Document:

<PAGE>
                                                                   Exhibit 10.2

                            STOCK PURCHASE AGREEMENT

                  THIS AGREEMENT is made as of the 26th day of March, 2002,
between Cell Pathways, Inc. (the "Company"), a corporation organized under the
laws of the State of Delaware, with its principal offices at 702 Electronic
Drive, Horsham, Pennsylvania 19044 and each purchaser whose name is set forth on
the signature page hereof (each a "Purchaser" and collectively, the
"Purchasers").

                  IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and each Purchaser, intending to be legally bound, agree
as follows:

                  SECTION 1. Authorization of Sale of the Units. Subject to the
terms and conditions of this Agreement, the Company has authorized the sale of
up to 2,390,269 units (the "Units"), each consisting of one share (each, a
"Share" and, collectively, the "Shares") of the common stock, $0.01 par value
per share, of the Company (the "Common Stock") and one warrant (each, a
"Warrant" and, collectively, the "Warrants"), to purchase one quarter (1/4) of
one share of Common Stock (each, a "Warrant Share" and, collectively, the
"Warrant Shares"). The terms of the Warrants shall be as set forth in the form
of Warrant set forth as Exhibit A attached hereto.

                  SECTION 2. Agreement to Sell and Purchase the Units. At the
Closing (as defined in Section 3), the Company will sell to each Purchaser, and
such Purchaser will buy from the Company, upon the terms and conditions
hereinafter set forth, the number of Units shown, and at the purchase price
shown, opposite such Purchaser's name on Schedule A attached hereto. The Shares
and the Warrants constituting the Units shall become immediately separable and
transferable upon the Closing. The Company may simultaneously enter into a
similar form of this purchase agreement with certain other investors (the "Other
Purchasers") and complete sales of Units to them, although it is understood that
there is no minimum number of Units that are required to be sold by the Company.
(The Purchaser and the Other Purchasers, if any, are hereinafter sometimes
collectively referred to as the "Purchasers," and this Agreement and the similar
agreements executed by the Other Purchasers are hereinafter sometimes
collectively referred to as the "Agreements.")

                  SECTION 3. Delivery of the Units at the Closing. The
completion of the purchase and sale of the Units (the "Closing") shall occur on
March 26, 2002, at the offices of Morgan, Lewis & Bockius LLP, 1701 Market
Street, Philadelphia, PA 19102, or at such other time or place as may be agreed
upon by the Company and each Purchaser (the "Closing Date"). At the Closing, the
Company shall deliver to such Purchaser one or more stock certificates for the
Shares and one or more Warrants registered in the name of such Purchaser, or in
such name(s) as designated by such Purchaser, based on the number of Units set
forth in Section 2

<PAGE>

above. The name(s) in which the stock certificates for the Shares and the
Warrants are to be registered are set forth in the Stock Certificate and Warrant
Questionnaire set forth on Appendix I attached hereto. The Company's obligation
to complete the purchase and sale of the Units and deliver such stock
certificate(s) and Warrant(s) to each Purchaser at the Closing shall be subject
to the following conditions, any one or more of which may be waived by the
Company in its sole discretion: (i) receipt by the Company of immediately
available funds in the full amount of the purchase price for the Units being
purchased hereunder; (ii) completion of the purchases and sales under the
Agreements with any Other Purchasers; and (iii) the accuracy of the
representations and warranties made by the Purchasers and the fulfillment of
those undertakings of the Purchasers to be fulfilled prior to the Closing;
provided, however, that in the event that condition (ii) or, with respect to
Other Purchasers, condition (iii) is not met, each Purchaser shall have the
right, but not the obligation, to purchase the Units which such Other Purchaser
(the "Defaulting Purchaser") should have purchased on the same terms, and if
Other Purchasers want to exercise this right, on a pro rata basis (based on the
number of Units purchased hereunder and under the other purchase agreements)
with any Other Purchasers exercising the right, and if the Purchaser and/or
Other Purchasers exercise this right, the condition shall be deemed to have been
met. Each Purchaser's obligation to accept delivery of such stock certificate(s)
and Warrant(s) and to pay for the Units evidenced thereby shall be subject to
the accuracy in all material respects of the representations and warranties made
by the Company in the Purchase Agreement and the fulfillment in all material
respects of those undertakings of the Company to be fulfilled prior to Closing.

                  SECTION 4. Representations, Warranties and Covenants of the
Company. The Company hereby represents and warrants to, and covenants with, each
Purchaser as follows:

                  4.1. Organization and Qualification. Each of the Company and
Cell Pathways Pharmaceuticals, Inc. (the "Subsidiary") is a corporation duly
organized and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to conduct its business as currently
conducted. Each of the Company and the Subsidiary is qualified to do business as
a foreign corporation and is in good standing in each jurisdiction in which the
Company or the Subsidiary, respectively, conducts business, except where the
failure to be so organized or in good standing would not be reasonably likely to
have a material adverse effect on the business, condition (financial or
otherwise) or results of operations of the Company or the Subsidiary, taken as a
whole.

                  4.2. Authorized and Issued Capital Stock.

                  (a) As of December 31, 2001, the authorized capital stock of
the Company consists of (i) 150,000,000 shares of Common Stock, of which
31,148,255 shares were issued and outstanding, and (ii) 10,000,000 shares of
preferred stock, par value $0.01 per share, of which no shares are issued and
outstanding. As of such date, the Company had issued options, warrants and other
securities convertible into an aggregate of 8,326,149 shares of Common Stock. In
addition, the Company has agreed in principal to issue 1,700,000 shares of
Common

                                       2
<PAGE>

Stock to certain parties in connection with litigation between the Company and
such parties, as described in the Company's Annual Report on Form 10-K for the
year ended December 31, 2001 (the "2001 Form 10-K"). Holders of the shares of
Common Stock have certain rights pursuant to the terms of a Rights Agreement,
dated as of December 3, 1998, between the Company and Registrar and Transfer
Company, as rights agent. All of the outstanding shares of Common Stock were
validly issued and are fully paid and non-assessable shares.

                  (b) The Common Stock is currently included for listing in the
Nasdaq National Market.

                  4.3. Due Execution, Delivery and Performance of this
Agreement. The execution, delivery and performance of this Agreement and the
Warrants by the Company, including, without limitation, the issuance of the
Shares, the Warrants and the Warrant Shares (when issued pursuant to the terms
of the Warrants) (i) have been duly authorized by all requisite corporate action
by the Company and (ii) will not violate (A) the Certificate of Incorporation
(the "Certificate of Incorporation") or the Bylaws (the "Bylaws") of the
Company, (B) any law, statute, rule or regulation applicable to the Company, or
(C) any provision of any indenture, mortgage, agreement, contract or other
material instrument to which the Company is a party or by which the Company or
any of its properties or assets is bound as of the date hereof, and (iii) will
not result in a breach of or constitute (upon notice or lapse of time or both) a
default under any such indenture, mortgage, agreement, contract or other
material instrument or result in the creation or imposition of any lien,
security interest, mortgage, pledge, charge or other encumbrance, of any
material nature whatsoever, upon any properties or assets of the Company, except
for such violations (other than in the case of clause (ii)(A)), breaches,
defaults or encumbrances which would not be reasonably likely to have a material
adverse effect on the business, condition (financial or otherwise) or results of
operations of the Company. The Company has no Significant Subsidiaries (as such
term is defined in Regulation S-X promulgated by the Commission), except for the
Subsidiary. Upon execution and delivery, and assuming the valid execution
thereof by the respective Purchasers, this Agreement and the Warrants will
constitute valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification and contribution agreements of the Company in
Section 7.4 hereof may be legally unenforceable.

                  4.4. Issuance, Sale and Delivery of the Shares and Warrant
Shares. When issued and paid for, the Shares to be sold hereunder by the Company
and the Warrant Shares (when issued pursuant to the terms of the Warrants) will
be validly issued and outstanding, fully paid and non-assessable. Neither the
sale of the Shares and Warrants, the issuance of the Warrant Shares (when issued
pursuant to the terms of the Warrants) nor the Company's performance of its
obligations pursuant to this Agreement and the Warrants shall (i) result in the

                                       3
<PAGE>

creation or imposition of any liens, charges, claims or other encumbrances upon
the Shares, the Warrants, the Warrant Shares or any of the assets of the
Company, or (ii) entitle the holders of the outstanding Common Stock to
preemptive or other similar rights to subscribe to or acquire Common Stock or
other securities of the Company.

                  4.5. Exemption from Registration. Assuming the accuracy of
each Purchaser's representations and warranties set forth in Section 5 hereof,
the offer, issuance and sale of the Shares and Warrants pursuant to the terms of
this Agreement and the Warrant Shares pursuant to the terms of the Warrants are
and will be exempt from the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act").

                  4.6. SEC Documents; Financial Statements. The Common Stock is
registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder, the
"Exchange Act"), and the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the Securities
and Exchange Commission (the "Commission") pursuant to the reporting
requirements of the Exchange Act, including material filed pursuant to Section
13(a) or 15(d) (all of the foregoing including filings incorporated by reference
therein being referred to herein as the "SEC Documents"). The Company has
delivered or made available to the Purchaser true and complete copies of all SEC
Documents (including, without limitation, proxy information and solicitation
materials and registration statements) filed with the Commission since December
31, 2000. As of their respective dates, the SEC Documents (as amended by any
amendments filed prior to the date of this Agreement or any Closing Date and
provided to each Purchaser) complied or, in the case of any such amendment, will
comply, as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder. As of the date it was filed, the 2001 Form 10-K did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments and the lack
of footnotes); provided, that anything else in this Section 4.6 notwithstanding,
the Company makes no representation or warranty in the previous two sentences
with respect to any impact upon the Company's financial statements or SEC

                                       4
<PAGE>

Documents resulting from regulations or laws of any governmental entity enacted
specifically to affect Arthur Andersen LLP.

                  4.7. No Material Change. As of the date hereof, to the
knowledge of the Company, there has been no undisclosed material adverse change
in the business, condition (financial or otherwise) or results of operations of
the Company or the Subsidiary since December 31, 2001, it being understood that
(a) the Company has not achieved material revenues and that the continued
expenditure of resources in the Company's continuing operations does not
constitute a material adverse change within the meaning of this paragraph, and
(b) that the Company is engaged in ongoing projects and processes whose outcomes
are uncertain and that the ongoing developments in respect of these projects and
processes do not constitute a material adverse change within the meaning of this
paragraph. By way of example and not by way of limitation, the ongoing projects
and processes whose outcomes are uncertain include (i) the ongoing clinical
trials of Aptosyn(R) (exisulind) and CP 461; (ii) the pendency of patent
applications in the patent offices of the United States and other countries;
(iii) the pendency and completion of settlement of class action litigation filed
against the Company, as described most recently in the notes to the financial
statements included as part of the Company's Annual Report on Form 10-K for the
year ended December 31, 2001, which litigation is subject to developments that
cannot be predicted by the Company; (iv) the Company's recent distribution
agreement with Sinclair Pharmaceuticals, Ltd. pursuant to which the Company has
acquired rights to distribute the product Gelclair TM in North America, and
which is subject to risks and uncertainties inherent in introducing a product
into the marketplace; and (v) the collaborations with major pharmaceutical
companies for combination therapy trials which are subject to change, delay or
cancellation due to any one or more factors which may develop at any time.

                  4.8. Legal Opinion. Prior to and as a condition to the
Closing, Morgan, Lewis & Bockius, LLP, counsel to the Company, will deliver a
legal opinion to the Purchasers as to the valid issuance of the Shares and
Warrant Shares, a draft of which has been provided to the Purchasers prior to
the date hereof.

                  4.9. Listing of Common Stock. The Company shall use its best
efforts to cause the Shares and the Warrant Shares to be included for listing in
the Nasdaq National Market and to maintain the listing of the Shares and the
Warrant Shares on each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed.

                  4.10 Eligibility. The Company is currently eligible to
register the resale of the Shares and the Warrant Shares on a registration
statement on Form S-3 under the Securities Act.

                  4.11 No Undisclosed Liabilities. To the knowledge of the
Company, neither the Company nor the Subsidiary has any liabilities or
obligations not reflected or disclosed in the SEC Documents, other than those
liabilities incurred in the ordinary course of its respective business since
December 31, 2001 or liabilities or obligations, individually or in the
aggregate, which do not or would not have a material adverse effect on the
Company or the Subsidiary, taken as a whole.

                                       5
<PAGE>

                  4.12 No Undisclosed Events or Circumstances. No event or
circumstance has occurred or exists with respect to the Company, the Subsidiary
or their respective business, properties, operations or financial condition,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed, other than any such event or circumstance which is required to be
disclosed in the Company's next periodic report to be filed pursuant to the
Exchange Act, but is not required to be publicly disclosed or announced prior to
the filing of such report.

                  4.13 No General Solicitation. None of the Company, the
Subsidiary or, to the Company's knowledge, any of their respective Affiliates,
as such term is defined in Rule 405 under the Securities Act, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D promulgated under the Securities Act ("Regulation D")) in
connection with the offer or sale of the Units.

                  4.14 No Litigation. Except as set forth in the SEC Documents,
no litigation or claim against the Company or the Subsidiary is pending or, to
the Company's knowledge, threatened.

                  SECTION 5. Representations, Warranties and Covenants of the
Purchasers.

                  (a) Each Purchaser acknowledges that the offering and sale of
the Shares and Warrants and the issuance of the Warrant Shares upon exercise of
the Warrants have not been registered under the Securities Act or any state
securities law and that the Shares, the Warrants and the Warrant Shares may not
be offered, sold, pledged or otherwise transferred (i) in the absence of such
registration, (ii) unless the Company receives an opinion of counsel reasonably
acceptable to it that such offer, sale, pledge or transfer is exempt from any
registration and prospectus delivery requirements of the Securities Act and any
applicable state securities laws or (iii) unless the Shares or the Warrant
Shares, as the case may be, are sold pursuant to Rule 144 promulgated under the
Securities Act ("Rule 144") in accordance with the terms of such rule. Each
certificate for the Shares issued at the Closing, or the Warrant Shares, as the
case may be, or upon direct or indirect transfer of or in substitution thereof,
shall be stamped or otherwise imprinted with a legend in substantially the
following form:

                  The Shares represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended, or
                  under any applicable state securities laws and may not be
                  offered, sold, pledged or transferred in the absence of such
                  registration unless the Company receives an opinion of
                  counsel, in form, substance and scope reasonably acceptable to
                  the Company, that such offer, sale, pledge or transfer is
                  exempt from any registration and prospectus delivery
                  requirements of the Securities Act and such applicable state
                  securities laws.

                                       6
<PAGE>

                  Each Purchaser acknowledges and agrees that the Warrants will
contain a similar legend, as set forth on the top of the form of Warrant set
forth in Exhibit A.

                  (b) Each Purchaser represents and warrants, as of the date
hereof and as of the Closing Date, to, and covenants with, the Company that: (i)
the Purchaser is knowledgeable, sophisticated and experienced in making, and is
qualified to make, decisions with respect to investments in equity securities
presenting an investment decision like that involved in the purchase of the
Units, including investments in equity securities issued by development-stage
biopharmaceutical companies; (ii) the Purchaser or its counsel, accountants or
other investment advisers have requested, received, reviewed and considered all
information deemed relevant by them in making an informed decision to purchase
the Units, (iii) the Purchaser is acquiring the Units for its own account for
investment only and with no present intention of distributing any of the Units,
and there is no arrangement or understanding with any other persons regarding
the distribution of the Units; provided however, that such representation and
warranty will not limit the Purchaser's right to sell Shares or Warrant Shares
pursuant to the Registration Statement or pursuant to an exemption from the
Securities Act; (iv) the Purchaser will not, directly or indirectly, offer, sell
(including sell short), pledge, transfer or otherwise dispose of (or solicit any
offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares or Warrant Shares except in compliance with the Securities Act and the
rules and regulations promulgated thereunder; (v) the Purchaser has completed or
caused to be completed the Registration Statement Questionnaire and the Stock
Certificate and Warrant Questionnaire, both set forth on Appendix I attached
hereto, for use in preparation of the Registration Statement, and the answers
thereto are true, correct and complete in all material respects as of the date
hereof and will be true, correct and complete in all material respects as of the
effective date of the Registration Statement; (vi) the Purchaser has, in
connection with its decision to purchase the Units, relied solely upon the SEC
Documents and the representations and warranties contained herein, as well as
any investigation completed by the Purchaser or its counsel, accountants or
other investment advisers; and (vii) the Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D.

                  (c) Each Purchaser agrees not to make any sale of the Shares
or Warrant Shares under the Registration Statement without effectively causing
the prospectus delivery requirement under the Securities Act to be satisfied,
and each Purchaser acknowledges and agrees that such Shares and Warrant Shares
are not transferable on the books of the Company unless the certificate
submitted to the transfer agent evidencing the Shares or the Warrant Shares is
accompanied by a separate officer's certificate: (i) in the form set forth on
Appendix II attached hereto, (ii) executed by an officer of, or other authorized
person designated by, the Purchaser, and (iii) to the effect that (A) such
Shares or Warrant Shares have been sold pursuant to and in accordance with the
Registration Statement and the "Plan of Distribution" section of the prospectus
included therein and (B) the requirement of delivering a current prospectus has
been satisfied, unless exempt from registration and prospectus delivery
requirements. Each Purchaser acknowledges that there may occasionally be times
when the Company must suspend the use of the prospectus forming a part of the
Registration Statement until such time as an amendment to

                                       7
<PAGE>

the Registration Statement has been filed by the Company and declared effective
by the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Exchange Act. Each Purchaser agrees
that it will not sell any Shares or Warrant during the period commencing at the
time at which the Company gives the Purchaser notice of the suspension of the
use of said prospectus and ending at the time the Company gives the Purchaser
notice that the Purchaser may thereafter effect sales pursuant to said
prospectus. The Company shall only be able to suspend the use of said prospectus
for periods aggregating no more than ninety (90) days in any twelve month period
(the "Aggregate Period"), of which no individual period shall be longer than
forty-five (45) consecutive days; provided, that should a Lock-Up Period (as
defined below in Section 5(e) hereof) occur, then the Aggregate Period for the
twelve month period during which such Lock-Up Period occurs shall be reduced by
a number of days equal to the number of days in such Lock-Up Period, but in no
case shall the Aggregate Period be reduced to a number of days that is less than
sixty (60) days. Each Purchaser further agrees to notify promptly the Company of
the sale of any or all of such Purchaser's Shares or Warrant Shares, and to
notify promptly the Company in writing of any material changes in the
information set forth in the Registration Statement relating to such Purchaser
or its plan of distribution, or of any supplemental information required to be
included in the Registration Statement relating to its plan of distribution.

                  (d) Each Purchaser further represents and warrants, as of the
date hereof and as of the Closing Date, to, and covenants with, the Company
that: (i) the Purchaser has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement, and (ii) upon the execution and delivery of this
Agreement, this Agreement shall constitute a valid and binding obligation of the
Purchaser enforceable in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification and contribution agreements of the Purchaser
in Section 7.4 hereof may be legally unenforceable.

                  (e) In consideration for the Company agreeing to its
obligations set forth in Section 7 below in respect of Shares and Warrant
Shares, each Purchaser agrees, in connection with any firm commitment
underwritten offering of the Common Stock, upon the request of the managing
underwriters of such offering, not to directly or indirectly (i) offer for sale,
sell, pledge, contract to sell or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition by any person at any time in the future of) any shares of Common
Stock or securities convertible into or exercisable or exchangeable for shares
of Common Stock or (ii) enter into any swap or derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of shares of Common Stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of shares of Common
Stock or other securities, in cash or otherwise, without the

                                       8
<PAGE>

prior written consent of such managing underwriters during the period of time
beginning ten days prior to the date when such managing underwriters advise the
Company that they expect to initiate such public offering and ending at a date
not to exceed ninety (90) days from the commencement of such public offering
(the "Lock-Up Period"). Notwithstanding the foregoing, this obligation shall not
apply to the Purchaser unless each of the Company's directors and executive
officers who beneficially owns shares of Common Stock enters into a similar
agreement.

                  SECTION 6. Survival of Representations, Warranties and
Agreements. Notwithstanding any investigation made by any party to this
Agreement, all covenants, agreements, representations and warranties made by the
Company and the Purchaser herein shall survive the execution of this Agreement,
the delivery to the Purchaser of the Shares being purchased and the payment
therefor, for a period of one year following such payment therefor.

                  SECTION 7. Registration of Shares for Resale

                  7.1. Registration Procedures and Expenses.

                  (a) The Company shall as soon as practicable after Closing,
but in no event later than thirty (30) days thereafter, prepare and file with
the Commission a registration statement on Form S-3 (or if such form is
unavailable to the Company, on such other form deemed appropriate for the
registration of the Common Stock by the Commission) (the "Registration
Statement") to register the Shares and Warrant Shares (collectively, the
"Registrable Shares") for resale by the Purchasers in non-underwritten, market
transactions, and shall use its best efforts to cause the Registration Statement
to become effective as soon as practicable thereafter. The Company shall, at
least three (3) business days before filing such Registration Statement, provide
a draft to each Purchaser and its counsel and its agent for review. The Company
shall use its best efforts to cause the Registration Statement to become
effective within ninety (90) days after the Closing or, if the Registration
Statement or any periodic report of the Company filed pursuant to the Exchange
Act is selected for a review by the Commission, within one hundred twenty (120)
days after the Closing;

                  (b) The Company shall promptly prepare and file with the
Commission such amendments and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to keep such the
Registration Statement effective until such date when either all of the
Registrable Shares have been sold pursuant thereto or, by reason of Rule 144(k)
of the Commission under the Securities Act or any other rule of similar effect,
the Registrable Shares may be sold by the Purchasers in ordinary market
transactions without registration and without compliance with of any volume
limitations (the "Registration Period");

                  (c) The Company shall promptly furnish to each Purchaser and
its agent such number of copies of prospectuses and preliminary prospectuses in
conformity with the

                                       9
<PAGE>

requirements of the Securities Act as such Purchaser or its agent may reasonably
request, in order to facilitate the public sale or other disposition of all or
any of the Shares by such Purchaser;

                  (d) The Company shall promptly file documents required of the
Company for any required blue sky clearance for the Registrable Shares in such
states specified in writing by each Purchaser or its agent; provided, however,
that the Company shall not be required to (i) qualify to do business or consent
to service of process in any jurisdiction in which it is not now so qualified or
has not so consented, (ii) subject itself to general taxation in any such
jurisdiction, (iii) provide any undertakings that cause the Company undue burden
or expense or (iv) make any change in its charter or bylaws;

                  (e) The Company shall promptly inform each Purchaser and its
agent when any stop order has been issued with respect to the Registration
Statement and use its commercially practical best efforts to promptly cause such
stop order to be withdrawn;

                  (f) The Company shall notify each Purchaser whose Registrable
Shares are registered on a Registration Statement and its agent at any time when
a prospectus relating to any Registrable Shares covered by such Registration
Statement or a Company Registration Statement is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing and promptly file such
amendments and supplements as may be necessary so that, as thereafter delivered
to such Purchasers of such Registrable Shares, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing and use its best commercially
practical efforts to cause each such amendment and supplement to become
effective;

                  (g) The Company shall bear all expenses in connection with the
procedures in clauses (a) through (f) in this Section 7.1 and the registration
of the Registrable Shares pursuant to the Registration Statement, other than
fees and expenses, if any, of counsel or other advisers to the Purchaser or the
Other Purchasers and any expenses relating to the sale of the Registrable Shares
by the Purchasers (including without limitation, broker's commissions, discounts
or fees of any nature and transfer taxes or charges of any nature); and

                  (h) The Company understands that each Purchaser disclaims
being an underwriter, but a Purchaser being deemed an underwriter shall not
relieve the Company of any obligations it has hereunder. A questionnaire related
to the Registration Statement to be completed by each Purchaser is set forth on
Appendix I.

                  7.2. Transfer of Registrable Shares. Each Purchaser agrees
that it will not effect any disposition of Registrable Shares except as
contemplated in the Registration Statement

                                       10
<PAGE>

and as described in the "Plan of Distribution" section of the prospectus
included therein, or as otherwise in compliance with applicable securities laws,
and that it will promptly notify the Company of any material changes in the
information set forth in the Registration Statement regarding the Purchaser or
such "Plan of Distribution." Without limitation, each Purchaser understands that
(i) except as permitted by applicable law, it may not use Registrable Shares to
cover a short position in shares of the Common Stock created prior to the
effective date of the Registration Statement, and (ii) it must deliver a
prospectus in connection with any short sale of the Registrable Shares unless it
is exempt from such requirement.

                  7.3. Certain Penalties. In the event that (i) the Registration
Statement to be filed by the Company pursuant to Section 7.1 hereof is not filed
with the Commission within thirty (30) days from the Closing Date, (ii) such
Registration Statement is not declared effective by the Commission within the
earlier of ninety (90) days after the Closing Date (which number of days shall
be increased to one hundred twenty (120) days if the Registration Statement or
any periodic report of the Company filed pursuant to the Exchange Act is
selected for full review by the Commission) or five (5) days of clearance by the
Commission to request effectiveness or (iii) such Registration Statement is not
maintained as effective by the Company for the period set forth in Section
7.1(b) hereof (each a "Registration Default") then the Company will pay
Purchaser (pro rated on a daily basis), as liquidated damages for such failure
and not as a penalty, one percent (1%) of the purchase price of shares of Common
Stock purchased from the Company and held by the Purchaser for each month until
such Registration Statement has been filed, and in the event of late
effectiveness (in case of clause (ii) above) or lapsed effectiveness (in the
case of clause (iii) above), one percent (1%) of the purchase price of shares of
Common Stock purchased from the Company and held by the Purchaser each month
(regardless of whether one or more such Registration Defaults are then in
existence, but without duplication of liquidated damages) until such
Registration Statement has been declared effective. Such payment of the
liquidated damages shall be made to the Purchaser in cash, within five (5)
calendar days of demand, provided, however, that the payment of such liquidated
damages shall not relieve the Company from its obligations to register the
Common Stock pursuant to this Section 7. Notwithstanding the foregoing, if a
Registration Default results solely from any action taken or failure to act by
the Purchaser, or from any governmental action taken with respect to the
Purchaser, the Company shall not be liable for any damages under this Section
7.3

                  If the Company does not remit the payment to the Purchaser as
set forth above, the Company will pay the Purchaser reasonable costs of
collection, including attorneys' fees, in addition to the liquidated damages.
The registration of the Common Stock pursuant to this provision shall not affect
or limit the Purchaser's other rights or remedies as set forth in this
Agreement.

                                       11
<PAGE>

                  7.4. Indemnification. For the purpose of this Section 7.4:

                  (a) the term "Selling Stockholder" shall include the
Purchaser, its officers, directors, agent and/or trustees and any affiliate or
controlling person of such Purchaser or any permitted assign hereunder;

                  (b) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1; and

                  (c) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any omission or alleged omission to
state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

                  The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or liabilities to which
such Selling Stockholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any breach of
the representations set forth in Section 4 hereof by the Company, or any untrue
statement of a material fact contained in the Registration Statement, or arise
out of any failure by the Company to fulfill any agreement, covenant or
undertaking contained in this Agreement or included in the Registration
Statement, and the Company will reimburse such Selling Stockholder for any
reasonable out-of-pocket legal or other documented out-of-pocket expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, (i) an untrue statement made in the
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Selling Stockholder
specifically for use in the Registration Statement (which shall be deemed to
include the information set forth in the Registration Statement Questionnaire
and in the "Plan of Distribution" section of the prospectus included as part of
the Registration Statement), (ii) the failure of such Selling Stockholder to
comply with the covenants and agreements contained herein respecting transfer or
sale of Registrable Shares, or (iii) any statement or omission in any prospectus
that is corrected in any subsequent prospectus that was delivered to the
Purchaser sufficiently prior to the pertinent sale or sales by the Purchaser.
The Company shall also not be liable for amounts paid in settlement of any loss,
claim, damage or liability if such settlement if effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld.

