Document:

<PAGE>   1
              MARINE DRILLING COMPANIES 401(k) PROFIT SHARING PLAN

We all plan for the future and look forward to the time when we can retire with
a dependable income for the rest of our lives. This Plan, called the Marine
Drilling Companies 401(k) Profit Sharing Plan, is provided to help you achieve
financial security during your retirement years. This booklet presents a summary
description of your Plan. We urge you to read it carefully for a better
understanding of the benefits that are available to you.

This booklet is intended only as a summary of the Plan. Every effort has been
made to accurately describe the Plan provisions which are contained in the Plan
documents. You should consult the Plan document in the event you have any
questions about your benefits and the Plan's provisions that this booklet does
not answer.

You may become more familiar with your Plan by reading the documents which are
available at the Home Office during regular business hours. If you would like
your own copy of the documents, you may obtain one by writing to your Plan
Administrator. There may be a small charge for this service.

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>

<S>                                                                                          <C>
INTRODUCTION..................................................................................1

PLAN NAME AND EFFECTIVE DATE..................................................................1

PLAN YEAR AND RECORDS.........................................................................1

ELIGIBILITY, PARTICIPATION DATE AND ENROLLMENT................................................2

SERVICE.......................................................................................2

COMPENSATION..................................................................................4

CONTRIBUTIONS.................................................................................5

YOUR PARTICIPANT'S ACCOUNT....................................................................8

INVESTMENT OF CONTRIBUTIONS..................................................................13

ANSWERLINE 1-800 TELEPHONE SERVICE...........................................................15

YOUR VESTED INTEREST.........................................................................17

WITHDRAWALS OF CONTRIBUTIONS.................................................................18

LOANS........................................................................................22

SUSPENSION OF CONTRIBUTIONS..................................................................23

DISTRIBUTION OF BENEFITS.....................................................................24
</TABLE>

<PAGE>   3

<TABLE>

<S>                                                                                         <C>
RETIREMENT...................................................................................35

CIRCUMSTANCES WHICH MAY LIMIT PLAN PARTICIPATION OR BENEFITS.................................36

QUALIFIED DOMESTIC RELATIONS ORDERS..........................................................37

LIMITATIONS ON WITHDRAWALS...................................................................37

TOP HEAVY PROVISIONS.........................................................................37

ADDITIONAL INFORMATION.......................................................................38

APPROVAL BY THE INTERNAL REVENUE SERVICE.....................................................40

YOUR ERISA RIGHTS............................................................................41

CLAIMING YOUR BENEFIT........................................................................42
</TABLE>

<PAGE>   4

                                  INTRODUCTION

Connecticut General Life Insurance Company, a CIGNA Company, has been retained
to assist us with the operation of our Plan. Their administrative and investment
system is unique and one of the most sophisticated available. They have more
than 200 years of experience in providing insurance and financial services to
organizations and individuals worldwide.

                          PLAN NAME AND EFFECTIVE DATE

The Marine Drilling Companies 401(k) Profit Sharing Plan originally became
effective on July 1, 1980.

This booklet describes the Plan in operation on January 1, 1995, as updated for
the Tax Reform Act of 1986 (TRA '86), the Omnibus Budget Reconciliation Act of
1986 (OBRA '86) and the Unemployment Compensation Amendment of 1992 (UCA '92).

                              PLAN YEAR AND RECORDS

Records of the Plan are kept on a Plan Year basis. The Plan Year is the 12-month
period beginning on January 1 each year and ending on December 31.

                                       1
<PAGE>   5

                 ELIGIBILITY, PARTICIPATION DATE AND ENROLLMENT

If you are currently a Participant in the Plan, you will continue to participate
under the revised Plan. If you are not currently a Participant, you will be
eligible to participate in the Plan if you are an Employee and:

o        you have at least 1/4 Year of Service.

o        you are not a Leased Employee.

If you are an eligible Employee, you will become a Participant in the Plan as of
the first day of the month following the date on which you meet the eligibility
requirements.

To become a Participant, you must complete an enrollment form and, if
applicable, a Salary Deferral Agreement provided by the Plan Administrator. If
you are a rehired Employee, see your Plan Administrator for details on your
participation in the Plan.

                                     SERVICE

Your Service begins with your date of employment. The following explains the
various terms associated with Service.

PERIOD OF SERVICE

The term Period of Service means the Employer-Employee relationship which begins
on your employment date and continues until your Severance from Service Date.
(Note: Your Period of Service will include any Period of Severance beginning on
your Severance from Service Date that is less than 12 months).

                                       2
<PAGE>   6

PERIOD OF SEVERANCE

A Period of Severance equals the period of time commencing on your Severance
from Service Date and ending on the date you are re-employed.

SEVERANCE FROM SERVICE DATE

Your Severance from Service Date will be the earliest of 1, 2, or 3 below:

1.       The date you terminate employment by reason of a quit, discharge,
         permanent disability, retirement, or death.

2.       The second anniversary of the first day you are absent from Service for
         maternity or paternity reasons.

3.       The first anniversary of the first day you separate from service for
         any other reason such as an authorized leave of absence, sickness,
         vacation, etc., after which you do not return to work.

YEAR OF SERVICE

You will be credited with one Year of Service for each Period of Service
equaling 12 months. Service counted in computing Years of Service need not be
consecutive or continuous, and all fractional Periods of Service shall be
aggregated.

BREAK IN SERVICE

The term Break in Service means a consecutive 12-month Period of Severance,
beginning on your Severance from Service Date. The Severance from Service Date
of an Employee who is absent from Service by reason of a maternity/paternity
absence is the second anniversary of the first date of such absence. This means
that the first possible Break in Service would occur 12 months later. The period
of time between the first and second anniversaries of your absence from work is
neither a Period of Service nor a Period of Severance.

                                       3
<PAGE>   7

The Plan Administrator may require that you certify in a timely fashion that
your leave is for one of these purposes.

There are special rules governing a Break in Service if you terminate for
reasons such as an authorized leave or sickness. See your Plan Administrator for
details.

                                  COMPENSATION

For purposes of this Plan, your Compensation is based on your wages and other
payments for the Plan Year that are normally reported by us as "Wages, tips,
other compensation" on your Form W-2. Compensation does not include fringe
benefits such as your deductible moving expenses paid or reimbursed by us or
other expense allowances. Amounts that we may contribute on your behalf to
salary deferral arrangements, which are excludable from your gross income under
the Internal Revenue Code, are included as part of your Compensation for the
purposes of this Plan.

The Plan will not recognize Compensation earned while you are in an ineligible
class of employees.

For Plan Years beginning in 1994, Compensation in excess of $150,000 will not be
considered Compensation for purposes of this Plan. Although the $150,000 is to
be adjusted annually for cost-of-living increases, if the accumulated annual
cost-of-living adjustment does not equal or exceed $10,000 it will be
disregarded. In some cases, this limit is applied to a total family group
working for the same employer. If any Plan Year is shorter than 12 months, this
limit will be adjusted.

                                        4

<PAGE>   8

                                  CONTRIBUTIONS

ELECTIVE DEFERRAL CONTRIBUTIONS

While you are a Participant, you may make contributions to the Plan by means of
a Salary Deferral Agreement. You may defer your salary by an amount equal to not
less than 1% nor more than 15% of your Compensation. We, in turn, will
contribute to the Plan the amount by which you defer your salary. You may change
the amount of your Elective Deferral Contributions on the first of the month
provided you give the Plan Administrator 15 days advance notice.

The salary you defer will not be included in your income we report to the
federal government for income tax purposes. You will pay taxes on Elective
Deferral Contributions when your contributions are distributed to you from the
Plan.

MATCHING CONTRIBUTIONS

For each $1.00 you contribute as an Elective Deferral Contribution, up to 5% of
your Compensation, we plan on contributing $1.00 on your behalf. However, this
is a discretionary amount and may vary periodically throughout the year. The
Matching Contributions we make on your behalf will be used to purchase shares of
Marine Drilling Companies, Inc. common stock.

Contributions will be made monthly. If you are a Participant on the last day of
this Monthly Contribution Period, we will make a contribution on your behalf.

Should you retire, become disabled or die during the Contribution Period, a
Matching Contribution will be made on your behalf for the period during which
you were a Participant.

The allocation that will be made on your behalf may be affected in any year that
the Plan is considered Top Heavy.

                                        5

<PAGE>   9

DISCRETIONARY CONTRIBUTIONS

We may make a contribution to the Plan at the end of the Plan Year. However, the
amount of contribution may vary from year to year.

In order for you to share in the Discretionary Contribution, you must be a
Participant on the last day of the Plan Year.

Should you retire, become disabled or die during the Plan Year, a Discretionary
Contribution will be made on your behalf for the period during which you were a
Participant.

When we make a contribution it will be allocated to you in the following manner:

Step 1 -  You will receive an amount equal to 5.7% of the sum of your total
          Compensation plus your Compensation that is in excess of $62,700.
          However, if we do not contribute enough to provide this amount for all
          Participants, you will receive an amount equal to the same proportion
          that your Compensation plus Compensation in excess of $62,700 bears to
          the Compensation plus Compensation in excess of $62,700 of all
          Participants eligible to receive a contribution.

Step 2 -  If there is any remaining contribution after applying Step 1, the
          amount allocated to you will be in the same proportion that your
          Compensation bears to the total Compensation paid to all Participants
          in the Plan.

The dollar amount limit noted above is a figure always equal to the Social
Security Taxable Wage Base and will increase when the Wage Base increases. At
such time that the Internal Revenue Service adjusts the OASDI (Old-Age,
Survivors and Disability Insurance) tax rate, so that the old-age insurance
portion of the rate exceeds 5.7%; the percentage in Step 1 above will be equal
to the old-age insurance proportion of the OASDI rate in effect at the beginning
of the Plan Year.

The allocation that will be made on your behalf may be affected in any year that
the Plan is considered Top Heavy.

                                        6

<PAGE>   10

ROLLOVER CONTRIBUTIONS

Contributions from a retirement plan established by a former Employer may be
"rolled over" to your Participant's Account under this Plan either directly or
through the medium of an individual retirement account. There are special rules
concerning acceptance of Rollover Contributions. Therefore, if you wish to bring
Rollover Contributions into this Plan, contact your Plan Administrator for more
details.

Please Note: If you do bring Rollover Contributions into this Plan, your future
access to these amounts will be governed by the terms of the Plan as further
described in this booklet.

PRIOR EMPLOYEE CONTRIBUTIONS

Prior to June 17, 1994, you were permitted to make Employee Contributions to
your Participant's Account. You may no longer make Employee Contributions;
however, your Prior Employee Contributions may remain invested in the Plan and
may be withdrawn and distributed to you as provided in the WITHDRAWAL OF
CONTRIBUTIONS section and DISTRIBUTION OF BENEFITS section in this booklet.

FORFEITURES

In addition, at the end of the Plan Year, any available Forfeitures as further
described in the "Termination Of Employment" section of this booklet, will be
allocated to you in the same manner as Matching Contributions described above.
Once allocated to your Participant's Account, the Forfeitures will be treated as
Matching Contributions as further discussed in this booklet.

Be sure to read the CIRCUMSTANCES WHICH MAY LIMIT PLAN PARTICIPATION OR
BENEFITS, the LIMIT ON CONTRIBUTIONS and the TOP HEAVY PROVISIONS sections of
this booklet for details on the circumstances and conditions which may affect
Plan contributions or your future Plan participation.

                                        7

<PAGE>   11

                             LIMIT ON CONTRIBUTIONS

ANNUAL ADDITIONS LIMIT

Federal law requires that amounts contributed on your behalf for a given year
generally may not exceed the lesser of 1 or 2 below:

1.       $30,000 (or such other amount as may be prescribed by the Secretary of
         the Treasury or his delegate).

2.       25% of your Compensation.

If you need further details on how this limit applies to you, contact your Plan
Administrator.

ANNUAL  LIMIT  (EXCESS  ELECTIVE  DEFERRALS)

Federal tax law limits the dollar amount of your salary deferral contributions,
including Elective Deferral Contributions, to all 401(k) and similar plans in
which you participate in any calendar year.

For 1996 the annual limit is $9,500. The IRS adjusts this limit each year for
inflation.

