
judgment of the Committee, may have a material adverse effect on the reported
earnings, assets or liabilities of the Company, the Committee shall have the
right and power to modify as necessary, any then outstanding and unexercised
Options as to which the applicable services or other restrictions have not been
satisfied.

                                    ARTICLE X

                             OTHER EMPLOYEE BENEFITS

         The amount of any compensation deemed to be received by a Participant
as a result of the exercise of an Option or sale of shares received upon such
exercise, shall not constitute "earnings" or "compensation" with respect to
which any other employee benefits of such employee are determined, including
without limitation benefits under any pension, profit sharing, 401(k), life
insurance or salary continuation plan.

                                   ARTICLE XI

                  PLAN AMENDMENT, MODIFICATION AND TERMINATION

         The Board may at any time terminate, and from time to time may amend or
modify the Plan provided, however, that no amendment or modification may become
effective without approval of the amendment or modification by the shareholders
if shareholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements, or if the Company, on the advice of
counsel, determines that shareholder approval is otherwise necessary or
desirable.

         No amendment, modification or termination of the Plan shall in any
manner adversely affect any Options theretofore granted under the Plan, without
the consent of the Participant holding such Options.

                                   ARTICLE XII

                                   WITHHOLDING

         12.1 WITHHOLDING REQUIREMENT. The Company's obligations to deliver
shares of Stock upon the exercise of any Option shall be subject to the
Participant's satisfaction of all applicable federal, state and local income and
other tax withholding requirements.

         12.2 WITHHOLDING WITH STOCK. At the time the Committee grants an
Option, or at any time thereafter, it may, in its sole discretion, grant the
Participant an election to pay all such amounts of tax

                                                                              11

<PAGE>   15

withholding, or any part thereof, by electing (a) to have the Company withhold
from shares otherwise issuable to the Participant, shares of Stock having a
value equal to the amount required to be withheld or such lesser amount as may
be elected by the Participant; provided however, that the amount of Stock so
withheld shall not exceed the minimum amount required to be withheld under the
method of withholding that results in the smallest amount of withholding, or (b)
to transfer to the Company a number of shares of Stock that were acquired by the
Participant more than six months prior to the transfer to the Company and that
have a value equal to the amount required to be withheld or such lesser amount
as may be elected by the Participant. All elections shall be subject to the
approval or disapproval of the Committee. The value of shares of Stock to be
withheld shall be based on the Fair Market Value of the Stock on the date that
the amount of tax to be withheld is to be determined (the "Tax Date"). Any such
elections by Participants to have shares of Stock withheld for this purpose will
be subject to the following restrictions:

                  (a) All elections must be made prior to the Tax Date; and

                  (b) All elections shall be irrevocable.

                                  ARTICLE XIII

                               REQUIREMENTS OF LAW

         13.1 REQUIREMENTS OF LAW. The issuance of Stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.

         13.2 GOVERNING LAW. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Delaware.

                                   ARTICLE XIV

                              DURATION OF THE PLAN

         Unless sooner terminated by the Board of Directors, the Plan shall
terminate at the close of business on November 22, 2010, and no Option shall be
granted, or offer to purchase Stock made, after such termination. Options
outstanding at the time of the Plan termination may continue to be exercised, or
become free of restrictions, or paid, in accordance with their terms.

Dated: November 22, 2000

                                   SIGNALSOFT CORPORATION,
                                   a Delaware corporation

                                   By: /s/ David A. Hose
                                       -----------------------------------------
                                   Name:  David A. Hose
                                   Title: President, Chief Executive Officer and
                                          Chairman of the Board of Directors

                                                                              12

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