                  Each Purchaser agrees, severally and not jointly, to indemnify
and hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each officer of the
Company who signs the Registration Statement and each director of the Company)
from and against any losses, claims, damages or liabilities to

                                       12
<PAGE>

which the Company (or any such officer, director or controlling person) may
become subject (under the Securities Act or otherwise), insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any breach of the representations set forth in
Section 5 hereof by such Purchaser, or any failure by such Purchaser to comply
with the covenants and agreements contained herein regarding the transfer or
sale of Registrable Shares, or any untrue statement of a material fact contained
in the Registration Statement if such untrue statement was made in reliance upon
and in conformity with written information furnished by or on behalf of the
Purchaser specifically for use in the Registration Statement. Each Purchaser
will reimburse, severally and not jointly, the Company (or such officer,
director or controlling person), as the case may be, for any out-of-pocket legal
or other documented out-of-pocket expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim. Each
Purchaser agrees that the information regarding the Purchaser or its officers,
directors and affiliates and their intended plan of distribution of the Shares
set forth in the Registration Statement Questionnaire, the form of which is set
forth on Appendix I, or included from time to time in the Registration Statement
(including without limitation the "Plan of Distribution" section of the
prospectus included in the Registration Statement) shall be deemed to be written
information furnished to the Company by or on behalf of the Purchaser
specifically for use in the Registration Statement. The foregoing
indemnification shall be limited in amount as to each Purchaser to the Purchase
Price paid by such Purchaser hereunder.

                  Promptly after receipt by any indemnified person of a notice
of a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.4, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action; provided, however, that any failure by an
indemnified person to notify an indemnifying person shall not relieve the
indemnifying person from its obligations hereunder except to the extent that the
indemnifying person is materially prejudiced thereby. Subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent it shall wish, to assume and control the defense thereof, with
counsel reasonably satisfactory to such indemnified person. After notice from
the indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists a conflict of interest that would make it inappropriate, in
the opinion of counsel to the indemnifying person, for the same counsel to
represent both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided
further, however, that no indemnifying person shall be responsible for the fees
and expenses of more than one separate counsel for all indemnified parties
hereunder and under the other Agreements.

                                       13
<PAGE>

                  If the indemnification provided for in this Section 7.4 from
the indemnifying person would be applicable by its terms but is otherwise
unavailable, as determined by a court of applicable jurisdiction, to an
indemnified person hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then the indemnifying person, in
lieu of indemnifying such indemnified person, shall contribute to the amount
paid or payable by such indemnified person as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the indemnifying person and indemnified persons in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying person and indemnified persons shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact, has been
made by, or relates to information supplied by, such indemnifying person or
indemnified persons, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in this Section 7.3, any reasonable legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.

                  The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7.4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 7.4, no Purchaser
shall be required to contribute any amount in excess of the aggregate dollar
amount of the proceeds received by such Purchaser upon the sale of the
Registrable Shares. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

                  7.5. Termination of Conditions and Obligations. The conditions
imposed by Section 5 or this Section 7 upon the transferability of Registrable
Shares shall cease and terminate as to any particular number of Registrable
Shares when the offering of such Registrable Shares shall have been effectively
registered under the Securities Act and sold or otherwise disposed of in
accordance with the intended method of disposition set forth in the Registration
Statement and the "Plan of Distribution" section of prospectus included therein,
or at such time as an opinion of counsel satisfactory to the Company shall have
been rendered to the effect that such conditions are not necessary in order to
comply with the Securities Act.

                  7.6. Continued Availability of Information. So long as the
Registration Statement is effective covering the resale of Registrable Shares
owned by the Purchaser, the Company will furnish to the Purchaser:

                                       14
<PAGE>

                  (a) as soon as practicable after available (but in the case of
the Company's Annual Report to Stockholders, within 120 days after the end of
each fiscal year of the Company), one copy of (i) its Annual Report to
Stockholders (which Annual Report shall contain financial statements audited in
accordance with generally accepted accounting principles by a firm of certified
public accountants), (ii) if not included in substance in the Annual Report to
Stockholders, its Annual Report on Form 10-K, (iii) any quarterly reports to
stockholders, and if not included in substance in its quarterly reports to
stockholders, its quarterly reports on Form 10-Q, and (iv) a full copy of the
Registration Statement (the foregoing, in each case, excluding exhibits);

                  (b) upon the reasonable request of a Purchaser or its agent,
all exhibits excluded by the parenthetical to clause (a)(iv) of this Section 7.6
and all other information that is made available to stockholders; and

                  (c) upon the reasonable request of a Purchaser or its agent,
an adequate number of copies of the prospectuses to supply to any other party
requiring such prospectuses;

and the Company, upon the reasonable request of a Purchaser or its agent, will
meet with the Purchaser or a representative thereof at the Company's
headquarters to discuss all information relevant for disclosure in the
Registration Statement and will otherwise cooperate with any Purchaser
conducting an investigation for the purpose of reducing or eliminating such
Purchaser's exposure to liability under the Securities Act, including the
reasonable production at the Company's headquarters of non-confidential
information (and, upon execution of a confidentiality agreement satisfactory to
the Company, confidential information).

                  7.7. Reports under Exchange Act. With a view to making
available to the Purchasers the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the Commission that may at
any time permit a Purchaser to sell Registrable Shares to the public without
registration, and with a view to making it possible to register the Registrable
Shares pursuant to a registration statement on Form S-3, the Company agrees to:

                  (a) make and keep available public information, as understood
and defined in Rule 144, at all times;

                  (b) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and

                  (c) furnish to a Purchaser owning any Registrable Shares or
its agent upon reasonable request (i) a written statement by the Company that is
has complied with the reporting requirements of Rule 144, the Securities Act and
the Exchange Act, or that it qualifies as a registrant whose Registrable Shares
may be resold pursuant to a registration statement on Form S-3 (at any time
after it so qualified), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other

                                       15
<PAGE>

information as may be reasonably required in availing any Purchaser of
Registrable Shares of any rule or regulation of the Commission which permits the
selling of any such Registrable Shares without registration or pursuant to such
form.

                  SECTION 8. Broker's Fees. Each of the parties hereto hereby
represents that, on the basis of any actions and agreements by it, there are no
brokers or finders entitled to compensation in connection with the sale of the
Units to the Purchaser, except for the Company's obligations to certain finders
or placement agents engaged by the Company pursuant to a written agreement.

                  SECTION 9. Expenses. At the Closing, each party hereto shall
bear its own expenses.

                  SECTION 10. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be sent by a nationally
recognized overnight express courier postage prepaid, and shall be deemed given
one day after being so sent and shall be delivered as addressed as follows:

                  (a)      if to the Company, to:

                           Cell Pathways, Inc.
                           702 Electronic Drive
                           Horsham, PA 19044
                           Attention: Robert J. Towarnicki
                           President and Chief Executive Officer

                           with copies so mailed to:

                           Martha E. Manning, Esq.
                           Senior Vice President, General Counsel and Secretary
                           Cell Pathways, Inc.
                           702 Electronic Drive
                           Horsham, PA 19044

                           and to

                           Morgan, Lewis & Bockius LLP
                           1701 Market Street
                           Philadelphia, Pennsylvania  19103-2921
                           Attention:  Stephen Jannetta

                           or to such other person at such other place as the
                           Company shall designate to the Purchaser in writing;
                           and

                                       16
<PAGE>

                  (b) if to the Purchaser, at the address set forth on Schedule
A or Schedule B hereto, or at such other address or addresses as may have been
furnished to the Company in writing,

                  SECTION 11. Entire Agreement; Changes. This Agreement sets
forth the entire agreement of the parties and may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Purchaser.

                  SECTION 12. Headings. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.

                  SECTION 13. Severability. In case any provision contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

                  SECTION 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS.

                  SECTION 15. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.

                                       17
<PAGE>

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

                                      CELL PATHWAYS, INC.

                                      By:
                                           -------------------------------------
                                           Robert J. Towarnicki
                                           President and Chief Executive Officer

                                      [PURCHASER]

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

                                       18
<PAGE>

                                   SCHEDULE A

NAME AND ADDRESS         NUMBER OF UNITS           PRICE            AGGREGATE
OF PURCHASERS            TO BE PURCHASED         PER UNIT        PURCHASE PRICE

<PAGE>

                                                                     Appendix I
                                                                   (one of two)

                               CELL PATHWAYS, INC.
                   STOCK CERTIFICATE AND WARRANT QUESTIONNAIRE

Please provide us with the following information:

1.   The exact name that your Shares and
     Warrants (both must be in the same
     name) are to be registered. This is
     the name that will appear on your
     stock certificate(s) and Warrants(s).
     You may use a nominee name if
     appropriate:                                        ______________________

2.   The relationship between the Purchaser of
     the Units and the registered holder listed
     in response to item 1 above:                        ______________________

3.   The mailing address of the registered holder
     listed in response to item 1 above:                 ______________________

                                                         ______________________

4.   The social security number or tax identification
     number of the registered holder listed in
     response to item 1 above:                           ______________________

<PAGE>

                                                                    Appendix I
                                                                  (two of two)

                               CELL PATHWAYS, INC.
                      REGISTRATION STATEMENT QUESTIONNAIRE

                  In connection with the preparation of the Registration
Statement, please provide us with the following information:

                  1. Pursuant to the "Selling Stockholder" section of the
Registration Statement, please state your or your organization's name exactly as
it should appear in the Registration Statement:

                  2. Please provide the number of shares of Common Stock that
you or your organization will own beneficially or of record immediately after
Closing, including those Shares purchased by you or your organization pursuant
to this Purchase Agreement and those shares purchased by you or your
organization through other transactions (indicating whether you have sole or
shared voting or dispositive power over such securities as determined under
applicable rules of the Securities and Exchange Commission):

<TABLE>
<CAPTION>
       VOTING POWER                 DISPOSITIVE POWER
   Sole           Shared          Sole            Shared
<C>            <C>            <C>              <C>            <S>
__________      __________     __________       __________     Common Stock beneficially owned prior to the
                                                               date hereof

__________      __________     __________       __________     Shares being purchased from the Company

__________      __________     __________       __________     Warrant Shares, issuable upon exercise of the Warrants being
                                                               purchased from the Company

__________      __________     __________       __________     Common Stock issuable upon exercise of other options or warrants
                                                               that you may own, to the extent such shares of Common Stock are
                                                               deemed to be beneficially owned

      TOTAL:    ________________ shares of Common Stock beneficially owned
</TABLE>

                  3. Have you or your organization had any position, office or
other material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Company's proxy statement for its 2001
annual meeting of stockholders, or with UBS Warburg LLC?

                           _____ Yes         _____ No

<PAGE>

                  If yes, please indicate the nature of any such relationships
below:

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

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

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

                  4. Attached is a draft of the proposed "Plan of Distribution"
section of the prospectus included in the Registration Statement. Please confirm
that the draft is a correct and complete statement of your intended plan of
distribution.

                           _____ Yes         _____ No

<PAGE>

                              PLAN OF DISTRIBUTION

                  The Shares being offered by the Selling Stockholder or its
respective pledgees, donees, transferees or other successors in interest, will
be sold in one or more transactions (which may involve block transactions) on
the Nasdaq National Market or on such other market on which the Common Stock may
from time to time be trading, in privately negotiated transactions, through the
writing of options on the Shares, short sales or any combination thereof. The
sale price to the public may be the market price prevailing at the time of sale,
a price related to such prevailing market price or such other price as the
Selling Stockholder determines from time to time. The Shares may also be sold
pursuant to Rule 144. The Selling Stockholder shall have the sole and absolute
discretion not to accept any purchase offer or make any sale of Shares if they
deem the purchase price to be unsatisfactory at any particular time.

                  The Selling Stockholder or its respective pledgees, donees,
transferee or other successors in interest, may also sell the Shares directly to
market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. Brokers acting as agents for the Selling
Stockholder will receive usual and customary commissions for brokerage
transactions, and market makers and block purchasers purchasing the Shares will
do so for their own account and at their own risk. It is possible that the
Selling Stockholder will attempt to sell shares of Common Stock in block
transactions to market makers or other purchasers at a price per share which may
be below the then market price. There can be no assurance with all or any of the
Shares offered hereby will be issued to, or sold by, the Selling Stockholder.
The Selling Stockholder and any brokers, dealers or agents, upon effecting the
sale of any of the Shares offered hereby, may be deemed "underwriters" as that
term is defined under the Securities Act or the Exchange Act, or the rules and
regulations thereunder.

                  The Selling Stockholder, alternatively, may sell all or any
part of the Shares offered hereby through an underwriter. The Selling
Stockholder has not entered into any agreement with a prospective underwriter
and there is no assurance that any such agreement will be entered into. If the
Selling Stockholder enters into such an agreement or agreements, the relevant
details will be set forth in a supplement or revisions to this prospectus.

                  Upon the Company being notified by the Selling Stockholder
that any material arrangement has been entered into with a broker or dealer for
the sale of Shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplemented prospectus will be filed, if required, pursuant to Rule 424(c)
under the Securities Act, disclosing (a) the name of each such broker-dealer,
(b) the number of Shares involved, (c) the price at which such Shares were sold,
(d) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (e) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, as supplemented, and (f) other facts material to
the transaction.

<PAGE>

                  The Selling Stockholder and any other persons participating in
the sale or distribution of the Shares will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, which provisions
may limit the timing of purchases and sales of any of the Shares by the Selling
Stockholder or any other such person. The foregoing may affect the marketability
of the Shares.

                  The Company has agreed to indemnify the Selling Stockholder,
or its transferees or assignees, against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments the Selling
Stockholder or its respective pledgees, donees, transferees or other successors
in interest, may be required to make in respect thereof.

                  The Company is bearing all costs relating to the registration
of the Shares (other than fees and expenses, if any, of counsel or other
advisers to the Selling Stockholder). Any commissions, discounts or other fees
payable to broker-dealers in connection with any sale of the Shares will be
borne by the Selling Stockholder.

<PAGE>

                                                                   APPENDIX II

Attention:

                   PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE

           The undersigned, [AN OFFICER OF, OR OTHER PERSON DULY AUTHORIZED BY]
___________________________________________________ [FILL IN OFFICIAL NAME OF
INDIVIDUAL OR INSTITUTION] hereby certifies that he/she [said institution] is
the Purchaser of the shares evidenced by the attached certificate, and as such,
sold such shares on [DATE] pursuant to and in accordance with registration
statement number ____________________ [FILL IN THE NUMBER OF OR OTHERWISE
IDENTIFY REGISTRATION STATEMENT] and the requirement of delivering a current
prospectus by the Company has been complied with in connection with such sale.

Print or Type:

            Name of Purchaser
              (individual or
              institution):        ______________________

            Name of individual
              representing
              Purchaser (if an
              institution)         ______________________

            Title of individual
              representing
              Purchaser (if an
              institution):        ______________________

Signature by:

            Individual purchaser
              or individual repre-
              senting purchaser:   ______________________Exhibit 10.1

                                      YOUR
                                GROUP INSURANCE
                                      PLAN

                      GENERAL MILLS EXECUTIVE HEALTH PLAN

<PAGE>

CERTIFICATE OF COVERAGE

This certifies that the employee named below is entitled to the benefits
described in this certificate, provided the eligibility and effective date
requirements of the plan are satisfied.

Group Policy No.____ Certificate No.____ Effective Date __________

Issued To ________________________________________________________

This CERTIFICATE OF COVERAGE replaces any CERTIFICATE OF COVERAGE previously
issued under the above Plan or under any other Plan providing similar or
identical benefits issued to the Planholder.

                                                                     B110.0031-R
<PAGE>

--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------

COMPLAINT NOTICE ..........................................................    1

GENERAL PROVISIONS
   Limitation of Authority ................................................    3
   Incontestability .......................................................    3
   Examination and Autopsy ................................................    4
   Accident and Health Claims Provisions ..................................    4
   Coordination Between Continuation Sections .............................    5
   An Important Notice About Continuation Rights ..........................    5

YOUR CONTINUATION RIGHTS
   Federal Continuation Rights ............................................    6
   Important Notice .......................................................   11
   Group Health Continuation Rights .......................................   11

YOUR DEPENDENT CONTINUATION RIGHTS
   Important Notice .......................................................   13
   Your Group Health Benefits Continuation Rights .........................   13

ELIGIBILITY FOR MAJOR MEDICAL COVERAGE
   Employee Coverage ......................................................   15
   Dependent Coverage .....................................................   16

CERTIFICATE AMENDMENT .....................................................   20

MAJOR MEDICAL HIGHLIGHTS ..................................................   22

MAJOR MEDICAL EXPENSE INSURANCE
   Benefit Provision ......................................................   23
   Extended Major Medical Benefits ........................................   24
   Covered Charges ........................................................   25
   Charges Covered With Special Limitations ...............................   29
   Exclusions .............................................................   34
   Hospital Bill Audit Bonus ..............................................   35
   Converting This Group Health Insurance .................................   36

ELIGIBILITY FOR DENTAL COVERAGE
   Employee Coverage ......................................................   38
   Dependent Coverage .....................................................   39

CERTIFICATE AMENDMENT .....................................................   42

DENTAL HIGHLIGHTS .........................................................   44

DENTAL EXPENSE INSURANCE
   Covered Charges ........................................................   45
   Pre-Treatment Review ...................................................   45
   Benefits From Other Sources ............................................   46
   The Benefit Provision - Qualifying For Benefits ........................   46
   After This Insurance Ends ..............................................   47
   Exclusions .............................................................   47
   List of Covered Dental Services ........................................   49
   Group I - Preventive Dental Services ...................................   49

<PAGE>

                                                       TABLE OF CONTENTS (CONT.)
--------------------------------------------------------------------------------
   Group II - Basic Dental Services .......................................   50
   Group III - Major Dental Services ......................................   52
   Group IV - Orthodontic Services ........................................   53

ELIGIBILITY FOR PRESCRIPTION DRUG COVERAGE
   Employee Coverage ......................................................   54
   Dependent Coverage .....................................................   55

CERTIFICATE AMENDMENT .....................................................   58

PRESCRIPTION DRUG EXPENSE INSURANCE
   Covered Drugs ..........................................................   60
   Dispensing Limits ......................................................   60
   Benefit Provisions .....................................................   60
   Extended Benefit .......................................................   61
   Employer Liability .....................................................   61
   Exclusions .............................................................   61

COORDINATION OF BENEFITS ..................................................   63

HOW THIS PLAN INTERACTS WITH MEDICARE
   Medicare Eligibility By Reason Of Age ..................................   66
   Medicare Eligibility By Reason Of Disability ...........................   66
   Medicare Eligibility By Reason Of End Stage Renal Disease ..............   67
   Other People Who Are Eligible For Medicare .............................   68

WORKER'S COMPENSATION .....................................................   69

GLOSSARY ..................................................................   70

SUMMARY PLAN DESCRIPTION SUPPLEMENT TO CERTIFICATE ........................   78

STATEMENT OF ERISA RIGHTS
   The Guardian's Responsibilities ........................................   81
   Claims Procedure .......................................................   81
   Termination of This Group Plan .........................................   82
<PAGE>

--------------------------------------------------------------------------------
COMPLAINT NOTICE
--------------------------------------------------------------------------------

This notice is to advise you that should any complaints arise regarding this
insurance you may contact the following:

                   The Guardian Sales Office
                   8300 Norman Center Drive
                   Suite 815
                   Bloomington, Minnesota 55437
                   Telephone: (612) 835-3470
                              (800) 814-1399
                   Fax: (612) 835-6886

                         * * * * *

                   Illinois Department of Insurance
                   Consumer Division or Public Services Section
                   Springfield, Illinois 62767

                                                                     B120.0007-R

                                                                             P.1
<PAGE>

--------------------------------------------------------------------------------
GENERAL PROVISIONS
--------------------------------------------------------------------------------

                        As used in this booklet:

                        "Accident and health" means any dental, hospital, major
                        medical, out-of-network point-of-service, prescription
                        drug, surgical or vision care insurance provided by this
                        PLAN.

                        "Covered person" means an EMPLOYEE or a dependent
                        insured by this PLAN.

                        "Employer" means the EMPLOYER who purchased this PLAN.

                        "Our," "The Guardian," "us" and "we" mean The Guardian
                        Life Insurance Company of America.

                        "Plan" means the Guardian PLAN of group insurance
                        purchased by your EMPLOYER.

                        "You" and "your" mean an EMPLOYEE insured by this PLAN.

                                                                     B160.0002-R

                                                         LIMITATION OF AUTHORITY
--------------------------------------------------------------------------------

                        No person, except by a writing signed by the President,
                        a Vice President or a Secretary of The Guardian, has the
                        authority to act for us to: (a) determine whether any
                        contract, plan or certificate of insurance is to be
                        issued; (b) waive or alter any provisions of any
                        insurance contract or plan, or any requirements of The
                        Guardian; (c) bind us by any statement or promise
                        relating to any insurance contract issued or to be
                        issued; or (d) accept any information or representation
                        which is not in a signed application.

                                                                     B160.0004-R

                                                                INCONTESTABILITY
--------------------------------------------------------------------------------

                        This PLAN is incontestable after two years from its date
                        of issue, except for non-payment of premiums.

                        No statement in any application, except a fraudulent
                        statement, made by a person insured under this PLAN
                        shall be used in contesting the validity of his
                        insurance or in denying a claim for a loss incurred, or
                        for a disability which starts, after such insurance has
                        been in force for two years during his lifetime.

                        If this PLAN replaces a plan your EMPLOYER had with
                        another insurer, we may rescind the EMPLOYER'S PLAN
                        based on misrepresentations made by the EMPLOYER or an
                        EMPLOYEE in a signed application for up to two years
                        from the effective date of this PLAN.

                                                                     B160.0003-R

                                                                             P.3
<PAGE>

                                                         EXAMINATION AND AUTOPSY
--------------------------------------------------------------------------------

                        We have the right to have a DOCTOR of our choice examine
                        the person for whom a claim is being made under this
                        PLAN as often as we feel necessary. And we have the
                        right to have an autopsy performed in the case of death,
                        where allowed by law. We'll pay for all such
                        examinations and autopsies.

                                                                     B160.0006-R

                                           ACCIDENT AND HEALTH CLAIMS PROVISIONS
--------------------------------------------------------------------------------

                        Your right to make a claim for any ACCIDENT AND HEALTH
                        benefits provided by this PLAN, is governed as follows:

PROOF OF LOSS           We'll furnish you with forms for filing proof of loss
                        within 15 days of receipt of notice. But if we don't
                        furnish the forms on time, we'll accept a written
                        description and adequate documentation of the INJURY or
                        SICKNESS that is the basis of the claim as proof of
                        loss. You must detail the nature and extent of the loss
                        for which the claim is being made. You must send us
                        written proof within 90 days of the loss.

LATE NOTICE OF PROOF    We won't void or reduce your claim if you can't send us
                        notice and proof of loss within the required time. But
                        you must send us notice and proof as soon as reasonably
                        possible.

PAYMENT OF BENEFITS     We'll pay all other ACCIDENT AND HEALTH benefits to
                        which you're entitled as soon as we receive written
                        proof of loss

                        We pay all ACCIDENT AND HEALTH benefits to you, if
                        you're living. If you're not living, we have the right
                        to pay all ACCIDENT AND HEALTH benefits, except
                        dismemberment benefits, to one of the following: (a)
                        your estate; (b) your spouse; (c) your parents; (d) your
                        children; (e) your brothers and sisters; and (f) any
                        unpaid provider of health care services. See "Your
                        Accidental Death and Dismemberment Benefits" for how
                        dismemberment benefits are paid.

                        When you file proof of loss, you may direct us, in
                        writing, to pay health care benefits to the recognized
                        provider of health care who provided the covered service
                        for which benefits became payable. We may honor such
                        direction at our option. But we can't tell you that a
                        particular provider must provide such care. And you may
                        not assign your right to take legal action under this
                        PLAN to such provider.

LIMITATIONS OF
ACTIONS                 You can't bring a legal action against this PLAN until
                        60 days from the date you file proof of loss. And you
                        can't bring legal action against this PLAN after three
                        years from the date you file proof of loss.

WORKERS'
COMPENSATION            The ACCIDENT AND HEALTH benefits provided by this PLAN
                        are not in place of, and do not affect requirements for
                        coverage by Workers' Compensation.

                                                                     B160.0005-R

                                                                             P.4
<PAGE>

                                      COORDINATION BETWEEN CONTINUATION SECTIONS
--------------------------------------------------------------------------------

                        A covered person may be eligible to continue his group
                        health benefits under this plan's "Federal Continuation
                        Rights" section and under other continuation sections of
                        this plan at the same time. If he chooses to continue
                        his group health benefits under more than one section,
                        the continuations: (a) start at the same time; (b) run
                        concurrently; and (c) end independently, on their own
                        terms.

                        A covered person covered under more than one of this
                        plan's continuation sections: (a) will not be entitled
                        to duplicate benefits; and (b) will not be subject to
                        the premium requirements of more than one section at the
                        same time.

                                                                     B240.0044-R

                                   AN IMPORTANT NOTICE ABOUT CONTINUATION RIGHTS
--------------------------------------------------------------------------------

                        The following "Federal Continuation Rights" section may
                        not apply to the employer's plan. The employee must
                        contact his employer to find out if: (a) the employer is
                        subject to the "Federal Continuation Rights" section,
                        and therefore; (b) the section applies to the employee.

                                                                     B240.0064-R

                                                                             P.5
<PAGE>

--------------------------------------------------------------------------------
YOUR CONTINUATION RIGHTS
--------------------------------------------------------------------------------

                                                     FEDERAL CONTINUATION RIGHTS
--------------------------------------------------------------------------------
IMPORTANT NOTICE        This section applies only to any dental, out-of-network
                        point-of-service medical, major medical, vision care or
                        prescription drug coverages which are part of this plan.
                        In this section, these coverages are referred to as
                        "group health benefits".

                        This section does not apply to coverages which apply to
                        loss of life, or to loss of income due to disability.
                        These coverages cannot be continued under this section.

                        Under this section, "qualified continuee" means any
                        person who, on the day before any event which would
                        qualify him or her for continuation under this section,
                        is covered for group health benefits under this plan as:
                        (a) an active, covered employee; (b) the spouse of an
                        active, covered employee; or (c) the dependent child of
                        an active, covered employee. A child born to, or adopted
                        by, the covered employee during a continuation period is
                        also a qualified continuee. Any other person who becomes
                        covered under this plan during a continuation provided
                        by this section is not a qualified continuee.

CONVERSION              Continuing the group health benefits does not stop a
                        qualified continuee from converting some of these
                        benefits when continuation ends. But, conversion will be
                        based on any applicable conversion privilege provisions
                        of this plan in force at the time the continuation ends.

IF YOUR GROUP
HEALTH BENEFITS END     If your group health benefits end due to your
                        termination of employment or reduction of work hours,
                        you may elect to continue such benefits for up to 18
                        months, if you were not terminated due to gross
                        misconduct.

                        The continuation: (a) may cover you or any other
                        qualified continuee; and (b) is subject to "When
                        Continuation Ends".

EXTRA CONTINUATION
FOR DISABLED
QUALIFIED
CONTINUEES              If a qualified continuee is determined to be disabled
                        under Title II or Title XVI of the Social Security Act
                        on or during the first 60 days after the date his or her
                        group health benefits would otherwise end due to your
                        termination of employment or reduction of work hours, he
                        or she may elect to extend his or her 18 month
                        continuation period explained above for up to an extra
                        11 months.

                        To elect the extra 11 months of continuation, the
                        qualified continuee must give your employer written
                        proof of Social Security's determination of his or her
                        disability before the earlier of: (a) the end of the 18
                        month continuation period; or (b) 60 days after the date
                        the qualified continuee is determined to be disabled.
                        If, during this extra 11 month continuation period, the
                        qualified continuee is determined to be no longer
                        disabled under the Social Security Act, he or she must
                        notify your employer within 30 days of such
                        determination, and continuation will end, as explained
                        in "When Continuation Ends".

                        This extra 11 month continuation is subject to "When
                        Continuation Ends".