If your Elective Deferral Contributions reach the annual limit during a calendar
year, we will take the following steps:

o        Your Elective Deferral Contributions and Matching Contributions will
         stop.

o        If your Participant's Account contains any Elective Deferral
         Contributions in excess of the limit for the year, the excess amount
         will be distributed to you no later than the April 15 following the end
         of the Plan Year in which the excess arose. You must report this excess
         amount as part of your gross income on your IRS Form 1040 for the year
         in which the excess was contributed.

                                        8

<PAGE>   12

         The excess amount distributed to you will also include any interest
         earned on the excess during the calendar year in which the excess
         amount was contributed to the Plan. The interest allocable to the
         excess is includible in your gross income for the year in which the
         interest is distributed to you.

o        If your Elective Deferral Contributions are stopped during the year
         because you reach the contribution limit, they will resume
         automatically beginning with the first pay period in the following
         year.

If you participate in more than one 401(k) or similar type plan during the year,
we may not be aware that your total contributions to all of your plans in which
you participated have exceeded the annual limit. You should keep track of your
salary deferral contributions to all plans to ensure that you do not exceed the
limit.

If you participate in more than one 401(k) or similar type plan during the year
and your salary deferral contributions do exceed the limit, you may request to
withdraw all or part of the excess from this Plan. To do this you must notify
the Plan Administrator in writing by March 1 of the existence of the excess and
request that the excess be distributed to you by April 15. The notice must
include:

o        The amount of the excess you wish to withdraw from this Plan (not to
         exceed the amount of Elective Deferral Contributions actually made to
         your Participant's Account under this Plan during the year).

o        The names of the other 401(k) or similar plans to which you made salary
         deferral contributions and the amount of your contributions to each
         plan.

o        A signed, written statement indicating that if the amount requested is
         not distributed to you, then this amount, when added to all other
         salary deferral contributions made on your behalf for the year, will
         exceed the annual limit.

If your request is late or does not contain all the necessary information, it
cannot be honored by the Plan Administrator.

                                        9

<PAGE>   13

If you do not withdraw the excess by the April 15 following the year in which
the excess occurred, you will be taxed twice on this amount: once in the year in
which the excess arose and again when the excess is actually distributed to you
from the Plan.

Finally, the Internal Revenue Code requires that any Matching Contributions
directly related to the excess amount distributed to you must be forfeited from
your Participant's Account and returned to the Plan.

ACTUAL DEFERRAL PERCENTAGE TEST
(EXCESS CONTRIBUTIONS)

To ensure that the Elective Deferral Contributions made to this Plan during a
Plan Year do not unfairly favor Highly Compensated Employees, the Internal
Revenue Code limits the extent to which the Elective Deferral Contributions of
Highly Compensated Employees can exceed the Elective Deferral Contributions of
all other employees. In order to satisfy this limit for a Plan Year, we may find
it necessary to take some or all of the following actions:

o        During the Plan Year the Plan Administrator may reduce the maximum
         percentage Highly Compensated Employees can contribute as Elective
         Deferral Contributions to the Plan.

         If the Plan Administrator determines that the Elective Deferral
         Contribution percentage for Highly Compensated Employees must be
         lowered, the future Elective Deferral Contributions of all Highly
         Compensated Employees whose contribution rates are higher than the new,
         lower maximum rate will be adjusted downward automatically.

         If the Plan Administrator subsequently determines that the maximum
         Elective Deferral Contribution percentage rate for Highly Compensated
         Employees can be raised, the Plan Administrator will automatically
         raise the level of each Highly Compensated Employee's Elective Deferral
         Contribution percentage to the new maximum level or to the level that
         was previously authorized by the affected employee, whichever is lower.

                                       10

<PAGE>   14

o        If at the end of any Plan Year the limit is exceeded, the Plan
         Administrator may return any Elective Deferral Contributions that
         exceed the limit to the affected Highly Compensated Employees. This
         corrective distribution will be made within 12 months after the Plan
         Year ends. The amount of the excess Elective Deferral Contributions
         returned will include any interest earned on the excess during the Plan
         Year in which the excess was contributed.

         The Internal Revenue Code requires that any Matching Contributions
         directly related to the excess Elective Deferral Contributions returned
         must be forfeited from the affected Highly Compensated Employee's
         Account and returned to the Plan.

o        We may make sufficient "Qualified" Nonelective Contributions or
         "Qualified" Matching Contributions to participants in order to meet the
         limits.

ACTUAL CONTRIBUTION PERCENTAGE TEST
(EXCESS AGGREGATE CONTRIBUTIONS)

The Internal Revenue Service has placed limits on the amounts of the following
contributions which can be contributed each year to this Plan on behalf of
Highly Compensated Employees:

o        Matching Contributions

In order to satisfy this limit for the Plan Year, we may find it necessary to
take some or all of the following actions:

o        The Plan Administrator may have to limit the level of Matching
         Contributions made to the Participant Accounts of Highly Compensated
         Employees.

         If the Plan Administrator lowers the level of Matching Contributions
         made to the Accounts of Highly Compensated Employees and subsequently
         determines that the contribution level can be increased, the
         contributions will be increased to the new, higher level automatically.

                                       11

<PAGE>   15

o        If at the end of any Plan Year the limit is exceeded, the Plan
         Administrator may return the vested Matching Contributions that exceed
         the limit to the affected Highly Compensated Employees. This corrective
         distribution will be made within 12 months after the Plan Year ends.
         The amount of the excess vested Matching Contributions returned will
         include any interest earned on the excess during the Plan Year in which
         the excess was contributed.

         If a Highly Compensated Employee is not 100-percent vested, the
         non-vested portion of the excess Matching Contributions that otherwise
         would have been refunded will be forfeited from the affected Highly
         Compensated Employee's Account and returned to the Plan.

o        We may make sufficient "Qualified" Nonelective Contributions to
         participants in order to meet the limit.

SPECIAL NOTE

In order to meet the tests described above, from time to time we may designate
some or all of the contributions we make on your behalf as Qualified Nonelective
Contributions and/or Qualified Matching Contributions. These "Qualified"
contributions will be subject to government regulations whereby they are 100%
immediately vested and may not be distributed before you terminate your
employment, die, become disabled, or retire before the Plan is terminated
without a replacement plan being established.

HIGHLY COMPENSATED EMPLOYEES

This booklet refers to the term "Highly Compensated Employee." Generally, a
Highly Compensated Employee is an Employee who owns at least 5% of the company;
earns more than $100,000; earns more than $66,000 and is one of the top 20% by
pay of the Employer; or is an officer and earns more than $60,000. The above
dollar amounts are generally adjusted for cost of living adjustment factors
determined by the government.

The rules involving who is a Highly Compensated Employee are relatively
complicated. Your Plan Administrator can provide you with further details.

                                       12

<PAGE>   16

Be sure to read the CIRCUMSTANCES WHICH MAY LIMIT PLAN PARTICIPATION OR
BENEFITS, the LIMIT ON CONTRIBUTIONS and the TOP HEAVY PROVISIONS sections of
this booklet for details on the circumstances and conditions which may affect
Plan contributions or your future Plan participation.

                           YOUR PARTICIPANT'S ACCOUNT

The Trustee is responsible for the Plan's fund. Contributions made to your
Participant's Account will be invested in the following account(s):

o Guaranteed Long-Term Account

o Employer Stock Account

o INVESCO Industrial Income Account

o Stock Market Index Account

o Fidelity Growth Opportunities Account

o Fidelity Contrafund Account

o PBHG Growth Account

o Warburg Pincus Emerging Growth Account

o Warburg Pincus International Equity Account

The following describes the investment account(s):

GUARANTEED LONG-TERM ACCOUNT

This account is structured to provide a consistently high return over the
longer term and a guarantee against loss. The interest rate is declared in
advance and will be changed periodically to reflect current long-term
investment conditions. Interest is credited to the Guaranteed-Long Term Account
daily. Both principal and credited interest are guaranteed, by Connecticut
General, against loss.

EMPLOYER STOCK ACCOUNT

This account is structured to provide the potential for growth, and gives you
the opportunity to invest in shares of Marine Drilling Companies, Inc. common
stock. Since the performance of this account is dependent upon the performance
of Marine Drilling Companies, Inc. common stock, there can be no guarantees mad
on the monies invested in this account. Dividends, when and if paid, will be
credited to the Employer Stock Account. Contributions that are to be invested in
the Employer Stock Account will be invested in a guaranteed short term account
prior to actual investment in the Employer Stock Account. All Matching
Contributions you receive will be used to purchase shares of Employer Stock.

INVESCO INDUSTRIAL INCOME ACCOUNT

Money designated for the INVESCO Industrial Income Account, a separate account
of Connecticut General Life Insurance Company, will be invested in shares of the
INVESCO Industrial Income Fund, a mutual fund of INVESCO Funds Group, Inc. The
mutual fund manager seeks the best possible current income while following sound
investment practices. The fund is invested in dividend-paying common stocks,
which provide a relatively high yield and stable return, and may also provide
capital appreciation over the long-term. Investments may also be made in
convertible bonds and preferred stocks.

Be aware that the value of the INVESCO Industrial Income Account will fluctuate
in response to stock market developments. Principal and earnings are not
guaranteed in this account.

STOCK MARKET INDEX ACCOUNT

This account provides the potential for growth through investment in common
stocks representing the Standard and Poor's Composite Stock Index (S&P500 index)
and S&P500 Index futures instruments. Since the performance of this account is
dependent upon the performance of the common stocks held for investment there
can be no guarantees made on the monies invested in this account.

FIDELITY GROWTH OPPORTUNITIES ACCOUNT

Money designated for the Fidelity Growth Opportunities Account, a separate
account of Connecticut General Life Insurance Company, will be invested in
shares of the Fidelity Advisor Growth Opportunities Fund, a mutual fund of
Fidelity Investments. The Fidelity Advisor Growth Opportunities Fund seeks
capital growth by investing primarily in common stocks or securities
convertible into common stocks. The Fidelity Advisor Growth Opportunities Fund
may purchase all types of securities (including foreign securities) such as
common and preferred stocks; bonds, debentures, notes and other debt securities;
and warrants and other rights to purchase securities. At least 65% of the
Fidelity Advisor Growth Opportunities Fund is invested in securities of
companies that the Fund Manager believes have long-term growth potential.

Be aware that the value of the Fidelity Growth Opportunities Account will
fluctuate in response to stock market developments. In addition, any investment
in foreign securities may involve currency and other risks not associated with
domestic investments. Principal and earnings are not guaranteed in this account.

FIDELITY CONTRAFUND ACCOUNT

This CIGNA Separate Account invests wholly in the Fidelity Contrafund. The Fund
seeks to provide long term capital growth by investing in securities of
companies that are undervalued or out-of-favor and not widely followed, but are
soon to embark on company changes (such as corporate restructuring or new
product development), which the portfolio manager expects to be positive.

This Account belongs to a broad category of investments for investors seeking a
long-term capital appreciation from equities, with little or no need for current
income. While specific account performance may vary, this category is
appropriate for those willing to accept potentially high level of account
balance fluctuation.

The Account is market-valued daily and provides no guarantee of principal or
investment returns.

PBHG GROWTH ACCOUNT

This CIGNA Separate Account seeks capital appreciation. The Fund manager will
seek to achieve this objective by investing in companies believed to have an
outlook for strong growth in earnings and the potential for significant capital
appreciation. Generally the Fund manager will invest at least 65% of the Fund's
total assets in common stocks and convertible securities of small capitalization
companies (market capitalization or annual revenues under $2 billion). The Fund
will likely have somewhat greater volatility than the stock market in general,
as measured by the S&P 500 Index. Although Fund managers have no present
intention of doing so, this Fund may invest up to 15% of its assets in
securities of foreign issuers and may also invest up to 15% of its assets in
illiquid securities.

Be aware that the value of the PBHG Growth Account will fluctuate in response to
stock market developments. In addition, any investment in foreign securities may
involve currency and other risks not associated with domestic investments.
Principal and earnings are not guaranteed in this account.

WARBURG PINCUS EMERGING GROWTH ACCOUNT

Money designated for the Warburg Pincus Emerging Growth Separate Account, a
separate account of Connecticut General Life Insurance Company, will be invested
in shares of the Warburg Pincus Emerging Growth Fund, a mutual fund of Warburg,
Pincus Counsellors, Inc., a wholly owned subsidiary of E.M. Warburg, Pincus &
Co., Inc. The Warburg Pincus Emerging Growth Fund seeks maximum capital
appreciation by investing in a portfolio of equity securities of domestic
emerging growth companies. Ordinarily the Fund will invest 65% of its total
assets in common stocks or warrants. The remainder of the Fund's assets may be
invested in debt securities, preferred stocks, and money market instruments.
The Fund may invest up to 10% of its total assets in foreign securities.