                                                                             P.6
<PAGE>

                                             FEDERAL CONTINUATION RIGHTS (CONT.)
--------------------------------------------------------------------------------

                        An additional 50% of the total premium charge also may
                        be required from the qualified continuee by your
                        employer during this extra 11 month continuation period.

                                                                     B235.0063-R

IF YOU DIE WHILE
INSURED                 If you die while insured, any qualified continuee whose
                        group health benefits would otherwise end may elect to
                        continue such benefits. The continuation can last for up
                        to 36 months, subject to "When Continuation Ends".

                                                                     B235.0075-R

IF YOUR MARRIAGE
ENDS                    If your marriage ends due to legal divorce or legal
                        separation, any qualified continuee whose group health
                        benefits would otherwise end may elect to continue such
                        benefits. The continuation can last for up to 36 months,
                        subject to "When Continuation Ends".

IF A DEPENDENT
LOSES ELIGIBILITY       If a dependent child's group health benefits end due to
                        his or her loss of dependent eligibility as defined in
                        this plan, other than your coverage ending, he or she
                        may elect to continue such benefits. However, such
                        dependent child must be a qualified continuee. The
                        continuation can last for up to 36 months, subject to
                        "When Continuation Ends".

CONCURRENT
CONTINUATIONS           If a dependent elects to continue his or her group
                        health benefits due to your termination of employment or
                        reduction of work hours, the dependent may elect to
                        extend his or her 18 month or 29 month continuation
                        period to up to 36 months, if during the 18 month or 29
                        month continuation period, either: (a) the dependent
                        becomes eligible for 36 months of group health benefits
                        due to any of the reasons stated above; or (b) you
                        become entitled to Medicare.

                        The 36 month continuation period starts on the date the
                        18 month continuation period started, and the two
                        continuation periods will be deemed to have run
                        concurrently.

SPECIAL MEDICARE
RULE                    If you become entitled to Medicare before a termination
                        of employment or reduction of work hours, a special rule
                        applies for a dependent. The continuation period for a
                        dependent, after your later termination of employment or
                        reduction of work hours, will be the longer of: (a) 18
                        months from your termination of employment or reduction
                        of work hours; or (b) 36 months from the date of your
                        earlier entitlement to Medicare. If Medicare entitlement
                        occurs more than 18 months before termination of
                        employment or reduction of work hours, this special
                        Medicare rule does not apply.

THE QUALIFIED
CONTINUEE'S
RESPONSIBILITIES        A person eligible for continuation under this section
                        must notify your employer, in writing, of: (a) your
                        legal divorce or legal separation from your spouse; or
                        (b) the loss of dependent eligibility, as defined in
                        this plan, of an insured dependent child.

                        Such notice must be given to your employer within 60
                        days of either of these events.

                                                                     B235.0077-R

                                                                             P.7
<PAGE>

                                             FEDERAL CONTINUATION RIGHTS (CONT.)
--------------------------------------------------------------------------------
YOUR EMPLOYER'S
RESPONSIBILITIES        Your employer must notify the qualified continuee, in
                        writing, of: (a) his or her right to continue this
                        plan's group health benefits; (b) the monthly premium he
                        or she must pay to continue such benefits; and (c) the
                        times and manner in which such monthly payments must be
                        made.

                        Such written notice must be given to the qualified
                        continuee within 14 days of: (a) the date a qualified
                        continuee's group health benefits would otherwise end
                        due to your death or your termination of employment or
                        reduction of work hours; or (b) the date a qualified
                        continuee notifies your employer, in writing, of your
                        legal divorce or legal separation from your spouse, or
                        the loss of dependent eligibility of an insured
                        dependent child.

YOUR EMPLOYER'S
LIABILITY               Your employer will be liable for the qualified
                        continuee's continued group health benefits to the same
                        extent as, and in place of, us, if: (a) he or she fails
                        to remit a qualified continuee's timely premium payment
                        to us on time, thereby causing the qualified continuee's
                        continued group health benefits to end; or (b) he or she
                        fails to notify the qualified continuee of his or her
                        continuation rights, as described above.

ELECTION OF
CONTINUATION            To continue his or her group health benefits, the
                        qualified continuee must give your employer written
                        notice that he or she elects to continue. This must be
                        done by the later of: (a) 60 days from the date a
                        qualified continuee receives notice of his or her
                        continuation rights from your employer as described
                        above; or (b) the date coverage would otherwise end. And
                        the qualified continuee must pay his or her first
                        month's premium in a timely manner.

                        The subsequent premiums must be paid to your employer,
                        by the qualified continuee, in advance, at the times and
                        in the manner specified by your employer. No further
                        notice of when premiums are due will be given.

                        The monthly premium will be the total rate which would
                        have been charged for the group health benefits had the
                        qualified continuee stayed insured under the group plan
                        on a regular basis. It includes any amount that would
                        have been paid by your employer. Except as explained in
                        "Extra Continuation for Disabled Qualified Continuees",
                        an additional charge of two percent of the total premium
                        charge may also be required by your employer.

                        If the qualified continuee fails to give your employer
                        notice of his or her intent to continue, or fails to pay
                        any required premiums in a timely manner, he or she
                        waives his or her continuation rights.

GRACE IN PAYMENT
OF PREMIUMS             A qualified continuee's premium payment is timely if,
                        with respect to the first payment after the qualified
                        continuee elects to continue, such payment is made no
                        later than 45 days after such election. In all other
                        cases, such premium payment is timely if it's made
                        within 31 days of the specified due date.

WHEN CONTINUATION
ENDS                    A qualified continuee's continued group health benefits
                        end on the first of the following:

                        (a)         with respect to continuation upon your
                                    termination of employment or reduction of
                                    work hours, the end of the 18 month period
                                    which starts on the date the group health
                                    benefits would otherwise end;

                                                                             P.8
<PAGE>

                                             FEDERAL CONTINUATION RIGHTS (CONT.)
--------------------------------------------------------------------------------

                        (b)         with respect to a disabled qualified
                                    continuee who has elected an additional 11
                                    months of continuation, the earlier of: (1)
                                    the end of the 29 month period which starts
                                    on the date the group health benefits would
                                    otherwise end; or (2) the first day of the
                                    month which coincides with or next follows
                                    the date which is 30 days after the date on
                                    which a final determination is made that a
                                    disabled qualified continuee is no longer
                                    disabled under Title II or Title XVI of the
                                    Social Security Act;

                        (c)         with respect to continuation upon your
                                    death, your legal divorce or legal
                                    separation, or the end of an insured
                                    dependent's eligibility, the end of the 36
                                    month period which starts on the date the
                                    group health benefits would otherwise end;

                        (d)         with respect to a dependent whose
                                    continuation is extended due to your
                                    entitlement to Medicare while the dependent
                                    is on continuation, the end of the 36 month
                                    period which starts on the date the group
                                    health benefits would otherwise end;

                        (e)         the date the employer ceases to provide any
                                    group health plan to any employee;

                        (f)         the end of the period for which the last
                                    premium payment is made;

                        (g)         the date he or she becomes covered under any
                                    other group health plan which does not
                                    contain any pre-existing condition exclusion
                                    or limitation affecting him or her; or

                        (h)         the date he or she becomes entitled to
                                    Medicare.

                                                                     B235.0067-R

                        Any person whose continued health benefits end as
                        described in (a), (b), (c), or (d) above may elect to
                        convert some of these benefits to an individual
                        insurance policy we normally issue for conversions at
                        the time he or she elects to convert, if conversion is
                        available under this plan.

                        If conversion is available, the applicant must apply to
                        us in writing and pay the required premium. This must be
                        done within 31 days of the date the applicant's
                        continued group health benefits end. We don't ask for
                        proof of insurability. The converted policy takes effect
                        on the date the applicant's continued group health
                        benefits end. If the applicant is a minor or
                        incompetent, the person who cares for and supports the
                        applicant may apply for him or her.

                        The converted policy will be renewable and will comply
                        with the laws of the place the applicant lived when he
                        or she applied. But, it won't provide exactly the same
                        benefits the applicant had under the group plan. Write
                        to us for details.

                                                                             P.9
<PAGE>

                                             FEDERAL CONTINUATION RIGHTS (CONT.)
--------------------------------------------------------------------------------

                        The premium for the converted policy will be based on:
                        (a) the policy the applicant selects; (b) the risk and
                        rate class, under the group plan, of the people to be
                        covered; and (c) the ages of the people to be covered,
                        as of the date the converted policy takes effect.

                        A covered person may also convert in certain other
                        situations. Read this plan's group health conversion
                        section for details. But, at no time can a person be
                        covered under more than one converted health policy.

                                                                     B235.0073-R

                                                                            P.10
<PAGE>

--------------------------------------------------------------------------------
YOUR CONTINUATION RIGHTS
--------------------------------------------------------------------------------

                                                                IMPORTANT NOTICE
--------------------------------------------------------------------------------

                        This section applies only to the hospital, surgical,
                        medical and major medical expense coverages provided by
                        this group plan. These coverages are referred to as
                        group health insurance.

                        This section does apply to coverages which provide
                        benefits for prescription drug expense, or dental
                        expense. These coverages can be continued under this
                        section.

                        Any continuation of group health insurance under this
                        section shall be subject to all the terms and conditions
                        of this plan.

                                                GROUP HEALTH CONTINUATION RIGHTS
--------------------------------------------------------------------------------

IF EMPLOYMENT OR
ELIGIBILITY ENDS        An employee whose group health insurance ends because
                        his employment or membership in a class of eligible
                        employees ends may elect to continue his group health
                        coverage, if:

                        (a)         he has been continuously insured under the
                                    group plan for at least three months;

                        (b)         he is not covered by Medicare;

                        (c)         he is not covered by similar benefits under
                                    another group plan;

                        (d)         he has not exercised any conversion rights
                                    he may have under this group plan.

                        However, continuation will not be available to the
                        employee if he commited a theft or a felony in
                        connection with his job and as a result was fired and
                        convicted by a court of competent jurisdiction.

                        The continuation will cover the employee. And, he may
                        elect to continue coverage for his insured dependents.

                        Subject to the timely payment of premiums, an employee
                        may continue the group health insurance until the
                        earliest of the following:

                        (a)         the expiration of a 9 month period which
                                    starts on the date his group health
                                    insurance would otherwise end;

                        (b)         the date he becomes eligible for, or covered
                                    by, Medicare;

                        (c)         the date he becomes covered by similar
                                    benefits under another group plan;

                        (d)         the end of the period for which the last
                                    premium payment was made;

                        (e)         the date the group plan ends, or is amended
                                    to end for the class of employees to which
                                    the employee belonged;

                        (f)         with respect to each dependent, the date
                                    such dependent ceases to be an eligible
                                    dependent as defined in the group plan.

                                                                            P.11
<PAGE>

                                        GROUP HEALTH CONTINUATION RIGHTS (CONT.)
--------------------------------------------------------------------------------

THE EMPLOYER'S
RESPONSIBILITY          The employer must give written notice to the employee,
                        of:

                        (a)         the employee's right to elect to continue
                                    his group health insurance under this part;

                        (b)         the monthly premium the employee must pay to
                                    continue such group health insurance; and

                        (c)         the times and manner in which the premium
                                    must be paid to the employer.

                        Such notice must be mailed to the employee's last known
                        address, as shown on the employer's records.

THE EMPLOYEE'S
RESPONSIBILITY          To continue his group health insurance, the employee
                        must give written notice to the employer. And, he must
                        pay the employer, on a monthly basis, the total cost of
                        the continued coverage. The written notice must be
                        given, and the first premium payment must be made,
                        within 60 days of the termination of coverage. The
                        employee waives his right to continue if he fails to
                        give the said notice or fails to pay a premium on time.

THE PREMIUM             The monthly premium will be the total rate which would
                        have been charged had the employee stayed insured under
                        the group plan on a regular basis. It includes any
                        amount which would have been paid by the employer.

THE EMPLOYER'S
LIABILITY               The employer shall be liable to the same extent as, and
                        in place of, us, if:

                        (a)         the employee paid his premium on time; but

                        (b)         the employer failed to remit the payment to
                                    us on the employee's behalf; and

                        (c)         we cancel the employee's group health
                                    insurance due to the employer's failure to
                                    remit the payment.

                        The employer shall also be liable if he fails to notify
                        the employee of the employee's right to continue his
                        group health insurance under this part.

THE RIGHT TO
CONVERT                 At the end of the continuation period under this
                        section, conversion rights which the employee may be
                        entitled to shall be available to him according to the
                        terms and conditions of this plan.

                                                                     B240.0010-R

                                                                            P.12
<PAGE>

--------------------------------------------------------------------------------
YOUR DEPENDENT CONTINUATION RIGHTS
--------------------------------------------------------------------------------

                                                                IMPORTANT NOTICE
--------------------------------------------------------------------------------

                        This section applies only to hospital, surgical, medical
                        and major medical, dental, and prescription drug expense
                        coverages as provided by this plan. In this section,
                        these coverages are referred to as "group health
                        benefits."

                        Any continuation of group health benefits under this
                        section shall be subject to all of the terms and
                        conditions of this plan.

                                  YOUR GROUP HEALTH BENEFITS CONTINUATION RIGHTS
--------------------------------------------------------------------------------

IF AN EMPLOYEE'S
MARRIAGE ENDS OR IF
AN EMPLOYEE DIES
WHILE INSURED           If an employee's marriage ends by legal divorce or
                        annulment, or if an employee dies while insured, his
                        then insured spouse may continue this plan's group
                        health benefits subject to all the terms below and to
                        the timely payment of premiums. Such group health
                        benefits will cover such spouse and those of the
                        employee's dependent children whose group health
                        benefits would otherwise end.

IF AN EMPLOYEE
RETIRES WHILE
INSURED                 If an employee retires while insured, his then insured
                        spouse who is age 55 or older at that time may continue
                        this plan's group health benefits subject to all the
                        terms below and to the timely payment of premiums. Such
                        group health benefits will cover such spouse and those
                        of the employee's dependent children whose group health
                        benefits would otherwise end.

HOW AND WHEN TO
CONTINUE THE GROUP
HEALTH BENEFITS         To continue the group health benefits, the employee's
                        spouse must: (a) be insured for group health benefits
                        under this plan at the time the marriage ends or the
                        employee dies or retires; (b) in the case of a retired
                        employee's spouse, be age 55 or older at the time the
                        employee retires; (c) give notice to us and the employer
                        of the end of the marriage or the death or retirement of
                        the employee. This must be done within 30 days after the
                        dissolution of the marriage or the death or retirement
                        of the employee; and (d) elect to continue the group
                        health benefits and pay the first monthly premium. This
                        must be done within 30 days after receiving a written
                        notice of continuation rights from us. Our notice will
                        be sent to the spouse's last known address by certified
                        mail.

                        The notice of continuation rights will: (i) contain a
                        form for electing to continue the group health benefits;
                        and (ii) explain all the details for continuing the
                        group health benefits, including: (a) the duration of
                        the continuation; (b) the monthly premium that must be
                        paid to continue the group health benefits; and (c) the
                        times and manner in which premium payments must be made.

                        If the employee's spouse fails to give us notice or
                        fails to pay any premium on time, he waives his right to
                        continue the group health benefits under this plan.

                                                                            P.13
<PAGE>

                          YOUR GROUP HEALTH BENEFITS CONTINUATION RIGHTS (CONT.)
--------------------------------------------------------------------------------

WHEN CONTINUATION
ENDS                    This continuation ends for each covered person on the
                        earliest of the following: (a) the end of the period for
                        which the last premium payment was made; (b) the date
                        the person becomes covered for similar benefits under
                        another group plan; (c) the date the employee's then
                        insured spouse remarries; (d) with respect to each
                        dependent, the date such dependent ceases to be an
                        eligible dependent as defined in the group plan, but not
                        less than 120 days after the date the group health
                        benefits would otherwise end in the absence of this
                        continuation; (e) two years from the date continuation
                        starts, if the insured spouse has not reached age 55
                        when the employee dies or the marriage ends; (f) the
                        date the insured spouse becomes qualified or otherwise
                        eligible for Medicare, if the insured spouse has reached
                        age 55 when the employee dies or retires, or the
                        marriage ends.

THE RIGHT TO
CONVERT                 When this continuation ends, conversion rights which the
                        covered person may be entitled to shall be available to
                        him according to all the terms and conditions of this
                        plan.

                                                                     B240.0140-R

                                                                            P.14
<PAGE>

--------------------------------------------------------------------------------
ELIGIBILITY FOR MAJOR MEDICAL COVERAGE
--------------------------------------------------------------------------------

                                                                     B449.0037-R

                                                               EMPLOYEE COVERAGE
--------------------------------------------------------------------------------

ELIGIBLE EMPLOYEES      To be eligible for EMPLOYEE coverage you must be an
                        active FULL-TIME/PART-TIME EMPLOYEE or a QUALIFIED
                        RETIREE. And you must belong to a class of EMPLOYEES
                        covered by this PLAN.

                                                                     B489.0131-R

WHEN YOUR
COVERAGE STARTS         EMPLOYEE benefits are scheduled to start on the
                        effective date shown on the sticker attached to the
                        inside front cover of this booklet.

                        But you must be actively at work on a
                        FULL-TIME/PART-TIME basis unless you are a QUALIFIED
                        RETIREE, on the scheduled effective date. And you must
                        have met all of the applicable conditions explained
                        above, and any applicable waiting period. If you are an
                        active FULL-TIME/PART-TIME EMPLOYEE and are not actively
                        at work on the date your insurance is scheduled to
                        start, unless you are disabled, we will postpone your
                        coverage until the date you return to active
                        FULL-TIME/PART-TIME work.

                        If you are a QUALIFIED RETIREE, you can not be confined
                        in a health care facility on the scheduled effective
                        date of coverage. If you are confined on that date, we
                        will postpone your coverage until the day after you are
                        discharged. And you must also have met all of the
                        applicable conditions of eligibility and any applicable
                        waiting period in order for coverage to start.

                        Sometimes, the effective date shown on the sticker or in
                        the endorsement is not a regularly scheduled work day.
                        But coverage will still start on that date if you were
                        actively at work on a FULL-TIME/PART-TIME basis on your
                        last regularly scheduled work day.

                                                                     B449.0146-R

WHEN YOUR
COVERAGE ENDS           If you are an active FULL-TIME/PART-TIME EMPLOYEE, your
                        coverage ends on the date your active
                        FULL-TIME/PART-TIME service ends for any reason, other
                        than disability. Such reasons include death, retirement
                        (except for QUALIFIED RETIREES), layoff, leave of
                        absence and the end of employment.

                        It also ends on the date you stop being a member of a
                        class of employees eligible for insurance under this
                        plan, or when this plan ends for all EMPLOYEES. And it
                        ends when this PLAN is changed so that benefits for the
                        class of EMPLOYEES to which you belong ends.

                        Read this booklet carefully if your coverage ends. You
                        may have the right to continue certain group benefits
                        for a limited time. And you may have the right to
                        replace certain group benefits with converted policies.

                                                                     B449.0115-R

                                                                            P.15
<PAGE>

                                                              DEPENDENT COVERAGE
--------------------------------------------------------------------------------

                                                                     B200.0271-R

ELIGIBLE DEPENDENTS
FOR DEPENDENT
MAJOR MEDICAL
BENEFITS                Your ELIGIBLE DEPENDENTS are: your legal spouse; your
                        same sex domestic partner who meets the eligibility
                        criteria on the Domestic Partner statement; your
                        unmarried dependent children who are under age 19; and
                        your unmarried dependent children, from age 19 until
                        their 26th birthday, who are enrolled as full-time
                        students at accredited schools.

                        "Unmarried dependent children" include your dependent
                        grandchildren who reside with you or if you are named in
                        a court order as having legal custody or the parent of
                        the grandchild(ren) is an eligible dependent child(ren)
                        of your same sex domestic partner if they meet the
                        criteria for unmarried natural children and their
                        primary residence is with the employee.

                                                                     B200.0496-R

ADOPTED CHILDREN
AND STEP-CHILDREN       Your "unmarried dependent children" include your legally
                        adopted children and your step-children, if their
                        primary residence is with you or you claim the dependent
                        on your tax return. We treat a child as legally adopted
                        from the time the child is placed in your home for the
                        purpose of adoption. We treat such a child this way
                        whether or not a final adoption order is ever issued.

                        The "Pre-Existing Conditions" provision of the major
                        medical portion of this plan, if any, does not apply to
                        an adopted child, if the child: (a) is adopted or placed
                        for adoption prior to his or her 18th birthday; and (b)
                        becomes covered by this plan within 30 days of such
                        placement.

DEPENDENTS NOT
ELIGIBLE                We exclude any dependent who is insured by this PLAN as
                        an EMPLOYEE. And we exclude any dependent who is on
                        active duty in any armed force.

                                                                     B200.0480-R

HANDICAPPED
CHILDREN                You may have an unmarried child with a mental or
                        physical handicap, or developmental disability, who
                        can't support himself or herself. Subject to all of the
                        terms of this coverage and the PLAN, such a child may
                        stay eligible for dependent benefits past this
                        coverage's age limit.

                        The child will stay eligible as long as he or she stays
                        unmarried and unable to support himself or herself, if:
                        (a) his or her conditions started before he or she
                        reached this coverage's age limit; (b) he or she became
                        insured by this coverage before he or she reached the
                        age limit, and stayed continuously insured until he or
                        she reached such limit; and (c) he or she depends on you
                        for most of his or her support and maintenance.

                        But, for the child to stay eligible, you must send us
                        written proof that the child is handicapped and depends
                        on you for most of his or her support and maintenance.
                        You have 31 days from the date the child reaches the age
                        limit to do this. We can ask for periodic proof that the
                        child's condition continues. But, after two years, we
                        can't ask for this proof more than once a year.

                        The child's coverage ends when yours does.

                                                                     B449.0042-R

                                                                            P.16
<PAGE>

                                                      DEPENDENT COVERAGE (CONT.)
--------------------------------------------------------------------------------

WHEN DEPENDENT
COVERAGE STARTS         In order for your dependent coverage to start you must
                        already be insured for employee major medical coverage,
                        or enroll for employee and dependent major medical
                        coverage at the same time. The date your dependent
                        coverage starts depends on when you elect to enroll your
                        INITIAL DEPENDENTS and agree to make any required
                        payments.

                        If you do this on or before your ELIGIBILITY DATE, each
                        INITIAL DEPENDENT'S coverage is scheduled to start on
                        the later of your ELIGIBILITY DATE and the date you
                        become insured for employee coverage.

                        If you do this within or after the ENROLLMENT PERIOD,
                        each INITIAL DEPENDENT'S coverage is scheduled to start
                        on the later of the date you sign the enrollment form
                        and the date you become insured for employee coverage.

                        However, if you do this after the ENROLLMENT PERIOD,
                        each INITIAL DEPENDENT is considered a LATE ENROLLEE,
                        and is subject to this coverage's pre-existing
                        conditions limitation for LATE ENROLLEES.

                        Once you have coverage for your INITIAL DEPENDENTS, you
                        must notify us when you acquire any new dependents, and
                        agree to make any additional require payments. The NEWLY
                        ACQUIRED DEPENDENT'S major medical coverage will start
                        on the date you sign the enrollment form, if you notify
                        us within 30 days of the date the dependent is acquired.
                        If you fail to notify us within 30 days of the date the
                        dependent is acquired, the dependent is considered a
                        LATE ENROLLEE, and is subject to this coverage's
                        pre-existing conditions limitation for LATE ENROLLEES.

                        A LATE ENROLLEE is a dependent who the employee fails to
                        enroll for major medical coverage: (a) during the
                        ENROLLMENT PERIOD if the dependent is an INITIAL
                        DEPENDENT; (b) within 30 days of the date a dependent
                        becomes an ELIGIBLE DEPENDENT, if the dependent is not
                        an INITIAL DEPENDENT; or (c) during a SPECIAL ENROLLMENT
                        PERIOD, as described below.

                        However, if you elect to enroll a dependent in this
                        coverage after you previously waived major medical
                        coverage under this PLAN for the dependent, because the
                        dependent was covered under another group plan, and,
                        upon his or her notification by us of this requirement,
                        you stated this in writing at the time of the waiver, we
                        will not consider the dependent to be a LATE ENROLLEE,
                        if the dependent's coverage under the other plan ends
                        due to:

                        (a)         the exhaustion of a COBRA continuation of
                                    coverage;

                        (b)         a death, divorce or legal separation;

                        (c)         the end of employment or reduction of work
                                    hours; or

                        (d)         the end of employer contributions toward the
                                    other plan, or the end of the other plan.

                        But you must enroll the dependent in this coverage
                        within 30 days of the date his or her coverage under the
                        other plan ends. And the dependent must still be an
                        ELIGIBLE DEPENDENT.

                                                                            P.17
<PAGE>

                                                      DEPENDENT COVERAGE (CONT.)
--------------------------------------------------------------------------------

                        Also, a dependent will not be considered a LATE ENROLLEE
                        if he or she is enrolled during a SPECIAL ENROLLMENT
                        PERIOD. A special enrollment period means a 30 day
                        period which begins on the later of: (a) the date
                        dependent major medical coverage is made available under
                        this PLAN; and (b) the date you acquire an ELIGIBLE
                        DEPENDENT through marriage, birth, adoption or placement
                        for adoption. You may enroll an eligible spouse who was
                        previously not enrolled at this time.

                        And a dependent will not be considered to be a LATE
                        ENROLLEE if he or she is enrolled due to a court order
                        which mandates that you provide this major medical
                        coverage for such dependent.

                                                                     B449.0158-R

NEWBORN CHILDREN        We cover your newborn child, including a newborn
                        dependent grandchild who resides with you, for dependent
                        benefits, from the moment of birth, if you are already
                        covered for dependent child coverage when the child is
                        born. If you do not have dependent coverage when the
                        child is born, we cover the child for the first 31 days
                        from the moment of birth. To continue the child's
                        coverage past the 31 days, you must enroll the child and
                        agree to make any required premium payments within 31
                        days of the date the child is born. If you fail to do
                        this, the child's coverage will end at the end of the 31
                        days, and when again enrolled, the child will be
                        considered a late enrollee, and is subject to this
                        coverage's pre-existing conditions limitations for late
                        enrollees. The child's coverage starts on the date the
                        enrollment form is signed.

                                                                     B449.0190-R

WHEN DEPENDENT
COVERAGE ENDS           Dependent coverage ends on the last day of the month for
                        all of your dependents when your EMPLOYEE coverage ends.
                        But if you die while insured, we'll automatically
                        continue dependent benefits for those of your dependents
                        who are insured when you die. We'll do this for six
                        months at no cost, provided: (a) the group PLAN remains
                        in force; (b) the dependents remain ELIGIBLE DEPENDENTS;
                        and (c) in the case of a spouse, the spouse does not
                        remarry.

                        If a surviving dependent elects to continue his or her
                        dependent benefits under this PLAN'S "Federal
                        Continuation Rights" provision, or under any other
                        continuation provision of this PLAN, if any, this free
                        continuation period will be provided as the first six
                        months of such continuation. Premiums required to be
                        paid by, or on behalf of a surviving dependent will be
                        waived for the first six months of continuation, subject
                        to restrictions (a), (b) and (c) above. After the first
                        six months of continuation, the remainder of the
                        continuation period, if any, will be subject to the
                        premium requirements, and all of the terms of the
                        "Federal Continuation Rights" or other continuation
                        provisions.

                        Dependent coverage also ends for all of your dependents
                        when you stop being a member of a class of EMPLOYEES
                        eligible for such coverage. And it ends when this PLAN
                        ends, or when dependent coverage is dropped from this
                        PLAN for all EMPLOYEES or for an EMPLOYEE'S class.

                                                                            P.18
<PAGE>

                                                      DEPENDENT COVERAGE (CONT.)
--------------------------------------------------------------------------------

                        An individual dependent's coverage ends when he or she
                        stops being an ELIGIBLE DEPENDENT. This happens to a
                        child on the last day of the month in which the child
                        attains this coverage's age limit, when he or she
                        marries, or when a step-child is no longer dependent on
                        the EMPLOYEE for support and maintenance. It happens to
                        a spouse when a marriage ends in legal divorce or
                        annulment.

                        Read this plan carefully if dependent coverage ends for
                        any reason. Dependents may have the right to continue
                        certain group benefits for a limited time. And they may
                        have the right to replace certain group benefits with
                        converted policies.

                                                                     B449.0051-R

                                                                            P.19
<PAGE>

--------------------------------------------------------------------------------
CERTIFICATE AMENDMENT
--------------------------------------------------------------------------------

                        This rider amends the "Dependent Coverage" provisions as
                        follows:

                        An employee's domestic partner will be eligible for
                        major medical coverage under this plan. Coverage will be
                        provided subject to all the terms of this plan and to
                        the following limitations:

                        To qualify for such coverage, both the employee and his
                        or her domestic partner must:

                        *           be 18 years of age or older;

                        *           be unmarried, constitute each other's sole
                                    domestic partner and not have had another
                                    domestic partner in the last 12 months;

                        *           share the same permanent address for at
                                    least 12 consecutive months and intend to do
                                    so indefinitely;

                        *           share joint financial responsibility for
                                    basic living expenses including food,
                                    shelter and medical expenses;

                        *           not be related by blood to a degree that
                                    would prohibit marriage in the employee's
                                    state of residence; and

                        *           be financially interdependent which must be
                                    demonstrated by at least four of the
                                    following:

                                    a.          ownership of a joint bank
                                                account;

                                    b.          ownership of a joint credit
                                                account;

                                    c.          evidence of a joint mortgage or
                                                lease;

                                    d.          evidence of joint obligation on
                                                a loan;

                                    e.          joint ownership of a residence;

                                    f.          evidence of common household
                                                expenses such as utilities or
                                                telephone;

                                    g.          execution of wills naming each
                                                other as executor and/or
                                                beneficiary;

                                    h.          granting each other durable
                                                powers of attorney;

                                    i.          granting each other health care
                                                powers of attorney;

                                    j.          designation of each other as
                                                beneficiary under a retirement
                                                benefit account; or

                                    k.          evidence of other joint
                                                financial responsibility.

                        The employee must complete a "Declaration of Domestic
                        Partnership" attesting to the relationship.

                        The domestic partner's dependent children will be
                        eligible for coverage under this plan on the same basis
                        as if the children were the employee's dependent
                        children.

                                                                            P.20
<PAGE>

                                                   CERTIFICATE AMENDMENT (CONT.)
--------------------------------------------------------------------------------

                        Coverage for the domestic partner and his or her
                        dependent children ends when the domestic partner no
                        longer meets the qualifications of a domestic partner as
                        indicated above. Upon termination of a domestic
                        partnership, a "Statement of Termination" must be
                        completed and filed with the employer. Once the employee
                        submits a "Statement of Termination," he or she may not
                        enroll another domestic partner for a period of 12
                        months from the date of the previous termination.

                        And, the domestic partner and his or her children will
                        be not eligible for:

                                    a.          survivor benefits upon the
                                                employee's death as explained
                                                under the "When Dependent
                                                Coverage Ends" section;

                                    b.          continuation of major medical
                                                coverage as explained under the
                                                "Federal Continuation Rights"
                                                section and under any other
                                                continuation rights section of
                                                this plan, unless the employee
                                                is also eligible for and elects
                                                continuation; or

                                    c.          conversion of major medical
                                                coverage as explained under the
                                                "Converting This Group Health
                                                Insurance" section of this plan.

                        This rider is a part of this plan. Except as stated in
                        this rider, nothing contained in this rider changes or
                        affects any other terms of this plan.

                                                                     B210.0014-R

                                                                            P.21
<PAGE>

--------------------------------------------------------------------------------
MAJOR MEDICAL HIGHLIGHTS
--------------------------------------------------------------------------------

                        This page provides a quick guide to some of the Major
                        Medical PLAN features which people most often want to
                        know about. But it's not a complete description of your
                        Major Medical PLAN. Read the following pages carefully
                        for a complete explanation of what we pay, limit and
                        exclude.

BENEFIT YEAR CASH
DEDUCTIBLE              PER COVERED PERSON .................................None

CO-PAYMENTS             For most COVERED CHARGES ..................No CO-PAYMENT

                        NOTE: There may be different CO-PAYMENTS for some types
                        of charges. Read all provisions of this PLAN carefully.

BENEFIT YEAR
PAYMENT LIMITS          Benefit year payment limit for preventive
                        health care ...................................Unlimited

LIFETIME LIMITS         Lifetime payment limit for most SICKNESSES
                        or INJURIES ...............................$2,000,000.00

                        NOTE: Some provisions have BENEFIT YEAR or treatment
                        period limits. Read all provisions of this PLAN
                        carefully.

                                                                            P.22
<PAGE>

--------------------------------------------------------------------------------
MAJOR MEDICAL EXPENSE INSURANCE
--------------------------------------------------------------------------------

                        This insurance will pay many of the medical expenses
                        incurred by you and those of your COVERED DEPENDENTS who
                        are insured for major medical coverage under this PLAN.
                        What we pay and the terms for payment are explained
                        below. All terms in ITALICS are defined terms with
                        special meanings. Their definitions are shown in the
                        "Glossary" at the back of this booklet. Other terms are
                        defined where they are used.

                                                                     B450.1173-R

                                                               BENEFIT PROVISION
--------------------------------------------------------------------------------

                                                                     B453.0785-R

THE CASH
DEDUCTIBLE              Each BENEFIT YEAR, each COVERED PERSON must have COVERED
                        CHARGES that exceed the cash deductible before we pay
                        any benefits to that person. The cash deductible is
                        shown in the schedule. The cash deductible can't be met
                        with NON-COVERED EXPENSES. Only COVERED CHARGES incurred
                        by the COVERED PERSON while insured by this PLAN can be
                        used to meet this deductible.

                        Once the cash deductible is met, we pay benefits for
                        other COVERED CHARGES above the deductible amount
                        incurred by that COVERED PERSON, less any applicable
                        CO-PAYMENTS, for the rest of that BENEFIT YEAR. But all
                        charges must be incurred while that COVERED PERSON is
                        insured by this PLAN. And what we pay is based on all
                        the terms of this PLAN.

                                                                     B453.0034-R

DEDUCTIBLE
CARRYOVER CREDIT        A COVERED PERSON may have COVERED CHARGES in the last
                        three months of a BENEFIT YEAR which are used to meet
                        the cash deductible under this PLAN for that year. These
                        charges will also be used to meet the deductible for the
                        next BENEFIT YEAR.

                                                                     B450.1177-R

DEDUCTIBLE FOR
COMMON ACCIDENTS
AND SICKNESSES          Sometimes two or more COVERED FAMILY members are INJURED
                        in the same accident. If they are, we apply only one
                        cash deductible (each BENEFIT YEAR) against all COVERED
                        CHARGES due to that accident. We do the same if two or
                        more COVERED FAMILY members get the same contagious
                        disease within ten days of each other. What we pay is
                        based on all of the terms of this PLAN.

                        Each COVERED PERSON must still meet the balance of his
                        or her own cash deductible before we pay benefits for
                        charges due to other conditions.

                                                                     B450.1182-R

PAYMENT LIMITS          For each SICKNESS or INJURY we pay up to the payment
                        limit shown below:

                        Charges for IN-PATIENT confinement in an EXTENDED CARE
                        or REHABILITATION CENTER, per BENEFIT YEAR .............
                        ................................................100 days

                        Charges for home health care, per BENEFIT YEAR .........
                        ..............................................100 visits

                        Charges for treatment of disease or deformity of the
                        feet, per BENEFIT YEAR ........................$2,500.00

                                                                            P.23
<PAGE>

                                                       BENEFIT PROVISION (CONT.)
--------------------------------------------------------------------------------

                        Charges for manipulation or adjustment of the spine, per
                        BENEFIT YEAR ..................................Unlimited

                        All Other Charges

                        Lifetime payment limit for each SICKNESS or INJURY not
                        listed above ..............................$2,000,000.00

                                                                     B453.0155-R

DAILY ROOM AND
BOARD LIMITS          * During a Period of HOSPITAL Confinement:

                        For semi-private room and board accommodations, we cover
                        charges up to the HOSPITAL'S actual daily room and board
                        charge.

                        For private room and board accommodations, we cover
                        charges up to the HOSPITAL'S average daily semi-private
                        room and board charge, or if the HOSPITAL does not have
                        semi-private accommodations, 90% of its lowest daily
                        room and board charge.

                        For special care units, we cover charges up to the
                        HOSPITAL'S actual daily room and board charge.

                      * For a Confinement In an EXTENDED CARE CENTER or
                        REHABILITATION CENTER:

                        We cover the lesser of: (a) the center's actual daily
                        room and board charge; or (b) 50% of the covered daily
                        room and board charge made by the HOSPITAL during the
                        COVERED PERSON'S preceding HOSPITAL confinement, for
                        semi-private accommodations.

                                                                     B453.0158-R

BENEFITS FROM OTHER
PLANS                   A COVERED PERSON may be covered by two or more plans
                        that provide similar benefits. For instance, your spouse
                        may be covered by this PLAN and a similar plan through
                        his or her own EMPLOYER. When another plan furnishes
                        benefits which are similar to ours, we coordinate our
                        benefits with the benefits from that other plan. We do
                        this so that no one gets more in benefits than he or she
                        incurs in charges. Read "Coordination of Benefits" to
                        see how this works.

                        The benefits under this PLAN may also be affected by
                        MEDICARE. See the provision "How This Plan Interacts
                        With Medicare" for an explanation of how this works.

                                                                     B450.1190-R

                                                 EXTENDED MAJOR MEDICAL BENEFITS
--------------------------------------------------------------------------------

                        If a COVERED PERSON'S insurance ends and he or she is
                        totally disabled and under a DOCTORS care, we extend
                        major medical benefits for that person under this PLAN
                        as explained below. This is to be done at no cost to
                        you.

                        We only extend benefits for COVERED CHARGES due to the
                        disabling condition. The charges must be incurred before
                        the extension ends. And what we pay is subject to all of
                        the terms of this PLAN.

                                                                            P.24
<PAGE>

                                         EXTENDED MAJOR MEDICAL BENEFITS (CONT.)
--------------------------------------------------------------------------------

                        We don't pay for charges due to other conditions. And we
                        don't pay for charges incurred by other family members.

                        The extension ends on the earliest of: (a) the date the
                        total disability ends; (b) one year from the date the
                        person's insurance under this PLAN ends; or (c) the date
                        the person has reached the payment limit for his or her
                        disabling condition.

                        However, we won't grant an extension if the person's
                        insurance ended because he or she failed to make
                        required payments. And if a person receives benefits
                        under this extension of benefits provision, he or she
                        will not be eligible for coverage under any continuation
                        of coverage provisions of this PLAN when the extension
                        ends.

                        You are totally disabled if, due to SICKNESS or INJURY,
                        you can't perform the main duties of your occupation. A
                        COVERED DEPENDENT is totally disabled if, due to
                        SICKNESS or INJURY, he or she can't perform the normal
                        activities of someone his or her age. You must submit
                        evidence to us that you or your dependent is totally
                        disabled, if we request it.

                                                                     B453.3699-R

                                                                 COVERED CHARGES
--------------------------------------------------------------------------------

                        This section lists the types of charges we cover. But
                        what we pay is subject to all the terms of this PLAN.
                        Read the entire PLAN to find out what we limit or
                        exclude.

                                                                     B450.1194-R

HOSPITAL CHARGES        We cover charges for HOSPITAL room and board and ROUTINE
                        NURSING CARE, up to the daily room and board limit, when
                        it is provided to you by a HOSPITAL on an INPATIENT
                        basis. And we cover other medically necessary HOSPITAL
                        services and supplies provided to you during the
                        INPATIENT confinement.

                        If you incur charges as an INPATIENT in a special care
                        unit, we cover the charges, up to the daily room and
                        board limit for special care units.

                        We also cover outpatient HOSPITAL services. These
                        include emergency room treatment, and services provided
                        by a HOSPITAL outpatient clinic.

                        Any charges in excess of the HOSPITAL daily room and
                        board limit are a NON-COVERED EXPENSE.

                                                                     B453.0177-R

PRE-ADMISSION
TESTING CHARGES         We cover pre-admission tests needed for a planned
                        HOSPITAL admission or surgery. We cover these tests if:
                        (a) the tests are done within seven days of the planned
                        admission or surgery; and (b) the tests are accepted by
                        the HOSPITAL in place of the same post-admission tests.

                        We don't cover tests that are repeated after admission
                        or before surgery, unless the admission or surgery is
                        deferred solely due to a change in the COVERED PERSON'S
                        health.

                                                                            P.25
<PAGE>

                                                         COVERED CHARGES (CONT.)
--------------------------------------------------------------------------------

EXTENDED CARE AND
REHABILITATION
CHARGES                 We cover charges, up to the daily room and board limit,
                        for room and board and ROUTINE NURSING CARE provided to
                        you or a COVERED DEPENDENT on an INPATIENT basis in an
                        EXTENDED CARE CENTER or REHABILITATION CENTER. Charges
                        above the daily room and board limit are a NON-COVERED
                        EXPENSE.

                        And we cover all other medically necessary services and
                        supplies provided to you or your COVERED DEPENDENT
                        during the confinement. But the confinement must start
                        within 14 days of a HOSPITAL stay. And we only cover the
                        first 100 days of confinement in each BENEFIT YEAR.
                        Charges for any additional days are a NON-COVERED
                        EXPENSE.

                        We also cover outpatient services furnished by an
                        extended care or REHABILITATION CENTER.

                                                                     B450.1196-R

HOME HEALTH CARE
CHARGES                 When home health care can take the place of INPATIENT
                        care, we cover such care furnished to you or a COVERED
                        DEPENDENT under a written home health care plan. We
                        cover medically necessary services or supplies,
                        including prescribed drugs, which we would have covered
                        if you or your COVERED DEPENDENT had been an INPATIENT
                        in a recognized facility. But payment is subject to all
                        of the terms of this PLAN and all of the conditions
                        below:

                        The COVERED PERSON'S DOCTOR must certify that home
                        health care is needed in place of INPATIENT care in a
                        recognized facility.

                        The services and supplies must be: (a) ordered by the
                        COVERED PERSON'S doctor; (b) included in the home health
                        care plan; and (c) furnished by, or coordinated by, a
                        home health care agency according to the written home
                        health care plan. The services and supplies must be
                        furnished by health care professionals with skills
                        equivalent to the skilled professional care furnished in
                        recognized facilities.

                        The home health care plan must be set up in writing by
                        the COVERED PERSON'S DOCTOR within 14 days after home
                        health care starts. And it must be reviewed by the
                        COVERED PERSON'S DOCTOR at least once every 60 days.

                        We only cover the first 100 home health care visits each
                        BENEFIT YEAR. Home health care charges after the first
                        100 visits in a BENEFIT YEAR are a NON-COVERED EXPENSE.

                        Each visit by a home health aide, NURSE, or other
                        recognized provider whose services are authorized under
                        the home health care plan can last up to four hours.

                        We don't pay for: (i) services furnished to family
                        members, other than the patient; or (ii) services and
                        supplies not included in the home health care plan.

                                                                     B450.1197-R

DOCTOR'S CHARGES
FOR NON-SURGICAL
CARE AND TREATMENT      We cover DOCTOR'S charges for the medically necessary
                        non-surgical care and treatment of a SICKNESS or INJURY.

                                                                            P.26
<PAGE>

                                                         COVERED CHARGES (CONT.)
--------------------------------------------------------------------------------

DOCTOR'S CHARGES
FOR SURGERY             We cover DOCTOR'S charges for medically necessary
                        surgery. We don't pay for cosmetic surgery. But we cover
                        reconstructive surgery needed due to a SICKNESS or
                        INJURY. This surgery can be performed either at the same
                        time as, or after, other needed surgery. We also cover
                        reconstructive surgery needed due to a functional birth
                        defect in a COVERED DEPENDENT child.

SECOND OPINION
CHARGES                 We cover DOCTOR'S charges for a second opinion and
                        charges for related X-rays and tests when a COVERED
                        PERSON is advised to have surgery or enter a HOSPITAL.
                        If the second opinion differs from the first, we cover
                        charges for a third opinion. We cover such charges if
                        the DOCTORS who give the opinions: (a) are board
                        certified and qualified, by reason of their specialty,
                        to give an opinion on the proposed surgery or HOSPITAL
                        admission; (b) are not business associates of the DOCTOR
                        who recommended the surgery; and (c) in the case of a
                        second surgical opinion, they do not perform the surgery
                        if it's needed.

AMBULATORY SURGICAL
CENTER CHARGES          We cover charges made by an AMBULATORY SURGICAL CENTER
                        in connection with covered surgery.

                                                                     B453.0063-R

HOSPICE CARE
CHARGES                 We cover charges made by a HOSPICE for palliative and
                        supportive care furnished to a terminally ill COVERED
                        PERSON under a HOSPICE care program.

                        "Palliative and supportive care" means care and support
                        aimed mainly at lessening or controlling pain or
                        symptoms; it makes no attempt to cure the COVERED
                        PERSON'S terminal illness.

                        HOSPICE care must be furnished according to a written
                        "hospice care program." A "hospice care program" is a
                        coordinated program for meeting the special needs of the
                        terminally ill COVERED PERSON. It must be set up and
                        reviewed periodically by the COVERED PERSON'S DOCTOR.

                        Under a HOSPICE care program, subject to all the terms
                        of this PLAN, we cover any services and supplies
                        including prescription drugs, to the extent they are
                        otherwise covered by this PLAN. Services and supplies
                        may be furnished on an INPATIENT and outpatient basis.

                        The services and supplies must be: (1) needed for
                        palliative and supportive care; (2) ordered by the
                        COVERED PERSON'S DOCTOR; (3) included in the HOSPICE
                        care program; and (4) furnished by, or coordinated by a
                        HOSPICE.

                        We don't pay for: (a) services and supplies provided by
                        volunteers or others who do not regularly charge for
                        their services; (b) funeral services and arrangements;
                        (c) legal or financial counseling or services; (d)
                        treatment not included in the HOSPICE care plan; (e)
                        services supplied to family members, other than the
                        terminally ill COVERED PERSON; or (f) counseling of any
                        type which is for the sole purpose of adjusting to the
                        terminally ill COVERED PERSON'S death.

                                                                     B450.1199-R

                                                                            P.27
<PAGE>

                                                         COVERED CHARGES (CONT.)
--------------------------------------------------------------------------------

PREVENTIVE CARE         We cover charges for routine physical exams including
                        related laboratory tests and X-rays. We also cover
                        charges for immunizations and vaccines. But we limit
                        what we pay each BENEFIT YEAR to the benefit year
                        payment limit shown in the schedule.

                                                                     B450.1316-R

MAMMOGRAMS              We pay benefits for COVERED CHARGES for mammograms
                        provided to a covered woman. We treat such charges the
                        same way we treat any other COVERED CHARGES for
                        SICKNESS. But, what we pay is based on all the terms of
                        this PLAN and the following limitations.

                                                                     B450.1374-R

OTHER COVERED
MEDICAL SERVICES
AND SUPPLIES            We cover anesthetics and their administration;
                        inhalation therapy; hemodialysis; radiation and
                        chemotherapy; physical therapy by a licensed physical
                        therapist; casts; splints; and surgical dressings.

                        We cover the initial fitting and purchase of braces,
                        trusses, orthopedic footwear and crutches.

                        We cover blood, blood products, and blood transfusions.
                        But we don't pay for blood which has been donated or
                        replaced on behalf of you or a COVERED DEPENDENT.

                        We cover medically necessary charges for transporting
                        you or a COVERED DEPENDENT to: (a) a local HOSPITAL if
                        needed care and treatment can be provided by a local
                        HOSPITAL; or (b) the nearest HOSPITAL where medically
                        necessary care and treatment can be given, if a local
                        HOSPITAL can't provide this treatment. But it must be
                        connected with an INPATIENT confinement. It can be by
                        professional ambulance service, train or plane. But we
                        don't pay for chartered air flights. And we won't pay
                        for other travel or communication expenses of patients,
                        DOCTORS, NURSES or family members.

                        We cover charges for the rental of DURABLE MEDICAL
                        EQUIPMENT needed for therapeutic use. At our option, and
                        with our advance written approval, we may cover the
                        purchase of such items when it is less costly and more
                        practical than rental. But we don't pay for: (1) any
                        purchases without our advance written approval; (2)
                        replacements or repairs; or (3) the rental or purchase
                        of items (such as air conditioners, exercise equipment,
                        saunas and air humidifiers) which do not fully meet the
                        definition of DURABLE MEDICAL EQUIPMENT.

                                                                     B450.1202-R

                        We cover charges made by a NURSE for medically necessary
                        private duty nursing care.

                                                                     B450.1203-R

                        We cover X-rays and laboratory tests which are medically
                        necessary to treat a SICKNESS or INJURY.

                                                                     B453.0102-R

                                                                            P.28
<PAGE>

                                        CHARGES COVERED WITH SPECIAL LIMITATIONS
--------------------------------------------------------------------------------

RECOGNIZED
PROVIDERS               COVERED CHARGES must be provided by recognized
                        providers. The providers we recognize are listed in the
                        glossary. We recognize both public and private
                        facilities. But all providers must be properly licensed
                        or certified under all applicable state and local laws
                        to provide the services they render, and be operating
                        within the scope of their license.

PROVIDERS WE DON'T
RECOGNIZE               We don't recognize: (a) rest homes; (b) old age homes;
                        (c) places that mainly provide CUSTODIAL CARE, education
                        or training; or (d) nurses' aides, home attendants,
                        nutritionists, dieticians, or massage therapists unless
                        this PLAN provides specific benefits for their services.

                                                                     B450.1206-R

DENTAL CARE AND
TREATMENT               We cover: (a) the diagnosis and treatment of oral tumors
                        and cysts; and (b) the surgical removal of impacted
                        teeth.

                        We also cover treatment of an INJURY to natural teeth or
                        the jaw, but only if: (a) the INJURY occurs while the
                        COVERED PERSON is insured; (b) the INJURY was not
                        caused, directly or indirectly by biting or chewing; and
                        (c) all treatment is finished within six months of the
                        date of the INJURY. Treatment includes replacing natural
                        teeth lost due to such INJURY. But in no event do we
                        cover orthodontic treatment.

PROSTHETIC DEVICES      We limit what we pay for prosthetic devices. We cover
                        only the initial fitting and purchase of artificial
                        limbs and eyes, and other prosthetic devices. And they
                        must take the place of a natural part of a COVERED
                        PERSON'S body, or be needed due to a functional birth
                        defect in a COVERED DEPENDENT child. We don't pay for
                        replacements or repairs, or for wigs, or dental
                        prosthetics or devices.

                                                                     B450.1207-R

IF THIS PLAN
REPLACES ANOTHER
PLAN                    The employer who purchased this PLAN may have purchased
                        it to replace a plan he had with some other insurer.

                        When this happens, we cover a COVERED PERSON'S
                        pre-existing condition, if: (a) the covered person was
                        insured by this EMPLOYER'S old plan; and (b) the
                        EMPLOYER'S old plan would have paid benefits for the
                        condition. But this PLAN must start within 90 days after
                        the EMPLOYER'S old plan ends.

                        We limit our payments to the lesser of: (a) what the
                        EMPLOYER'S old plan would have paid; or (b) what we'd
                        normally pay. And we deduct any benefits actually paid
                        by the EMPLOYER'S old plan under any extension
                        provision.

                        The COVERED PERSON may have incurred charges for covered
                        expenses under the EMPLOYER'S old plan before it ended.
                        If so, these charges will be used to meet this PLAN'S
                        deductible if: (a) the charges were incurred during the
                        calendar year in which this PLAN starts; (b) this PLAN
                        would have paid benefits for the charges, if this PLAN
                        had been in effect; (c) the COVERED PERSON was covered
                        by the old plan when it ended and enrolled in this PLAN
                        on its effective date; and (d) this PLAN starts within
                        90 days after the old plan ends.

                                                                     B453.3698-R

                                                                            P.29
<PAGE>

                                        CHARGES COVERED WITH SPECIAL LIMITATIONS
--------------------------------------------------------------------------------

TREATMENT OF
INFERTILITY             We cover charges for the treatment of infertility.
                        Infertility treatment includes, but is not limited to,
                        in vitro fertilization, uterine embryo lavage, embryo
                        transfer, artificial insemination, gamete intrafallopian
                        tube transfer, zygote intrafallopian transfer and low
                        tubal ovum transfer.

                        We cover treatments that include oocyte retrievals.
                        However, we don't cover charges for oocyte retrievals if
                        the COVERED PERSON has already received four completed
                        oocyte retrievals during such COVERED PERSON'S lifetime.
                        But, if a live birth follows a completed oocyte
                        retrieval, we cover two additional completed oocyte
                        retrievals.

                        We don't cover charges for: (a) reversal of
                        sterilization procedures such as reversal of vasectomy
                        or tubal ligation; (b) psychiatric sex therapy; (c)
                        medical services rendered to a surrogate for purposes of
                        childbirth; (d) cryopreservation and storage of sperm,
                        eggs and embryos, unless subsequent medically necessary
                        procedures using the cryopreserved substance are deemed
                        non-experimental and non-investigational; (e) selected
                        termination of an embryo, unless the life of the mother
                        would be in danger if all embryos were carried to full
                        term; (f) non-medical costs on an egg or sperm donor;
                        (g) costs of travel within 100 miles of the COVERED
                        PERSON'S home address or costs for travel that is not
                        medically necessary, not mandated or not required by the
                        insurance company; or (h) infertility treatments deemed
                        experimental or investigational by the American
                        Fertility Society or the American College of Obstetrics
                        and Gynecology, except that when a treatment involves
                        both experimental and non-experimental procedures, we
                        pay benefits for the non-experimental procedures that
                        can be delineated and separately charged.

                        The couple experiencing the infertility must have a
                        medically documented history of unexplained infertility
                        lasting at least one year, or the infertility must be
                        certified by a DOCTOR as medically necessary.

                        All treatment must be performed on an outpatient basis.
                        We do not cover INPATIENT treatment of infertility.

                        The treatment must be performed in a facility which is
                        licensed or certified for what it does by the state in
                        which it operates.

                        Unless this PLAN provides specific benefits, we do not
                        cover the resulting pregnancy.

                                                                     B453.4962-R

PREGNANCY               This PLAN pays for pregnancies the same way we would
                        cover a SICKNESS.

BIRTHING CENTER
CHARGES                 We cover BIRTHING CENTER charges made for pre-natal
                        care, delivery, and postpartum care in connection with
                        you or a COVERED DEPENDENT'S pregnancy. We cover charges
                        up to the daily room and board limit for the room and
                        board and routine nursing care when INPATIENT care is
                        provided to you or a COVERED DEPENDENT by a BIRTHING
                        CENTER. But charges above the daily room and board limit
                        are a NON-COVERED EXPENSE.

                                                                            P.30
<PAGE>

                                CHARGES COVERED WITH SPECIAL LIMITATIONS (CONT.)
--------------------------------------------------------------------------------

                        We cover all other medically necessary services and
                        supplies during the confinement. But, unless this PLAN
                        provides specific benefits, we don't cover routine
                        nursery charges for the newborn child.

                                                                     B450.1213-R

BENEFITS FOR A
COVERED NEWBORN
CHILD                   Subject to all of the terms of this PLAN, we cover the
                        care and treatment of your covered newborn child if he
                        or she is sick, injured, premature, or born with a
                        congenital birth defect.

                        And we cover charges for your child's routine nursery
                        care while he or she is in the HOSPITAL. This includes:
                        (a) nursery charges; (b) charges for routine DOCTOR'S
                        examinations and tests; and (c) charges for routine
                        procedures, like circumcision. But, unless this PLAN
                        provides specific benefits, we don't pay for the routine
                        care of the child once he or she leaves the HOSPITAL.

                                                                     B450.1215-R

SPEECH THERAPY          We cover speech therapy when needed due to a SICKNESS or
                        INJURY. But we exclude speech therapy services that are
                        educational in any part, or due to: articulation
                        disorders; tongue thrust; stuttering; lisping; abnormal
                        speech development; changing an accent; dyslexia;
                        hearing loss which is not medically documented; or
                        similar disorders.