Be aware that the value of the Warburg Pincus Emerging Growth Separate Account
will fluctuate in response to stock market developments and changing interest
rates. In addition, any investment in foreign securities may involve currency
and other risks not associated with domestic investments. Principal and earnings
are not guaranteed in this account.

WARBURG PINCUS INTERNATIONAL EQUITY ACCOUNT

Money designated for the Warburg Pincus International Equity Separate Account, a
separate account of Connecticut General Life Insurance Company, will be invested
in shares of the Warburg Pincus International Equity Fund, a mutual fund of
Warburg, Pincus Counsellors, Inc., a wholly owned subsidiary of E.M. Warburg,
Pincus & Co., Inc. The Warburg Pincus International Equity Fund seeks long-term
appreciation by investing primarily in marketable equity securities of
non-United States issues. However, up to 35% of the Fund's assets may be
invested in the securities of companies having their principal business
activities in the United States. In addition, when Warburg Pincus believes that
a conservative or defensive posture is warranted, the Fund may invest
temporarily without limit in investment grade debt obligations and securities of
U.S. companies.

Be aware that the value of the Warburg Pincus International Equity Separate
Account will fluctuate in response to market developments. In addition, any
investment in foreign securities may involve currency and other risks not
associated with domestic investments. Principal and earnings are not guaranteed
in this account.

                          INVESTMENT OF CONTRIBUTIONS

You have the responsibility to decide how your own contributions and the
Discretionary Contributions made by your Employer on your behalf will be
invested. Your Employer shall be responsible for the investment of Matching
Contributions made on your behalf, which shall be invested in shares of Employer
Stock. During each Plan Year, you may change the portions of future
contributions made on your behalf that will be invested in the above accounts.
You may make these changes once every 30 days. Your Plan Administrator will
provide you with the forms needed to make this change.

Once every 30 days, during each Plan Year, you may transfer a portion of your
Participant's Account between the investment accounts described above, subject
to the following rules:

o Amounts may be transferred between the:

  o Guaranteed-Long Term Account

  o INVESCO Industrial Income Account

  o Stock Market Index Account

  o Fidelity Growth Opportunities Account

  o Fidelity Contrafund Account

  o PBHG Growth Account

  o Warburg Pincus Emerging Growth Account

  o Warburg Pincus International Equity Account

In addition, when you become 100% vested in the company Matching Contributions,
you may also transfer all or a portion of your balance from the Employer Stock
account to the other funds. These transfers can only be made once per calendar
year. The minimum amount that you can transfer from this account is $1,000 and
an administrative fee of $.07 per share will be charged to your account.

Under certain circumstances, the amount transferred from the Guaranteed
Long-Term Account to other investment accounts may be limited by Connecticut
General Life Insurance Company.

Please keep in mind that such transfers do not affect the investment mix of
future contributions.

SECTION 404(c) PLAN

This Plan is intended to meet the requirements of ERISA section 404(c) and its
regulations. Under these rules, plan fiduciaries may be relieved of liability
for losses that are a direct and necessary result of participants' and
beneficiaries' investment instructions.

                                       13

<PAGE>   17

o        Investment instruction may be given by:

         o        Active participants.

         o        Former participants who have retained an account balance in
                  the plan.

         o        Beneficiaries.

         o        Alternate payees.

o        Upon your request, we will provide you with the following:

         o        A description of the annual operating expenses of each
                  investment alternative (e.g., investment management fees or
                  administrative fees) that reduces the rate of return you
                  receive, and the aggregate amount of these expenses, expressed
                  as a percentage of the average net assets in the investment
                  alternative.

         o        Copies of any materials relating to the available investments,
                  to the extent such materials are provided to the plan (e.g.,
                  prospectuses, financial statements and reports).

         o        A list of assets making up the portfolios of certain funds,
                  and any information on the name of any bank or insurance
                  company issuing a fixed rate investment contract, along with
                  the terms and rate of return under the contract.

         o        Information on the value of shares or units in an investment,
                  as well as the past and current investment performance
                  information.

         o        Information on the value of the shares or units held in your
                  account.

         If you would like to receive any of the above information, please
         contact the Plan Administrator.

                                       14

<PAGE>   18

o        You must receive a copy of the most recent prospectus for each
         registered security in which you actually make an investment. These
         will be provided to you either before or immediately following your
         initial investment in the security.

o        Employer Stock:

         o        Information relating to the purchase, holding and sale of
                  employer stock, or the exercise of voting and tender rights on
                  employer stock is confidential. This information is available
                  only to you and to those directly involved in administering
                  the plan who have a plan-related need to know the information.
                  Otherwise, the information will only be disclosed if
                  specifically required by law.

                  If the designated plan fiduciary determines that there may be
                  a potential for undue employer influence on participants with
                  regard to the exercise of shareholder rights, an independent
                  fiduciary will be appointed to carry out those activities.

         o        Voting rights on employer stock are passed through to
                  participants and beneficiaries.

o        You will be responsible for the transaction charge when either a
         distribution or a loan is made to you.

                       ANSWERLINE 1-800 TELEPHONE SERVICE

The "AnswerLine" service allows you to enroll in the plan, make changes to your
retirement investments, to change the amount you contribute to the Plan, and to
get information about your Participant's Account. To access the "AnswerLine"
service call 1-800-25FACTS or 1-800-253-2287.

                                       15

<PAGE>   19

Once you have met the eligibility requirements of the Plan, you may use
"AnswerLine" to enroll in the plan. Be sure to have your Social Security number
ready. "AnswerLine" will prompt you to determine the amount you wish to
contribute to the plan. "AnswerLine" will also provide information on the
various investment options and allow you to determine how you wish all
contributions to be invested.

The "AnswerLine" service allows you to make a variety of changes to your
retirement investments. First you may change the way your future contributions
are invested. For example, if your contributions are split 50% between two
investment funds and you wish to change the allocation of your future
contributions to 60% in one fund and 40% in the other, the "AnswerLine" service
will make the change immediately for all future contributions.

You may also transfer dollars already in your account among available investment
funds. For example, you could move 80% of your employee dollars from one fund to
two other funds, allocating 50% to the second fund and 50% to the third.
Generally, transactions of this type received on any normal business day before
3:00 p.m. Eastern Time will be initiated the day of the call. Transactions
received after 3:00 p.m. Eastern Time will be processed on the next normal
business day. "AnswerLine" is normally available 24 hours a day, seven days a
week.

As a source of information, the "AnswerLine" service provides you immediate
access to information about your retirement savings account. Routine questions
such as current account balance or how your savings are currently split between
investments can be answered.

If you are considering applying for a loan, you may use "AnswerLine" to initiate
a loan transaction. "AnswerLine" can create various loan repayment models based
on the amount you wish to borrow or the amount you wish deducted from your pay.
Once you have determined what would work best for you, "AnswerLine" will
generate a loan application package that will be mailed directly to your home.
To complete the loan transaction, sign and return the application to the Plan
Administrator within 28 days of receipt.

You may call CIGNA's "AnswerLine" from any touch-tone phone. Be sure to have
your Social Security number and personal identification number (PIN) ready.

                                       16

<PAGE>   20

As your request is processed, the "AnswerLine" service will confirm your
instructions to make sure that the transaction can be made according to your
investment options, your account balances, and the provisions of your plan.
Written confirmation of your transactions will be sent to your home once the
transaction has been processed. Please contact your Plan Administrator with any
questions you may have regarding this service.

                              YOUR VESTED INTEREST

As you accumulate Years of Service, you acquire a right or "Vested Interest" in
the value of the contributions made by your Employer to your Participant's
Account. Your Vested Interest cannot be forfeited and increases as follows:

<TABLE>
<CAPTION>

         Years of Service                   Vesting Percentage
         ----------------                   ------------------
<S>                                         <C>
         Less than 1                                    0%
         1 but less than 2                             20%
         2 but less than 3                             40%
         3 but less than 4                             60%
         4 but less than 5                             80%
         5 or more                                    100%
</TABLE>

Notwithstanding the vesting schedule above, any Qualified Nonelective
Contributions or Qualified Matching Contributions we may make on your behalf
will be 100% immediately vested.

The portions of your Participant's Account attributable to the following types
of contributions are always 100% vested and nonforfeitable:

o        Elective Deferral Contributions

o        Rollover Contributions

                                       17

<PAGE>   21

o        Prior Employee Contributions

Additionally, regardless of your Years of Service, your Participant's Account
will be 100% vested when you reach normal retirement age, become permanently
disabled, or die. For further details concerning the disposition of your
non-vested account balance upon your termination of employment, please refer to
the "Termination Of Employment" section of this booklet.

                          WITHDRAWALS OF CONTRIBUTIONS

WITHDRAWALS  AFTER  AGE  59-1/2

If you have attained age 59-1/2, once every 12-consecutive months, you may
withdraw any amount, up to 100% of the value of your:

o        Elective Deferral Contributions, including earnings

See the LIMITATIONS ON WITHDRAWALS section of this booklet.

SERIOUS FINANCIAL HARDSHIP WITHDRAWALS OF ELECTIVE DEFERRAL CONTRIBUTIONS

If you experience a "serious financial hardship," you may request an in-service
withdrawal of your Elective Deferral Contributions from your Participant's
Account. For purposes of the Plan, a "serious financial hardship" is an
immediate and heavy financial need resulting from:

o        Expenses for medical care previously incurred by you, your spouse, or
         any of your dependents; or the amount necessary to pay for you, your
         spouse, or any of your dependents to obtain medical care.

                                       18

<PAGE>   22

o        Costs directly related to the purchase of your primary residence
         (excluding mortgage payments).

o        Tuition payments and related educational fees for the next 12 months of
         post-secondary education for you, your spouse, your children, or your
         dependents.

o        Payments necessary to prevent your eviction from your personal
         residence or to prevent foreclosure on the mortgage on your residence.

The following rules also apply to hardship withdrawals:

o        The amount you withdraw cannot exceed the amount required to satisfy
         the serious financial hardship.

o        Only your actual Elective Deferral Contributions and earnings credited
         to your Elective Deferral Contributions before January 1, 1989 may be
         withdrawn. The Internal Revenue Code does not permit the earnings
         credited to your Elective Deferral Contributions after December 31,
         1988 to be withdrawn for hardship purposes.

o        The amount withdrawn may include the amount necessary to pay income
         taxes or penalties reasonably anticipated to result from the hardship
         withdrawal. Thus, the amount of the hardship withdrawal may be "grossed
         up" for anticipated federal, state and local income taxes and
         penalties.

o        You must obtain all distributions, other than hardship distributions,
         and all non-taxable loans currently available to you under all plans
         maintained by us before you can request a hardship withdrawal of your
         Elective Deferral Contributions.

o        You will be suspended from making contributions, including Elective
         Deferral Contributions, to this Plan and any other deferred
         compensation plan maintained by us for a period of at least 12 months
         after you receive your distribution.

o        The maximum annual deferral limit that will apply to you for the year
         immediately following the year in which you take the hardship
         withdrawal will be reduced by the

                                       19

<PAGE>   23

         amount of Elective Deferral Contributions made to your Participant's
         Account for the year of the hardship withdrawal. (Refer to the section
         entitled "Annual Limit (Excess Elective Deferrals)" for a description
         of the maximum annual deferral limit.)

o        Generally, any amount withdrawn before age 59-1/2 is subject to regular
         income tax plus a penalty tax equal to 10 percent of the amount
         withdrawn.

Other requirements apply to hardship withdrawals. The Plan Administrator can
explain these requirements and provide you with the necessary forms you must
complete in order to receive an in-service hardship withdrawal.

See the LIMITATIONS ON WITHDRAWALS section of this booklet.

WITHDRAWAL OF PRIOR EMPLOYEE CONTRIBUTIONS

You may withdraw, once every 12-consecutive months, any amount (not exceeding
100%) of the actual value of your Prior Employee Contributions including
earnings.

See the LIMITATIONS ON WITHDRAWALS section of this booklet.