                                                                     B450.1217-R

TREATMENT FOR
SPINAL MANIPULATION     We do not limit what we cover for SPINAL MANIPULATION
                        per BENEFIT YEAR. And we cover no more than two
                        modalities per visit. Charges for such treatment above
                        these limits are a NON-COVERED EXPENSE.

                                                                     B450.1218-R

DISEASES OR
DEFORMITY OF THE
FEET                    We pay benefits for COVERED CHARGES for treatment of
                        SICKNESS or deformity below the ankle.

                                                                     B450.1219-R

TREATMENT FOR
OBESITY                 We limit what we pay for the treatment of obesity. If a
                        COVERED PERSON is morbidly obese, we cover visits to a
                        DOCTOR'S office, and related laboratory tests for the
                        treatment of the morbid obesity. But we only cover one
                        course of treatment. "Morbidly obese" means the COVERED
                        PERSON weighs at least twice as much as a normal person
                        of the same height, age and sex. Treatment must be
                        provided by a DOCTOR on an outpatient basis according to
                        a written treatment plan.

                        We don't pay for anything not included in the written
                        treatment plan. And we don't pay for appetite or weight
                        control drugs, dietary supplements, special foods or
                        food supplements, health or weight control centers or
                        resorts, health club memberships or exercise equipment.

                        A course of treatment begins and ends as specified in
                        the treatment plan, or sooner if the COVERED PERSON
                        discontinues treatment.

                        We exclude more than one course of treatment or repeated
                        attempts to lose weight. And we exclude all treatment of
                        obesity for any COVERED PERSON who is not morbidly
                        obese.

                                                                     B450.1220-R

                                                                            P.31
<PAGE>

                                CHARGES COVERED WITH SPECIAL LIMITATIONS (CONT.)
--------------------------------------------------------------------------------

TMJ AND
CRANIOMANDIBULAR
DISORDERS               We pay benefits for COVERED CHARGES for the medically
                        necessary care and treatment of temporomandibular joint
                        disorder (TMJ) and craniomandibular disorder in a
                        COVERED PERSON. We treat such charges the same way we
                        treat any other COVERED CHARGES for SICKNESS. But what
                        we pay is based on all of the terms of this PLAN.

                        Unless this PLAN provides specific benefits, we don't
                        cover any charges for the dental treatment of TMJ and
                        craniomandibular disorders.

                                                                     B453.4628-R

INVESTIGATIONAL
CANCER TREATMENTS       Anything in this PLAN to the contrary notwithstanding,
                        we cover charges for routine patient care in connection
                        with investigational cancer treatment in an approved
                        cancer research trial. But, the care must be: (1)
                        medically necessary; and (2) for a COVERED PERSON who
                        has been diagnosed by his or her DOCTOR with a
                        life-threatening terminal illness related to cancer.

                        We treat such charges the same way we treat COVERED
                        CHARGES for a SICKNESS. But, what we pay is based on all
                        the terms of this PLAN and subject to a maximum limit of
                        $10,000 in each calendar year.

                        "Routine patient care" includes: (a) blood tests; (b)
                        x-rays; (c) bone scans; (d) magnetic resonance images;
                        (e) patient visits; (f) HOSPITAL stays; or (g) other
                        similar care generally provided to the COVERED PERSON in
                        standard cancer treatment. Routine patient care does not
                        include: (i) clinical trial therapies, regimens, or any
                        combination of them; (ii) drugs or pharmaceuticals in
                        connection with an approved clinical trial; (iii) goods,
                        services, or benefits that are generally furnished
                        without charge in connection with an approved cancer
                        research trial; (iv) charges for added costs associated
                        with the provision of goods, services, or benefits
                        previously provided, paid for, or reimbursed; (v)
                        treatments or services prescribed for the convenience of
                        the COVERED PERSON or DOCTOR; or (vi) similar care.

                        "Approved cancer research trial" means a clinical trial
                        that meets all of the conditions listed below:

                        * the effectiveness of the treatment has not been
                          determined relative to established therapies;

                        * the trial is under clinical investigation as part of
                          an approved cancer research trial in Phase II, Phase
                          III, or Phase IV of investigation;

                        * the trial has been approved by the Department of
                          Health and Human Services, the Director of the
                          National Institutes of Health (NIH), the Commissioner
                          of the Food and Drug Administration (FDA) in the form
                          of an investigational new drug, a qualified
                          nongovernmental cancer research entity as defined in
                          NIH guidelines, or a peer reviewed and approved cancer
                          research program as defined by the U.S. Secretary of
                          Health and Human Services;

                        * the trial is conducted for the primary purpose of
                          determining whether or not a cancer treatment is safe
                          or efficacious or has any other characteristic of a
                          cancer treatment that must be demonstrated in order
                          for the cancer treatment to be medically necessary or
                          appropriate;

                        * the trial is being conducted at multiple sites;

                                                                            P.32
<PAGE>

                                CHARGES COVERED WITH SPECIAL LIMITATIONS (CONT.)
--------------------------------------------------------------------------------

                        * the COVERED PERSON'S primary care DOCTOR, if any, is
                          involved in the coordination of care; and

                        * the results of the cancer research trial will be
                          submitted for publication in peer reviewed scientific
                          studies, research or literature published in, or
                          accepted for publication by, medical journals that
                          meet nationally recognized requirements for scientific
                          manuscripts and that submit most of their published
                          articles for review by experts who are not part of the
                          editorial staff. These studies may include those
                          conducted by, or under the auspices of, the federal
                          government's Agency for Health Care Policy and
                          Research, NIH, National Cancer Institute, National
                          Academy of Sciences, Health Care Financing
                          Administration, and any national board recognized by
                          the NIH for the purpose of evaluating the medical
                          value of health services.

                          Unless this PLAN provides specific benefits, we don't
                          cover any other charges for routine care or
                          EXPERIMENTAL TREATMENT.

                                                                     B453.6813-R

RECONSTRUCTIVE
SURGERY FOLLOWING A
MASTECTOMY              We pay benefits for COVERED CHARGES for reconstructive
                        surgery following a mastectomy. What we pay is subject
                        to all the terms of this PLAN and to the following
                        limitations.

                        We cover charges for: (a) breast reconstruction
                        following surgery for a mastectomy; (b) surgery and
                        reconstruction of the other breast to produce a
                        symmetrical appearance; and (c) prostheses and physical
                        complications for all stages of a mastectomy, including
                        lymphedemas.

                                                                     B453.5650-R

MENTAL AND NERVOUS
CONDITIONS AND
DRUG ABUSE              We pay for the treatment of MENTAL AND NERVOUS
                        CONDITIONS and drug abuse. We include a SICKNESS under
                        this provision if it manifests symptoms which are
                        primarily mental or nervous, regardless of any
                        underlying physical cause.

                        Inpatient coverage: A COVERED PERSON may receive such
                        treatment as an INPATIENT in a HOSPITAL, RESIDENTIAL
                        TREATMENT FACILITY, or in a MENTAL HEALTH or DRUG ABUSE
                        CENTER. If so, we will pay benefits for the COVERED
                        CHARGES he or she incurs for such treatment, the same
                        way we would for any other SICKNESS.

                        A treatment period starts on the date that a COVERED
                        PERSON is confined for such treatment. It ends on the
                        date the COVERED PERSON has resumed and carried out the
                        normal activities of a healthy person of the same age
                        for 12 consecutive months.

                        Outpatient coverage: A COVERED PERSON may also receive
                        such treatment as an outpatient.

                        Outpatient treatment can be furnished by a HOSPITAL, or
                        by a MENTAL HEALTH or DRUG ABUSE CENTER. It can also be
                        furnished by any properly licensed or certified DOCTOR,
                        psychologist, or social worker.

                                                                     B453.5223-R

                                                                            P.33
<PAGE>

                                CHARGES COVERED WITH SPECIAL LIMITATIONS (CONT.)
--------------------------------------------------------------------------------

ALCOHOL ABUSE           We pay for the treatment of alcohol abuse.

                        Inpatient coverage: You or a COVERED PERSON may receive
                        such treatment as an INPATIENT in a HOSPITAL,
                        RESIDENTIAL TREATMENT FACILITY, or ALCOHOL ABUSE CENTER.
                        If so, we will pay benefits for the COVERED CHARGES you
                        or your COVERED DEPENDENT incurs for such treatment, the
                        same way we would for any other SICKNESS.

                        Outpatient coverage: You or a COVERED DEPENDENT may also
                        receive such treatment as an outpatient.

                        Outpatient treatment can be furnished by a HOSPITAL, or
                        ALCOHOL ABUSE CENTER. It can also be furnished by any
                        properly licensed or certified DOCTOR, psychologist, or
                        social worker.

                                                                     B450.1459-R

                                                                      EXCLUSIONS
--------------------------------------------------------------------------------

                        We don't pay for any charge identified as a NON-COVERED
                        EXPENSE.

                        We don't pay for services and supplies for which no
                        charge is made, or for which, in the absence of this
                        insurance, the COVERED PERSON is not required to pay.
                        This usually means services and supplies furnished by:
                        (a) a COVERED PERSON'S EMPLOYER, labor union or similar
                        group, in its medical department or clinic; (b) a
                        HOSPITAL or clinic owned or run by any government body;
                        or (c) any public program, except MEDICAID, paid for or
                        sponsored by any government body. But, if a charge is
                        made and we are legally required to pay it, we will.

                        We don't pay for services and supplies which are not:
                        (a) furnished or ordered by a recognized provider; (b)
                        medically necessary to diagnose or treat a SICKNESS or
                        INJURY; (c) accepted by a professional medical society
                        in the United States as beneficial for the control or
                        cure of the SICKNESS or INJURY being treated; and (d)
                        furnished within the framework of generally accepted
                        methods of medical management currently used in the
                        United States.

                        We don't pay for EXPERIMENTAL TREATMENT.

                        We don't pay for care and treatment of SICKNESS or
                        INJURY caused, directly or indirectly, by declared or
                        undeclared war or act of war. And we don't pay for care
                        and treatment of SICKNESS or INJURY which occurs while a
                        COVERED PERSON is on active duty in any armed force.

                        We don't pay for services or supplies furnished by close
                        relatives. By "close relatives" we mean: (a) your
                        spouse, children, parents, brothers and sisters; and (b)
                        any person who is part of your household. And we don't
                        pay for services or supplies furnished by business or
                        professional associates of you or your family.

                                                                     B450.1223-R

                                                                            P.34
<PAGE>

                                                              EXCLUSIONS (CONT.)
--------------------------------------------------------------------------------

                        We don't pay for care and treatment needed due to: (a)
                        an on-the-job or job-related INJURY; or (b) SICKNESS or
                        INJURY for which benefits are payable by Worker's
                        Compensation or similar laws.

                                                                     B450.1225-R

                        We don't pay for care and treatment of conditions
                        caused, directly or indirectly, by: (a) a COVERED PERSON
                        taking part in a riot or other civil disorder; or (b) a
                        COVERED PERSON taking part in the commission of a
                        felony.

                                                                     B450.1226-R

                        We don't pay for personal comfort items, like TV's and
                        phones. And we don't pay for items which are generally
                        useful to the patient's household, including but not
                        limited to first aid kits, exercise equipment, air
                        conditioners, humidifiers and saunas.

                        We don't pay for CUSTODIAL CARE, education or training.
                        And we don't pay for room and board in a rest home, old
                        age home, or any place which is mainly a school.

                        We don't pay for wigs, toupees, hair transplants, hair
                        weaving or any drug used to restore hair growth.

                                                                     B450.1227-R

                        We don't pay for room or board charges for a COVERED
                        PERSON in any facility for any period of time during
                        which he or she was not physically present.

                        We don't pay for cosmetic surgery, except for
                        reconstructive surgery needed due to a SICKNESS or
                        INJURY as explained in the provision "Doctor's Charges
                        for Surgery."

                                                                     B450.1232-R

                        We don't pay for ambulance services used to transport a
                        COVERED PERSON from a HOSPITAL or other health care
                        facility, unless the COVERED PERSON is being transferred
                        to another INPATIENT health care facility.

                        We don't pay for services and supplies which are
                        specifically limited or excluded in other parts of this
                        PLAN.

                                                                     B450.1239-R

                                                       HOSPITAL BILL AUDIT BONUS
--------------------------------------------------------------------------------

                        We pay a cash bonus to any covered person who shows us
                        that he was overcharged by $10.00 or more on his
                        hospital bill. But the error must be for a covered
                        charge. To get the bonus, the covered person must obtain
                        a corrected bill and send the corrected bill and the
                        original, incorrect bill to us. The bonus equals the
                        lesser of: (a) 50% of the overcharge; or (b) $500.00.

                                                                     B455.0002-R

                                                                            P.35
<PAGE>

                                          CONVERTING THIS GROUP HEALTH INSURANCE
--------------------------------------------------------------------------------

IMPORTANT NOTICE        This section applies only to hospital, surgical, and
                        major medical expense coverages. In this section these
                        coverages are referred to as "group health benefits".

                        This section does not apply to coverages which provide
                        benefits for loss of life, loss of income due to
                        disability, prescription drug expense, or dental
                        expense, if provided under this plan. These coverages
                        cannot be converted under this section.

IF AN EMPLOYEE'S
GROUP HEALTH
BENEFITS END            If an employee's group health benefits end for any
                        reason other than the group plan ending where there is a
                        succeeding carrier, he can obtain a converted policy.
                        But, he must have been insured by the group plan for at
                        least three months. The converted policy will cover the
                        employee and those of his dependents whose group
                        coverage ends.

IF AN EMPLOYEE DIES
WHILE INSURED           If an employee dies while insured, after any applicable
                        continuation period has ended, his then insured spouse
                        may convert. The converted policy will cover the spouse
                        and those of the employee's dependent children whose
                        group health benefits end. If the spouse is not living,
                        each dependent child whose group health benefits end may
                        convert for himself.

IF AN EMPLOYEE'S
MARRIAGE ENDS           If an employee's marriage ends by legal divorce or
                        annulment, his former spouse can convert. The converted
                        policy will cover the former spouse and those of the
                        employee's dependent children whose group health
                        benefits end.

WHEN A DEPENDENT
LOSES ELIGIBILITY       When an insured dependent stops being an eligible
                        dependent, as defined in this plan, he may convert. The
                        converted policy will only cover the dependent whose
                        group health benefits end.

HOW AND WHEN TO
CONVERT                 To convert, the applicant must apply to us in writing
                        and pay the required premium. He has 31 days after his
                        group health benefits end to do this. We don't ask for
                        proof of insurability. The converted policy will take
                        effect on the date the applicant's group health benefits
                        end. If the applicant is a minor or incompetent, the
                        person who cares for and supports the applicant may
                        apply for him.

THE CONVERTED
POLICY                  The applicant may convert to one of the individual
                        health insurance policies we normally issue for
                        conversion at the time he applies. The converted policy
                        will comply with the laws of the place where the
                        applicant lives when he applies.

                        The premium for the converted policy will be based on:
                        (a) the plan the applicant selects; (b) the risk and
                        rate class, under the group plan, of the people to be
                        covered; and (c) the ages of the people to be covered.

RESTRICTIONS           (1) A covered person can't convert if his group health
                           benefits end because the employee has failed to make
                           required payments.

                       (2) A covered person can't convert if he is insured for
                           similar benefits elsewhere which, together with the
                           converted policy, would result in overinsurance by
                           our standards. Where required, our overinsurance
                           standards are on file with the state insurance
                           department.

                                                                            P.36
<PAGE>

                                  CONVERTING THIS GROUP HEALTH INSURANCE (CONT.)
--------------------------------------------------------------------------------

                        (3) A covered person can't convert if he's eligible for
                            Medicare by reason of age.

                        PLEASE NOTE The benefits provided under the converted
                        policy are not identical to the benefits provided under
                        the group plan. The converted policy provides more
                        limited benefits. Ask the employer for details or write
                        to us.

                                                                     B456.0026-R

                                                                            P.37
<PAGE>

--------------------------------------------------------------------------------
ELIGIBILITY FOR DENTAL COVERAGE
--------------------------------------------------------------------------------

                                                                     B489.0002-R

                                                               EMPLOYEE COVERAGE
--------------------------------------------------------------------------------

ELIGIBLE EMPLOYEES      To be eligible for EMPLOYEE coverage you must be an
                        active FULL-TIME/PART-TIME EMPLOYEE or a QUALIFIED
                        RETIREE. And you must belong to a class of EMPLOYEES
                        covered by this PLAN.

                                                                     B489.0131-R

WHEN YOUR
COVERAGE STARTS         EMPLOYEE benefits are scheduled to start on your
                        effective date.

                        But you must be actively at work on a
                        FULL-TIME/PART-TIME basis unless you are a QUALIFIED
                        RETIREE, on the scheduled effective date. And you must
                        have met all of the applicable conditions explained
                        above, and any applicable waiting period. If you are an
                        active FULL-TIME/PART-TIME EMPLOYEE and are not actively
                        at work on the date your insurance is scheduled to
                        start, we will postpone your coverage until the date you
                        return to active FULL-TIME/PART-TIME work.

                        If you are a QUALIFIED RETIREE, you can not be confined
                        in a health care facility on the scheduled effective
                        date of coverage. If you are confined on that date, we
                        will postpone your coverage until the day after you are
                        discharged. And you must also have met all of the
                        applicable conditions of eligibility and any applicable
                        waiting period in order for coverage to start.

                        Sometimes, your effective date is not a regularly
                        scheduled work day. But coverage will still start on
                        that date if you were actively at work on a
                        FULL-TIME/PART-TIME basis on your last regularly
                        scheduled work day.

                                                                     B489.0067-R

WHEN YOUR
COVERAGE ENDS           If you are an active FULL-TIME/PART-TIME EMPLOYEE, your
                        coverage ends on the date your active
                        FULL-TIME/PART-TIME service ends for any reason. Such
                        reasons include disability, death, retirement (except
                        for QUALIFIED RETIREES), layoff, leave of absence and
                        the end of employment.

                        It also ends on the date you stop being a member of a
                        class of EMPLOYEES eligible for insurance under this
                        PLAN, or when this PLAN ends for all EMPLOYEES. And it
                        ends when this PLAN is changed so that benefits for the
                        class of EMPLOYEES to which you belong ends.

                        Read this booklet carefully if your coverage ends. You
                        may have the right to continue certain group benefits
                        for a limited time.

                                                                     B489.0111-R

                                                                            P.38
<PAGE>

                                                              DEPENDENT COVERAGE
--------------------------------------------------------------------------------

                                                                     B200.0271-R

ELIGIBLE DEPENDENTS
FOR DEPENDENT
DENTAL BENEFITS         Your ELIGIBLE DEPENDENTS are: your legal spouse; your
                        same sex domestic partner who meets the eligibility
                        criteria on the Domestic Partner statement; your
                        unmarried dependent children who are under age 19; and
                        your unmarried dependent children, from age 19 until
                        their 26th birthday, who are enrolled as full-time
                        students at accredited schools.

                        "Unmarried dependent children" include your dependent
                        grandchildren who reside with you or if you are named in
                        a court order as having legal custody or the parent of
                        the grandchild(ren) is an eligible dependent child(ren)
                        of your same sex domestic partner if they meet the
                        criteria for unmarried natural children and their
                        primary residence is with the employee.

                                                                     B200.0515-R

ADOPTED CHILDREN
AND STEP-CHILDREN       Your "unmarried dependent children" include your legally
                        adopted children and your step-children, if their
                        primary residence is with you or you claim the dependent
                        on your tax return. We treat a child as legally adopted
                        from the time the child is placed in your home for the
                        purpose of adoption. We treat such a child this way
                        whether or not a final adoption order is ever issued.

DEPENDENTS NOT
ELIGIBLE                We exclude any dependent who is insured by this PLAN as
                        an EMPLOYEE. And we exclude any dependent who is on
                        active duty in any armed force.

                                                                     B264.0007-R

HANDICAPPED
CHILDREN                You may have an unmarried child with a mental or
                        physical handicap, or developmental disability, who
                        can't support himself or herself. Subject to all of the
                        terms of this coverage and the PLAN, such a child may
                        stay eligible for dependent benefits past this
                        coverage's age limit.

                        The child will stay eligible as long as he or she stays
                        unmarried and unable to support himself or herself, if:
                        (a) his or her conditions started before he or she
                        reached this coverage's age limit; (b) he or she became
                        insured by this coverage before he or she reached the
                        age limit, and stayed continuously insured until he or
                        she reached such limit; and (c) he or she depends on you
                        for most of his or her support and maintenance.

                        But, for the child to stay eligible, you must send us
                        written proof that the child is handicapped and depends
                        on you for most of his or her support and maintenance.
                        You have 31 days from the date the child reaches the age
                        limit to do this. We can ask for periodic proof that the
                        child's condition continues. But, after two years, we
                        can't ask for this proof more than once a year.

                        The child's coverage ends when yours does.

                                                                     B449.0042-R

WAIVER OF DENTAL
LATE ENTRANTS
PENALTY                 If you initially waived dental coverage for your spouse
                        or eligible dependent children under this plan because
                        they were covered under another group plan, and you now
                        elect to enroll them in the dental coverage under this
                        plan, the Penalty for Late Entrants provision will not
                        apply to them with regard to dental coverage provided
                        their coverage under the other plan ends due to one of
                        the following events: (a) termination of your spouse's
                        employment; (b) loss of eligibility under your spouse's
                        plan; (c) divorce; (d) death of your spouse; or (e)
                        termination of the other plan.

                                                                            P.39
<PAGE>

                                                      DEPENDENT COVERAGE (CONT.)
--------------------------------------------------------------------------------

                        But you must enroll your spouse or eligible dependent
                        children in the dental coverage under this plan within
                        30 days of the date that any of the events described
                        above occur.

                        In addition, the Penalty for Late Entrants provision for
                        dental coverage will not apply to your spouse or
                        eligible dependent children if: (a) you are under legal
                        obligation to provide dental coverage due to a
                        court-order; and (b) you enroll them in the dental
                        coverage under this plan within 30 days of the issuance
                        of the court-order.

                                                                     B200.0749-R

WHEN DEPENDENT
COVERAGE STARTS         In order for your dependent coverage to begin you must
                        already be insured for employee coverage or enroll for
                        employee and dependent coverage at the same time.
                        Subject to the "Exception" stated below and to all of
                        the terms of this PLAN, the date your dependent coverage
                        starts depends on when you elect to enroll your INITIAL
                        DEPENDENTS and agree to make any required payments.

                        If you do this on or before your ELIGIBILITY DATE, the
                        dependent's coverage is scheduled to start on the later
                        of your ELIGIBILITY DATE and the date you become insured
                        for employee coverage.

                        If you do this within the ENROLLMENT PERIOD, the
                        coverage is scheduled to start on the later of the date
                        you sign the enrollment form; and the date you become
                        insured for employee coverage.

                        Once you have dependent coverage for your INITIAL
                        DEPENDENTS, you must notify us when you acquire any new
                        dependents and agree to make any additional payments
                        required for their coverage.

                                                                     B489.0060-R

EXCEPTION               If a dependent, other than a newborn child, is confined
                        to a HOSPITAL or other health care facility; or is
                        home-confined; or is unable to carry out the normal
                        activities of someone of like age and sex on the date
                        his dependent benefits would otherwise start, we will
                        postpone the effective date of such benefits until the
                        day after his discharge from such facility; until home
                        confinement ends; or until he resumes the normal
                        activities of someone of like age and sex.

                                                                     B200.0692-R

NEWBORN CHILDREN        We cover your newborn child, including a newborn
                        dependent grandchild who resides with you, for dependent
                        benefits, from the moment of birth, if you are already
                        covered for dependent child coverage when the child is
                        born. If you do not have dependent coverage when the
                        child is born, we cover the child for the first 31 days
                        from the moment of birth. To continue the child's
                        coverage past the 31 days, you must enroll the child and
                        agree to make any required premium payments within 31
                        days of the date the child is born. If you fail to do
                        this, the child's coverage will end at the end of the 31
                        days, and once the child is enrolled, the child is a
                        late entrant, is subject to any applicable late entrant
                        penalties, and will be covered as of the date you sign
                        the enrollment form.

                                                                     B489.0007-R

                                                                            P.40
<PAGE>

                                                      DEPENDENT COVERAGE (CONT.)
--------------------------------------------------------------------------------

WHEN DEPENDENT
COVERAGE ENDS           Dependent coverage ends on the last day of the month for
                        all of your dependents when your coverage ends. But if
                        you die while insured, we'll automatically continue
                        dependent benefits for those of your dependents who were
                        insured when you died. We'll do this for six months at
                        no cost, provided: (a) the group plan remains in force;
                        (b) the dependents remain ELIGIBLE DEPENDENTS; and (c)
                        in the case of a spouse, the spouse does not remarry.

                        If a surviving dependent elects to continue his or her
                        dependent benefits under this PLAN'S "Federal
                        Continuation Rights" provision, or under any other
                        continuation provision of this PLAN, if any, this free
                        continuation period will be provided as the first six
                        months of such continuation. Premiums required to be
                        paid by, or on behalf of a surviving dependent will be
                        waived for the first six months of continuation, subject
                        to restrictions (a), (b) and (c) above. After the first
                        six months of continuation, the remainder of the
                        continuation period, if any, will be subject to the
                        premium requirements, and all of the terms of the
                        "Federal Continuation Rights" or other continuation
                        provisions.

                        Dependent coverage also ends for all of your dependents
                        when you stop being a member of a class of EMPLOYEES
                        eligible for such coverage. And it ends when this PLAN
                        ends, or when dependent coverage is dropped from this
                        PLAN for all EMPLOYEES or for an EMPLOYEE'S class.

                        An individual dependent's coverage ends when he or she
                        stops being an ELIGIBLE DEPENDENT. This happens to a
                        child on the last day of the month in which the child
                        attains this coverage's age limit, when he or she
                        marries, or when a step-child is no longer dependent on
                        you for support and maintenance. It happens to a spouse
                        when a marriage ends in legal divorce or annulment.

                        Read this PLAN carefully if dependent coverage ends for
                        any reason. Dependents may have the right to continue
                        certain group benefits for a limited time.

                                                                     B489.0048-R

                                                                            P.41
<PAGE>

--------------------------------------------------------------------------------
CERTIFICATE AMENDMENT
--------------------------------------------------------------------------------

                        This rider amends the "Dependent Coverage" provisions as
                        follows:

                        An employee's domestic partner will be eligible for
                        dental coverage under this plan. Coverage will be
                        provided subject to all the terms of this plan and to
                        the following limitations:

                        To qualify for such coverage, both the employee and his
                        or her domestic partner must:

                        * be 18 years of age or older;

                        * be unmarried, constitute each other's sole domestic
                          partner and not have had another domestic partner in
                          the last 12 months;

                        * share the same permanent address for at least 12
                          consecutive months and intend to do so indefinitely;

                        * share joint financial responsibility for basic living
                          expenses including food, shelter and medical expenses;

                        * not be related by blood to a degree that would
                          prohibit marriage in the employee's state of
                          residence; and

                        * be financially interdependent which must be
                          demonstrated by at least four of the following:

                          a. ownership of a joint bank account;

                          b. ownership of a joint credit account;

                          c. evidence of a joint mortgage or lease;

                          d. evidence of joint obligation on a loan;

                          e. joint ownership of a residence;

                          f. evidence of common household expenses such as
                             utilities or telephone;

                          g. execution of wills naming each other as executor
                             and/or beneficiary;

                          h. granting each other durable powers of attorney;

                          i. granting each other health care powers of attorney;

                          j. designation of each other as beneficiary under a
                             retirement benefit account; or

                          k. evidence of other joint financial responsibility.

                        The employee must complete a "Declaration of Domestic
                        Partnership" attesting to the relationship.

                        The domestic partner's dependent children will be
                        eligible for coverage under this plan on the same basis
                        as if the children were the employee's dependent
                        children.

                                                                            P.42
<PAGE>

                                                   CERTIFICATE AMENDMENT (CONT.)
--------------------------------------------------------------------------------

                        Coverage for the domestic partner and his or her
                        dependent children ends when the domestic partner no
                        longer meets the qualifications of a domestic partner as
                        indicated above. Upon termination of a domestic
                        partnership, a "Statement of Termination" must be
                        completed and filed with the employer. Once the employee
                        submits a "Statement of Termination," he or she may not
                        enroll another domestic partner for a period of 12
                        months from the date of the previous termination.

                        And, the domestic partner and his or her children will
                        be not eligible for:

                        a. survivor benefits upon the employee's death as
                           explained under the "When Dependent Coverage Ends"
                           section; or

                        b. continuation of dental coverage as explained under
                           the "Federal Continuation Rights" section and under
                           any other continuation rights section of this plan,
                           unless the employee is also eligible for and elects
                           continuation.

                        This rider is a part of this plan. Except as stated in
                        this rider, nothing contained in this rider changes or
                        affects any other terms of this plan.

                                                                     B210.0016-R

                                                                            P.43
<PAGE>

--------------------------------------------------------------------------------
DENTAL HIGHLIGHTS
--------------------------------------------------------------------------------

                        This page provides a quick guide to some of the Dental
                        Expense Insurance PLAN features which people most often
                        want to know about. But it's not a complete description
                        of your Dental Expense Insurance PLAN. Read the
                        following pages carefully for a complete explanation of
                        what we pay, limit and exclude.

                        * BENEFIT YEAR CASH DEDUCTIBLE FOR NON-ORTHODONTIC
                          SERVICES .........................................None

                        * PAYMENT RATES:

                          For Group I Services .............................100%
                          For Group II Services ............................100%
                          For Group III Services ...........................100%
                          For Group IV Services ............................100%

                        * BENEFIT YEAR PAYMENT LIMIT FOR NON-ORTHODONTIC
                          SERVICES

                          For Group I, II and III Services ............Unlimited

                        * LIFETIME PAYMENT LIMIT FOR ORTHODONTIC TREATMENT

                          For Group IV Services .......................Unlimited

                                                                            P.44
<PAGE>

--------------------------------------------------------------------------------
DENTAL EXPENSE INSURANCE
--------------------------------------------------------------------------------

                        This insurance will pay many of your and your covered
                        dependents' dental expenses. What we pay and the terms
                        for payment are explained below.

                                                                     B490.0036-R

                                                                 COVERED CHARGES
--------------------------------------------------------------------------------

                        Covered charges are reasonable and customary charges for
                        the dental services named in the List of Covered Dental
                        Services.

                        By reasonable, we mean the charge is the DENTIST'S usual
                        charge for the service furnished. But if more than one
                        type of service can be used to treat a dental condition,
                        we have the right to consider charges for the least
                        expensive one which meets the accepted standards of
                        dental practice. By customary, we mean the charge made
                        for the given dental condition isn't more than the usual
                        charge made by most other DENTISTS with similar training
                        and experience in the same geographic area.

                        We only pay for covered charges incurred by a COVERED
                        PERSON while he's insured. A covered charge for a crown,
                        bridge or cast restoration is incurred on the date the
                        tooth is prepared. A covered charge for any other
                        PROSTHETIC DEVICE is incurred on the date the master
                        impression is made. A covered charge for root canal
                        treatment is incurred on the date the pulp chamber is
                        opened. A covered charge for ORTHODONTIC TREATMENT is
                        incurred on the date the active APPLIANCE is first
                        placed. All other covered charges are incurred on the
                        date the services are furnished.

                                                                     B490.0038-R

                                                            PRE-TREATMENT REVIEW
--------------------------------------------------------------------------------

                        When the expected cost of a proposed course of treatment
                        is $200.00 or more, the COVERED PERSON'S DENTIST must
                        send us a treatment PLAN before he starts. This must be
                        done on a form acceptable to The Guardian. The treatment
                        PLAN must include: (a) a list of the services to be
                        done, using the American Dental Association Nomenclature
                        and codes; (b) the itemized cost of each service; and
                        (c) the estimated length of treatment. Dental X-rays,
                        study models and whatever else we need to evaluate the
                        treatment PLAN must be sent to us, too.

                        A treatment PLAN must always be sent to us before
                        ORTHODONTIC TREATMENT starts.

                        We review the treatment PLAN and estimate what we will
                        pay. The estimate will be sent to the COVERED PERSON'S
                        DENTIST. If we don't agree with a treatment PLAN, or if
                        one is not sent in, we have the right to base our
                        payments on treatment suited to the COVERED PERSON'S
                        condition by accepted standards of dental practice.

                                                                            P.45
<PAGE>

                                                    PRE-TREATMENT REVIEW (CONT.)
--------------------------------------------------------------------------------

                        Pre-treatment review is not a guarantee of what we will
                        pay. It tells the COVERED PERSON and his DENTIST, in
                        advance, what we would pay for the covered dental
                        services named in the treatment PLAN. But payment is
                        conditioned on: (a) the work being done as proposed and
                        while the COVERED PERSON is insured; and (b) the
                        deductible and payment limit provisions and all of the
                        other terms of this PLAN.

                        Emergency treatment, oral examinations, dental X-rays
                        and teeth cleaning are part of a course of treatment,
                        but may be done before the pre-treatment review is made.

                                                                     B490.0039-R

                                                     BENEFITS FROM OTHER SOURCES
--------------------------------------------------------------------------------

                        This PLAN supplements the medical plan provided by your
                        EMPLOYER, if any.

                        This PLAN, and your EMPLOYER'S medical plan, if any, may
                        provide benefits for the same charges. If they do, we
                        subtract what your EMPLOYER'S medical plan, if any, pays
                        from what we'd otherwise pay.

                        Other plans may furnish similar benefits, too. For
                        instance, you may be covered by this PLAN and a similar
                        plan through your spouse's EMPLOYER. If you are, we
                        coordinate our benefits with the benefits from these
                        other plans. We do this so no one gets more in benefits
                        than the charges he incurs. Read "Coordination of
                        Benefits" to see how this works.

                                                                     B497.0968-R

                                 THE BENEFIT PROVISION - QUALIFYING FOR BENEFITS
--------------------------------------------------------------------------------

GROUP I, II AND III
NON-ORTHODONTIC
SERVICES                We pay for Group I, II and III covered charges at the
                        applicable payment rate.

                        All charges must be incurred while the COVERED PERSON is
                        insured. What we pay is based on all of the terms of
                        this PLAN.

                                                                     B490.0112-R

GROUP IV
ORTHODONTIC
SERVICES                This PLAN provides benefits for Group IV orthodontic
                        services.

                        We pay for Group IV covered charges at the applicable
                        payment rate. Using the treatment plan, we calculate the
                        total benefit we will pay. We divide this into equal
                        payments, which we spread out over the shorter of two
                        years or the proposed length of treatment.

                        We make the initial payment when the active APPLIANCE is
                        first placed. We make further payments at the end of
                        each subsequent three month period. But treatment must
                        continue and the COVERED PERSON must stay insured. What
                        we pay is based on all of the terms of this PLAN.

                        Orthodontic benefits won't be charged against the
                        BENEFIT YEAR payment limit which applies to all other
                        services.

                                                                     B490.0160-R

                                                                            P.46
<PAGE>

                         THE BENEFIT PROVISION - QUALIFYING FOR BENEFITS (CONT.)
--------------------------------------------------------------------------------

PAYMENT RATES

                        Benefits for covered charges are paid at the following
                        rates:

                        Benefits for Group I Services are paid at a rate
                        of .................................................100%
                        Benefits for Group II Services are paid at a rate
                        of .................................................100%
                        Benefits for Group III Services are paid at a rate
                        of .................................................100%
                        Benefits for Group IV Services are paid at a rate
                        of .................................................100%

                                                                     B497.0029-R

                                                       AFTER THIS INSURANCE ENDS
--------------------------------------------------------------------------------

                        We won't pay for charges incurred after this insurance
                        ends. But we pay for the following if all work is
                        finished in the 31 days after this insurance ends: (a) a
                        crown, bridge or cast restoration, if the tooth is
                        prepared before the insurance ends; (b) any other
                        PROSTHETIC DEVICE, if the master impression is made
                        before the insurance ends; and (c) root canal treatment,
                        if the pulp chamber is opened before the insurance ends.

                        Benefits for ORTHODONTIC TREATMENT will only be paid to
                        the end of the month in which the insurance ends. The
                        final payment will be pro-rated.

                                                                     B490.0045-R

IF THIS PLAN
REPLACES ANOTHER
PLAN                    This PLAN may be replacing another plan your EMPLOYER
                        had with some other insurer.

                        We don't want anyone to lose benefits when this happens.
                        So we pay for certain charges incurred before this PLAN
                        starts, if: (1) the COVERED PERSON was insured by the
                        old plan; and (2) the old plan would have paid for such
                        charges. But this PLAN must start right after the old
                        plan ends. And the covered person must be insured by
                        this PLAN from the start.

                        We limit what we pay to the lesser of: (1) what the old
                        plan would have paid; or (2) what we would otherwise
                        pay. And we deduct any benefits actually paid by the old
                        plan under any extension provision.

                        In the first BENEFIT YEAR of this PLAN, we also reduce
                        this PLAN'S deductibles by the amount of covered charges
                        applied against the old plan's deductible. And, in the
                        first BENEFIT YEAR, we charge benefits which were paid
                        by the old plan against this PLAN'S payment limits.

                                                                     B490.0053-R

                                                                      EXCLUSIONS
--------------------------------------------------------------------------------

                        - We won't pay for:

                          - Oral hygiene, plaque control or diet instruction.

                          - Precision attachments.

                        - We won't pay for:

                          - Treatment which does not meet accepted standards of
                            dental practice.

                          - Treatment which is experimental in nature.

                                                                            P.47
<PAGE>

                                                              EXCLUSIONS (CONT.)
--------------------------------------------------------------------------------

                      - We won't pay for any APPLIANCE or PROSTHETIC DEVICE
                        used to:

                        - Change vertical dimension.

                        - Restore or maintain occlusion, except to the extent
                          that this PLAN covers ORTHODONTIC TREATMENT.

                        - Splint or stabilize teeth for periodontic reasons.

                        - Replace tooth structure lost as a result of abrasion
                          or attrition.

                      - We won't pay for any service furnished for cosmetic
                        reasons. This includes, but is not limited to:

                        - Characterizing and personalizing PROSTHETIC DEVICES.

                        - Making facings on PROSTHETIC DEVICES for any teeth in
                          back of the second bicuspid.

                      - We won't pay for replacing an APPLIANCE or PROSTHETIC
                        DEVICE with a like appliance or device, unless:

                        - It is at least ten years old and can't be made usable.

                        - It is damaged while in the COVERED PERSON'S mouth in
                          an INJURY suffered while insured, and can't be fixed.

                      - We won't pay for:

                        - Replacing a lost, stolen or missing APPLIANCE or
                          PROSTHETIC DEVICE.

                        - Making a spare APPLIANCE or device.

                      - We won't pay for treatment needed due to:

                        - An on-the-job or job-related injury.

                        - A condition for which benefits are payable by Worker's
                          Compensation or similar laws.

                      - We won't pay for treatment for which no charge is
                        made. This usually means treatment furnished by:

                        - The COVERED PERSON'S EMPLOYER, labor union or similar
                          group, in its dental or medical department or clinic.

                        - A facility owned or run by any governmental body.

                        - Any public program, except Medicaid, paid for or
                          sponsored by any government body.

                        But if a charge is made and we are legally required to
                        pay it, we will.

                                                                     B497.0039-R

                                                                            P.48
<PAGE>

                                                 LIST OF COVERED DENTAL SERVICES
--------------------------------------------------------------------------------

                        The services covered by this PLAN are named in this
                        list. Each service on this list has been placed in one
                        of four groups. A separate payment rate applies to each
                        group. Group I is made up of preventive services. Group
                        II is made up of basic services. Group III is made up of
                        major services. Group IV is made up of orthodontic
                        services.

                        All covered dental services must be furnished by or
                        under the direct supervision of a DENTIST. And they must
                        be usual and necessary treatment for a dental condition.

                                                                     B490.0048-R

                                            GROUP I - PREVENTIVE DENTAL SERVICES
--------------------------------------------------------------------------------
                                                               (Non-Orthodontic)

PROPHYLAXIS AND
FLUORIDE TREATMENTS     Prophylaxis (limited to two treatments in the calendar
                        year, additional available when medically necessary) -
                        Allowance includes the complete removal of
                        explorer-detectable calculus, soft deposits, plaque,
                        stains, and the smoothing of tooth surfaces above the
                        gingival attachment.

                        Topical application of fluoride, including prophylaxis,
                        (limited to COVERED PERSONS under age 14 and limited to
                        one treatment in any six consecutive month period).

SPACE MAINTAINERS       (Limited to covered persons under age 16 and limited to
                        initial appliance only) Allowance includes all
                        adjustments in the first six months after installation:

                        - Fixed, unilateral, band or stainless steel crown type.

                        - Removal, bilateral type.

FIXED AND
REMOVABLE
APPLIANCES              To Inhibit Thumbsucking - (Limited to COVERED PERSONS
                        under age 14 and limited to initial appliance only) -
                        Allowance includes all adjustments in the first six
                        months after installation.

DIAGNOSTIC SERVICES     Allowance includes examination and diagnosis - X-Rays.

                        - Full mouth series of at least 14 films including
                          bitewings, if needed (limited to once in any 36
                          consecutive month period).

                        - Bitewing films (limited to a maximum of four films, in
                          one visit, in any twelve consecutive month period).

                        - Intraoral periapical or occlusal X-Rays-single films.

                        - Extraoral superior or inferior maxillary film.

                        - Panoramic film, maxilla and mandible, allowable only
                          when necessary to diagnose accidental injury, or in
                          conjunction with cyst or tumor removal.

DENTAL SEALANTS         (Limited to the unrestored permanent molars of COVERED
                        PERSONS under age 19 and limited to one treatment in any
                        12 consecutive month period).

                                                                            P.49
<PAGE>

                                    GROUP I - PREVENTIVE DENTAL SERVICES (CONT.)
--------------------------------------------------------------------------------
                                                               (Non-Orthodontic)

OFFICE VISITS AND
EXAMINATIONS            Oral examination (limited to two examinations in any
                        twelve consecutive month period).

                        Emergency palliative treatment and other non-routine,
                        unscheduled visits. We pay for this only if no other
                        service (except X-Rays) is rendered during the visit.

                                                                     B497.0057-R

                                                GROUP II - BASIC DENTAL SERVICES
--------------------------------------------------------------------------------
                                                               (Non-Orthodontic)

OFFICE VISITS AND
EXAMINATIONS            Diagnostic consultation with a dentist other than the
                        one providing treatment (limited to one consultation for
                        each dental specialty in any 12 consecutive month
                        period) - We pay for this only if no other service is
                        rendered during the visit.

DIAGNOSTIC SERVICES     Allowance includes examination and diagnosis.

                        - Diagnostic casts, when necessary to diagnose complex
                          restorative cases.

                        - Biopsy and examination of oral tissue.

RESTORATIVE SERVICES    Multiple restorations on one surface will be considered
                        one restoration. Also see "Major Restorative Services".
                        Allowance includes insulating base and local anesthesia.

                        - Amalgam restorations (primary or permanent teeth).

                          - Cavities involving one surface, two surfaces and
                            three or more surfaces.

                        - Synthetic restorations: Allowable includes curing
                          light and etchant.

                          - Anterior teeth - per restoration: Acrylic or plastic
                            filling - Class I and III types; Composite resin -
                            Class I and III types 2330; Composite resin -
                            involving incisal angle.

                          - Bicuspid teeth - Composite resin - Class V type.

                        - Crowns: Acrylic or plastic, without metal, and
                          Stainless steel.

                        - Pins: Pin retention, exclusive of restorative material
                          - used in lieu of cast restorations.

                        - Recementation: Inlay or onlay, Crown, and Bridge.

ENDODONTIC
SERVICES                Allowance includes all endodontic treatment within 12
                        months.

                        - Pulp capping, direct, for full or new pulpal exposure.

                        - Remineralization (Calcium Hydroxide), as a separate
                          procedure.

                        - Vital pulpotomy.

                        - Apexification, therapeutic apical closure.

                        - Root canal therapy on non-vital (nerve-dead) teeth.
                          Allowance includes routine X-Rays and cultures, but
                          excludes final restoration.

                          - Anterior, bicuspid, or molar teeth.

                                                                            P.50
<PAGE>

                                        GROUP II - BASIC DENTAL SERVICES (CONT.)
--------------------------------------------------------------------------------
                                                               (Non-Orthodontic)

                        - Apicoectomy, as a separate procedure or in conjunction
                          with other endodontic procedures. Allowance includes
                          retrograde filling.

PERIODONTIC
SERVICES                Allowance includes the treatment plan, local anesthetics
                        and post-operative care.

                        - Non-Surgical Services:

                          - Periodontal root planing - As necessary for
                            substantial bone and attachment loss.

                          - Occlusal adjustment - Allowable only when done in
                            conjunction with periodontal surgery.

                        - Surgical Services:

                          - Gingivectomy, per tooth - Less than 3 teeth and not
                            incidental to crown preparations.

                          - Osseous surgery, per quadrant - Including all
                            necessary (associated) surgical procedures.

                          - Mucogingival Surgery (pedicle soft tissue graft,
                            sliding horizontal flap, free soft tissue graft).

ORAL SURGERY            Allowance includes diagnosis, the treatment plan, local
                        anesthetics and post-surgical care.

                        - Extractions:

                          - Uncomplicated non-surgical extraction, one or more
                            teeth.

                          - Surgical removal of erupted teeth, involving tissue
                            flap and bone removal.

                          - Surgical removal of impacted teeth.

OTHER SURGICAL
PROCEDURES              - Alveolectomy, per quadrant.

                        - Stomatoplasty with ridge extension, per arch.

                        - Removal of mandibular tori, per quadrant.

                        - Excision of hyperplastic tissue.

                        - Excision of pericoronal gingiva, per tooth.

                        - Removal of palatal torus.

                        - Removal of cyst or tumor - not associated with the
                          removal of impacted teeth.

                        - Incision and drainage of abscess.

                        - Closure of oral fistula or maxillary sinus.

                        - Reimplantation of tooth.

                        - Frenectomy.

                        - Suture of soft tissue injury.

                        - Sialolithotomy for removal of salivary calculus.

                        - Closure of salivary fistula.

                        - Dilation of salivary duct.

                        - Sequestrectomy for osteomyelitis or bone abscess,
                          superficial.

                        - Maxillary sinusotomy for removal of tooth fragment or
                          foreign body.

                                                                     B497.0058-R

PROSTHODONTIC
SERVICES                Specialized techniques and characterization are not
                        covered. Also see "Major Prosthodontic Services".

                                                                            P.51
<PAGE>

                                        GROUP II - BASIC DENTAL SERVICES (CONT.)
--------------------------------------------------------------------------------
                                                               (Non-Orthodontic)

                        - Denture repairs, acrylic: Repairing dentures, no teeth
                          damaged; Repairing dentures and replace one or more
                          broken teeth; and Replacing one or more broken teeth,
                          no other damage.

                        - Denture repairs, metal - Allowance based on the extent
                          and nature of damage and on the type of materials
                          involved.

                        - Full or partial denture rebase, jump case (limited to
                          once per denture in any 36 consecutive month period).

                        - Full or partial denture reline (limited to once per
                          denture in any 12 consecutive month period): Office
                          reline; Cold cure; Laboratory reline.

                        - Denture adjustments (limited to adjustments by a
                          dentist other than the one providing the denture, and
                          adjustments are more than 6 months after the initial
                          installation).

                        - Tissue conditioning (limited to a maximum of 2
                          treatments per arch in any 12 consecutive month
                          period).

                        - Adding teeth to partial dentures to replace extracted
                          natural teeth.

                        - Repairs to crowns and bridges - allowance based on the
                          extent and nature of damage and the type of materials
                          involved).

OTHER SERVICES          - General anesthesia in connection with surgical
                          procedures only.

                        - Injectable antibiotics needed solely for treatment of
                          a dental condition.

                                                                     B497.0059-R

                                               GROUP III - MAJOR DENTAL SERVICES
--------------------------------------------------------------------------------
                                                               (Non-Orthodontic)

RESTORATIVE SERVICES    Cast restorations and crowns are covered only when
                        needed because of decay or INJURY, and only when the
                        tooth cannot be restored with a routine filling
                        material. Allowance includes insulating bases,
                        temporization and minor associated gingival involvement.
                        Also see "Basic Restorative Services".

                        - Inlays.

                        - Onlays, in the presence of an inlay.

                        - Crowns and Posts: Acrylic with metal. Porcelain,
                          Porcelain with metal, Full cast metal (other than
                          stainless steel), 3/4 cast metal (other than stainless
                          steel), Cast post and core, in addition to crown (not
                          a thimble coping), Steel post and composite or amalgam
                          core, in addition to crown, and Cast dowel pin
                          (one-piece cast with crown) - Allowance based on type
                          of crown, Crown build-up - Necessitated by loss of
                          natural tooth structure.

PROSTHODONTIC
SERVICES                Specialized technique and characterizations are not
                        covered. Also see "Basic Prosthodontic Services".

                        - Fixed bridges - Each abutment and each pontic makes up
                          a unit in a bridge.

                                                                            P.52
<PAGE>

                                       GROUP III - MAJOR DENTAL SERVICES (CONT.)
--------------------------------------------------------------------------------
                                                               (Non-Orthodontic)

                        - Bridge abutments - See inlays and crowns under "Major
                          Restorative Services".

                        - Bridge Pontics: Cast metal, sanitary, Plastic or
                          porcelain with metal, and Slotted pontic.

                        - Simple stress breakers, per unit.

                        - Dentures - Allowance includes all adjustments done by
                          the DENTIST furnishing the denture in the first 6
                          months after installation. Temporary dentures older
                          than one year are considered to be a permanent
                          appliance.

                        - Full dentures, upper or lower.

                        - Partial dentures - Allowance includes base, all
                          clasps, rests and teeth.

                          - Unilateral, one piece chrome casting, clasp
                            attachment, including pontics.

                          - Upper, with two chrome clasps with rests, acrylic
                            base.

                          - Upper, with chrome palatal bar and clasps, acrylic
                            base.

                          - Lower, with two chrome clasps with rests, acrylic
                            base.

                          - Lower, with chrome lingual bar and clasps, acrylic
                            base.

                          - Stayplate base, upper or lower (anterior teeth
                            only).

                                                                     B497.0060-R

                                                 GROUP IV - ORTHODONTIC SERVICES
--------------------------------------------------------------------------------
ORTHODONTIC
SERVICES                - Any Group I, II or III service in connection with
                          ORTHODONTIC TREATMENT.

                        - Surgical exposure of impacted or unerupted teeth in
                          connection with ORTHODONTIC TREATMENT - Allowance
                          includes routine X-Rays, local anesthetics and
                          post-surgical care.

                        - Active APPLIANCES - All types - Allowance includes
                          diagnostic services, the treatment plan, the fitting,
                          making and placing of the active APPLIANCE, and all
                          related office visits including post-treatment
                          stabilization.

                                                                     B490.0052-R

                                                                            P.53
<PAGE>

--------------------------------------------------------------------------------
ELIGIBILITY FOR PRESCRIPTION DRUG COVERAGE
--------------------------------------------------------------------------------

                                                                     B509.0002-R

                                                               EMPLOYEE COVERAGE
--------------------------------------------------------------------------------

ELIGIBLE EMPLOYEES      To be eligible for EMPLOYEE coverage you must be an
                        active FULL-TIME/PART-TIME EMPLOYEE or a QUALIFIED
                        RETIREE. And you must belong to a class of EMPLOYEES
                        covered by this PLAN.

                                                                     B489.0131-R

WHEN YOUR
COVERAGE STARTS         EMPLOYEE benefits that don't require PROOF that you are
                        insurable are scheduled to start on the effective date
                        shown on the sticker attached to the inside front cover
                        of this booklet.

                        But you must be actively at work on a
                        FULL-TIME/PART-TIME basis unless you are a QUALIFIED
                        RETIREE, on the scheduled effective date or dates. And
                        you must have met all of the applicable conditions
                        explained above, and any applicable waiting period. If
                        you are an active FULL-TIME/PART-TIME EMPLOYEE and are
                        not actively at work on any date part of your insurance
                        is scheduled to start, we will postpone that part of
                        your coverage until the date you return to active
                        FULL-TIME/PART-TIME work.

                        If you are a QUALIFIED RETIREE, you can not be confined
                        in a health care facility on the scheduled effective
                        date of coverage. If you are confined on that date, we
                        will postpone your coverage until the day after you are
                        discharged. And you must also have met all of the
                        applicable conditions of eligibility and any applicable
                        waiting period in order for coverage to start.

                        Sometimes, the effective date shown on the sticker or in
                        the endorsement is not a regularly scheduled work day.
                        But coverage will still start on that date if you were
                        actively at work on a FULL-TIME/PART-TIME basis on your
                        last regularly scheduled work day.

                                                                     B180.0068-R

WHEN YOUR
COVERAGE ENDS           If you are an active FULL-TIME/PART-TIME EMPLOYEE, your
                        coverage ends on the date your active
                        FULL-TIME/PART-TIME service ends for any reason. Such
                        reasons include disability, death, retirement (except
                        for QUALIFIED RETIREES), layoff, leave of absence and
                        the end of employment.

                        It also ends on the date you stop being a member of a
                        class of EMPLOYEES eligible for insurance under this
                        PLAN, or when this PLAN ends for all EMPLOYEES. And it
                        ends when this PLAN is changed so that benefits for the
                        class of EMPLOYEES to which you belong ends.

                        Read this booklet carefully if your coverage ends. You
                        may have the right to continue certain group benefits
                        for a limited time.

                                                                     B489.0111-R

                                                                            P.54
<PAGE>

                                                              DEPENDENT COVERAGE
--------------------------------------------------------------------------------

                                                                     B200.0271-R

ELIGIBLE DEPENDENTS
FOR DEPENDENT
PRESCRIPTION DRUG
BENEFITS                Your ELIGIBLE DEPENDENTS are: your legal spouse; your
                        same sex domestic partner who meets the eligibility
                        criteria on the Domestic Partner statement; your
                        unmarried dependent children who are under age 19; and
                        your unmarried dependent children, from age 19 until
                        their 26th birthday, who are enrolled as full-time
                        students at accredited schools.

                        "Unmarried dependent children" include your dependent
                        grandchildren who reside with you or if you are named in
                        a court order as having legal custody or the parent of
                        the grandchild(ren) is an eligible dependent child(ren)
                        of your same sex domestic partner if they meet the
                        criteria for unmarried natural children and their
                        primary residence is with the employee.

                                                                     B200.0524-R

ADOPTED CHILDREN
AND STEP-CHILDREN       Your "unmarried dependent children" include your legally
                        adopted children and your step-children, if their
                        primary residence is with you or you claim the dependent
                        on your tax return. We treat a child as legally adopted
                        from the time the child is placed in your home for the
                        purpose of adoption. We treat such a child this way
                        whether or not a final adoption order is ever issued.

DEPENDENTS NOT
ELIGIBLE                We exclude any dependent who is insured by this PLAN as
                        an EMPLOYEE. And we exclude any dependent who is on
                        active duty in any armed force.

                                                                     B264.0007-R

HANDICAPPED
CHILDREN                You may have an unmarried child with a mental or
                        physical handicap, or developmental disability, who
                        can't support himself or herself. Subject to all of the
                        terms of this coverage and the PLAN, such a child may
                        stay eligible for dependent benefits past this
                        coverage's age limit.

                        The child will stay eligible as long as he or she stays
                        unmarried and unable to support himself or herself, if:
                        (a) his or her conditions started before he or she
                        reached this coverage's age limit; (b) he or she became
                        insured by this coverage before he or she reached the
                        age limit, and stayed continuously insured until he or
                        she reached such limit; and (c) he or she depends on you
                        for most of his or her support and maintenance.

                        But, for the child to stay eligible, you must send us
                        written proof that the child is handicapped and depends
                        on you for most of his or her support and maintenance.
                        You have 31 days from the date the child reaches the age
                        limit to do this. We can ask for periodic proof that the
                        child's condition continues. But, after two years, we
                        can't ask for this proof more than once a year.