SPECIAL NOTE

You will be taxed differently on withdrawals of Prior Employee Contributions,
depending upon whether they were contributed before January 1, 1987 or on or
after January 1, 1987.

Until you withdraw the full amount of these contributions made before January 1,
1987, you will only have to pay income taxes on any earnings that you withdraw.
Earnings will be taxed as ordinary income and may also be subject to the 10%
"Additional Tax" discussed below.

                                       20

<PAGE>   24

Once you have withdrawn the full amount of these contributions made before
January 1, 1987, a portion of any further withdrawal you take will be
considered, for tax purposes, as if some earnings were withdrawn, regardless of
whether they in fact were.

The taxable amount of your withdrawal will be automatically calculated for you
when your withdrawal is processed by Connecticut General Life Insurance Company.

WITHDRAWAL OF ROLLOVER CONTRIBUTIONS

Once during a Plan Year, you may withdraw any amount, up to 100%, of the value
of your Rollover Contributions.

See the LIMITATIONS ON WITHDRAWALS section of this booklet.

WITHDRAWALS NOT ALLOWED

You may not withdraw the following contributions, as these contributions are
meant to accumulate until you retire to provide you with an income during your
retirement years:

o        Matching Contributions

o        Discretionary Contributions

SPOUSAL CONSENT FOR WITHDRAWALS

If you are married at the time you take a withdrawal, you may be required to
obtain consent in writing from your spouse. Consult with your Plan Administrator
for further details.

NOTE: The law does not permit repayment of withdrawals.

                                       21

<PAGE>   25

                                      LOANS

We realize that there are times when you must have access to the money in your
Participant's Account. For this reason we have included a loan provision that
allows you to borrow from your Vested Interest attributable to Elective Deferral
Contributions, Discretionary Contributions, Rollover Contributions and Prior
Employee Contributions. Generally, you must be actively employed to apply for a
loan. The Benefits/Payroll Manager will administer our loan program and will be
referred to as the Loan Administrator.

To apply for a loan, you have two options: (1) call the AnswerLine at
1-800-253-2287 and follow the instructions, or (2) you can fill out an
application and sign a promissory note to repay the amount of the loan with
interest. The promissory note verifies that your entire right, title and
interest in your Vested Interest shall be used as collateral. The Loan
Administrator will supply you with the loan application. If you are married at
the time you take a loan, you may be required to obtain consent in writing from
your spouse. Consult with your Loan Administrator for further details about
these consent requirements.

The Loan Administrator shall make a determination on your loan application on a
nondiscriminatory basis. Factors that will be considered in granting your loan
may include your creditworthiness and your financial need (similar to those
factors required in a normal commercial lending setting). Loans shall not be
made available to Highly Compensated Employees on a more favorable basis than to
other Employees. You may only have one outstanding loan at any time.

The maximum amount you may borrow is 50% of your entire Vested Interest. In no
event may you borrow more than $50,000 minus any loan amounts repaid in the last
12 months. The minimum loan request is $1,000.

The Loan Administrator shall determine what the appropriate interest rate will
be at any given time by following procedures that consider interest rates issued
by lending institutions under similar circumstances. After you have taken a
loan, the interest rate is fixed for the duration of the loan. The terms of the
loan will not be changed nor will the interest rate be renegotiated.

                                       22

<PAGE>   26

Generally, you have five years to repay the loan in equal bi-weekly or
semi-monthly installments over the specific loan period. The Loan Administrator
may allow you to repay the loan over a period longer than five years if you are
using the proceeds of the loan to purchase your primary residence (repayment
period may not exceed 120 months).

Repayments must be made through payroll deduction. If you do not make the
required payment of principal and interest when due or within a 30-day grace
period, your loan shall be considered to be in default and the entire
outstanding loan balance will become immediately due and payable. This will be
treated as a distribution to you. The significance of the loan balance being
treated as a distribution is that the amount of this distribution will be
taxable as ordinary income. A form 1099R will be issued to you and the total
amount of the distribution will be reported to the IRS. You should know that the
inability to repay your loan in a timely fashion is grounds for disapproval of
any subsequent loan application from the Plan.

While you are on an authorized unpaid leave of absence, you will be excused from
making scheduled loan repayments for a period up to one year.

If you want to prepay the loan, you may do so without penalty.

If you terminate your employment, retire or die while you have a loan, the
outstanding loan balance will be treated as part of the distribution of your
Participant's account and will be included on the Form 1099R which will be
produced when your final check is issued.

For further information regarding loans please see your Loan Administrator.

                           SUSPENSION OF CONTRIBUTIONS

ELECTIVE DEFERRAL CONTRIBUTIONS

You may suspend your Salary Deferral Agreement, at any time, by notifying the
Plan Administrator. Such suspension period may extend indefinitely. You may
resume having

                                       23

<PAGE>   27

Elective Deferral Contributions made to the Plan on the first of the month
following the expiration of the suspension period.

                            DISTRIBUTION OF BENEFITS

CHOOSING YOUR BENEFICIARY

Upon enrollment, you should choose a Beneficiary on a form available from your
Plan Administrator.

If you are married and die before the time your benefit payments are scheduled
to begin, the Plan requires that 100% of your Vested Interest be used to provide
benefits for your spouse.

Once you reach age 35, you may waive your spouse as your Beneficiary and
designate someone else as your Beneficiary under the Plan. Your spouse must
consent to this waiver in writing. This written consent must be witnessed by a
Plan Official or Notary Public. However, spousal consent is not needed if you
are designating your spouse as your Beneficiary for your entire Participant's
Account balance under the Plan.

Your spouse may consent to this waiver in one of two ways:

1.       Your spouse's consent may specifically acknowledge your designation of
         a person other than your spouse, in which case any future change of
         Beneficiary designation must have your spouse's written consent, or

2.       Your spouse's consent need not specifically identify the non-spouse
         Beneficiary, in which case you could change the Beneficiary designation
         in the future without your spouse's consent.

You may revoke the waiver at any time before your death, which would thus make
your spouse the Beneficiary. If you want, you may then make a new election
subject to the same provisions as specified above concerning spousal consent.

                                       24

<PAGE>   28

It is important that you and your spouse understand your respective rights and
obligations concerning benefits payable upon your death, and particularly, the
financial implications for your spouse of waiving his/her right to benefits upon
your death.

Upon the death of any married Participant, the terms of the Plan document will
supersede any Beneficiary designation on file that does not comply with the
requirements stated above.

Also, since your spouse has certain government-mandated rights to the death
benefit, you should immediately inform the Plan Administrator of any change in
your marital status.

If you are not married and die before retirement, your Participant's Account
balance will be distributed to the Beneficiary you have designated under the
Plan.

It is important that you keep the Plan Administrator informed of your
Beneficiary's proper name and address at all times. This will insure that your
chosen Beneficiary will receive the death benefit available under the Plan.

If you do not designate a Beneficiary or if no named Beneficiary survives you,
your Participant's Account balance will be distributed in accordance with the
terms of the Plan. Please contact your Plan Administrator for further details.

PAYMENT OF DEATH BENEFITS TO YOUR SPOUSE

If you die before your Normal Retirement Date and hadn't previously elected an
annuity form of distribution from the Plan (other than an Installment Refund
Annuity), and your total Vested Interest exceeds (or at the time of any prior
distribution exceeded) $3,500, your spouse will receive your total Vested
Interest in the form of a single sum cash payment within a reasonable period of
time after the Plan Administrator is informed of your death, unless your spouse
elects another form of payment.

If you had previously elected an annuity form of distribution from the Plan
(other than an Installment Refund Annuity), and your total Vested Interest
exceeds (or at the time of any prior distribution exceeded) $3,500, your spouse
must consent to the distribution before it is made.

                                       25

<PAGE>   29

If your spouse does not consent to a distribution, all benefits will be deferred
and will be paid subject to the requirements stated under the "Death Benefit
Commencement Date" section of this booklet. If your spouse does not consent to a
distribution prior to the date that is five years after your date of death, the
provisions of 2. under the "Death Benefit Commencement Date" section of this
booklet will apply.

If you die on or after your Normal Retirement Date and if your total Vested
Interest exceeds $3,500, and your spouse does not consent to a distribution, the
distribution will be made in the form of a Preretirement Survivor Annuity that
will provide your spouse with a series of monthly payments for his/her life or,
at his/her option, a benefit of equal value in any other form of payment
available under the Plan.

PAYMENT OF DEATH BENEFITS TO A BENEFICIARY OTHER THAN YOUR SPOUSE

If your benefit is to be paid to a Beneficiary other than your spouse, and if
your total Vested Interest exceeds (or at the time of any prior distribution
exceeded) $3,500, unless your Beneficiary elects another form of distribution,
that portion of your Vested Interest payable to the Beneficiary will be
distributed in the form of a single sum cash payment within a reasonable period
of time after the Plan Administrator is notified of your death.

PAYMENT OF DEATH BENEFITS WHEN VESTED INTEREST IS LESS THAN $3,500

If your total Vested Interest is $3,500 or less at the time it becomes payable,
the distribution will always be made in the form of a single sum cash payment
and shall be paid within a reasonable period of time after the Plan
Administrator is notified of your death.

DEATH BENEFIT COMMENCEMENT DATE

If you die after your benefits have commenced, the remaining portion of your
Vested Interest that has not been distributed to you will be paid to your
Beneficiary at least as rapidly as under the method of distribution in effect
prior to your death.

                                       26

<PAGE>   30

If you die before distribution of your Vested Interest has commenced, your
entire Vested Interest will be distributed no later than five years after your
death unless your Beneficiary elects 1 or 2 below:

1.       If your benefits are being paid to a Beneficiary other than your
         spouse, the benefit will be paid in the form of a life annuity (or in
         installments over a period not extending beyond the life expectancy of
         the Beneficiary) starting no later than one year after your death.

2.       If your spouse is your designated Beneficiary, the benefit will be paid
         in the form of a life annuity (or in installments over a period not
         extending beyond your spouse's life expectancy). However, the payments
         are not required to begin prior to the date you (not your spouse) would
         have attained age 70-1/2.

WHEN PAYMENT OF YOUR BENEFITS WILL BEGIN

If your total Vested Interest exceeds (or at the time of any prior distribution
exceeded) $3,500, you and, in some limited circumstances, your spouse must
consent to the distribution of your benefits. The Plan Administrator will
provide you with a Notice within a reasonable time after the occurrence of an
event that permits a distribution (for example, termination of employment or
retirement). This Notice will provide you with a general description of the
important features, and an explanation of the relative values of the available
optional forms of benefit. The Notice must be provided no less than 30 days, and
no more than 90 days, before the commencement of your benefits. You may not
consent to a distribution either before you receive this Notice or more than 90
days before the distribution of your benefits is made.

An election to receive an immediate distribution of Plan benefits in excess of
$3,500 is not valid unless you receive notice of certain rights no less than 30
days and no more than 90 days before the distribution. The notice includes a
general description of the important features, and an explanation of the
relative values of the available optional forms of benefit. However, you may
waive the 30-day minimum period that must precede a distribution by making an
election to do so. You can receive your distribution less than 30 days after the
required notice if: (1) the Plan Administrator notifies you that you have at
least 30 days after receiving the

                                       27

<PAGE>   31

notice to consider the decision of whether or not to elect the distribution and
(2) you make an affirmative election to receive the distribution after receiving
the notice.

The Notice discussed above will also inform you of your right, if any, to defer
distribution of your benefits to a date of your choosing. This date may not be
later than your attainment of age 62. You will have 90 days from the date you
receive the Notice from the Plan Administrator to elect and consent to a
distribution, to defer distribution or to take no action. If you elect to defer,
this election may not be changed. If you take no action, distribution will be
made at your attainment of age 62 in the form of a Joint and Survivor Annuity or
cash.

If you retire after your attainment of age 62, you may not defer distribution of
your benefits.

If your total Vested Interest is $3,500 or less at the time it becomes payable,
your distribution will always be in cash and will be made at your termination of
employment. Such a distribution may not be deferred. The consent of you and your
spouse is not required for such a distribution.

HOW YOUR BENEFIT WILL BE PAID

Benefits may be received in the form of an annuity, cash, Employer stock or a
combination of these. If you do not elect a distribution option, your benefit
will, in most cases, be paid in the form of a single sum cash payment.

Your election must be made in the 90-day period preceding the start of your
benefit payments. This 90-day period is referred to as the "benefit election
period." During the benefit election period, you may change your election as
often as you wish.