                        The child's coverage ends when yours does.

                                                                     B449.0042-R

WHEN DEPENDENT
COVERAGE STARTS         In order for your dependent coverage to begin you must
                        already be insured for employee coverage, or enroll for
                        employee and dependent coverage at the same time.
                        Subject to the "Exception" stated below and to all of
                        the terms of this PLAN, the date your dependent coverage
                        starts depends on when you elect to enroll your INITIAL
                        DEPENDENTS and agree to make any required payments.

                                                                            P.55
<PAGE>

                                                      DEPENDENT COVERAGE (CONT.)
--------------------------------------------------------------------------------

                        If you do this on or before your ELIGIBILITY DATE, the
                        dependent's coverage is scheduled to start on the later
                        of your ELIGIBILITY DATE and the date you become insured
                        for employee coverage.

                        If you do this within the ENROLLMENT PERIOD, the
                        coverage is scheduled to start on the later of the date
                        you sign the enrollment form; and the date you become
                        insured for employee coverage.

                        Once you have dependent coverage for your INITIAL
                        DEPENDENTS, you must notify us when you acquire any new
                        dependents and agree to make any additional payments
                        required for their coverage.

                        A NEWLY ACQUIRED DEPENDENT will be covered for those
                        dependent benefits not subject to PROOF OF INSURABILITY
                        from the later of the date you notify us and agree to
                        make any additional payments, and the date the NEWLY
                        ACQUIRED DEPENDENT is first eligible.

                                                                     B200.0315-R

NEWBORN CHILDREN        We cover your newborn child, including a newborn
                        dependent grandchild who resides with you, for dependent
                        benefits, from the moment of birth, if you are already
                        covered for dependent child coverage when the child is
                        born. If you do not have dependent coverage when the
                        child is born, we cover the child for the first 31 days
                        from the moment of birth. To continue the child's
                        coverage past the 31 days, you must enroll the child and
                        agree to make any required premium payments within 31
                        days of the date the child is born. If you fail to do
                        this, the child's coverage will end at the end of the 31
                        days, the child won't be covered until you give us PROOF
                        that the child is insurable, and we approve that PROOF
                        in writing.

                                                                     B449.0005-R

WHEN DEPENDENT
COVERAGE ENDS           Dependent coverage ends on the last day of the month for
                        all of your dependents when your coverage ends. But if
                        you die while insured, we'll automatically continue
                        dependent benefits for those of your dependents who were
                        insured when you died. We'll do this for six months at
                        no cost, provided: (a) the group plan remains in force;
                        (b) the dependents remain ELIGIBLE DEPENDENTS; and (c)
                        in the case of a spouse, the spouse does not remarry.

                        If a surviving dependent elects to continue his or her
                        dependent benefits under this PLAN'S "Federal
                        Continuation Rights" provision, or under any other
                        continuation provision of this PLAN, if any, this free
                        continuation period will be provided as the first six
                        months of such continuation. Premiums required to be
                        paid by, or on behalf of a surviving dependent will be
                        waived for the first six months of continuation, subject
                        to restrictions (a), (b) and (c) above. After the first
                        six months of continuation, the remainder of the
                        continuation period, if any, will be subject to the
                        premium requirements, and all of the terms of the
                        "Federal Continuation Rights" or other continuation
                        provisions.

                        Dependent coverage also ends for all of your dependents
                        when you stop being a member of a class of EMPLOYEES
                        eligible for such coverage. And it ends when this PLAN
                        ends, or when dependent coverage is dropped from this
                        PLAN for all EMPLOYEES or for an EMPLOYEE'S class.

                                                                            P.56
<PAGE>

                                                      DEPENDENT COVERAGE (CONT.)
--------------------------------------------------------------------------------

                        An individual dependent's coverage ends when he or she
                        stops being an ELIGIBLE DEPENDENT. This happens to a
                        child on the last day of the month in which the child
                        attains this coverage's age limit, when he or she
                        marries, or when a step-child is no longer dependent on
                        you for support and maintenance. It happens to a spouse
                        when a marriage ends in legal divorce or annulment.

                        Read this PLAN carefully if dependent coverage ends for
                        any reason. Dependents may have the right to continue
                        certain group benefits for a limited time.

                                                                     B489.0048-R

                                                                            P.57
<PAGE>

--------------------------------------------------------------------------------
CERTIFICATE AMENDMENT
--------------------------------------------------------------------------------

                        This rider amends the "Dependent Coverage" provisions as
                        follows:

                        An employee's domestic partner will be eligible for
                        prescription drug coverage under this plan. Coverage
                        will be provided subject to all the terms of this plan
                        and to the following limitations:

                        To qualify for such coverage, both the employee and his
                        or her domestic partner must:

                        * be 18 years of age or older;

                        * be unmarried, constitute each other's sole domestic
                          partner and not have had another domestic partner in
                          the last 12 months;

                        * share the same permanent address for at least 12
                          consecutive months and intend to do so indefinitely;

                        * share joint financial responsibility for basic living
                          expenses including food, shelter and medical expenses;

                        * not be related by blood to a degree that would
                          prohibit marriage in the employee's state of
                          residence; and

                        * be financially interdependent which must be
                          demonstrated by at least four of the following:

                          a. ownership of a joint bank account;

                          b. ownership of a joint credit account;

                          c. evidence of a joint mortgage or lease;

                          d. evidence of joint obligation on a loan;

                          e. joint ownership of a residence;

                          f. evidence of common household expenses such as
                             utilities or telephone;

                          g. execution of wills naming each other as executor
                             and/or beneficiary;

                          h. granting each other durable powers of attorney;

                          i. granting each other health care powers of attorney;

                          j. designation of each other as beneficiary under a
                             retirement benefit account; or

                          k. evidence of other joint financial responsibility.

                        The employee must complete a "Declaration of Domestic
                        Partnership" attesting to the relationship.

                        The domestic partner's dependent children will be
                        eligible for coverage under this plan on the same basis
                        as if the children were the employee's dependent
                        children.

                                                                            P.58
<PAGE>

                                                   CERTIFICATE AMENDMENT (CONT.)
--------------------------------------------------------------------------------

                        Coverage for the domestic partner and his or her
                        dependent children ends when the domestic partner no
                        longer meets the qualifications of a domestic partner as
                        indicated above. Upon termination of a domestic
                        partnership, a "Statement of Termination" must be
                        completed and filed with the employer. Once the employee
                        submits a "Statement of Termination," he or she may not
                        enroll another domestic partner for a period of 12
                        months from the date of the previous termination.

                        And, the domestic partner and his or her children will
                        not be eligible for:

                          a. survivor benefits upon the employee's death as
                             explained under the "When Dependent Coverage Ends"
                             section;

                          b. continuation of prescription drug coverage as
                             explained under the "Federal Continuation Rights"
                             section and under any other continuation rights
                             section of this plan, unless the employee is also
                             eligible for and elects continuation; or

                          c. conversion of prescription drug coverage as
                             explained under the "Converting This Group Health
                             Insurance" section of this plan.

                        This rider is a part of this plan. Except as stated in
                        this rider, nothing contained in this rider changes or
                        affects any other terms of this plan.

                                                                     B509.0054-R

                                                                            P.59
<PAGE>

--------------------------------------------------------------------------------
PRESCRIPTION DRUG EXPENSE INSURANCE
--------------------------------------------------------------------------------

                        This PLAN pays benefits for covered drugs prescribed by
                        a DOCTOR. What we pay and the terms of payment are
                        explained below.

                                                                     B510.0003-R

                                                                   COVERED DRUGS
--------------------------------------------------------------------------------

                        This plan covers: (a) legend drugs; (b) compound drugs
                        which include at least one legend drug: (c) injectable
                        insulin; and (d) other drugs which, under applicable
                        state law, may only be dispensed when prescribed by a
                        doctor.

                        This plan only pays benefits for covered drugs which
                        are: (a) prescribed by a doctor (except for insulin);
                        (b) dispensed by a licensed pharmacist or by a mail
                        order pharmacy; (c) needed to treat a sickness or
                        injury; and (d) accepted as safe and effective by the
                        health community.

                                                                     B510.0126-R

                                                               DISPENSING LIMITS
--------------------------------------------------------------------------------

                        Each time a covered drug is dispensed by a mail order
                        pharmacy, we will pay a benefit for an amount not
                        exceeding a 90 day supply, when used as prescribed.

                        If the covered person does not obtain the covered drug
                        from a mail order pharmacy, each time the covered drug
                        is dispensed, we will pay a benefit for an amount not
                        exceeding the greater of: (a) a 34 day supply, when used
                        as prescribed; or (b) a 100 unit dose, when used as
                        prescribed.

                        What we pay is based on all of the terms of this plan.
                        See "Exclusions" for the drugs we exclude.

                                                                     B510.0109-R

                                                              BENEFIT PROVISIONS
--------------------------------------------------------------------------------

CASH DEDUCTIBLE         A COVERED PERSON must pay an out-of-pocket cash
                        deductible for each covered drug each time it is
                        dispensed. This prescription drug deductible must be
                        paid before this PLAN pays any benefit for that drug.
                        The deductible amount for each prescription or refill
                        is:

                           for drugs received from a MAIL ORDER PHARMACY ..none;

                           for drugs not received from a MAIL ORDER
                           PHARMACY .......................................none.

                        After the deductible is paid, we will pay the COVERED
                        CHARGE in excess of the deductible for each covered drug
                        dispensed while the COVERED PERSON is insured. Of
                        course, what we pay is subject to all the terms of this
                        PLAN.

                                                                     B510.0130-R

                                                                            P.60
<PAGE>

                                                                EXTENDED BENEFIT
--------------------------------------------------------------------------------

                        If a COVERED PERSON is totally disabled and under a
                        DOCTOR'S care when his insurance ends, we will extend
                        his prescription drug expense insurance, in accordance
                        with the Extended Benefits provision under the Major
                        Medical portion of this plan, but not for more than
                        three months. There is no premium charged for the
                        extended prescription drug insurance coverage. But, the
                        COVERED PERSON will have to pay the cash deductible for
                        each prescription.

                                                                     B510.0010-R

                                                              EMPLOYER LIABILITY
--------------------------------------------------------------------------------

                        If a COVERED PERSON'S insurance ends for any reason, the
                        employer will be liable to us for any benefits paid to
                        such previously COVERED PERSON after his insurance ends,
                        except as described in the Extended Benefit provision.

                                                                     B510.0011-R

                                                                      EXCLUSIONS
--------------------------------------------------------------------------------

                        We won't pay for any of the following:

                        * Administering a drug.

                        * Drugs labeled "Caution - limited by Federal Law to
                          investigational use", or experimental drugs.

                        * Drugs, except injectable insulin, which can be
                          obtained legally without a DOCTOR'S prescription.

                        * Any therapeutic device or appliance. This includes
                          support garments and other non-medical substances,
                          regardless of their intended use.

                        * Immunization agents, biological sera, blood or blood
                          plasma, or vitamins (other than LEGEND vitamins).

                        * Drugs needed due to conditions caused, directly or
                          indirectly, by a COVERED PERSON taking part in a riot
                          or other civil disorder; or the COVERED PERSON taking
                          part in the commission of a felony.

                        * Drugs needed due to conditions caused, directly or
                          indirectly, by declared or undeclared war or act of
                          war.

                        * Drugs dispensed to a COVERED PERSON while on active
                          duty in any armed force.

                        * Drugs for which there is no charge. This usually means
                          drugs furnished by the COVERED PERSON'S employer,
                          labor union or similar group, in its medical
                          department or clinic; a HOSPITAL or clinic owned or
                          run by any government body; or any public program,
                          except MEDICAID, paid for or sponsored by any
                          government body. But if a charge is made and we are
                          legally required to pay it, we will.

                        * Drugs dispensed to, or taken by, a COVERED PERSON
                          while confined to a HOSPITAL, an EXTENDED CARE CENTER
                          or a DRUG ABUSE, ALCOHOL ABUSE or MENTAL HEALTH CENTER
                          or any similar facility.

                                                                            P.61
<PAGE>

                                                              EXCLUSIONS (CONT.)
--------------------------------------------------------------------------------

                        * Any drugs which are paid for, in whole or in part, by
                          another group health coverage or plan.

                        * Drugs needed due to an on-the-job or job-related
                          injury, or conditions for which benefits are payable
                          by Worker's Compensation or similar laws.

                        * Refills of a prescription in excess of the number of
                          refills ordered by the DOCTOR.

                        * A refill dispensed more than one year from the date of
                          the DOCTOR'S order.

                                                                     B510.0012-R

                                                                            P.62
<PAGE>

--------------------------------------------------------------------------------
COORDINATION OF BENEFITS
--------------------------------------------------------------------------------

IMPORTANT NOTICE        This provision applies to all health benefits under this
                        plan except prescription drug expense insurance.

PURPOSE OF THIS
PROVISION               An employee may be covered for health expense benefits
                        by more than one plan. For instance, he may be covered
                        by this plan as an employee and by another plan as a
                        dependent of his spouse. If he is, this provision allows
                        us to coordinate what we pay with what the other plan
                        pays. We do this so the covered person doesn't collect
                        more in benefits than he incurs in charges.

DEFINITIONS             "We" and "our" mean The Guardian Life Insurance Company
                        of America.

                        "Plan" means any of the following that provide health
                        benefits or services:

                        (A) Group or blanket insurance plans;

                        (B) Group Blue Cross plans, group Blue Shield plans, or
                            other service or prepayment plans on a group basis;

                        (C) Union welfare plans, employer plans, employee
                            benefit plans, trusteed labor and management plans,
                            or other plans for members of a group;

                        (D) Programs or coverages required or provided by law,
                            including Medicare;

                        (E) Group or group-type hospital indemnity benefits
                            which exceed $100.00 per day; and

                        (F) Medical benefits provided by a group or group-type
                            automobile "no-fault" and traditional "fault-type"
                            contracts.

                        "Plan" does not include:

                        (A) Medicaid or any other government program or coverage
                            which we are not allowed to coordinate with by law;

                        (B) School accident-type coverages;

                        (C) Group or group-type hospital indemnity benefits of
                            $100.00 per day or less; and

                        (D) Any plan we say we supplement.

                        "This plan" means the part of our group plan subject to
                        this provision.

                        "Member" or "employee" means the person who receives a
                        certificate or other proof of coverage from a plan that
                        covers him for health expense benefits.

                        "Dependent" means a person who is covered by a plan for
                        health expense benefits, but not as a member.

                        "Allowable expense" means any necessary, reasonable, and
                        usual expense for health care incurred by a member or
                        dependent under both this plan and at least one other
                        plan. When a plan provides service instead of cash
                        payment, we view the reasonable cash value of each
                        service as an allowable expense and as a benefit paid.
                        We also view benefits payable by another plan as an
                        allowable expense and as a benefit paid, whether or not
                        a claim is filed under this plan.

                                                                            P.63
<PAGE>

                                                COORDINATION OF BENEFITS (CONT.)
--------------------------------------------------------------------------------

                        "Claim determination period" means a calendar year in
                        which a member or dependent is covered by this plan and
                        at least one other plan and incurs one or more allowable
                        expense under such plans.

HOW THIS PROVISION
WORKS                   We apply this provision when a member or a dependent is
                        covered by more than one plan. When this happens we
                        consider each plan separately when coordinating
                        payments.

                        In order to apply this provision, one of the plans is
                        called the primary plan. All other plans are called
                        secondary plans. The primary plan pays first, ignoring
                        all other plans. The secondary plans then pay all
                        remaining allowable expenses. If a plan has no
                        coordination provisions, it is primary. But, during any
                        claim determination period, when this plan and at least
                        one other plan have coordination provisions, the rules
                        that govern which plan pays first are as follows:

                        (A) A plan that covers a person as a member pays first;
                            the plan that covers a person as a dependent pays
                            second; except that, if the person is also a
                            Medicare beneficiary, Medicare is:

                            *   Secondary to the plan covering the person as a
                                dependent; and

                            *   Primary to the plan covering the person as other
                                than a dependent.

                        (B) A plan that covers a person as an active employee or
                            as a dependent of such employee, pays first. A plan
                            that covers a person as a laid-off or retired
                            employee or as a dependent of such employee pays
                            second.

                            But, if the plan we're coordinating with doesn't
                            have a similar provision for such persons, then (B)
                            will not apply.

                        (C) A plan that covers a person as an active employee or
                            as a dependent of such employee pays first. A plan
                            that covers a person or that person's dependent
                            under a right of continuation pursuant to federal or
                            state law pays second.

                            But, if the plan that we're coordinating with
                            doesn't have a similar provision for such persons,
                            then (C) will not apply.

                        (D) Except for dependent children of separated or
                            divorced parents, the following governs which plan
                            pays first when the person is a dependent of a
                            member:

                            A plan that covers a dependent of a member whose
                            birthday falls earliest in the calendar year pays
                            first. The plan that covers the dependent as a
                            member whose birthday falls later in the calendar
                            year pays second. The member's year of birth is
                            ignored.

                            But, if the plan we're coordinating with doesn't
                            have a similar provision for such persons, then (D)
                            will not apply and the other plan's coordination
                            provision will determine the order of benefits.

                                                                     B555.0048-R

                        (E) For a dependent child of separated or divorced
                            parents, the following governs which plan pays first
                            when the person is a dependent of a member:

                                                                            P.64
<PAGE>

                                                COORDINATION OF BENEFITS (CONT.)
--------------------------------------------------------------------------------

                        *   When a court order makes one parent financially
                            responsible for the health care expenses of the
                            dependent child, then that parent's plan pays first;

                        *   If there is no such court order, then the plan of
                            the natural parent with custody pays before the plan
                            of the stepparent with custody;

                        *   the plan of the stepparent with custody pays before
                            the plan of the natural parent without custody; and

                        *   If a court order states that both parents have joint
                            custody of the child or that both parents are
                            financially responsible for the health care expenses
                            of the dependent child, then the benefits will be
                            determined by Rule (D) above.

                        If rules (A), (B), (C), (D), and (E) don't determine
                        which plan pays first, the plan that has covered the
                        person for the longer time pays first.

                        If, when we apply this provision, we pay less than we
                        would otherwise pay, we apply only that reduced amount
                        against payment limits of this plan.

OUR RIGHT TO
CERTAIN INFORMATION     In order to coordinate benefits, we need certain
                        information. An employee must supply us with as much of
                        that information as he can. But if he can't give us all
                        the information we need, we have the right to get this
                        information from any source. And if another insurer
                        needs information to apply its coordination provision,
                        we have the right to give that insurer such information.
                        If we give or get information under this section we
                        can't be held liable for such action.

                        When payments that should have been made by this plan
                        have been paid by another plan, we have the right to
                        repay that plan. If we do so, we're no longer liable for
                        that amount. And if we pay out more than we should have,
                        we have the right to recover the excess payment.

SMALL CLAIMS WAIVER     We don't coordinate payments on claims of less than
                        $50.00. But if, during any claim determination period,
                        more allowable expenses are incurred that raise the
                        claim above $50.00, we'll count the entire amount of the
                        claim when we coordinate.

                                                                     B555.0049-R

                                                                            P.65
<PAGE>

--------------------------------------------------------------------------------
HOW THIS PLAN INTERACTS WITH MEDICARE

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

                        The following provisions explain how this plan's group
                        health benefits interact with the benefits available
                        under Medicare. A covered person may be eligible for
                        Medicare by reason of age, disability, or End Stage
                        Renal Disease. Different rules apply to each type of
                        Medicare eligibility, as shown below.

                        With respect to the following provisions:

                        (1) A covered person is considered to be eligible for
                            Medicare by reason of age from the first day of the
                            month during which he reaches age 65. However, if
                            the covered person is born on the first day of a
                            month, he is considered to be eligible for Medicare
                            from the first day of the month which is immediately
                            prior to his 65th birthday.

                        (2) "Group health benefits" means any hospital, major
                            medical, out-ofnetwork point-of-service,
                            prescription drug and surgical coverages provided by
                            this plan.

                        (3) A "primary" health plan pays benefits for a covered
                            person's covered charge first, ignoring what the
                            covered person's "secondary" plan pays. A
                            "secondary" health plan then pays the remaining
                            unpaid allowable expenses. See this plan's
                            "Coordination of Benefits" provision for a
                            definition of "allowable expense".

                                                                     B560.0011-R

                                           MEDICARE ELIGIBILITY BY REASON OF AGE
--------------------------------------------------------------------------------

APPLICABILITY           This section applies to an employee or his insured
                        spouse who is eligible for Medicare by reason of age.

                        Under this section, such an employee or insured spouse
                        is referred to as a "Medicare eligible."

                        This section does not apply to: (a) a covered person
                        other than an employee or insured spouse; (b) an
                        employee or insured spouse who is under age 65; or (c) a
                        covered person who is eligible for Medicare solely on
                        the basis of End Stage Renal Disease.

WHEN AN EMPLOYEE
OR INSURED SPOUSE
BECOMES ELIGIBLE
FOR MEDICARE            When an employee or insured spouse becomes eligible for
                        Medicare by reason of age, if he incurs a covered charge
                        for which benefits are payable under both this plan and
                        Medicare, this plan is considered primary. This plan
                        pays first, ignoring Medicare. Medicare is considered
                        the secondary plan.

                                                                     B560.0014-R

                                    MEDICARE ELIGIBILITY BY REASON OF DISABILITY
--------------------------------------------------------------------------------

APPLICABILITY           This section applies to a covered person who is: (a)
                        under age 65; and (b) eligible for Medicare by reason of
                        disability.

                        Under this section, such covered person is referred to
                        as a "disabled Medicare eligible."

                                                                            P.66
<PAGE>

                            MEDICARE ELIGIBILITY BY REASON OF DISABILITY (CONT.)
--------------------------------------------------------------------------------

                        This section does not apply to: (a) a covered person who
                        is eligible for Medicare by reason of age; or (b) a
                        covered person who is eligible for Medicare solely on
                        the basis of End Stage Renal Disease.

WHEN A COVERED
PERSON BECOMES
ELIGIBLE FOR
MEDICARE                When a covered person becomes eligible for Medicare by
                        reason of disability, this plan supplements the benefits
                        provided by Medicare.

                        If a disabled Medicare eligible incurs a covered charge
                        for which benefits are payable under both this plan and
                        Medicare, we subtract what Medicare pays from what we'd
                        normally pay.

                        If a covered person is eligible for Medicare by reason
                        of disability, he must be covered by both Parts A and B.
                        If he's not, he must meet the Medicare Alternate
                        Deductible.

                        For any covered person who is eligible for Medicare by
                        reason of disability, but is not insured by both Parts A
                        and B, the Medicare Alternate Deductible is equal to the
                        Cash Deductible plus what Parts A and B of Medicare
                        would have paid had the covered person been so insured.

                        After the 30 month period as described in "Medicare
                        Eligibility By Reason Of End Stage Renal Disease," with
                        respect to a covered person who is eligible for Medicare
                        solely on the basis of End Stage Renal Disease, but is
                        not insured by both Parts A and B, the Medicare
                        Alternate Deductible is equal to the Cash Deductible
                        plus what Parts A and B of Medicare would have paid had
                        the covered person been so insured.

                                                                     B560.0042-R

                       MEDICARE ELIGIBILITY BY REASON OF END STAGE RENAL DISEASE
--------------------------------------------------------------------------------

APPLICABILITY           This section applies to a covered person who is eligible
                        for Medicare solely on the basis of End Stage Renal
                        Disease (ESRD).

                        Under this section, such a covered person is referred to
                        as an "ESRD Medicare eligible."

                        This section does not apply to a covered person who is
                        eligible for Medicare by reason of age or disability.

WHEN A COVERED
PERSON BECOMES
ELIGIBLE FOR
MEDICARE DUE TO
ESRD                    When a covered person becomes eligible for Medicare
                        solely on the basis of ESRD, for a period of up to 30
                        consecutive months, if he incurs a charge for the
                        treatment of ESRD for which benefits are payable under
                        both this plan and Medicare, this plan is considered
                        primary. This plan pays first, ignoring Medicare.
                        Medicare is considered the secondary plan.

                        This 30 month period begins on the earlier of: (a) the
                        first day of the month during which a regular course of
                        renal dialysis starts; and (b) with respect to a ESRD
                        Medicare eligible who receives a kidney transplant, the
                        first day of the month during which such covered person
                        becomes eligible for Medicare.

                                                                            P.67
<PAGE>

               MEDICARE ELIGIBILITY BY REASON OF END STAGE RENAL DISEASE (CONT.)
--------------------------------------------------------------------------------

                        After the 30 month period described above ends, if an
                        ESRD Medicare eligible incurs a charge for which
                        benefits are payable under both this plan and Medicare,
                        we supplement what Medicare pays. We subtract what
                        Medicare pays from what we'd normally pay. If a covered
                        person is eligible for Medicare solely on the basis of
                        ESRD, he must be covered by both Parts A and B. If he's
                        not, he must meet the Medicare Alternate Deductible

                        The Medicare Alternate Deductible is equal to the Cash
                        Deductible plus what Parts A and B of Medicare would
                        have paid had the covered person been so insured.

                                                                     B560.0039-R

                                      OTHER PEOPLE WHO ARE ELIGIBLE FOR MEDICARE
--------------------------------------------------------------------------------

APPLICABILITY           This section applies to a COVERED PERSON who: (a) is
                        eligible for Medicare; but (b) does not fall into any of
                        the categories discussed above.

                        Under this section, such COVERED PERSONS are referred to
                        as "other Medicare eligibles."

                        This section does not apply to any COVERED PERSON who is
                        eligible for Medicare as described in the above
                        sections.

WHEN OTHER
COVERED PERSONS
BECOME ELIGIBLE FOR
MEDICARE                When a COVERED PERSON other than one discussed above
                        becomes eligible for Medicare, this PLAN supplements the
                        benefits provided by Medicare.

                        If an "other Medicare eligible" incurs a COVERED CHARGE
                        for which benefits are payable under both this PLAN and
                        Medicare, we subtract what Medicare pays from what we'd
                        normally pay. But what we pay is based on all of the
                        terms of this PLAN.

                        An "other Medicare eligible" must be covered by both
                        Parts A and B of Medicare. If he's not, he must meet the
                        Medicare Alternate Deductible. The Medicare Alternate
                        Deductible is equal to the Cash Deductible plus what
                        Parts A and B of Medicare would have paid had the
                        covered person been so insured.

                                                                     B560.0044-R

                                                                            P.68
<PAGE>

--------------------------------------------------------------------------------
WORKER'S COMPENSATION
--------------------------------------------------------------------------------

FOR PERSONS NOT
COVERED BY
WORKER'S
COMPENSATION            A covered person may not be eligible for, or may choose
                        not to be covered by Worker's Compensation. Such person
                        may sustain an on-the-job or job-related injury. If this
                        occurs, we provide benefits as described below:

                        (1) For all coverages under this plan, except those that
                            provide benefits for loss of life or loss of income
                            due to disability, we pay benefits for covered
                            charges incurred by the covered person for care and
                            treatment of such injury or condition to the same
                            extent we'd pay benefits for covered charges due to
                            any other sickness or injury.

                            But what we pay is based on all the terms of this
                            plan.

                        (2) For any coverages that provide benefits for loss of
                            income due to disability, we pay benefits for
                            disability due to such injury or condition the same
                            way we'd pay benefits for any other disability.

                            But what we pay is based on all the terms of this
                            plan.

                                                                     B595.0004-R

                                                                            P.69
<PAGE>

--------------------------------------------------------------------------------
GLOSSARY
--------------------------------------------------------------------------------

                        This Glossary defines the italicized terms appearing in
                        your booklet.

                                                                     B900.0118-R

ACTIVE APPLIANCE        means an APPLIANCE like braces, used in ORTHODONTIC
                        TREATMENT to move teeth.

                                                                     B750.0192-R

AMBULATORY SURGICAL
CENTER                  means a facility which is mainly engaged in performing
                        outpatient surgery. It must: (a) be staffed by DOCTORS
                        and NURSES, under the supervision of a DOCTOR ; (b) have
                        permanent operating and recovery rooms; (c) be staffed
                        and equipped to give emergency care; and (d) have
                        written back-up arrangements with a local HOSPITAL for
                        emergency care. We'll recognize it if it carries out its
                        stated purpose under all relevant state and local laws,
                        and it is either: (a) accredited for its stated purpose
                        by either the JOINT COMMISSION or the Accreditation
                        Association for Ambulatory Care; or (b) approved for its
                        stated purpose by MEDICARE. We don't recognize a
                        facility as an AMBULATORY SURGICAL CENTER if it is part
                        of a HOSPITAL.

                                                                     B900.0013-R

APPLIANCE               means any dental device other than a PROSTHETIC DEVICE.

                                                                     B750.0193-R

BENEFIT YEAR            with respect to this PLAN'S dental expense insurance,
                        means a 12 month period which starts on October 1st and
                        ends on September 30th.

                                                                     B750.0444-R

BENEFIT YEAR            with respect to the Major Medical Expense portion of
                        this PLAN, means each successive 12 month period which
                        starts on January 1st and ends on December 31st.

                                                                     B900.0015-R

BIRTHING CENTER         means a facility which mainly provides care and
                        treatment for people during uncomplicated pregnancy,
                        routine full-term delivery, and the immediate
                        post-partum period. It must: (a) provide full-time
                        skilled nursing care by or under the supervision of
                        NURSES; (b) be staffed and equipped to give emergency
                        care; and (c) have written back-up arrangements with a
                        local HOSPITAL for emergency care. We'll recognize it
                        if: (a) it carries out its stated purpose under all
                        relevant state and local laws; or (b) it is approved for
                        its stated purpose by the Accreditation Association for
                        Ambulatory Care; or (c) it is approved for its stated
                        purpose by MEDICARE. We don't recognize a facility as a
                        BIRTHING CENTER if it's part of a HOSPITAL.

                                                                     B900.0016-R

CLOSE RELATIVE          means: (a) a COVERED PERSON'S spouse, children, parents,
                        brothers and sisters; and (b) any other person who is
                        part of a COVERED PERSON'S household. We don't pay for
                        services and supplies furnished by CLOSE RELATIVES.

                                                                     B750.0195-R

                                                                            P.70
<PAGE>

                                                                GLOSSARY (CONT.)
--------------------------------------------------------------------------------

COVERED CHARGES         are reasonable charges for the types of services and
                        supplies described in the "Covered Charges" and "Charges
                        Covered with Special Limitations" section of this PLAN'S
                        Major Medical Expense Insurance provisions, and the
                        "Covered Drugs" section of this PLAN'S Prescription Drug
                        Expense Insurance provisions. The services and supplies
                        must be: (a) furnished or ordered by a recognized health
                        care provider; (b) medically necessary to diagnose or
                        treat a SICKNESS or INJURY; (c) accepted by a
                        professional medical society in the United States as
                        beneficial for the control or cure of the SICKNESS or
                        INJURY being treated; and (d) furnished within the
                        framework of generally accepted methods of medical
                        management currently used in the United States.

                        By "reasonable" we mean the charge isn't more than the
                        usual local charge for that service or supply. When we
                        decide what's reasonable, we look at the COVERED
                        PERSON'S condition and how severe it is. And we also
                        look at special circumstances.

                        A COVERED CHARGE is incurred on the date the service or
                        supply is furnished. Subject to all of the terms of this
                        PLAN, we pay benefits for COVERED CHARGES incurred by a
                        COVERED PERSON while he's insured by this PLAN. Read the
                        entire PLAN to find out what we limit or exclude.

                                                                     B900.0113-R

COVERED PERSON          with respect to this PLAN'S dental expense insurance,
                        means an EMPLOYEE or any of his COVERED DEPENDENTS.

                                                                     B750.0196-R

COVERED DEPENDENT       means an ELIGIBLE DEPENDENT who is covered by the Major
                        Medical Expense portion of this PLAN.

COVERED FAMILY          means you and those of your ELIGIBLE DEPENDENTS who are
                        covered by the Major Medical Expense portion of this
                        PLAN.

                                                                     B900.0081-R

COVERED PERSON          with respect to the Major Medical Expense portion of
                        this PLAN, means you or a COVERED DEPENDENT.

                                                                     B750.0003-R

COVERED PERSON          with respect to the Prescription Drug Expense portion of
                        this PLAN, means you or a COVERED DEPENDENT.

                                                                     B750.0004-R

CREDITABLE COVERAGE     means coverage of a person under: (a) a group health
                        plan, including COBRA continuation coverage; (b) an
                        individual health policy; (c) Medicare Part A or B; (d)
                        Medicaid; (e) CHAMPUS; (f) Federal Employees Health
                        Benefit Plan; (g) a medical care program of the Indian
                        Health Service or of a tribal organization; (h) a state
                        health benefits risk pool; (i) a public health plan; or
                        (j) a Peace Corps Plan.

                                                                            P.71
<PAGE>

                                                                GLOSSARY (CONT.)
--------------------------------------------------------------------------------

                        When determining if coverage is CREDITABLE COVERAGE, we
                        use the guidelines established by all applicable State
                        and/or Federal laws and regulations. We, however,
                        reserve the right to determine if coverage is included
                        or excluded from the definition of CREDITABLE COVERAGE.

                                                                     B750.0505-R

CUSTODIAL CARE          means any service or supply, including room and board,
                        which: (a) is furnished mainly to help a person meet his
                        routine daily needs; and (b) can be furnished by someone
                        who has no professional health care training or skills.
                        Even if you or a COVERED DEPENDENT are in a HOSPITAL or
                        other recognized facility, we don't pay for care if it's
                        mainly CUSTODIAL.

                                                                     B900.0022-R

DENTIST                 means any dental or medical practitioner we are required
                        by law to recognize who: (a) is properly licensed or
                        certified under the laws of the state where he
                        practices; and (b) provides services which are within
                        the scope of his license or certificate and covered by
                        this PLAN.

                                                                     B750.0198-R

DOCTOR                  means a medical or dental practitioner we are required
                        by law to recognize who: (a) is properly licensed or
                        certified to provide medical care under the laws of the
                        state where he practices; and (b) provides medical
                        services which are within the scope of his or her
                        license or certificate and are covered by this PLAN.

                                                                     B900.0023-R

DRUG ABUSE
CENTERS, ALCOHOL
ABUSE CENTERS,
MENTAL HEALTH
CENTERS                 mainly provide treatment for people with drug abuse,
                        alcohol abuse or mental health problems. We'll recognize
                        such a place if it carries out its stated purpose under
                        all relevant state and local laws, and it is either: (a)
                        accredited for its stated purpose by the JOINT
                        COMMISSION; or (b) approved for its stated purpose by
                        MEDICARE.

                                                                     B900.0025-R

DURABLE MEDICAL
EQUIPMENT               is equipment which: (a) can withstand repeated use; (b)
                        is mainly and customarily used to serve a medical
                        purpose; and (c) is generally not useful to a covered
                        person in the absence of a sickness or injury. Some
                        examples are wheel chairs, hospital-type beds, and
                        breathing equipment.

                                                                     B750.0499-R

ELIGIBILITY DATE        for dependent coverage is the earliest date on which:
                        (a) you have initial dependents; and (b) are eligible
                        for dependent coverage.

                                                                     B900.0003-R

ELIGIBLE DEPENDENT      is defined in the provision entitled "Dependent
                        Coverage."

                                                                     B750.0015-R

EMPLOYEE                means a person who works for the EMPLOYER at the
                        EMPLOYER'S place of business, and whose income is
                        reported for tax purposes using a W-2 form.

                                                                     B750.0006-R

                                                                            P.72
<PAGE>

                                                                GLOSSARY (CONT.)
--------------------------------------------------------------------------------

EMPLOYER                means GENERAL MILLS, INC.

                                                                     B900.0051-R

ENROLLMENT DATE         means: (a) for a newly hired EMPLOYEE, the date you are
                        hired by the EMPLOYER for FULL-TIME service; (b) for a
                        LATE ENROLLEE, the date you sign the enrollment form; or
                        (c) for a SPECIAL ENROLLEE, the date of the event which
                        triggers a SPECIAL ENROLLMENT PERIOD.

                                                                     B750.0503-R

ENROLLMENT PERIOD       with respect to dependent coverage, means the 31 day
                        period which starts on the date that you first become
                        eligible for dependent coverage.

                                                                     B900.0004-R

EXPERIMENTAL
TREATMENT               means treatment: (a) that has not been scientifically
                        proven or fully developed; (b) cannot be supported in
                        medical literature published by a professional medical
                        society in the United States; (c) is not accepted by a
                        professional medical society in the United States as
                        beneficial for the control or cure of SICKNESS or INJURY
                        being treated; or (d) is not furnished within the
                        framework of generally accepted methods of medical
                        management currently being used in the United States.

                                                                     B900.0026-R

EXTENDED CARE
CENTER                  means a facility which mainly provides full-time
                        INPATIENT skilled nursing care for SICK or INJURED
                        people who don't need to be in a HOSPITAL. We'll
                        recognize it if it carries out its stated purpose under
                        all relevant state and local laws, and it is either: (a)
                        accredited for its stated purpose by the JOINT
                        COMMISSION; or (b) approved for its stated purpose by
                        MEDICARE. In some places, an "Extended Care Center" may
                        be called a "Skilled Nursing Center."

                                                                     B900.0027-R

FULL-TIME/PART-TIME     means the EMPLOYEE regularly works at least the number
                        of hours in the normal work week set by the EMPLOYER, or
                        50% of the regular scheduled work week, at his
                        EMPLOYER'S place of business.

                                                                     B750.0229-R

HOME HEALTH
AGENCY                  means a provider which mainly provides home health care
                        to SICK or INJURED people under a home health care
                        program designed to reduce or eliminate HOSPITAL stays.
                        We will recognize it if: (a) it carries out its stated
                        purpose under all relevant state and local laws; and (b)
                        it is approved for its stated purpose by MEDICARE.

                                                                     B900.0028-R

HOSPICE                 means a facility which mainly provides palliative and
                        supportive care for terminally ill people under a
                        HOSPICE care program. We will recognize a HOSPICE if it
                        carries out its stated purpose under all relevant state
                        and local laws, and it is either: (a) approved for its
                        stated purpose by MEDICARE; or (b) accredited for its
                        stated purpose by either the JOINT COMMISSION or the
                        National Hospice Organization.

                                                                     B900.0029-R

                                                                            P.73
<PAGE>

                                                                GLOSSARY (CONT.)
--------------------------------------------------------------------------------

HOSPITAL                means a facility which mainly provides INPATIENT care
                        and treatment for SICK or INJURED people. It may also
                        provide outpatient services. We'll recognize it if it
                        carries out its stated purpose under all relevant state
                        and local laws, and it is either: (a) accredited as a
                        HOSPITAL by the JOINT COMMISSION; or (b) approved as a
                        HOSPITAL by MEDICARE.

                                                                     B900.0030-R

INITIAL DEPENDENTS      means those ELIGIBLE DEPENDENTS you have at the time you
                        first become eligible for EMPLOYEE coverage. If at this
                        time you do not have any ELIGIBLE DEPENDENTS, but you
                        later acquire them, the first ELIGIBLE DEPENDENTS you
                        acquire are your INITIAL DEPENDENTS.

                                                                     B900.0006-R

INJURY                  with respect to this PLAN'S dental expense insurance,
                        means all damage to a COVERED PERSON'S mouth due to an
                        accident, and all complications rising from that damage.
                        But the term INJURY does not include damage to teeth,
                        APPLIANCES or PROSTHETIC DEVICES which results from
                        chewing or biting food or other substances.

                                                                     B750.0199-R

INJURY                  means all damage to a COVERED PERSON'S body due to an
                        accident, and all complications arising from that
                        damage.

                                                                     B900.0031-R

INPATIENT               means a COVERED PERSON who is physically confined as a
                        registered bed patient in a HOSPITAL or other recognized
                        health care facility.

                                                                     B900.0032-R

JOINT COMMISSION        means the JOINT COMMISSION on the Accreditation of
                        Health Care Facilities.

                                                                     B900.0033-R

LATE ENROLLEE           means an EMPLOYEE or dependent who fails to enroll in
                        this PLAN: (a) within 30 days of your hire for FULL-TIME
                        service with the EMPLOYER; (b) WITHIN 30 DAYS OF THE
                        DATE HE OR SHE BECOMES AN ELIGIBLE DEPENDENT; OR (c)
                        DURING A SPECIAL ENROLLMENT PERIOD, as defined below.
                        However, if an eligibility waiting period under this
                        PLAN applies to a COVERED PERSON, the COVERED PERSON
                        will be considered a LATE ENROLLEE if he or she fails to
                        enroll within 30 days of the end of the waiting period.

                                                                     B750.0501-R

LEGEND DRUG             means any drug or vitamin which must be labeled "Caution
                        - Federal Law prohibits dispensing without a
                        prescription."

                                                                     B900.0088-R

MAIL ORDER
PHARMACY                is a licensed pharmaceutical warehouse which has an
                        agreement in force with us to provide prescription drugs
                        by mail to covered persons.

                                                                     B750.0381-R

MEDICAID                means the health care program for the needy provided by
                        Title XIX of the Social Security Act, as amended from
                        time to time.

                                                                            P.74
<PAGE>
                                                                GLOSSARY (CONT.)
--------------------------------------------------------------------------------

MEDICARE                means Parts A and B of the health care program for the
                        aged and disabled provided by the Title XVIII of the
                        Social Security Act, as amended from time to time.

                                                                     B900.0034-R

MENTAL AND NERVOUS
CONDITION               means a SICKNESS which manifests symptoms which are
                        primarily mental or nervous, regardless of any
                        underlying physical cause.

                                                                     B900.0035-R

NEWLY ACQUIRED
DEPENDENT               means an ELIGIBLE DEPENDENT you acquire after you
                        already have coverage in force for INITIAL DEPENDENTS.

                                                                     B900.0008-R

NON-COVERED
EXPENSES                are expenses which do not meet our definition of
                        "COVERED CHARGES," or which exceed any of the benefit
                        limits shown in this PLAN, or which are specifically
                        identified as NON-COVERED EXPENSES or are otherwise not
                        covered by this PLAN.

                                                                     B900.0036-R

NURSE                   is a registered NURSE or licensed practical NURSE,
                        including a nursing specialist such as a NURSE mid-wife
                        or a NURSE anesthetist, who: (a) is properly licensed or
                        certified to provide medical care under the laws of the
                        state where he or she practices; and (b) provides
                        medical services which are within the scope of his or
                        her license or certificate and are covered by this PLAN.

                                                                     B900.0037-R

ORTHODONTIC
TREATMENT               means the movement of one or more teeth by the use of
                        ACTIVE APPLIANCES. It includes: (a) diagnostic services;
                        (b) the treatment plan; (c) the fitting, making and
                        placement of an ACTIVE APPLIANCE; and (d) all related
                        office visits, including post-treatment stabilization.

                                                                     B750.0201-R

PLAN                    means the GUARDIAN group PLAN purchased by your EMPLOYER
                        and known as the "General Mills, Inc. Senior Executive
                        Benefit Plan," except in the provision entitled
                        "Coordination of Benefits" where "plan" has a special
                        meaning. See that provision for details.

                                                                     B900.0039-R

PROSTHETIC DEVICE       means a device which is used to replace missing or lost
                        teeth or tooth structure. It includes all types of
                        dentures, crowns, bridges, pontics and cast
                        restorations.

                                                                     B750.0203-R

QUALIFIED RETIREE       means all former employees who are retired from the
                        company and were covered by this plan on their last day
                        of employment with the company.

                                                                     B750.0008-R

                                                                            P.75
<PAGE>

                                                                GLOSSARY (CONT.)
--------------------------------------------------------------------------------

REHABILITATION
CENTER                  means a facility which mainly provides therapeutic and
                        restorative services to sick or injured people. We'll
                        recognize it if it carries out its stated purpose under
                        all relevant state and local laws, and it is either: (a)
                        accredited for its stated purpose by either the Joint
                        Commission or the Commission on Accreditation for
                        Rehabilitation Facilities; or (b) approved for its
                        stated purpose by Medicare. In some places a
                        REHABILITATION CENTER is called a "rehabilitation
                        hospital."

RESIDENTIAL
TREATMENT FACILITY      means a facility which provides 24 hour treatment for
                        people with drug abuse, alcohol abuse or mental health
                        problems on an INPATIENT basis. It must provide at least
                        the following: room and board; medical services; nursing
                        and dietary services; patient diagnosis, assessment and
                        treatment; individual, family and group counseling; and
                        educational and support services. We'll recognize a
                        RESIDENTIAL TREATMENT FACILITY if it's accredited for
                        its stated purpose by the Joint Commission, and carries
                        out its stated purpose in compliance with all relevant
                        state and local laws.

                                                                     B750.0226-R

ROUTINE FOOT CARE       means the cutting, debridement, trimming, reduction,
                        removal or other care of corns, calluses, flat feet,
                        fallen arches, weak feet, chronic foot strain,
                        dystrophic nails, excresences, helomas, hyperkeratosis,
                        hypertrophic nails, non-infected ingrown nails,
                        deratomas, keratosis, onychauxis, onychocryptosis,
                        tylomas or symptomatic complaints of the feet.

                                                                     B900.0043-R

ROUTINE NURSING
CARE                    means the nursing care customarily furnished by a
                        recognized facility for the benefit of its INPATIENTS.

                                                                     B900.0044-R

SICKNESS                means any illness or disease suffered by a COVERED
                        PERSON. We consider all complications or recurrences,
                        and all related conditions as one SICKNESS.

                                                                     B900.0045-R

SPECIAL CARE UNIT       means a part of a HOSPITAL set up for very sick patients
                        who must be observed constantly. The unit must have a
                        specially trained staff. And it must have special
                        equipment and supplies on hand at all times. Some types
                        of SPECIAL CARE UNITS are: (a) intensive care units; (b)
                        cardiac care units; (c) neonatal care units; and (d)
                        burn units.

                                                                     B900.0047-R

                                                                            P.76
<PAGE>

                                                                GLOSSARY (CONT.)
--------------------------------------------------------------------------------

SPECIAL ENROLLEE        means an EMPLOYEE or dependent who enrolls in this PLAN
                        during a SPECIAL ENROLLMENT PERIOD, as explained below.

SPECIAL ENROLLMENT
PERIOD                  means a 30 day period which begins on the later of: (a)
                        the date dependent coverage is made available under this
                        PLAN; and (b) the date an EMPLOYEE acquires an ELIGIBLE
                        DEPENDENT through marriage, birth, adoption or placement
                        for adoption. An EMPLOYEE, and his or her eligible
                        spouse, who previously declined major medical coverage
                        may enroll in this PLAN, at the same time he or she
                        enrolls a new ELIGIBLE DEPENDENT.

                                                                     B750.0506-R

SPINAL MANIPULATION     includes manipulation or adjustment of the spine; hot or
                        cold packs; electrical muscle stimulation; diathermy;
                        skeletal adjustments; massage, adjunctive, ultra-sound,
                        doppler, whirlpool or hydro therapy; or other treatment
                        of a similar nature.

                                                                     B900.0048-R

                                                                            P.77
<PAGE>

--------------------------------------------------------------------------------
SUMMARY PLAN DESCRIPTION SUPPLEMENT TO CERTIFICATE
--------------------------------------------------------------------------------

                        * INTRODUCTION

                        The previous sections of the handbook outline and
                        describe the specific provisions of the General Mills,
                        Inc. Senior Executive Benefit Plan available to eligible
                        employees. In addition to this information, employees
                        should also be aware of important administrative
                        information about the benefits provided to you by the
                        company. The Employee Retirement Income Security Act of
                        1974 (ERISA) requires companies to publish certain
                        specific information about their employee benefit plans.
                        The technical information for the General Mills, Inc.
                        Senior Executive Benefit Plan is consolidated in this
                        section of the handbook. The entire handbook is intended
                        to be a Summary Plan Description and provides important
                        information about your rights under ERISA.

                        * PLAN NAMES

                        The plan can be identified by its formal name, General
                        Mills, Inc. Senior Executive Plan, and plan number 678.

                        * EMPLOYER IDENTIFICATION NUMBER (EIN)

                        The EIN, assigned by the Internal Revenue Service for
                        General Mills, Inc. is 41- 0274440. The benefits
                        described in this handbook are identified and filed with
                        the federal government using this EIN.

                        * PLAN SPONSER

                        General Mills, Inc.

                        704 West Washington Street

                        West Chicago, IL 60185

                        Mailing Address:

                        P.O. Box 1113

                        Minneapolis, MN 55440

                        Telephone Number: (763) 764-7647

                        * PLAN BENEFITS PROVIDED BY

                        The Guardian

                        * TYPE OF PLAN

                        Medical and dental (welfare benefits)

                        * PLAN YEAR

                        The Plan Year is a 12 month period used for determining
                        the Plan's financial records. The Plan Year for the plan
                        is June 1 through May 31.

                        * PLAN ADMINISTRATOR

                        General Mills, Inc.

                        704 West Washington Street

                                                                            P.78
<PAGE>

                        West Chicago, IL 60185

                        Mailing Address:

                        P.O. Box 1113

                        Minneapolis, MN 55440

                        Telephone Number: (763) 764-7647

                        * TYPE OF PLAN ADMINISTRATION

                        The company has retained The Guardian to administer this
                        insured Plan.

                        * TYPE OF FUNDING

                        The benefits under the General Mills, Inc. Senior
                        Executive Benefit Plan are insured.

                        * AGENT FOR SERVICE OF LEGAL PROCESS

                        General Mills, Inc.

                        704 West Washington Street

                        West Chicago, IL 60185

                        Mailing Address:

                        P.O. Box 1113

                        Minneapolis, MN 55440

                                                                     B800.0002-R

                                                                            P.79
<PAGE>

--------------------------------------------------------------------------------
STATEMENT OF 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:

                        (a) examine, without charge, all plan documents,
                            including insurance contracts, collective bargaining
                            agreements and copies of all documents filed by the
                            plan with the U. S. Department of Labor, such as
                            detailed annual reports and plan descriptions. The
                            documents may be examined at the Plan
                            Administrator's office and at other specified
                            locations such as worksites and union halls.

                        (b) obtain copies of all plan documents and other plan
                            information upon written request to the Plan
                            Administrator, who may make a reasonable charge for
                            the copies; and

                        (c) receive a summary of the plan's annual financial
                            report from the Plan Administrator (if such a report
                            is required).

                        In addition to creating rights for plan participants,
                        ERISA imposes duties upon the people, called
                        "fiduciaries", who are responsible for the operation of
                        the employee benefit plan. They have a duty to operate
                        the plan prudently and in the interest of plan
                        participants and beneficiaries. Your employer may not
                        fire you or otherwise discriminate against you in any
                        way to prevent you from obtaining a welfare benefit or
                        exercising your rights under ERISA. If your claim for a
                        welfare benefit is denied in whole or in part, you must
                        receive a written explanation of the reason for the
                        denial. You have the right to have your claim reviewed
                        and reconsidered.

                        Under ERISA, there are steps you can take to enforce the
                        above rights. For instance, you may file suit in a
                        federal court if you request materials from the plan and
                        do not receive them within 30 days. The court may
                        require the plan administrator to provide the materials
                        and pay you up to $110.00 a day until you receive them
                        (unless the materials were not sent because of reasons
                        beyond the administrator's control). If your claim for
                        benefits is denied in whole or in part, or ignored, you
                        may file suit in a state or federal court. If plan
                        fiduciaries misuse the plan's money, or discriminate
                        against you for asserting your rights, you may seek
                        assistance from the U.S. Department of Labor, or file
                        suit in a federal court. If you are successful, the
                        court may order the person you have sued to pay court
                        costs and legal fees. If you lose, the court may order
                        you to pay; for example, if 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 office of
                        the Pension and Welfare Benefits Administration, U.S.
                        Department of Labor, listed in your telephone directory,
                        or the Division of Technical Assistance and Inquiries,
                        Pension and Welfare Benefits Administration, U.S.
                        Department of Labor, 200 Constitution Avenue, N.W.,
                        Washington D.C. 20210.

                                                                     B800.0050-R

                                                                            P.80
<PAGE>

                                                 THE GUARDIAN'S RESPONSIBILITIES
--------------------------------------------------------------------------------

                                                                     B800.0048-R

                        The medical expense benefits provided by this plan are
                        guaranteed by a policy of insurance issued by The
                        Guardian. The Guardian also supplies administrative
                        services, such as claims services, including the payment
                        of claims, preparation of employee certificates of
                        insurance, and changes to such certificates.

                                                                     B800.0051-R

                        The dental expense benefits provided by this plan are
                        guaranteed by a policy of insurance issued by The
                        Guardian. The Guardian also supplies administrative
                        services, such as claims services, including the payment
                        of claims, preparation of employee certificates of
                        insurance, and changes to such certificates.

                                                                     B800.0053-R

                        The prescription drug expense benefits provided by this
                        plan are guaranteed by a policy of insurance issued by
                        The Guardian. The Guardian also supplies administrative
                        services, such as claims services, including the payment
                        of claims, preparation of employee certificates of
                        insurance, and changes to such certificates.

                                                                     B800.0057-R

                        The Guardian is located at 7 Hanover Square, New York,
                        New York 10004.

                                                                     B800.0049-R

                                                                CLAIMS PROCEDURE
--------------------------------------------------------------------------------

                        Claim forms and instructions for filing claims may be
                        obtained from the Plan Administrator. Completed claim
                        forms and any other required material should be returned
                        to the Plan Administrator for submission to The
                        Guardian.

                        The Guardian is the Claims Fiduciary with discretionary
                        authority to determine eligibility for benefits and to
                        construe the terms of the PLAN with respect to claims.

                        In addition to the basic claim procedure explained in
                        your certificate, The Guardian will also observe the
                        procedures listed below. All notification from The
                        Guardian will be in writing.

                        (a) If a claim is wholly or partially denied, the
                            claimant will be notified of the decision within 90
                            days after The Guardian received the claim.

                        (b) If special circumstances require an extension of
                            time for processing the claim, written notice of the
                            extension shall be furnished to the claimant prior
                            to the termination of the initial 90-day period. In
                            no event shall such extension exceed a period of 90
                            days from the end of such initial period. The
                            extension notice shall indicate the special
                            circumstances requiring an extension of time and the
                            date by which The Guardian expects to render the
                            final decision.

                                                                            P.81
<PAGE>

                                                        CLAIMS PROCEDURE (CONT.)
--------------------------------------------------------------------------------

                        (c) If a claim is denied, The Guardian will provide to
                            the Plan Administrator, for delivery to the
                            claimant, a notice that will set forth:

                            (1) the specific reason(s) the claim was denied;

                            (2) specific references to the pertinent PLAN
                                provision on which the denial is based;

                            (3) a description of any additional material or
                                information needed to make the claim valid, and
                                an explanation of why the material or
                                information is needed;

                            (4) an explanation of the PLAN'S claim review
                                procedure.

                            A claimant must file a request for review of a
                            denied claim within 60 days after receipt of written
                            notification of denial of a claim.

                        (d) The Guardian will notify the claimant of its
                            decision within 60 days of receipt of the request
                            for review. If special circumstances require an
                            extension of time for processing, The Guardian will
                            render a decision as soon as possible, but no later
                            than 120 days after receiving the request. The
                            Guardian will notify the claimant about the
                            extension.

                        The above procedures are required under the provisions
                        of ERISA.

                                                                     B800.0032-R

                                                  TERMINATION OF THIS GROUP PLAN
--------------------------------------------------------------------------------

                        Your EMPLOYER may terminate this group PLAN at any time
                        by giving us 31 days advance written notice. This PLAN
                        will also end if your EMPLOYER fails to pay a premium
                        due by the end of this grace period.

                        We may have the option to terminate this PLAN if the
                        number of people insured falls below a certain level.

                        When this PLAN ends, you may be eligible to continue or
                        convert your insurance coverage. Your rights upon
                        termination of the PLAN are explained in this booklet.

                                                                     B800.0007-R

                                                                            P.82
<PAGE>

                                     [LOGO]
                                    GUARDIAN

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}]]