Generally, you may take a distribution without having to obtain your spouse's
consent. However, if you are married, you will need your spouse's consent to
elect an annuity option other than a Joint and Survivor or an Installment Refund
Annuity. You will also need your spouse's consent if you change your election
from any annuity option other than the Installment Refund Annuity.

                                       28

<PAGE>   32

Your Plan Administrator can explain to you in greater detail what additional
requirements must be satisfied in order to obtain valid spousal consent, if
necessary.

PURCHASING AN ANNUITY

An annuity is a retirement benefit providing monthly payments over a period of
time. Annuities can be:

o        Fixed: providing level monthly payments,

o        Variable: providing payments in an amount which may go up or down
         depending on investment performance, or

o        A combination of fixed and variable.

The following annuity forms are offered:

o        JOINT AND SURVIVOR ANNUITY. If you are married when you retire and do
         not choose otherwise, a Joint and Survivor Annuity will be purchased
         for you. This annuity provides fixed monthly payments to you for life.
         At your death, monthly payments (in an amount equal to 50% of the
         monthly amount payable to you, or 100% if you so elect) will continue
         for the life of the spouse to whom you were married at the time the
         annuity was purchased. If you decide to accept the Joint and Survivor
         Annuity at retirement or to elect another annuity form, your decision
         is final and cannot be changed in response to a post-retirement change
         in circumstance.

         As a married Participant, you may choose another annuity form. Your
         spouse, however, must consent in writing to this decision. The consent
         must be witnessed by a Plan Representative or Notary Public. You may
         then select any of the other annuity forms available. During your
         "benefits election period" you may change such optional form of benefit
         provided spousal consent is obtained, unless the change is back to a
         Joint and Survivor Annuity.

                                       29

<PAGE>   33

o        YEARS CERTAIN AND LIFE ANNUITY. This annuity provides monthly payments
         to you for life. You may choose 10 or 15 years as the "certain period."
         If you die before receiving payments for 10 (or 15) years, payments in
         the same amount will continue to your Beneficiary for the rest of the
         certain period.

o        CONTINGENT ANNUITANT - TEN YEAR CERTAIN AND LIFE ANNUITY. This annuity
         provides monthly payments to you for life. At your death, payments will
         continue to your contingent annuitant for life. If you die before
         receiving payments for 10 years, payments to your contingent annuitant
         will be in the same amount you received. After the end of the 10-year
         period, 50% (or 100% if you so elect) of the monthly amount payable to
         you will continue to your contingent annuitant for life. If both you
         and your contingent annuitant die within the 10-year period, payments
         will continue to your Beneficiary for the rest of the 10-year period.

o        FLEXIBLE INSTALLMENT REFUND ANNUITY. This annuity refunds your account
         balance to you in monthly payments over a number of years. The actual
         payment that is made each year is determined on the basis of your life
         expectancy under IRS tables. The life expectancy is redetermined
         annually and the amount of the monthly payment may change each year. If
         you should die, the remaining balance in your account will be
         distributed to your named Beneficiary.

o        INSTALLMENT REFUND ANNUITY. This annuity refunds your account balance
         to you for a period certain of 5, 10, or 15 years. At the end of this
         time, all payments will stop. If you die before the end of the period
         you select, the payments will continue to your Beneficiary for the
         remainder of the period.

SPECIAL NOTE

The value of your account used to provide an annuity will be reduced by a state
tax, if applicable, and a policy handling fee. If the amount available to
purchase an annuity is less than $3,500, an annuity will not be purchased and
the distribution will always be made in cash. You may not elect to defer receipt
of this cash distribution.

                                       30

<PAGE>   34

REQUIRED DISTRIBUTIONS

If you continue to work after your Normal Retirement Date, your Plan
Administrator will confirm in writing that distribution of your account will
begin on the first day of the month coinciding with or next following your
retirement. Your distribution must begin no later than the April 1 following the
calendar year in which you reach age 70-1/2. However, if you reach age 70-1/2
before January 1, 1988 and you were not a 5% owner of the Employer during the
Plan Year in which you reached age 66-1/2, nor were you a 5% owner in later Plan
Years, you may defer receiving your distribution until the April 1 date
following the calendar year in which you retire.

TERMINATION OF EMPLOYMENT

You will be entitled to a distribution of the Vested Interest of your
Participant's Account if you terminate employment before your retirement date.
Please refer to the DISTRIBUTION OF BENEFITS section of this booklet for further
details.

Any amounts in your account that are not vested will be forfeited at the time
you incur five consecutive one-year Breaks in Service following your
termination. However, if you terminate employment as a result of a permanent
disability, you will receive 100% of your account.

If you terminate your employment and later return to work with us, and again
become a Participant, the following will occur to any non-vested contributions
which were maintained in your Participant's Account on your date of termination:

o        If you return to work before you have incurred five consecutive
         one-year Breaks in Service, that portion of your account which was not
         vested will not be forfeited.

o        If you return to work after you have incurred five consecutive one-year
         Breaks in Service, that portion of your account which was not vested
         will be forfeited, and will not be restored.

Upon your re-enrollment in this Plan, your vesting percentage will take into
account all Years of Service except those years excluded in the VESTED INTEREST
section of this booklet.

                                       31

<PAGE>   35

TAX WITHHOLDING ON PAYMENTS AND DIRECT ROLLOVER OPPORTUNITIES

Generally, you can choose to have the taxable portion of a payment from this
Plan paid to you in two ways. You can have all or a portion of your payment
either (1) paid in a DIRECT ROLLOVER or (2) PAID TO YOU. The choice you make
will affect the taxes you owe.

If you choose a DIRECT ROLLOVER:

o        Your payment will be made directly from this Plan to the individual
         retirement account or annuity (IRA) of your choice or to a qualified
         defined contribution plan that will accept your rollover.

o        Your payment will not be taxed in the current year and no income tax
         will be withheld from the payment. Instead, your payment will be taxed
         later, when you take it out of the IRA or the qualified plan.

         For example, if your payment is $10,000, and you choose a direct
         rollover for this entire amount, the Plan will pay the $10,000 to the
         IRA or qualified plan of your choice. No taxes will be withheld from
         this amount, and you will not owe any income tax on the $10,000 until
         you later take it out of the IRA or qualified plan.

o        You cannot choose a direct rollover for payments of less than $200.

o        You cannot choose a direct rollover of the amount used to repay
         (offset) an outstanding unpaid loan balance.

         For example, your vested account balance is $10,000. You have a $4,000
         loan. Your plan loan is secured by your account balance. You terminate
         employment without repaying the outstanding loan and the Plan offsets
         your account balance by $4,000 to repay the unpaid loan balance. When
         your account balance is distributed, you could choose a direct rollover
         of the remaining $6,000. You could not, however, elect a direct
         rollover of the $4,000 used from your account to repay the outstanding
         unpaid loan balance.

                                       32

<PAGE>   36

If you choose to have your payment PAID TO YOU:

o        You will only receive 80% of the payment, because the Plan
         Administrator is required to withhold 20% of the payment and send it to
         the IRS as income tax withholding. The amount withheld is credited
         against your taxes when you file your income tax return. The 20%
         withholding requirement is not an additional tax.

         For example, if your payment is $10,000, and you choose to have the
         payment paid to you, you will receive only $8,000 because the Plan
         Administrator must withhold $2,000 as income tax. However, when you
         prepare your income tax return, you will report the full $10,000 as a
         payment from the Plan to you. The $2,000 will be reported as income tax
         withheld, and it will be credited against any income tax you owe for
         the year.

o        If you receive the payment before age 59-1/2, you may have to pay an
         additional 10% tax.

o        You can roll over the payment made to you by paying it to an individual
         retirement account or annuity (IRA) or to another qualified plan within
         60 days of receiving the payment. You will not be taxed on the amount
         rolled over until you take it out of the IRA or qualified plan.
         However, the Plan Administrator must still withhold 20% of the payment
         when it is paid to you. Therefore, if you want to roll over 100% of the
         payment to an IRA or a qualified plan, you must find other money to
         replace the 20% that was withheld. If you only roll over the 80% that
         you received, you will be taxed on the 20% that was withheld but was
         not rolled over.

         For example, your payment is $10,000, and you choose to have it paid to
         you. You will receive $8,000, and $2,000 will be sent to the IRS as
         income tax withholding. Within 60 days of receiving the $8,000, you may
         roll over the entire $10,000 to an IRA or another qualified plan. To do
         this, you roll over the $8,000 you received from the Plan, and you will
         have to find $2,000 from other sources (your savings, a loan, etc.). In
         this case, the entire $10,000 is not taxed until you take it out of the
         IRA or qualified plan. If you roll over the entire $10,000, when you
         file your income tax return you may get a refund of the $2,000
         withheld.

                                       33

<PAGE>   37

         If, on the other hand, you roll over only $8,000, the $2,000 you did
         not roll over is taxed in the year it was withheld. When you file your
         income tax return you may get a refund of part of the $2,000 withheld.
         (However, any refund is likely to be larger if you roll over the entire
         $10,000.)

o        You may choose to have part of your payment paid to you and part paid
         in a direct rollover to your IRA or to a qualified plan. However, the
         portion paid as a direct rollover must equal at least $500. In
         addition, if the taxable amount of your payment is $500 or less, you
         may not divide the payment and have part of it paid to you and part of
         it paid in a direct rollover.

The rules described above apply to the taxable portion of your payment. These
rules do not apply to payments of non-taxable monies. In addition these rules
also do not apply to payments from an annuity payable over your life or from an
annuity that makes payments over a period of ten or more years. In addition,
these rules do not apply to the minimum required payments that you must begin to
receive when you reach age 70-1/2.

The Plan Administrator will provide you with a more detailed description of your
payment options, tax rules and direct rollover rights when you request a
withdrawal or distribution from the Plan.

10% "ADDITIONAL TAX"

A distribution or withdrawal of taxable money is generally subject to a 10%
additional tax if it is considered to be taken "early." An early distribution or
withdrawal is one that occurs before you reach age 59-1/2, die, or become
totally or permanently disabled.

There are exceptions to the 10% additional tax for:

o        a distribution made to you after separation from service in the form of
         a lifetime annuity for you, or for you and your Beneficiary

o        any distribution made to you upon the termination of your employment
         after you reach age 55

                                       34

<PAGE>   38

o        any withdrawals used to pay unreimbursed medical expenses for you or
         your dependent in excess of 7.5% of your adjusted gross income as
         reported on your Form 1040 federal tax return

o        any withdrawal or distribution made under the terms of a Qualified
         Domestic Relations Order

o        any corrective distributions made to satisfy the Actual Deferral
         Percentage Test or the Actual Contribution Percentage Test.

The 10% additional tax will not apply to any of the following types of
contributions that are distributed from the Plan:

o        Prior Employee Contributions

However, the 10% additional tax will apply to the early withdrawal of any
investment gains you are deemed to have taken on the above contributions.

Your Plan Administrator will provide you with information on the tax
consequences of your distribution. However, you should consult your own tax
advisor for more complete information regarding your particular tax situation.

                                   RETIREMENT

Your Normal Retirement Date will be the first day of the month following the
date you attain age 55. If you continue to work past your Normal Retirement
Date, you will remain a Participant in the Plan and contributions will continue
to be made on your behalf until you retire. You are always 100% vested on your
Normal Retirement Date.

When you do retire, you will receive a total distribution of your Participant's
Account. There are government-imposed regulations regarding the distribution of
your retirement benefits. Please refer to the DISTRIBUTION OF BENEFITS section
of this booklet for further details.

                                       35

<PAGE>   39

                       CIRCUMSTANCES WHICH MAY LIMIT PLAN
                            PARTICIPATION OR BENEFITS

The following conditions may have an effect on the contributions made to your
Participant's Account or your further participation in this Plan:

o        If your benefit is paid to you in one lump sum, you will receive no
         further benefits.

o        If you become eligible for a disability benefit before your retirement,
         you will receive the entire value of your account, and no further
         contributions will be made on your behalf.

o        You can expect the Plan to continue indefinitely. However, we may
         modify, suspend or terminate the Plan should circumstances force us to
         do so. If the Plan is terminated, contributions to the Plan will stop.
         If we have not established a successor plan, you will be entitled to
         receive a distribution of your Participant's Account.

o        Your account may be reduced if we determine that certain expenses
         necessary to operate and administer the Plan will be deducted from your
         Participant's Account.

o        Your Vested Interest will not increase during Plan Years in which you
         do not complete a Year of Service.

o        Once you have incurred five consecutive one-year Breaks in Service
         following your termination of employment, you will forfeit the
         non-vested portion of your Participant's Account.

o        You will not be entitled to a benefit if you terminate employment
         before you have any Vested Interest.

                                       36

<PAGE>   40

                       QUALIFIED DOMESTIC RELATIONS ORDERS

A Qualified Domestic Relations Order is a court order that creates or recognizes
an alternate payee's (e.g. spouse, former spouse, child) right to part or all of
your Plan benefits. While ERISA generally protects Plan benefits against
creditors, Qualified Domestic Relations Orders are an exception. Such an order
may require payment of benefits to an alternate payee before the Participant has
separated from service and/or is entitled to a distribution on account of
retirement, termination, death or disability, even though the Plan prohibits
distributions to the Participant earlier than one of these events. The Plan
Administrator must notify you if the Plan receives a domestic relations order
and must also determine, within a reasonable time, if the order is qualified.
You and each alternate payee will be notified of the decision. In the meantime,
the benefits affected are segregated in a separate account.

                           LIMITATIONS ON WITHDRAWALS

Under certain circumstances, the withdrawal that you receive from your
Participant Account may be delayed by Connecticut General Life Insurance
Company. The circumstances under which this may happen are fully described in
the Group Annuity Contract. No payment would be delayed, however, under these
circumstances in the event of your death, Retirement, Termination of Employment
with us or total and permanent disability.

                              TOP HEAVY PROVISIONS

A Plan is deemed to be Top Heavy if adjusted account balances attributable to
Key Employees are 60% or more of the total adjusted account balances.

Key Employees are generally considered to be certain officers and owners of the
Employer.

                                       37

<PAGE>   41

If the Plan is deemed to be Top Heavy for any given Plan Year, the following
Plan provisions will change:

o        A minimum contribution of 3% of your Compensation (4% under certain
         circumstances) may be made on your behalf. If the contribution we make
         is less than 3%, the contribution made on behalf of Non-Key Employees
         will equal the greatest contribution, as a percentage of Compensation,
         made on behalf of any Key Employee.

o        However, if you are a Non-Key Employee and also a Participant in a
         defined benefit plan sponsored by Marine Drilling Management Company,
         instead of the minimum contribution described above, you will be
         provided with a minimum benefit in the defined benefit plan. The
         minimum benefit will be equal to the average of your five highest
         consecutive calendar year compensation amounts multiplied by the lesser
         of: 2% (3% in certain instances), multiplied by the number of years of
         service you have accrued; or 20% (20% plus one percentage point for
         each year that this Plan is maintained to a maximum of 30%, in certain
         instances). Specific compensation periods and years of service to be
         taken into account in the calculation of this benefit will be according
         to the rules set forth in the defined benefit plan.

See your Plan Administrator for more details.

                             ADDITIONAL INFORMATION

THE EMPLOYERS:

Marine Drilling Companies, Inc.
One Sugar Creek Center Boulevard, Suite 600
Sugar Land, Texas 77478-3556

                                       38

<PAGE>   42

Marine Drilling Management Company
One Sugar Creek Center Boulevard, Suite 600
Sugar Land, Texas 77478-3556

THE EMPLOYERS' IDENTIFICATION NUMBERS:

74-2558926

74-2570231

YOUR PLAN'S NUMBER: 001

PLAN ADMINISTRATOR: Marine Drilling Management Company will serve as Plan
Administrator and will be responsible for administration of the Plan and benefit
information. The Company's Benefits/Payroll Manager has been designated to
represent the Plan Administrator. You may contact this person at:

Marine Drilling Management Company
One Sugar Creek Center Boulevard, Suite 600
Sugar Land, Texas 77478-3556
Telephone: (713) 243-3000

TRUSTEE:

CG Trust Company, an Illinois Company
525 West Monroe Street
Suite 1800
Chicago, IL 60661-3629

AGENT FOR SERVICE OF LEGAL PROCESS: Your Plan Administrator is designated to
receive any summons or legal notice delivered to inform the Plan of a legal
action concerning it.

In addition, the Trustee may receive any summons or legal notice delivered to
inform the Plan of a legal action concerning it.

                                       39

<PAGE>   43

PLAN FIDUCIARIES: This Plan's Fiduciaries are the Employer, the Plan
Administrator and the Trustee(s).

PLAN TYPE: Our Plan is a defined contribution profit sharing plan. This means
that we will make a contribution on the behalf of each Participant. In addition,
we will make a contribution equal to the amount by which the Participant's
Compensation was deferred, pursuant to a Salary Deferral Agreement.

The amount of contributions we make on your behalf may vary from year to year.
However, we may choose to base contributions on business profits in any Plan
Year, if we so desire.

The actual value of these contributions at the time of your retirement will be
used to provide your retirement benefit. Because individual participant accounts
are maintained for defined contribution plans, the benefits under such plans are
not eligible to be insured by the Pension Benefit Guaranty Corporation.

TYPE OF ADMINISTRATION: This Plan operates under a contract administration. This
means that Plan contributions accumulate and benefit payments are payable under
a group annuity contract. Our contract is with Connecticut General Life
Insurance Company.

                    APPROVAL BY THE INTERNAL REVENUE SERVICE

This Plan is intended to be a "Qualified" plan under Internal Revenue Code
section 401(a). As such, contributions made to the Plan are not taxable to you
until distributed. In the unlikely event the Internal Revenue Service determines
that the Plan does not meet IRS qualification requirements, then all
contributions shall cease. At such time, your contributions will be returned to
you.

                                       40

<PAGE>   44

                                YOUR ERISA RIGHTS

As a Participant, you are entitled to certain rights and protection under the
Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all
Plan Participants shall be entitled to:

o        Examine, without charge, at the Plan Administrator's office and at
         other specified locations, all Plan documents, including insurance
         contracts and copies of all documents filed by the Plan with the U. S.
         Department of Labor, such as detailed annual reports and Plan
         descriptions.

o        Obtain copies of all Plan documents and other Plan information upon
         written request to the Plan Administrator. The Plan Administrator may
         make a reasonable charge for the copies.

o        Receive a summary of the Plan's annual financial report. The Plan
         Administrator is required by law to furnish each Participant with a
         copy of this summary annual report.

o        Obtain a statement telling you whether you have a right to receive a
         benefit at Normal Retirement and, if so, what your benefit would be at
         Normal Retirement if you stop working under the Plan now. If you do not
         have a right to a benefit, the statement will tell you how many more
         years you have to work to get a right to a benefit. This statement must
         be requested in writing and is not required to be given more than once
         a year. The Plan Administrator must provide the statement free of
         charge.

In addition to creating rights for Plan Participants, ERISA imposes duties upon
the people who are responsible for the operation of the Plan. The people who
operate your Plan are called "Fiduciaries" of the Plan and are identified in the
ADDITIONAL INFORMATION section of this booklet. They have a duty to operate the
Plan prudently and in the interest of you and other Plan Participants and
Beneficiaries. No one, including your Employer or other person, may fire you or
otherwise discriminate against you in any way to prevent you from obtaining a
benefit or exercising your rights under ERISA. If your claim for a benefit is
denied in whole or in part, you must receive written explanation of the reason
for the denial. You have the right to have the Plan Administrator review and
reconsider your claim.

                                       41

<PAGE>   45

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive them within
30 days, you may file suit in a federal court. In such a case, the court may
require the Plan Administrator to provide the materials and pay you up to $100 a
day until you receive the materials, unless the materials were not sent because
of reasons beyond the control of the Plan Administrator.

If you have a claim for a benefit which is denied or ignored, in whole or in
part, you may file suit in a state or federal court. If it should happen that
Plan Fiduciaries misuse the Plan's money, or if you are discriminated against
for asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a federal court. The court will decide who should
pay court costs and legal fees. If you are successful, the court may order the
person you have sued to pay these costs and fees. If you lose, the court may
order you to pay these costs and fees, if for example, it finds your claim is
frivolous.

If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.

                              CLAIMING YOUR BENEFIT

To claim your benefit under the Plan, you (or your Beneficiary) should make an
appointment with the Plan Administrator to complete the forms necessary to
process the benefit. Normally, your Plan Administrator will help you to complete
the forms, which must be signed by both you and the Plan Administrator. If
approved by the Plan Administrator, the forms will then be sent to Connecticut
General Life Insurance Company for processing.

A decision regarding the status of your claim should be made by the Plan
Administrator within 90 days from the date the claim is filed.

                                       42

<PAGE>   46

IF YOUR CLAIM IS DENIED

Government regulations set forth specific procedures to take care of the rare
instance when a claim for a benefit is denied in whole or in part. A claim for a
benefit might be denied if:

1.       The Plan Administrator does not believe a Participant is entitled to a
         benefit.

2.       The Plan Administrator disagrees with the amount of benefit to which
         the Participant believes he is entitled.

If this happens to you, the Plan Administrator should notify you, in writing, of
the reasons for the denial within 90 days of the date you make your claim. If
more time is required for a special case, the Plan Administrator may take up to
an additional 90 days, but you will receive written notification explaining the
special circumstances which require more time as well as indicate the date by
which a final decision is expected (see the NOTE below). The notice of denial
should:

o        explain why your claim for a benefit has been denied and specify the
         Plan provisions on which the denial was based;

o        provide a description of any additional information needed and an
         explanation of why it is necessary;

o        explain the claim review procedure.

If you do not receive notice of the status of your claim or the denial of your
claim from the Plan Administrator within 90 days, or within 180 days if it is a
special case, you can assume your claim has been denied and you may then request
a review of your denial.

REVIEW OF THE DENIAL

If your claim has been denied, you may request a review of the denial. You have
60 days after receipt of the written notice of denial to request a review. This
request must be in writing and may be made to any Plan Fiduciary. (The
ADDITIONAL INFORMATION

                                       43

<PAGE>   47

section of this booklet identifies the Plan Fiduciaries.) If you wish, you (or
your representative) may also review the Plan documents and submit issues and
comments supporting your claim, in writing, to the appropriate Plan Fiduciary.

A review of the denial should be made in writing by the Plan Fiduciary within 60
days (see the NOTE below) after your request is received. The decision should:

o        be written in a manner you can easily understand;

o        specify the Plan provisions on which the decision is based;

o        tell you the results of the review.

If you do not receive a decision on your request for review within 60 days, you
can assume your request has been denied.

If you disagree with the results of the review, you may file suit in federal or
state court. If your suit is successful, the court may award you legal costs
including attorney's fees.

NOTE: The 90 and 60 day deadlines may be extended under special circumstances.
You will be told of the extension in writing before the end of the 90 (or 60)
day period. The extension notice will state why the extension is needed and the
date you may expect a decision.

                                       44

<PAGE>   48

                                      NOTES<PAGE>

                                                                    EXHIBIT 10.4

                            PNY TECHNOLOGIES, INC.

                            1999 STOCK OPTION PLAN

                  (As Amended and Restated, October 27, 2000)

                                   * * * * *

         1.       Purpose. The purpose of the PNY Technologies, Inc. 1999 Stock
                  -------
Option Plan (the "Plan") is to further and promote the interests of PNY
Technologies, Inc. (the "Company"), its Subsidiaries and its shareholders by
enabling the Company and its Subsidiaries to attract, retain and motivate key
employees, non-employee directors, consultants or other individuals or entities
or those who will become employees, non-employee directors or consultants, and
to align the interests of those individuals and the Company's shareholders.

         2.       Definitions. For purposes of the Plan, the following terms
                  -----------
shall have the meanings set forth below:

                  2.1 "Award Agreement" means the agreement executed by a
Participant pursuant to Sections 3.2 of the Plan in connection with the granting
of a Stock Option.

                  2.2 "Board" means the Board of Directors of the Company, as
constituted from time to time.

                  2.3 "Closing" means the occurrence of the closing of the
initial public offering by the Company of the Common Stock.

                  2.4 "Code" means the Internal Revenue Code of 1986, as in
effect and as amended from time to time, or any successor statute thereto,
together with any rules, regulations and interpretations promulgated thereunder
or with respect thereto.

                  2.5 "Common Stock" means the Common Stock, par value $.01 per
share, of the Company or any security of the Company issued by the Company in
substitution or exchange therefor.

                  2.6 "Disability" means a permanent physical or mental
"disability", as defined under the Company's long-term disability plan, if any.
If the Company does not maintain a long-term disability plan, "Disability" shall
mean any physical or mental disability which is determined to be total and
permanent by a physician selected in good faith by the Company.

<PAGE>

                                      -2-

                  2.7 "Exchange Act" means the Securities Exchange Act of 1934,
as in effect and as amended from time to time, or any successor statute thereto,
together with any rules, regulations and interpretations promulgated thereunder
or with respect thereto.

                  2.8 "Fair Market Value" means on, or with respect to, any
given date, the closing market price of the Common Stock, as reported on the
transaction reporting system for the exchange or market upon which the Common
Stock is traded for such date or, if the Common Stock was not traded on such
date, on the next preceding day or days on which the Common Stock was traded. If
at any time the Common Stock is not traded on such exchange, the Fair Market
Value of a share of the Common Stock shall be determined in good faith by the
Board.

                  2.9 "Incentive Stock Option" means any stock option granted
pursuant to the provisions of Section 6 of the Plan (and the relevant Award
Agreement) that is intended to be (and is specifically designated as) an
"incentive stock option" within the meaning of Section 422 of the Code.

                  2.10 "Non-Qualified Stock Option" means any stock option
granted pursuant to the provisions of Section 6 of the Plan (and the relevant
Award Agreement) that is not (and is specifically designated as not being) an
Incentive Stock Option.

                  2.11 "Participant" means any individual who is selected from
time to time under Section 5 to receive an award under the Plan.

                  2.12 "Retirement" means the voluntary retirement by the
Participant from active employment with the Company and its Subsidiaries on or
after the attainment of (i) age 65, or (ii) 60, with the consent of the Board.

                  2.13 "Subsidiary(ies)" means any corporation (other than the
Company) in an unbroken chain of corporations, including and beginning with the
Company, if each of such corporations, other than the last corporation in the
unbroken chain, owns, directly or indirectly, more than fifty percent (50%) of
the voting stock in one of the other corporations in such chain.

         3.       Administration.
                  --------------

                  3.1 The Committee. The Plan shall be administered by a
                      -------------
committee (the "Committee"). The Committee shall be appointed from time to time
by the Board and shall, after the Closing, be comprised of not less than two (2)
of the then members of the Board who qualify as (a) Non-Employee Directors (as
defined by Rule 16b-3(b)(3) promulgated under the Exchange Act) and (b) Outside
Directors (as defined in Treasury Regulation 1.162-27(e)(3)). Consistent with
the Bylaws of the Company, members of the Committee shall serve at the pleasure
of the Board and the Board, subject to the

<PAGE>

                                      -3-

immediately preceding sentence, may at any time and from time to time remove
members from, or add members to, the Committee.

                  3.2 Plan Administration and Plan Rules. The Committee is
                      ----------------------------------
authorized to construe and interpret the Plan and to promulgate, amend and
rescind rules and regulations relating to the implementation, administration and
maintenance of the Plan. Subject to the terms and conditions of the Plan, the
Committee shall make all determinations necessary or advisable for the
implementation, administration and maintenance of the Plan including, without
limitation, (a) selecting the Plan's Participants, (b) making awards in such
amounts and form as the Committee shall determine, (c) imposing such
restrictions, terms and conditions upon such awards as the Committee shall deem
appropriate, and (d) correcting any technical defect(s) or technical
omission(s), or reconciling any technical inconsistency(ies), in the Plan and/or
any Award Agreement. The Committee may designate persons other than members of
the Committee to carry out the day-to-day ministerial administration of the Plan
under such conditions and limitations as it may prescribe, except that the
Committee shall not delegate its authority with regard to the selection for
participation in the Plan and/or the granting of any awards to Participants. The
Committee's determinations under the Plan need not be uniform and may be made
selectively among Participants, whether or not such Participants are similarly
situated. Any determination, decision or action of the Committee in connection
with the construction, interpretation, administration, implementation or
maintenance of the Plan shall be final, conclusive and binding upon all
Participants and any person(s) claiming under or through any Participants. The
Company shall effect the granting of awards under the Plan, in accordance with
the determinations made by the Committee, by execution of written agreements
and/or other instruments in such form as is approved by the Committee.

                  3.3 Liability Limitation. Neither the Board nor the Committee,
                      --------------------
nor any member of either, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan (or
any Award Agreement), and the members of the Board and the Committee shall be
entitled to indemnification and reimbursement by the Company in respect of any
claim, loss, damage or expense (including, without limitation, attorneys' fees)
arising or resulting therefrom to the fullest extent permitted by law and/or
under any directors and officers liability insurance coverage which may be in
effect from time to time.

                  3.4 Pre-IPO Administration. Notwithstanding anything in the
                      ----------------------
Plan to the contrary and prior to the Closing (the "Pre-IPO Period"), the Plan
may also be administered by the Board. During the Pre-IPO Period (but not
beyond), the Board shall have all the authority, rights and powers set forth in
Sections 3.1, 3.2 and 3.3 of the Plan and may make any and all determinations,
and take any and all other actions, which may or could be made, or taken, by the
Committee under the Plan.

         4. Term of Plan/Common Stock Subject to Plan. The Plan shall terminate
            -----------------------------------------
on December 31, 2009, except with respect to awards then outstanding. After such

<PAGE>

                                      -4-

date no further awards shall be granted under the Plan. The maximum number of
shares of Common Stock in respect of which awards may be granted or paid out
under the Plan, subject to adjustment as provided in Section 9.2 of the Plan,
shall not exceed 7,500,000 shares (which includes an adjustment for the stock
split implemented prior to the Closing). In the event of a change in the Common
Stock of the Company that is limited to a change in the designation thereof to
"Capital Stock" or other similar designation, or to a change in the par value
thereof, or from par value to no par value, without increase or decrease in the
number of issued shares, the shares resulting from any such change shall be
deemed to be the Common Stock for purposes of the Plan. Common Stock which may
be issued under the Plan may be either authorized and unissued shares or issued
shares which have been reacquired by the Company (in the open-market or in
private transactions) and which are being held as treasury shares. No fractional
shares of Common Stock shall be issued under the Plan.

         5. Eligibility. Individuals eligible for awards under the Plan shall
            -----------
consist of all employees, non-employee directors, consultants and other
individuals or entities, or those who will become employees, non-employee
directors, or consultants of the Company and/or its Subsidiaries, who are
responsible for the management, growth and protection of the business of the
Company and/or its Subsidiaries or whose performance or contribution, in the
sole discretion of the Committee, benefits or will benefit the Company.

         6.       Stock Options.
                  -------------

                  6.1 Terms and Conditions. Awards of stock options granted
                      --------------------
under the Plan shall be in respect of Common Stock and may be in the form of
Incentive Stock Options or Non-Qualified Stock Options (sometimes referred to
collectively herein as the "Stock Option(s))". Such Stock Options shall be
subject to the terms and conditions set forth in this Section 6 and any
additional terms and conditions, not inconsistent with the express terms and
provisions of the Plan, as the Committee shall set forth in the relevant Award
Agreement.

                  6.2 Grant. Stock Options may be granted under the Plan in such
                      -----
form as the Committee may from time to time approve. Special provisions shall
apply to Incentive Stock Options granted to any employee who owns (within the
meaning of Section 422(b)(6) of the Code) more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or its parent
corporation or any subsidiary of the Company, within the meaning of Sections
424(e) and (f) of the Code (a "10% Shareholder").

                  6.3 Exercise Price. The exercise price per share of Common
                      --------------
Stock subject to a Stock Option shall be determined by the Committee; provided,
                                                                      --------
however, that the exercise price of an Incentive Stock Option shall not be less
-------
than one hundred percent (100%) of the Fair Market Value of the Common Stock on
the date of the grant of such Incentive Stock Option; provided, further,
                                                      --------  -------
however, that, in the case of a 10%
-------
<PAGE>

                                     -5-

Shareholder, the exercise price of an Incentive Stock Option shall not be less
than one hundred ten percent (110%) of the Fair Market Value of the Common Stock
on the date of grant.

                  6.4 Term. The term of each Stock Option shall be such period
                      ----
of time as is fixed by the Committee; provided, however, that the term of any
Incentive Stock Option shall not exceed ten (10) years (five (5) years, in the
case of a 10% Shareholder) after the date immediately preceding the date on
which the Incentive Stock Option is granted.

                  6.5 Method of Exercise. A Stock Option may be exercised, in
                      ------------------
whole or in part, by giving written notice of exercise to the Secretary of the
Company, or the Secretary's designee, specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the exercise
price in cash, by certified check, bank draft or money order payable to the
order of the Company or, if permitted by the Committee (in its sole discretion)
and applicable law, by delivery of, alone or in conjunction with a partial cash
or acceptable instrument payment, (a) a fully-secured promissory note or notes,
(b) shares of Common Stock already owned by the Participant for at least six (6)
months, or (c) some other form of payment acceptable to the Committee. The
Committee may also permit Participants (either on a selective or group basis) to
utilize a broker other than the Company or any of its Subsidiaries to
simultaneously exercise Stock Options and sell or surrender the shares of Common
Stock thereby acquired, pursuant to a "cashless exercise" arrangement or program
maintained by such broker, selected by and approved of in all respects in
advance by the Committee. Payment instruments shall be received by the Company
subject to collection. The proceeds received by the Company upon exercise of any
Stock Option may be used by the Company for general corporate purposes. Any
portion of a Stock Option that is exercised may not be exercised again.

                  6.6 Exercisability. In respect of any Stock Option granted
                      --------------
under the Plan, unless otherwise (a) determined by the Committee (in its sole
discretion) at any time and from time to time in respect of any such Stock
Option, or (b) provided in the Award Agreement or in the Participant's
employment agreement (if any) in respect of any such Stock Option, such Stock
Option shall become exercisable as to the aggregate number of shares of Common
Stock underlying such Stock Option, as determined on the date of grant, as
follows:

     o    25% on the first anniversary of the date of grant of the Stock Option,
          provided the Participant is then employed by the Company and/or one of
          its Subsidiaries;

     o    50 %, on the second anniversary of the date of grant of the Stock
          Option, provided the Participant is then

<PAGE>

                                      -6-

          employed by the Company and/or one of its Subsidiaries;

     o    75%, on the third anniversary of the date of grant of the Stock
          Option, provided the Participant is then employed by the Company
          and/or one of its Subsidiaries;

     o    100%, on the fourth anniversary of the date of grant of the Stock
          Option, provided the Participant is then employed by the Company
          and/or one of its Subsidiaries.

In no event shall any Stock Option become exercisable as to more than 100% of
the aggregate number of shares of Common Stock underlying such Stock Option.

Notwithstanding anything to the contrary contained in this Section 6.6, a Stock
Option shall become one hundred percent (100%) exercisable as to the aggregate
number of shares of Common Stock underlying such Stock Option upon the death,
Disability or Retirement of the Participant.

         7. Termination of Employment or Provision of Services. Except as
            --------------------------------------------------
provided in an Award Agreement and subject to any determination of the Committee
pursuant to Section 6.6 of the Plan, if a Participant's employment with, or
provision of services to, the Company terminates for any reason, any of the then
unexercisable Stock Options shall be forfeited and canceled by the Company.
Except as otherwise provided in this Section 7 or in any Award Agreement, if a
Participant's employment with, or provision of services to, the Company and its
Subsidiaries terminates for any reason, such Participant's rights, if any, to
exercise any then exercisable Stock Options, if any, shall terminate thirty (30)
days after the date of such termination (but not beyond the stated term of any
such Stock Option as determined under Sections 6.4) and thereafter such Stock
Options shall be forfeited and canceled by the Company. The Committee, in its
sole discretion, may determine that any such Participant's Stock Options, if
any, to the extent exercisable immediately prior to any termination of
employment or the provision of services (other than a termination due to death,
Retirement or Disability), may remain exercisable for an additional specified
time period after such thirty (30) day period expires (subject to any other
applicable terms and provisions of the Plan and the relevant Award Agreement),
but not beyond the stated term of any such Stock Option. Except as provided in
any Award Agreement, if any termination of employment or the provision of
services is due to death, Retirement or Disability, a Participant (and such
Participant's estate, designated beneficiary or other legal representative, as
the case may be and as determined by the Committee) shall have the right, to the
extent exercisable as of the date of any such termination, to exercise such
Stock Options, if any, at any time within the ninety (90) day period following
such termination due to

<PAGE>

                                      -7-

death, Retirement or Disability (but not beyond the term of any such Stock
Option as determined under Sections 6.4).

         8.  Non-transferability of Awards.
             -----------------------------

                  8.1 Stock Options. Unless otherwise provided in the Award
                      -------------
Agreement, no Stock Option under the Plan or any Award Agreement, and no rights
or interests herein or therein, shall or may be assigned, transferred, sold,
exchanged, encumbered, pledged, or otherwise hypothecated or disposed of by a
Participant or any beneficiary(ies) of any Participant, except by testamentary
disposition by the Participant or the laws of intestate succession. No such
interest shall be subject to execution, attachment or similar legal process,
including, without limitation, seizure for the payment of the Participant's
debts, judgements, alimony, or separate maintenance. Unless otherwise provided
in the Award Agreement, during the lifetime of a Participant, Stock Options are
exercisable only by the Participant.

                  8.2 Option Shares. No voluntary or involuntary transfer or
                      -------------
pledge of shares of the Company after issuance thereof to the Participant (or of
any shares subsequently issued in relation to such shares, whether as a stock
dividend or otherwise) may be made or suffered by the Participant except
pursuant to the terms of Stock Option Plan Stockholders Agreement (the
"Stockholders Agreement"), in the form attached hereto as Exhibit "A." The
Participant shall execute and deliver to the Company a counterpart to the
Stockholders Agreement at the time of and in connection with the grant of any
Stock Option to such Participant, unless the Participant has previously executed
the Stockholders Agreement. Notwithstanding any provision hereof to the
contrary, the Company shall be entitled to treat any Stock Option as void unless
and until the Participant has executed and delivered to the Company a
counterpart to the Stockholders Agreement.

         9. Changes in Capitalization and Other Matters.
            -------------------------------------------

                  9.1 No Corporate Action Restriction. The existence of the
                      -------------------------------
Plan, any Award Agreement and/or the awards granted hereunder shall not limit,
affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize (a) any adjustment,
recapitalization, reorganization or other change in the Company's or any
Subsidiary's capital structure or its business, (b) any merger, consolidation or
change in the ownership of the Company or any Subsidiary, (c) any issue of
bonds, debentures, capital, preferred or prior preference stocks ahead of or
affecting the Company's or any Subsidiary's capital stock or the rights thereof,
(d) any dissolution or liquidation of the Company or any Subsidiary, (e) any
sale or transfer of all or any part of the Company's or any Subsidiary's assets
or business, or (f) any other corporate act or proceeding by the Company or any
Subsidiary. No Participant, beneficiary or any other person shall have any claim
against any member of the Board or the Committee, the Company or any Subsidiary,
or any employees, officers or agents of the Company or any subsidiary, as a
result of any such action.

<PAGE>

                                      -8-

                  9.2 Recapitalization Adjustments. In the event of any change
                      ----------------------------
in capitalization affecting the Common Stock of the Company, including, without
limitation, a stock dividend or other distribution, stock split, reverse stock
split, recapitalization, consolidation, subdivision, split-up, spin-off,
split-off, combination or exchange of shares or other form of reorganization or
recapitalization, or any other change affecting the Common Stock, the Board
shall authorize and make such proportionate adjustments, if any, as the Board
deems appropriate to reflect such change, including, without limitation, with
respect to the aggregate number of shares of the Common Stock for which Stock
Options in respect thereof may be granted under the Plan, the maximum number of
shares of the Common Stock which may be granted or awarded to any Participant,
the number of shares of the Common Stock covered by each outstanding Stock
Options, and the exercise price per share of Common Stock in respect of
outstanding Stock Options.

                  9.3  Certain Mergers.
                       ---------------

                           9.3.1 If the Company effects any merger,
         reorganization or other business combination with any person or entity
         (such merger, reorganization or other business combination to be
         referred to herein as a "Merger Event") and as a result of any such
         Merger Event the Company will be or is the surviving corporation, a
         Participant shall be entitled, as of the date of the Merger Event (the
         "Execution Date") and with respect to both exercisable and
         unexercisable Stock Options (but only to the extent not previously
         exercised), to receive substitute stock options in respect of the
         shares of the surviving corporation on such terms and conditions, as to
         the number of shares, pricing and otherwise, which shall substantially
         preserve the value, rights and benefits of any affected Stock Options
         granted hereunder as of the date of the consummation of the Merger
         Event. Notwithstanding anything to the contrary in this Section 9.3, if
         any Merger Event occurs, the Company shall have the right, but not the
         obligation, to pay to each affected Participant an amount in cash or
         check equal to the excess of the Fair Market Value of the Common Stock
         underlying any affected unexercised Stock Options as of the Execution
         Date (whether then exercisable or not) over the aggregate exercise
         price of such unexercised Stock Options, and upon any such payment by
         the Company, such affected Stock Options shall be immediately
         cancelled.

                           9.3.2 If, in the case of a Merger Event in which the
         Company will not be, or is not, the surviving corporation, and the
         Company determines not to make the cash or check payment described in
         Section 9.3.1 of the Plan, the Company shall compel and obligate, as a
         condition of the consummation of the Merger Event, the surviving or
         resulting corporation and/or the other party to the Merger Event, as
         necessary, or any parent, subsidiary or acquiring corporation thereof,
         to grant, with respect to both exercisable and unexercisable Stock
         Options (but only to the extent not previously exercised), substitute
         stock options

<PAGE>

                                      -9-

          in respect of the shares of common or other capital stock of such
          surviving or resulting corporation on such terms and conditions, as to
          the number of shares, pricing and otherwise, which shall substantially
          preserve the value, rights and benefits of any affected Stock Options
          previously granted hereunder as of the date of the consummation of the
          Merger Event.

                           9.3.3 Upon receipt by any affected Participant of any
         such cash, check, or substitute stock options or stock appreciation
         rights as a result of any such Merger Event, such Participant's
         affected Stock Options for which such cash, check or substitute awards
         was received shall be thereupon canceled without the need for obtaining
         the consent of any such affected Participant.

                           9.3.4  The foregoing adjustments and the manner of
application of the foregoing provisions, including, without limitation, the
issuance of any substitute stock options, shall be determined in good faith by
the Committee in its sole discretion. Any such adjustment may provide for the
elimination of fractional shares.

         10.  [RESERVED]

         11. Amendment, Suspension and Termination. The Board may suspend or
             -------------------------------------
terminate the Plan (or any portion thereof) at any time and may amend the Plan
at any time and from time to time in such respects as the Board may deem
advisable to insure that any and all Stock Option awards conform to or otherwise
reflect any change in applicable laws or regulations, or to permit the Company
or the Participants to benefit from any change in applicable laws or
regulations, or in any other respect the Board may deem to be in the best
interests of the Company or any Subsidiary. No such amendment, suspension or
termination shall materially adversely effect the rights of any Participant
under any outstanding Stock Options, without the consent of such Participant.
The Committee may (in its sole discretion) amend or modify at any time and from
time to time the terms and provisions of any outstanding Stock Options, in any
manner to the extent that the Committee under the Plan or any Award Agreement
could have initially determined the restrictions, terms and provisions of such
Stock Options, including, without limitation, changing or accelerating the date
or dates as of which such Stock Options shall become exercisable. No such
amendment or modification shall, however, materially adversely affect the rights
of any Participant under any such award without the consent of such Participant.

         12.      Miscellaneous.
                  -------------

                  12.1 Tax Withholding. The Company shall have the right to
                       ---------------
deduct from any payment or settlement under the Plan, including, without
limitation, the exercise of any Stock Option, any federal, state, local or other
taxes of any kind which the Committee, in its sole discretion, deems necessary
to be withheld to comply with the

<PAGE>

                                     -10-

Code and/or any other applicable law, rule or regulation. If the Committee, in
its sole discretion, permits shares of Common Stock to be used to satisfy any
such tax withholding, such Common Stock shall be valued based on the Fair Market
Value of such stock as of the date the tax withholding is required to be made,
such date to be determined by the Committee. The Committee may establish rules
limiting the use of Common Stock to meet withholding requirements by
Participants who are subject to Section 16 of the Exchange Act. In addition, the
Company shall have the right to require payment from a Participant to cover any
applicable withholding or other employment taxes due upon any payment or
settlement under the Plan.

                  12.2 No Right to Employment. Neither the adoption of the Plan,
                       ----------------------
the granting of any award, nor the execution of any Award Agreement, shall
confer upon any employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, as the case may be, nor shall it
interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.

                  12.3 Other Company Benefit and Compensation Programs. Payments
                       -----------------------------------------------
and other benefits received by a Participant under an award made pursuant to the
Plan shall not be deemed a part of a Participant's compensation for purposes of
the determination of benefits under any other employee welfare or benefit plans
or arrangements, if any, provided by the Company or any Subsidiary unless
expressly provided in such other plans or arrangements, or except where the
Board expressly determines in writing that inclusion of an award or portion of
an award should be included to accurately reflect competitive compensation
practices or to recognize that an award has been made in lieu of a portion of
competitive annual base salary or other cash compensation.

                  12.4 Listing, Registration and Other Legal Compliance. No
                       ------------------------------------------------
awards or shares of the Common Stock shall be required to be issued or granted
under the Plan unless legal counsel for the Company shall be satisfied that such
issuance or grant will be in compliance with all applicable federal and state
securities laws and regulations and any other applicable laws or regulations.
The Committee may require, as a condition of any payment or share issuance, that
certain agreements, undertakings, representations, certificates, and/or
information, as the Committee may deem necessary or advisable, be executed or
provided to the Company to assure compliance with all such applicable laws or
regulations. Certificates for shares of the Common Stock delivered under the
Plan may be subject to such stock-transfer orders and such other restrictions as
the Committee may deem advisable under the rules, regulations, or other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law. In addition, if, at any time specified herein (or in any Award
Agreement or otherwise) for (a) the making of any award, or the making of any
determination, (b) the issuance or other distribution of Common Stock, or (c)
the payment of amounts to or through a Participant with respect to any award,
any law, rule, regulation or other

<PAGE>

                                     -11-

requirement of any governmental authority or agency shall require either the
Company, any Subsidiary or any Participant (or any estate, designated
beneficiary or other legal representative thereof) to take any action in
connection with any such determination, any such shares to be issued or
distributed, any such payment, or the making of any such determination, as the
case may be, shall be deferred until such required action is taken.

                  12.5 Designation of Beneficiary. Each Participant to whom an
                       --------------------------
award has been made under the Plan may designate a beneficiary or beneficiaries
to exercise any option or to receive any payment which under the terms of the
Plan and the relevant Award Agreement may become exercisable or payable on or
after the Participant's death. At any time, and from time to time, any such
designation may be changed or canceled by the Participant without the consent of
any such beneficiary. Any such designation, change or cancellation must be on a
form provided for that purpose by the Committee and shall not be effective until
received by the Committee. If no beneficiary has been designated by a deceased
Participant, or if the designated beneficiaries have predeceased the
Participant, the beneficiary shall be the Participant's estate. If the
Participant designates more than one beneficiary, any payments under the Plan to
such beneficiaries shall be made in equal shares unless the Participant has
expressly designated otherwise, in which case the payments shall be made in the
shares designated by the Participant.

                  12.6 Governing Law. The Plan and all actions taken thereunder
                       -------------
shall be governed by and construed in accordance with the laws of the State of
Delaware, without reference to the principles of conflict of laws thereof. Any
titles and headings herein are for reference purposes only, and shall in no way
limit, define or otherwise affect the meaning, construction or interpretation of
any provisions of the Plan.

                  12.7 Effective Date. The Plan as amended and restated shall be
                       --------------
effective upon its approval by the Board and adoption by the Company, subject to
the approval of the Plan by the Company's shareholders in accordance with
Section 422 of the Code.

                  IN WITNESS WHEREOF, this Plan is adopted by the Company as of
the 30th day of JUNE, 1999 and amended on February 4, 2000 and October 27, 2000.

                               PNY Technologies, Inc.

                               By: /s/     GADI COHEN
                                   ---------------------------------------
                                   Name:   Gadi Cohen
                                   Title:  President & Chief Executive
                                           Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]